Some time ago, Phil Agree's Red Rock Eater newsletter had a pointer to a former IMF official who had turned on the IMF for the policies it foisted on third world countries; one item he noted as a piece of silly new orthodoxy was the push to get everyone to adopt or tie to the US dollar as a currency, for reasons that made no sense to me. After all, if attacks on the currencies of Malasyia and the United Kingdom provide a lesson, it's that trying to peg one's currency to a particular amount or even range can have a disasterous effect for the national treasury and, by extension, the taxpayer. Who would be me. In a marketplace where currencies are freely tradable, currencies will tend toward the value that people think it should (or at least, the people who buy and sell money).
It was also got a lesson from living in the UK which appears to elude many people across the political spectrum - namely, that while a strong currency may make your dick hard, the economic benefits are less clear cut. The area I lived in, Stourbrige, had a nearly dead glassmaking and pottery industry; the demise was due to the fact that the difference in the strength of the pound against the currencies of Eastern European nations with glassblowing industries (such as Poland and the Czech Republic) meant that one simply could not produce glass in the United Kingdom that could compete in the market.
So when I started to hear various idiots, mostly on the right, but including some (such as Pete Hodgson) nominally on the left, complain about the strength of the dollar and begin to agitate for New Zealand to peg to the Australian or US dollar, I began to worry. This, it seemed to me, would be an unmitigated disaster. The US dollar is worth a lot of money because the US has more than a quarter billion people who form the richest consumer economy in the world (for now) and is an economic, political, and millitary powerhouse (although all but the millitary will almost certainly erode in my lifetime - well within it). People, therefore, buy US dollars - to buy its goods, to trade with the vast US market, or to use as a medium of exchange, since it is considered a trusted currency in a way that the rouble or the peso or the New Zealand dollar is not. New Zealand has none of these charateristics.
In order to prop the New Zealand currency up to the levels of the US dollar, the New Zealand government would have to spend a fortune (of my money) to buck the market's perception of our currency of simply not being that valuable. And having done that, what would the benefit be? We would have a strong currency. If we were a country which imported raw materials and exported scarce, highly manufactured goods, this might be a win, but we aren't. Instead, we are a country that imports huge amounts of manufactured products (everything from cars to computers to clothes), and exports primary products, usually lightly manufactured (with some honourable exceptions, such as the more research-intensive parts of the agricultural economy). In those more sophisticated areas where we do foot it to any degree, such as making movies or supplying IT talent, we do so in large part because we have a weak currency and because a US company can spend a beer budget and buy champagne Kiwi talent. In the short term, spending all the taxpayers' money to artifically propping up the currency would let already well-off New Zealanders go on a spending spree. In the long term, it would destroy our export industries and bankrupt our taxpayers as we bought, not a better healthcare system or education, but a strong currency.
This is basically what's happened in Argentina - in the years since their currency was tied to the dollar, they've lost any competitiveness in the industries they used to have, and now they've run out of money. Oops. (Of course, it isn't as simple as that, but it's a major factor).<
From the Jargon Gone Mad file: You're an employee of Kinkos. You get an email containing the following phrase:
GOOD people are [our most important asset], because those good people repeatedly touch our customers and create positive experiences for them
Is that Kinkos, or Kink-os? You'd never guess they were in the photocopying and printing business, would you?
Whenever I hear phrases like, “touch our customers” my mind slips “inappropriately” in there, so maybe it's just me, of course.
Isn't it great when you work as a programmer/systems integrator and client employees feel the best use of your times is debugging their desktop problems? After all, it's not like you have anything better to do!
Still the contracting mantra applies: they're paying me the same rate, whatever work I do.