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California State University, Dominguez Hills
University of Wisconsin, Parkside
Created: July 31, 2001
Latest update: July 31, 2001


The Morning's Headlines
Am I responsible for the multinationals' profits? Is the dollar responsible?

Entry by jeanne

Copyright: Jeanne Curran and Susan R. Takata: July 2001. "Fair Use" encouraged.

I just insisted on reading this passage in the New York Times to Arnold over breakfast. Arnold threatened to stop delivery on the New York Times so he could have a peaceful breakfast. The passage:
"a growing number of economists say . . . it is time to consider whether the dollar has risen to a level that could do more harm than good.

. . . the dollar is making exporters noncompetitive in international markets and hurting the bottom lines of multinational corporations when profits earned abroad are translated into dollars. The result is lost jobs and faltering stock prices at a time when the economy seems perilously balanced between recovery and recession."

"More Experts Grow Wary as the Dollar Keeps Rising" New York Times. July 31, 2001.

Now, that says to me, in layman's terms, that profits are limited by what other countries can afford to buy from us, in terms of their currencies' relative worth. It also says that this is bad for multinationals. Doesn't say a thing about how bad it is for you and me. It seems pretty straightforward that if other countries can't buy from us on the world market, that that would hurt the profit of multinational corporations. But how does that hurt us here in America?

The article clarifies that: "lost jobs . . . at a time when the economy seems perilously balanced between recovery and recession."

OK. I get it. The dollar is so strong that other countries can't buy from the multinationals in the global market. And that in turn causes a loss of jobs, apparently for US workers, because that "perilous balance between recovery and recession" is in the US. I'm a sociologist. And I'd like to understand why the multinationals' response to other countries' buying power relative to the US dollar involves the cutting of US jobs, instead of attention to the market strategies themselves and what they mean to the various countries involved and their workers. Trickle down theory never seems to work when it's profits that are trickling, but look at the instantaneous and direct relationship when losses are trickling.

I would like us to discuss the implications of this analysis which seems to present the loss of workers' jobs in the US and the loss of corporate profit as faits accomplis, the inevitable choices for factors over which we have some control. Why is there a complete lack of any discourse on the relative values and needs of the different countries and their workers? How can such decisions as the "best" strength for the dollar be made without inputing the validity claims of workers, both in the US and abroad? Who is involved in this project of deciding on the "best" strength of the dollar? Experts? And what perspective do they represent? And who shall voice the validity claims of different perspectives?

This brings to mind Bedri Baykam's comments on the acceptance of reporting painting prices in US dollars:

"There are two obvious reasons why the prices are marked in American Dollars. One, for easy international reference and comparison. Two,because otherwise, if the prices were in Turkish Liras, nobody world could really understand them and the prices would have to be changed everyweek, because of Turkey1s world famous inflation level. (This note is a shield against cheap attacks associating, stupidly, the use of dollars with lack of nationalism.)"

Dollars may be the best tool for relative understanding of exchange value, but that is irrelevant to issues of values, needs, and beliefs of the people, the real people, of this global market.

Am I responsible for the multinationals' profits? Is the dollar responsible? We need to ponder the sociological aspect of these questions.