Rothbard on Bryan

Murray Rothbard on the rise of William Jennings Bryan and Bryanism in the Democratic Party.

"Poor Grover Cleveland, a hard-money laissez-faire Democrat, was blamed for the panic of 1893, and many leading Cleveland Democrats lost their gubernatorial and senatorial posts in the 1894 elections. The Cleveland Democrats were temporarily weak, and the Southern-Mountain coalition was ready to hand. Seeing this opportunity, William Jennings Bryan and his pietist coalition seized control of the Democratic Party at the momentous convention of 1896. The Democratic Party was never to be the same again."

That may require some explanation. The notion of a "pietist coalition" is key to Rothbard's understanding of US political history. The pietists were and are a certain subset of Protestant groups -- generally from those denominations that see themselves as most fiercely anti-papist, anti-hierarchal, etc. -- and they believe Christians must prepare the way for the coming of the Lord by creating just social conditions first, i.e. Jesus' return shall be "postmillennial." Thus, the state (as Rothbard conveys the pietists' view of it) must be controlled by pious folks and so organized as to hasten that glorious day.

The era of Andrew Jackson -- the President that Rothbard sees as most embodying his own laissez-faire ideas -- was also the era of the Second Great Awakening -- the revivalist movement that brought pietism in this form to the US in a big way. Pietists wanted to control both people's personal lives (through the prohibition of alcohol and Sunday closing laws for example) and the counrtry's economic life, through control of the money supply and tariffs on foreign trade. The great political divide was then, between the Democrats, who were laissez-faire on both personal and economic matters, and the Whigs or later Republicans, who were statist on both sets of matters.

Cleveland is the last figure in US political history to whom Rothbard extends any sympathy. The rise of Bryan meant the pietists had taken over both parties, and everything has been pretty steadily downhill ever since.

Liu Xiang

Every August of the last three years I have written an entry about the Chinese track-and-field star Liu Xiang.  Here are the earlier such entries:

2008
2009
2010 

Here is a trip down memory lane from the China Herald, their thoughts back in 2008 about "what killed Liu Xiang's Olympic ambitions?"

There is some news about Liu.  This year he is expected to be the PRC's star in the IAAF World Championships, to be held in Daegu, from August 28 to September 4.  The IAAF, by the way, the the International Association of Athletics Federations, and Daegu is the fourth-largest city in the Republic of Korea.

Apparently, in the hurdles, Liu has adopted a new technique since his injury, approaching the first hurdle in seven strides instead of -- as in his earlier days --  in eight.  Here is a discussion from China's Xinhua News Agency.

In that event Liu will face tough competition in the 110 meter hurdles from a US star, David Oliver, who has a season best in this event of 12.94 seconds. Liu's season best is 13 seconds flat.

Here's an Oliver biography.

Due respect to Oliver, but this blog has adopted Liu as its track-and-field fav, and we'll be cheering him on.  Besides, it's a good bet he won't be suffering from jet lag the way Oliver might be at the Daegu competition!

And there's London next year, i.e. the 2012 Olympics.  I'm psyched already.

Women's Suffrage

Congratulations and happy anniversary to the enfranchised women of the United States.

It was on this day, August 26, ninety-two years ago, that the 19th amendment was ratified, after about 70 years of agitation. 

"The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of sex and Congress shall have power to enforce this article by appropriate legislation."

Ambiguity or Sloppy Grammar

Back in the spring of this year, The New York Times ran an obituary of a certain infamous individual that began with these words: "Osama bin Laden, who was killed in Pakistan on Sunday, was a son of the Saudi elite whose radical violent campaign to re-create a seventh-century Muslim empire redefined the threat of terrorism for the 21st century."

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Now, they probably didn't mean to say that it is the Saudi elite in general whose radical violent campaign to recreate etc. has redefined the threat of terrorism for the 21st century.

This was, after all, an obit for Osama in particular, and they were saying that he is deserving of historic attention because of his own radical violent campaign, etc.

Or at least that's what they seem likely to have been trying to say! This is a classic instance (perhaps!) of the grammatical mistake known as a misplaced modifier. The phrase "son of the Saudi elite" is intended as a modifier for Osama bin Laden, but is misplaced so it looks like the "Saudi elite" is the subject on which the rest of the sentence is predicated.

They could have avoided the double-takes if they had written, say, "A son of the Saudi elite, Osama bin Laden, was killed in Pakistan on Sunday, ending his radical, violent campaign....which redefined...."

