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Of course. During the Reagan/Bush years, of course. (Gee, the Bush name seems to come popping up in every peoples catastrophe these last 30 years.)
Ronald Reagan, formerly my vote for worst president ever, decided he was going to have an arms buildup while also giving record tax breaks to the top 1% of our population, and while Paul Volcker, Greenspan/Bernanke's predecessor at the Fed, was trying to retard consumption (to tame inflation) through monetary policy (via rising interest rates). The Reagan deficits were consuming all U.S. private savings at the time, requiring interest rates to rise to records that stand to this day (Carter holds the record for nominal rates, inflation plus real interest -- Reagan holds the record for real interest rates, which are nominal rates minus inflation -- real interest rates are far more destructive than nominal, as history has shown).
Real interest had to rise high compared to the rest of the world (after discounting for risk), thereby priming the pump with foriegn cash flows to fund the then record Reagan deficits. But you could only buy U.S. Treasury instruments with U.S. dollars, so the world sold their Yen, Marcs, Francs, et al., for USD, creating record strength for the dollar. I recall Yen trading at 268 to the dollar at one point (it's about 112 right now).
An unfortunate result, then, was that U.S. goods and services grew too pricey compared to our competition in world markets, and U.S. manufacturing industry lost significant market share, never recovered (we even lost whole industries, like VCR manufacture, television manufacture, etc.). To counter, U.S. manufacturing started moving plants overseas, to cheap labor countries, and the rusting of the vast mid-west manufacturing base began. The source of middle class prosperity for so many was destroyed so that the rich could have their Reagan-Bush tax cuts, and Reagan could shift additional cash flow to the military-industrial complex, his base.
Well, this would not do; the rascal multitudes (you and I) were starting to agitate. Were we better off in 1985 than 4 years before? Beside, some of the Reagan-Bush victims were country club residing factory owners who paid their bribes (campaign contributions) and expected better. So Reagan-Bush acted, they sent fixer-extraordinaire onto the problem, James Baker.
Baker convened the world's central bankers at the Plaza hotel in NYC at then a top-secret series of meetings. The result was the Plaza Accord, where the G8 nations agreed to support trading ranges for the world's currencies through central bank manipulation (so much for "free markets"). However, they weren't very good at it initially; the dollar dropped like a rock. By 1987 or so the Yen was trading at 89 to the dollar, far below the 120-140 trading range agreed to.
The result? A massive selloff of U.S. assets. From real estate to company after company, now the world traded their Yen and Marcs and Francs for U.S. real assets. It was the Great American Firesale! We bought a degree of prosperity to (1) counter the earlier damaging policies of the Republithug Reagan-Bush White House, and (2) to position Republithugs for re-election. But at what cost?
In 1981, the U.S. owned 3.7x more of the rest of the world than the world owned of us; by 1992, the rest of the world owned 0.4x more of us than we of them (source: Boiling Point, Kevin Phillips). A sea change in our economic standing in the world of tsunami proportions. Couple that with the fact that we went from the world's creditor to the biggest debtor on the globe during the same time, it's easy to see why Bush Jr. feels forced to resort to historical-conventional military imperialism to try to hold onto our fragile hegemony. However, as witness of every previous empire shows, we can't hold on to hegemony with bombs and bullets alone; via the route chosen by Bush, American supremacy is fast becoming an anachronism. It won't last. We've rusted out our heart and over-extended our force.
May history judge Bush and his Regime for what they are: Nation destroyers -- destroying both our nation as well as a myriad of smaller nations in geo-political strategic locations. I think the damage is already done and over the next half-century we will drift into U.K.-like second-tier standing, or worse: We could evolve into an Argentina/Chile/El Salvador/Guatamala/Honduras two tiered state with a small class of owners living a life of opulence, served by a sliver of well-rewarded managers and magistrates, and then everyone else, the "useless eaters" and "cannon fodder" who toil in the fields of the Great Plantation the feudal U.S. economy will become. Note that it does seem that the Bush Regime is acting as if this is our future, with signing statements and "unitary executive" priviledge, and appointments of people (e.g., Negroponte) quite adept at terrorizing indigent populations into passive obedience.
We live in interesting times. Unfortunately. :(
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