That has passed as a result of the dollar's decline and the ebbing political strength of right-wing populist factions in the US that seek ever-greater redistribution to the rich fueled by ever-increasing tax cuts and ever-rising long-term deficits.
Today, the principal source of international economic disorder is made in China, owing to factions inside its government that hope to avoid a more rapid appreciation of the yuan's value.
I cannot judge the strength of these factions, or whether they know that the falling US account deficit and dollar may reduce the urgency of adjustment in the rest of the world, but not in China.
Former US president Richard Nixon's treasury secretary, John Connally, once told a group of European leaders that while the dollar was the US currency, its misalignment was Europe's problem. Today, the misalignment of the dollar -- and the euro -- against the yuan and other Asian currencies is increasingly becoming Asia's problem.
J. Bradford DeLong, professor of economics at the University of California at Berkeley, was assistant US Treasury secretary during the administration of former US president Bill Clinton.
Copyright: Project Syndicate
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