But my Machiavellian streak suggests that maybe this isn't carelessness, maybe they did mean to indict the whole Saudi elite, under the guise of an obit for an individual.

The New York Post

Someone recently asked me -- not for any reason worth mentioning here -- about the politics of the New York Post.  This someone was apparently under the impression I live closer to NYC than I do, or have some reason to follow its tabloids in particular.

I made to her the following observations:

I won't claim to know anything about the political complexion of the Post either. Maybe some New Yorker will (a) admit to reading it with some regularity and (b) clue us both in.

But since you brought it up ... further thoughts.

I do know that it is part of the Murdochian empire. News Corp. bought it in 1976, [the Post created the immortal headline "Headless Body in Topless Bar" in 1983], News Corp. sold it in 1988, acquired it again in 1993 (more on that in a sec), and has owned it since. I personally would not conclude that this makes the Post a "conservative" paper. After all, I don't believe Murdoch is ideologically driven. I think he is profit driven. (Which, I assure you, I also think of as a good trait.)

Fox News is, IMHO, rightward slanted, and in fact they more-or-less admit this, though they generally say that they are justifiably so given the contrary slant of their competitors. They see themselves more as a balancing factor than as in themselves balanced -- two different notions. Again -- no quarrel from me. I don't beleive in "balance" or in "objectivity" either except as widespread fictions. There is true, there is false. Within the realm of the truthful, all truth-telling is selective. Only God knows truth without partiality.

I am reminded of what a little girl wrote to the editor of another NY newspaper in the late 19th century. "Papa says, if you see it in the Sun it's so." Yes, Virginia, there is truth. There is that which simply "is so" as your father sensibly defines truth. But neither the Sun nor any other paper ever printed failed to select particular truths as more worthy of print than others for particular reasons. As indeed, their decision to put your letter on the front page one fateful day rather illustrates. Is there some sense in which that was an objective news-value-driven decision?

But I'll return to the 21st century now ... if I am right about Murdoch, we can't infer anything about the Post, the WSJ, etc., from Fox. All we know is that putting Roger Ailes in charge and letting him run Fox News has made Murdoch a lot of money, so Murdoch has left that goose alone to lay its golden eggs the way the goose thinks best. That doesn't imply any ideological passion in the head office of News Corp at all, and my guess is that the Post probably is largely autonomous in day-to-day terms too.

There is an interesting bit of history. As I mentioned, the first News Corp. era for the Post was 1976 - 1988. When they were putting together Fox News network, they wanted NYC's WNYW, but under cross-ownership rules then in place they couldn't have both WNYW and the Post. So they opted for the former, and sold the Post to Peter Kalikow.

Kalikow was wealthy from real estate wheelings and dealings, but knew zip abut the news business, and for several years the Post went steadily downhill. News Corp bought it again in 1993 -- at that time it was considered a rescue, so the cross-ownership rules were waived. Hmmm. Murdoch was given an either/or choice and ended up with both. A conspiracy theorist could go to town on that.

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Bottom line, If you see it in Pragmatism Refreshed -- it's so. Otherwise. you're taking your chances.

Kant and the Austrian Economists II

Yesterday, I discussed the "Austrian" school of economics, and how it distinguishes itself from the "Chicago" school, although in the minds of the general public they are all alike free marketeers.

I ended with the observation that there is a Kantian edge to Austrian method, it treats the significance of incentives and other premises in much the way that Kant treated his synthetic a priori principles.  I am not learned enough to know whether this is a matter of direct influence, coincidence, or something else.

But the Austrian arguments I quoted yesterday do make another bell go off in my mind: Ayn Rand.

Rand, as my readers may know, was the Russian-born screenwriter-turned-novelist who became the center of an "Objectivist" movement of pop philosophy in the 1960s, an influence upon such young minds as Nathaniel Branden and Alan Greenspan, etc.  Her aphorisms are still quoted today by many free market advocates, including apparently tea partiers.

I have never been one of her admirers.  Certainly my goal in this blog, the goal of refreshing pragmatism, is not one that appeals to Objectivists.

But one fact that stands out in my own mind from the reading I've done in O-ist literature is how vituperative they are toward the memory of Immanuel Kant, and anything that they think smacks of his influence.  It is enough to say, "X sounds like Kant" to thoroughly and foundationally condemn X amongst them.

