Paulson and the Administration's Message

Back in late July, our Treasury Secretary Hank Paulson hit my radar by reportedly making the following comments on the economy:

Speaking on CNBC television, Paulson said the economy was moving to a sustainable pace of growth and the risks in the subprime mortgages market were largely contained.
(This was from a yahoo news article which has since expired.)

Now, bear in mind that when he said it, it was becoming clear that the subprime problems were not terribly well contained. I believe it was earlier that week that Mozillo explicitly said that the delinquencies were showing up in Alt-A and even Prime loans. Furthermore, the "subprime is contained" talking points had started to become something of a joke.

So to hear the Secretary of the Treasury tossing out talking points past their expiration date was a bit troubling. Either he was doing a really poor job of trying to bamboozle, or he was woefully uninformed.

Consequently, I've been trying to keep an eye on what Hank has to say about the economy since then.

Today, Bonddad informs me of his latest masterpiece. Now that the dollar is at all time lows against the Euro, and down substantially against just about every major currency which isn't on a dollar peg, Hank tells us:

"I believe that a strong dollar is in our nation's interest and also that currency values should be set in a competitive marketplace based upon underlying economic fundamentals,"

Bonddad comments:

Look -- if the US wants a "strong dollar policy" they have to act like a strong dollar economy. That means things like exporting more than they import and not issuing mammoth amounts of new debt every year. You just can't say it; you have to act in a way that leads to that result.

Indeed.

At this point, it's really hard to shake the belief that everyone in the Administration genuinely believes that if you just say something enough times, it will magically become true.