Making Sense of the Dollar: Exposing Dangerous Myths about Trade and Foreign Exchange

Acknowledgments xi

Introduction xiii

1 Myth 1: The Trade Deficit Reflects U.S. Competitiveness 1

2 Myth 2: The Current Account Deficit Drives the Dollar 21

3 Myth 3: You Can’t Have Too Much Money 39

4 Myth 4: Labor Market Flexibility is the Key to U.S. Economic Prowess 57

5 Myth 5: There Is One Type of Capitalism73

6 Myth 6: The Dollar’s Privileged Place in the World is Lost 91

7 Myth 7: Globalization Destroyed American Industry 111

8 Myth 8: U.S. Capitalist Development Prevents Socialism 133

9 Myth 9: The Weak U.S. Dollar Boosts Exports and Drives Stock Markets 155

10 Myth 10: The Foreign Exchange Market is Strange and Speculative 173

11 Summary and Some Thoughts on the Way Forward 191

Bibliography 203

Index 206