Why this vituperation?  I'm not clear.  It isn't justified by the reasons they give.  Indeed, if you read Kant's essay, "What is Enlightenment?," you'll find that much of it has an O-ist feel to it, beginning with the Latin motto, Sapare Aude, "Dare to Know," that Kant there takes as his own.  Dare to think for yourself! he was saying, which is exactly the daring that Objectivists generally believe their own central virtue.

Perhaps the reason for the vituperation, though, is precisely that Rand had to carve out her own space in the world of ideas in order to be seen -- in order even to see herself -- as an original thinker.  She couldn't do that by being yet another popularizer of the free-market ideas of the Austrian school.  But perhaps (a) I'm right that the Austrians were Kantians, and (b) she knew or sensed the same thing.  She might well have decided to carve out some space for herself by being the anti-Kantian Austrian!

Puzzle solved.

Kant and the Austrian Economists I

As many of my readers presumably know, there are important differences among different schools of "free market economists."  If you are a Marxist, or for that matter a Keynesian, you'll likely think all free marketers sound pretty much the same.  This, though, is a trick of perspective.

One oft-noted contrast is between the "Chicago School" (associated with Milton Friedman and monetarism) on the one hand, and the "Austrian School" (of Friedrich Hayek and his close ideological kin) on the other.

Here's a full account of the difference, from an "Austrian." I put the label "Austrian" in quotation marks there because, although the school got its start there, by no means do all "Austrians" of today have names that sound, well ... Austrian.  It isn't all Hayek and von Mises anymore!  The author of the article to which I linked you above has the distinctly not-middle-Europe moniker, "Robert Murphy."

Anyway, many of the points of divergence are methodological -- even you might say epistemological.  Murphy quotes Friedman on the question of how economics should work as a science:

The relevant question to ask about the "assumptions" of a theory is not whether they are descriptively "realistic," for they never are, but whether they are sufficiently good approximations for the purpose in hand. And this question can be answered only by seeing whether the theory works, which means whether it yields sufficiently accurate predictions.

Testable predictions.  Newton tells us to assume objects are moving around in a frictionless environment.  They (almost) never are, but assuming that makes the math easy, and the easy math makes for testable predictions. One we test those predictions, we can note that they are slightly off (only "sufficiently" accurate as Friedman says) and then worry about correcting for friction!  So Friedman seeks to create an economic science that is just as genuinely a science as is physics.

Murphy, as an "Austrian," has a different view.  After all, a basic premise of economic theory, he says, is that "people respond to incentives."  Is that itself a testable prediction?  Murphy thinks that it is not, and he is unbothered by its untestability.

Think of falsifiability, the specific notion of "testability" developed by Karl Popper, an Austrian in the non-economists' sense.  How could anyone falsify the claim that people respond to incentives?  I ask you to cut off your big toe.  You ignore me.  I offer you $20 to cutr off your big toe.  You continue to ignore me.  I offer $1,000.  You continue to ignore me.  At what point has my little experiment falsified the view that people respond to incentives?  At none.  It is immune from falsification.

I don't know off hand what Friedman would say about the big toe experiment, but Murphy is unbothered by its lack of result.  This premise isn't supposed to be falsifiable, he says.  It is part of an internally coherent framework for interpreting data, not an empirical datum itself.

This is where a couple of "aha" bulbs went off in my brain.  It seems that Murphy is saying (though without being explicit, for he is writing for a non-academic audience) that the Austrian school has a Kantian philosophical slant.  The idea that people respond to incentives might be what Kant called a synthetic a priori principle.  It tells us about any possible world, any experiencable world, and thus is a premise of science rather than a result.  A bit like the idea that every event has a cause.  That was the first aha bulb.

The second bulb had to do with the American novelist pop-philosopher Ayn Rand, by whom I have to be frank never been enamoured.

But I've gone on a bit long here and I think I'll finish this thought tomorrow.
 

Wall Street ... Huh?

In four wild days on Wall Street last week, August 8th to August 11th, the indexes went on the most jagged roller coaster ride they've had since anybody has bothered keeping indexes.  A record down day Monday, most of that gained back Tuesday, the gains lost again on Wednesday and re-conquered on Thursday.  The only time in history there have been moves of 400 points or more in each of four trading days, and they all came in alternation, as if the charts wanted to create their own "W".

What was going on? 

One possible theory is that this was all a reaction to the S&P downgrade of US Treasury debt instruments.  How could both the ups and the downs be a reaction to the same event?

