The NYT has an article that seems to express surprise at the fact that the fall in the value of the dollar has helped to lower the size of the trade deficit. It notes that the fall in the value of dollar has helped to boost exports, commenting at one point: "Rather than hurting many American companies, a weak dollar is actually providing a strong lift. The exchange rate difference stokes profits from earnings generated abroad, countering the adverse effects on importers who must pay more and Americans traveling abroad with a less valuable currency in their wallets. 'The old notion that if the dollar’s bad, corporate profits have to go down is no longer correct,' said Howard Silverblatt, a senior analyst at Standard & Poor’s." Of course the fall in the dollar is helping the trade deficit. It is hard to believe that any economist would argue otherwise. Conversely, the run-up in the dollar in the late nineties is the reason that our trade deficit exploded. This is all very basic economics. It's not clear what the news in this article is.
--Dean Baker
