Americans want Treasury Secretary Henry Paulson to act to stop the dollar's decline, which has stoked the inflation eroding their household incomes.
A Bloomberg/Los Angeles Times poll released Wednesday found that 76 percent of Americans think the government should do something to halt the falling dollar. Among those with incomes of $100,000 or more, seven in 10 favored aiding the currency, putting pressure on Paulson, who's charged with setting the policy, to match his “strong dollar” rhetoric with action.
The U.S. currency has slumped 41 percent against the euro since 2002 and 13 percent in the past 12 months alone. That has contributed to a surge in energy and commodity prices to record levels, and prompted central banks to reduce their share of foreign exchange reserves in dollars.
“It's not just the economic impact,” said Paul Burt, who heads Westlake Financial Group, an employee benefits consulting firm, in Lake Forest, Ill. “The perception of the decline in the dollar is as important as the decline itself. The dollar needs to be respected in the world, and the government needs to realize that.”
Burt, 47, had few specific prescriptions for the Bush administration beyond trimming the federal budget and U.S. trade deficits.
“I don't think it can be addressed very easily,” he said, referring to halting the dollar's drop.
The nationwide poll of 2,208 adults was conducted May 1-8. The sampling error is plus or minus 3 percentage points. There were 650 respondents who earned at least $100,000.
The survey noted that economists say a weaker dollar both adds to the cost of imported goods and helps American exports.
Five consecutive Treasury secretaries in the Clinton and Bush administrations have maintained the so-called strong-dollar policy since 1995. Bush’s Treasury chiefs have refrained from intervening in markets to buy the currency. The last time the U.S. bought dollars to influence its value was 13 years ago.
Paulson did help strengthen the language used by Group of Seven officials to address the dollar's decline last month. Central bankers and finance ministers from the G-7 denounced “sharp fluctuations in major currencies” that could have “implications for economic and financial stability.”
The statement was aimed at persuading investors to look past the short-term U.S. economic slowdown and financial-market turmoil, a Treasury official said last week.
Though the poll results indicate Americans want stronger action, analysts said it's still unlikely Paulson would abandon his opposition to intervention. That means popular discontent with the currency's decline may deepen.
A new administration will take office in January after elections in November.
— Bloomberg News