On this theory, Mr Market himself was having a tough time making up his mind whether the S&P downgrade was a big deal for him.  This should certainly caution folks such as yours truly against professing our own dogmatic views on that.  After all,  according to some theorists, Mr Market is an idealized model of efficiency and rationality.  Nobody has ever said that about me!
 
Actually, false humility aside, my guess is that the downgrade a medium-sized deal, and it could become a big deal yet. Last week's wild "W" could reflect that.   

There are lots of pension funds and other institutional investors out there with AAA mandates of one sort or another.  This might be a charter clause or by-law, or it might be a Labor Department regulation, but for one reason or another, a given pension manager may be required to keep at least X% of the portfolio in AAA bonds. It makes a great deal of difference whether the US Treasury bonds help satisfy that mandate. If they don't, then demand for US bonds could take a serious hit, forcing yields up, with nasty consequences either fiscal or (if we choose to monetize it) inflationary.

But ... it is my impression that most of these asset managers are allowed to average out the ratings.   If you were taking three course in school and had an A from two professors and a B+ from the other one, what would your average grade be? It would still be "A."

Since two of the major rating agencies still say AAA and the other one says AA+, the US Treasuries have an average rating of AAA, and even the asset managers with the most conservative of mandates can still buy them.

The S&P downgrade puts us a big step closer to the moment when THAT might change. The next downgrade -- either a step further frm S&P or down to AA+ by Fitch or Moodys, would be an average changer, which would in turn make it a game changer.

Thus: this is a medium deal because it could be a step toward a really big deal event.

Bernstein on Freud on Moses

Richard J. Bernstein, Freud and the Legacy of Moses (1998).

"We may feel uneasy about the way in which Freud so freely appeals to the Hebrew Bible when it suits his purposes, and dismisses it as a distortion when it contradicts his beliefs.  Freud does open himself to serious methodological critique when he self-confidently asserts: 'No historian can regard the biublical account of Moses and the Exodus as anything other that a pious piece of imaginative fiction, which has recast a remote tradition for the benefit of its own tendentious purposes'....It is difficult to resist the conclusion that once Freud became convinced about what he thought really happened, he then scanned the Bible in order to select the evidence that would support his case."

That would seem spot on.  Bernstein doesn't think Freud makes a contribution to our understanding of Moses or ancient Egypt, although he does think that studying this particular book can make a contribution to our understanding both of Freud and of his circle.

Both the friends and the enemies of psychoanalysis called it a "Jewish science."  Anna Freud herself said in 1977 that such characterizations, even though or in part because they were once hurled by Nazis, "can serve as a title of honour."    

The questions that intrigue Bernstein concern the issue of what Jewish identity meant in the time of Alfred Dreyfus, at least for the highly educated and secular European Jews of whom Freud was an example, and whether psychoanalysis, in a sense that need be neither a disparagement nor a title of honor, was in origin Jewish.

Some Favorite Hedge Fund Books

A Linked-In group to which I belong is discussing the not-very-burning question:  what are you favorite hedge fund books? 

Among those mentioned, in no particular order:
The Gathering Storm, ed.by Lee Robinson & Patrick Young (2010).
More Money than God, by Sebastian Mallaby (2011).
When Genius Failed, by Roger Lowenstein (2001).
Inventing Money, by Nicholas Dunbar (2000).
The Big Short, by Michael Lewis (2011).
Hedge Hunters by Katherine Burton (2007).
Julian Robertson: A Tiger in the land of Bulls and Bears by Daniel A. Strachman (2004).

Channel Stuffing

From my ms.

There are innumerable grounds on which securities-fraud lawsuits can be and are brought.   I will offer no survey of that field here.   But it does help our cause -- it helps us set the stage for the overly dramatic events of 2007-08, if we consider one such lawsuit, one that arose out of allegations of accounting chicanery.

In 2000, investors who had bought Coca-Cola stock subsequent to October 21, 1999, filed a lawsuit claiming that beginning on or about that date Coke was overstating its revenues through an accounting practice known as channel-stuffing.   Wherever there is a channel between the manufacturer of a product and the ultimate buyer, there may arise a temptation on the part of the manufacture to push more product into that channel than there is any good reason to believe the ultimate consumers will accept.   The whole of the amount shipped to wholesalers, and then perhaps on to retailers, may then be booked, by the manufacturer, as accounts receivable, and thus as revenue.

