Mother Lode

Taylor Marsh points out that the Wall Street Journal thinks Obama is on to something.

The underreported economic news of the week is that Barack Obama favors a stronger dollar. Even better, he thinks a stronger greenback would help to reduce oil prices.

That at least is what the Democratic Presidential candidate told a town hall forum in Parma, Ohio, on Tuesday. "If we had a strengthening of the dollar, that would help" reduce fuel costs, he said, according to a Reuters dispatch ignored by most of the media.

This ought to be a bigger story. In linking the dollar to oil prices, Mr. Obama is pointedly at odds with the Bush Administration and Federal Reserve, both of which blame high commodity prices on supply and demand, despite falling demand due to slower global growth. Fed officials -- in particular, Vice Chairman Donald Kohn -- have expressly rejected any strong link between the dollar's collapse and the oil price surge since last August.

Even the WSJ isn't buying the Bush line on this. It's absolutely the case that a weak dollar is the major contributor to the massive inflation we're having, and especially the inflation in oil prices. In the last three weeks as the dollar has strengthened, oil has dropped 20%. The greenback shored up a bit because with their own inflation problems, the Eurozone has left their interest rates alone and the Fed has stopped cutting rates here. People flocked to oil as a hedge on the dollar, overinflating the price of oil. Now that pressure is draining somewhat...for now. When the dollar starts floundering again, oil will shoot back up. The Bushies and McSame are simply denying the dollar has anything to do with oil prices when it's the major factor. Weak dollar = inflation. Period.

Not really shocking that the media didn't pick up on it. Economics isn't always explainable in a way that can translate. This is real trouble for McCain any way you slice it. Because it all points to Bush's economic policies or better yet, lack thereof. Now Obama has to keep pounding it home. Economics tied to energy could win the race.

This goes again back to that 48% that think the economy is the issue. These are the people Obama has to reach. Eight years of Bush policies have done this to our economy.

"What's in your wallet?" is this year's "Are you better off than 4 years ago?"