A classic Bushism was coined Monday. George W. Bush's verbal gaffe didn't have the comic appeal of ones like "more and more of our imports come from overseas" or "my pro-life position is I believe there's life," but it's a noteworthy one. It could even be important.
The US president tripped over his tongue in Tokyo, after meeting with Prime Minister Junichiro Koizumi. Bush, debriefing reporters on what the two leaders discussed, listed the "devaluation issue," among other topics. The yen plunged, and the White House quickly clarified Bush meant the "deflation issue."
That's fair enough, until you really think about. Bush knows lots about pointing at a map of Afghanistan and saying: "Destroy this." He's not known to be well versed in the intricacies of foreign-exchange policies. All of this makes you wonder where Bush picked up the "devaluation issue" phraseology.
Is it routinely used in the Bush White House? If so, Japan's neighbors in Asia could be in for a rough year. Few believe the Koizumi's administration's denials that it's seeking a weak yen to boost exports and the economy. Tokyo's beggar-thy-neighbor policy isn't playing out well here in Singapore or elsewhere in the region. If Bush's team understands the devaluation issue, then it's looking the other way while Tokyo wastes its time with a strategy that won't help.
The Freudian potential here is fascinating. It may also be far-fetched. Bush has been known to put both feet in his mouth at once, leaving Americans relieved he only has two. It's entirely possible that Bush's devaluation comment was what the White House said: a meaningless gaffe. That'd be easier to buy if Bush talked of, say, the "inflation issue" rather than the deflation one.
Bush is hardly the first US leader who's shocked the currency markets. His predecessor, Bill Clinton, unnerved traders now and again with comments on the dollar. He also managed to enrage an entire continent thanks to a currency comment. That was in late 1997, when he called the Asian crisis "a few little glitches" on the road to prosperity.
Ten years before that, Ronald Reagan sent shockwaves through forex land when he suggested the dollar had room to move lower.
His handlers quickly clarified things, saying Reagan wanted a stable currency. The dollar stopped plunging.
In 1972, Richard Nixon offered arguably the best currency comment in US history. An aide was trying to brief the commander-in-chief on Italy's worsening currency crisis. Nixon, too focused on important domestic issues like scheming against enemies, said, "[Expletive] the lira!" We can't use the actual word here, but Nixon made it clear he had little concern over the lira's slide.
Bush's real communication problem with Japan isn't about words, but tone. His visit to Tokyo could be a big boost to Koizumi, whose popularity slid in recent weeks with the economy.
Calling Koizumi a "great reformer" and comparing him to Ichiro Suzuki and saying "the prime minister can hit anything you throw at him" is 180 degrees away from reality.
The message Bush is sending is that Japan is on the right track and should continue doing what it's been doing to stabilize the economy. Perhaps Bush is privy to information we're not, but what exactly has Koizumi reformed? What has he hit? In reality, Koizumi has struck out again and again. And now that he no longer enjoys superhuman popularity, he'll have fewer and fewer at-bats.
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