Thanks, Tyler for putting it in perspective. I have had conversations with friends along the same lines..
Should we be happy with the low U.S. dollar?
A low dollar simply looks bad. We are, after all, used to judging ourselves against others — comparing our salaries with the earnings of our peers, and our homes with those of our neighbors. We’re used to thinking it is a big advantage to stand at the top of a numerical list.
But when it comes to currencies, a higher value neither brings national success nor predicts future prosperity. The measure of a nation’s wealth is the goods and services it produces, not the relative standing of its currency. Take a look at 1985-88, when the dollar lost more ground than in the last few years. Those were good times, and the next decade was largely prosperous as well.
Most of the piece is standard economics, not far from recent writings by Krugman or DeLong. The more interesting question is which measures of a national economy we, for reasons of pride, inefficiently attach too much importance to.