Tuesday, May 27, 2008

Obama: Rock our World

If Obama wants to talk international policy, he should come out forcefully for a strong dollar. The time is right to pop this commodity bubble and watch the oil prices come down to earth. Wall Street would love it and public approval over the shrinking gas prices will more than make up for the concerns by farmers (who are still angry at McCain for not supporting ethanol price supports) and other exporters who are certainly profiting from the low dollar.

In a process called "jawboning" Obama could talk up the dollar and do much more for the price of oil than merely giving a summer "tax holiday" on the price of gas at the pump. He should come out with a policy statement about the economic positives of his presidency and the favorable conditions for future US growth he will create.

On taxes he should say that the government debt is the Republican problem and that he will work with them to help reduce it.

But the US has to be serious about its energy policy and can be a global leader with some government prodding on energy research, mileage standards, and the support of a modern electrical grid that would promote entrepreneurial opportunities for local energy production.

The global foreign exchange markets are too big for the Treasury to intervene very effectively. But the time is right for a major voice to emerge on economic issues. Obama could be in a historic position to leverage his position as the likely Democratic nominee to quell the current hunger for economic clarity and burst a speculative bubble which is causing serious pain for the American public. A radical move here could pay off big for Obama and provide energy dividends for the American public.