Why would a seller do that?   Because by boosting receivables in this way it pretties up its books, at least for a specific quarter, making itself appear more attractive to prospective investors than a more truthful accounting would, helping it sell more securities if it is inclined to do so, or boosting the value of those already in the marketplace.

One important point for understanding the 2007-08 crisis is that channel stuffing, like most examples of accounting chicanery, is a self-defeating practice.   Since (in our stipulation) the retailers can’t sell all the product sent to them, they’ll end up shipping it back up the channel again.   The manufacturer will eventually have to re-adjust its books, bursting whatever stock-price bubble the practice might have created.

Even if they don’t send it back, because they have the necessary freezer space, all that leftover Coke from the previous quarter will quench the thirst of customers in the next quarter, depressing that next quarter’s revenues for the manufacturer.

This is why the practice of channel-stuffing is often cited as an example of the short-sightedness of corporate managements, which (in this critique) often look only to their this-quarter numbers, rather than to the longer run sustainability of the company.   Short sightedness represents the temporal dimension of the agency problem.

Coca-Cola settled with these plaintiffs in July 2008.   It didn’t admit that it had done anything wrong, but it did pay the plaintiff investors, led by the Carpenters Health & Welfare Fund of Philadelphia, $137.5 million.

We should think of channel stuffing as a token of a type here, a simple case of the sort of accounting chicanery that can easily become a good deal more complicated.   Simple or complex, though, it often has this feature: a corporation meets its target numbers for one quarter or year by borrowing against the next one.

How can anyone who does not expect to die or retire within three months not see the flaw in that? Perhaps some of the executives involved in some such schemes assume that they will soon hit a good-enough year or quarter to even everything out and keeping all possible hounds at bay.

Gambling With Borrowed Chips

No more need to settle for outlines and a sample chapter any longer.  The earliest form of my book is now available, dear reader.  I'm looking for intelligent critiques, observations, hints.

click.

I hope to tighten it up a bit before entering it into the B&N self-publishing software.  Once it's there, the goal is to use it as an ad for something longer and more treatise-like.

Yerushalmi on Freud on Moses

Yosef Hayim Yerushalmi, a former professor of Jewish History at Columbia, in NYC, passed away in 2009.  Back in 1993, though,  he wrote FREUD'S MOSES, a discussion of Sigmund Freud's theory on the buried (historically and psychoanalytically buried) origins of monotheism. 

In one brief passage in that book, he states Freud's theory in a more straightforward manner than Freud ever managed to.  I'll reproduce that here. 

"Monotheism is not of Jewish origin but an Egyptian discovery.  The pharaoh Amenhotep IV established it as his state religion in the form of an exclusive worship of the sun-power, or Aton, thereafter calling himself Ikhnaton.  The Aton religion ... was characterized by the exclusive belief in one God, the rejection of anthropomorphism, magic, and sorcery, and the absolute denial of an afterlife.  Upon Ikhnaton's death, however, his great heresy was rapidly undone, and the Egyptians reverted to their old gods.  Moses was not a Hebrew but an Egyptian priest or noble, and a fervent monotheist.  In order to save the Aton religion from extinction he placed himself at the head of an oppressed Semitic tribe living in Egypt, brought them forth from bondage, and created a new nation.  He gave them an even more spiritualized, imageless form of monotheistic religion and, in order to set them apart, introduced the Egyptian custom of circumcision.  But the crude mass of former slaves could not bear the severe demands of the new faith.  In a mob revolt, Moses was killed and the memory of the murder repressed.  The Israelites went on to form an alliance of compromise with kindred Semitic tribes in Midian whose fierce volcanic deity, named Yahweh, now became their national God.  As a result, the God of Moses was fused with Yahweh and the deeds of Moses ascribed to a Midianite priest also called Moses.  However, over a period of centuries the submerged tradition of the true faith and its founder gathered  sufficient force to reassert itself and emerge victorious.  Yahweh was henceforth endowed with the universal and spiritual qualities of Moses' god, though the memory of Moses' murder remained repressed, reemerging only in a very disguised form with the rise of Christianity."

No comment.

A Thought Re: The Crude Oil Boom and Bust of 2008

The price of crude oil rose steadily all through the first half of 2008, hit a peak in July of that year, and headed down for the remainder of the year, right through the election.  Given the rest of the dramatic financial and political events of 2008, and given the general contemporary expectation that the price of oil is tied into everything, this quick spike in crude's price has naturally attracted a lot of attention and speculation. 

