Congresswoman Michelle Bachmann is clueless about the dollar’s role as the world’s reserve currency. In fact, it seems she’s clueless about what a reserve currency is. That’s why, in reaction to China’s SDR proposal, she’s introducing legislation to “bar the dollar from being replaced by any foreign currency.” And apparently a lot of people are similarly confused and need a quick explanation of the difference between legal tender and currency reserves.
If Rep. Bachmann’s office needs some assistance with international economics, I’d be happy to provide some advice over the phone at a reasonable price.
Having had my fair share of economic discussions with Jonathan, I can readily vouch for his expertise.
Having had their fair share of international gaffes in recent weeks, too (see here and here, for instance), I would urge U.S. politicians to do engage in greater background research before making future pronouncements (pertaining to anything, really) or attempting gestures of goodwill. Unfortunately, things in this department do not appear especially promising: standing in front of the Basilica of Our Lady of Guadalupe, which was "miraculously imprinted by Mary on the tilma, or cloak, or Juan Diego in 1531," Hilary Clinton on her recent trip to Mexico turned to the priest who was showing her the Basilica and asked, "Who painted it?"
Quite frankly I don't know how anyone is to take the U.S. seriously if such blunders continue to be made. Of course such slips of the tongue occur frequently in the wonderful world that is international relations, but one would hope that politicians in the world's superpower would be sufficiently knowledgeable on what really are commonplace matters. Even I understand the difference between legal tender and currency reserves, and I will be the first to admit that economics is not my forte.
While on the surface such slips may not appear to be a big deal, they do go a long way in discrediting the United States in the global arena, and are likewise utilized by leaders in countries who are interested in asserting their superiority over (or equality to) the U.S. in doing precisely that. China is no exception.
[HT: Andrew Sullivan]