Obama may choose to speak softly on currency issues

Apr 01, 2010 | 07:47 AM | Kevin Foster

When Leo Gerard starts praising Ronald Reagan, you know the world is changing.

Gerard, the United Steelworkers union president best known for his tough support of workers' rights, and Reagan, the darling of the Republican right, would normally make unlikely bedfellows. But on one issue—the need to defend the U.S. economy from the impact of an undervalued foreign currency—Gerard seems to have more in common with Reagan than with the current President.

It was Reagan who took action in 1985 to depreciate the dollar vs. the Japanese yen—or, as Gerard put it at a recent conference, "called (Japan) in and said it was unacceptable" for them to continue to maintain the yen at an artificially weak level, so boosting their exports and swelling the U.S. current account deficit. The resulting deal, most economists agree, helped pull the U.S. economy out of recession.....

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