Here's a bit more.

In August 2007, voters in Turkey elected Abdullah Gül their new President.  Gül was the first devout Moslem ever to become president of modern Turkey – a country that since it came into existence in reaction to its Ottoman precursors has possessed a determinedly secular political culture.  Indeed, the law at this time prohibited women at universities from wearing of headscarves, for fear of its Islamic implications.  Gül, too, was surely a matter of concern to the world’s oil traders, both those with speculation and those with hedging on their minds. 

Those nasty oil speculators were as usual, following events, not making them.  Early in 2008, Turkey’s parliament passed a law allowing for such headscarves, and it should be noted that the first lady of Turkey, Hayrünnisa Gül, wears a headscarf.

I have impressions and opinions about everything, and of course would be perfectly happy to see women at any university anywhere free to wear whatever head gear pleases them individually.  But such feelings are utterly unhelpful in analysis.  The significance of the issue of the secular or non-secular character of Turkey for the stability of the whole region should not be underestimated.

So a reasonable account of what happened to the oil market in the U.S., and what role it played in the business cycle, might be this.  The market (in accord with what the efficient markets hypothesis we’ve discussed in earlier chapters might lead us to suspect) understood that the U.S. is heavily reliant upon imported oil.  The price of any commodity in an efficient marketplace is forward looking, and events in the Middle East led the market to anticipate further trouble and to build that trouble into its prices.  Those were supply side calculations, i.e. calculations about where the oil was coming from.

Any sign of Islamism in Turkey naturally drew the attention of these market, and this attention may have started that dramatic upward move.

But when the market price started heading down, in July 2008, was this also a supply side phenomenon?  Was the market saying either that sources of supply overseas had been successfully secured or that domestic sources were going to take up the slack?  I doubt either versions of that hypothesis.  No, the most reasonable hypothesis is that in July 2008 the oil market collectively saw that the United States, and with it the rest of the industrialized, oil-consuming world, was headed into a deep recession that would undermine the demand for crude oil and any of its derivatives.     

Opalesque Roundtable

This week I received a press release assuring me that, on the authority of Opalesque and a "roundtable of UK based hedge fund experts" that they have convened, "London is still the dominant location for hedge funds in Europe, with the highest concentration of Europe's talent, assets, risk taking, service rpoviders and new launches."

Take THAT Zurich upstarts!

Click here for more, and here for the Roger Miller song it inevitably suggests.

Feldstein as Ruling Caste Sahib

On Monday of this week, the Wall Street Journal published an op-ed piece by Martin Feldstein, who as some of you will remember was chairman of the Council of Economic Advisers in the Reagan administration.   His essay has brought my anarcho-capitalist blood to a boil.

The gist of it is that the US dollar will lose value vis-a-vis other currencies in coming years, and this will be a good thing, because it will help our exporters. 

That line of thought in itself isn't surprising or especially infuriating.  Nor is the first of the reasons that Feldstein gives for this expectation.  He says that various "sovereign wealth funds and other international holders of large dollar balances" will diversify the currencies of their holdings, and this will have the effect of reducing the value of the dollar.  I can't argue with that.

The second reason he gives for this expected fall, though, is what lights a fire under my sanguinary kettle. He says the dollar will fall in value because the Fed will engineer such a fall, and that will be a good thing becauise the Fed can do so without setting off wage-price inflation.

"In the U.S., where only 7% of private workers are unionized, there is now little danger of an inflationary wage-price spiral.  The Fed can therefore counter the current economic weakness by promising to keep short rates at a near-zero level for an extended period of time," Feldstein writes.  Of course, if the Fed keeps rates near zero while the ECB raises its rates, then people will convert their dolars into euros to take advantage of the latter.  Which will help our exporters. Get it?

Why is this offensive?  It asks us to believe that inflation is only a problem if workers are organized and can fight back.  If workers aren't organized (as, in the US private sector, Feldstein rightly notes they aren't) then they can't fight back and demand increases as the value of their wages is being cheapened by ruling-class honchos like Feldstein and his policy making friends.  So, stick it to them!

Ah, it's all justified by creating more market opportunities for our exporters.  Evidently, it won't do much good for the people working for those exporters, because they are among those happily unorganized private sector workers who are going to get screwed.  So Feldstein means that a loss in the value of the dollar, and their wages, will end up helping the stockholders of our exporters.

Sorry, Sahib, but this makes me want to head to the ocean for some salt.