The dollar's nearly two month plunge against other currencies should pull up temporarily when news comes out today of all the jobs we've added (223,000 last month!). But most money gurus think the fall will pick up again when that report wears off, and we won't look too good against the Euro and Yen at year's end.

The current economic recovery is one of the cures for this, and since that is fueled by President Bush's tax cuts he's right to try and make them permanent (For the uninformed, the flow chart on that flows this way: tax cuts => private sector vitality => growing profits => higher government tax revenues => lower deficit).

But there's only one thing that will really restore confidence in the dollar: Mr. Bush getting more specifically serious about his pledge to cut the deficit in half by 2009 -- more than just reinforcing past tax cut policy. When foreign governments see him applying his formidable energy and political capital to that task, the dollar will be strong again.


UPDATE: Well, that did not turn out well, did it? The jobs were less than economists expected, and therefore generated no updraft for the dollar. As Ronald Reagan (himself the holder of an economics degree) once said, "If you lined 100 economists up end-to-end, they'd point in every direction."