I know of no better way than escape the accumulated stress of New York City than to fly All Nippon Airlines across the international date line to Tokyo. Fourteen hours of total freedom from emails, phone calls, google and breaking news, with no options other than to succumb to the temptations offered by kimono-clad hostesses that included a bento box Kai-seki banquet, complimentary ANA pajamas, and magically reclining my seat into a perfectly flat bed with a down comforter and Japanese pillow. She then offers further separation from reality in the form of a gauze a face mask, eye shades, and ear plugs, making me feel like the comatose crew in Kubrick’s 2001/
At Narita Airport, alas, I get fewer Yen at the Citibank ATM machine for my dollars than I received on my last research trip in June– a consequence of the Bush administration’s misguided policy of devaluing the dollar.
Since Treasury Secretary John W. Snow proclaimed in May 2003 that the U.S. government would no longer measure the dollar's strength by its market value against the Yen and other leading currencies, the dollar has lost almost one-fifth of its value against the Yen. Underlying this snow job is the fallacy that a devalued currency necessarily results in a more favorable trade balance. If that was the case, all the African countries that periodically devalue their currencies by adding zeroes to them would have massive trade surpluses instead of continuing massive trade deficits. But the sad reality is that politicians can no more change the terms of their trade with the rest of the world by changing the numerical values of their accounting units– whether the Congolese Franc, the Mexican Peso, or the U.S. dollar– than they can increase life expectancy by devaluing the number of minutes in an hour or increasing average height by devaluing the inch.
What happens when the U.S, reduces the value of the dollar is that Americans have to spend more to buy the same amount of foreign goods, and foreigners have to spend less to buy the same amount of American goods. The devaluation may increase the number of items Americans export, but since the dollar value for each is now less. they may wind up with less money. Similarly, a rise in price of foreign goods –such as oil– may result in fewer units being imported, but the trade deficit can still grow larger because the price is higher for each unit imported into the US. And, as the numbers now demonstrate, this is exactly what has happened. Since Bush first became President in 2001, the Federal Reserve Bank's Major Currency Index, the trade weighted dollar, has fallen by 22 percent while the U.S. trade deficit, rather than also decreasing, has increased by 33 percent.
Because of this sad devaluation, an airport taxi to Tokyo now costs $210. So I take the convenient bus service, which costs only $28, and goes from the terminal to the Grand Hyatt Hotel, my favorite hotel in the world.
