Good! The U.S. Dollar: Larry Kudlow

From Larry Kudlow at RealClearMarkets.com:
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A strong greenback is a very good thing indeed

Despite the conventional criticisms of the financial commentariat, both theory and evidence argue for a strong, stable, and reliable currency as a crucial channel to prosperity.

Just think of the reverse: If you could devalue your way into prosperity, Argentina would be the center of the world economy...

Wall Street insists that King Dollar is bad.  It is wrong.

This falsehood is a near cousin to the idea that falling energy prices will wreck the economy.  Also wrong.

Energy will slow, but the rest of the economy will benefit.

In fact, the rising dollar, a key factor in the oil-price plunge, provides a double tax cut for the economy.  Both will also promote world recovery.

Over the past year, the dollar has appreciated about 20 percent.

So what happened?

The S&P 500 is up 11 percent and the American economy has actually improved...

And the inflation rate is nil.  The consumer price deflator is flat...

What's happening?

The dollar is up and oil prices are down. The economy, jobs, and stocks are up, and inflation is down.

How could this be bad?

So let me dust off some of my golden oldies: King Dollar is a very good thing.

King Dollar has far-reaching benefits that way offset any temporary small costs.

King Dollar is pro-growth...

In fact, the King Dollar/plunging-energy-price combination has substantially reduced the cost structure of American businesses, making them more competitive.

And at the same time, the buying power of consumer incomes is significantly increased as prices for energy, food, and virtually all goods and services have dropped...

How about some more history?

Between 1982 and 2000, as the dollar increased 178 percent, King Dollar (with lower tax rates and lighter regulation) presided over a stock market gain of 1,099 percent, a jobs increase near 40 million, and 3.5 percent average annual real GDP.

During the recent dollar decline period, from 2001 to 2011, as the dollar fell 25 percent, jobs increased a paltry 2.3 million, real GDP growth averaged less than 2 percent, and the S&P gained a measly 15 percent.

And don't forget the dreadful 1970s: The dollar plunged, the economy suffered through years of stagflation, and the real value of stocks fell significantly...

In any event, as the Fed slows its accommodation, and while pro-growth corporate tax reform is in the air, King Dollar is on the rise.

Stop whining, folks. It's a good thing.
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Link: http://www.realclearmarkets.com/articles/2015/03/14/king_dollar_naysayer_nonsense_101580.html