Kirkus Star


Email this review


The dollar will not be almighty ever again; but it can be sound."" So concludes Martin Mayer in this clear, pointed, engagingly subjective review of global economics, 1957-68, and in particular of the dollar's descent during the Administrations involved. Unlike Robert Solomon, whose The IMS: An Insider's View (1977) provides a soberly instructive briefing on the international monetary system, Mayer delights in airing his own frequently uncharitable opinions of U.S. officialdom. For openers, he maintains that Eisenhower's ""conservatives,"" in an effort to reduce incipient balance-of-payments deficits resulting from post-WW II U.S. largesse, were largely content to change the terms of grants and expenditures; their ""narrow measures,"" Mayer contends, ""merely shook the world's confidence in the dollar, beginning a retreat from American dominance that still has not found a defensible redoubt."" Then, he charges, JFK's ""improvisers"" tried to stanch a hemmorhage of dollars with a Band-Aid--an interest-equalization tax on purchases of foreign securities. Although Mayer lauds LBJ's ""warriors"" for their role in the creation of so-called paper gold (Special Drawing Rights of the International Monetary Fund), he also sees them as losers because SDRs became the visible evidence of America's new status as a debtor rather than creditor nation. Similarly, Nixon's ""nationalists"" are knocked for losing control of the dollar ""in terms both of the exchange values and of the quantities available."" Ford's ""ideologues,"" finally, were around only long enough to exhibit a destructive preference for shadow over substance, while Carter's ""incompetents"" can't seem to explain, even to willing allies, the reasons for ineffectual shifts of policy. Mayer does better at explaining the reasons for the global glut of dollars that depresses their exchange value, infuriates international creditors, and contributes to high inflation rates, domestic and worldwide, than he does in advancing possible solutions to the problem. Nonetheless, he does advocate an IMS with multiple reserve currencies (yen, francs, riyals, or whatever as well as dollars) on the logical grounds that modern telecommunications give stateless greenbacks a prospectively disastrous velocity in international money markets beyond the effective reach of U.S. monetary authorities. He also emerges as something of a scold--suggesting, for example, that the federal bureaucracy employ a few more specialists who ""know more from markets than the fine points of monetary theory."" Overall, though, his treatment of a complex cause for widespread concern is sounder than today's dollar and within general reach.

Pub Date: March 3rd, 1980
Publisher: Times Books