Mixed company

Normally I don't have much use for our collectively clueless superego -- the UN. But occasionally they agree with me, and a recent update to their economic report warns that the current strength in the dollar may be temporary. They also point out that the world is a closed system, and that we can't all stimulate at the same time. What would make more sense is if the US cut back on consumer spending and Japan and China took up the slack by buying things from us. Is the solution really to yet again encourage Americans to go out and do their patriotic duty and shop? From the report:

Continuing, he said the current tendency in macroeconomic policy was not all in the right direction, particularly in the surplus countries where there had been a tightening of monetary and fiscal policies, particularly in Germany and Japan, making it more difficult for the United States to lower its external deficits by export growth. The United States would also need to adopt some contractionary policies to slow down its deficit. Another way to compensate without a major recession in the world economy was for the surplus countries to make more expansionary adjustments in their economies. The more expansionary fiscal policies of some Asian countries seemed to be insufficient to compensate for the possible deflationary effects of an adjustment in the United States.

The report called, therefore, for a coordinated strategy that would think about how to adjust global imbalances while avoiding recessionary tendencies in the global economy, he said. International policy coordination could take place outside of the mediation of the International Monetary Fund, provided that the Fund pushed ahead with its reforms and enhanced representation of the votes and voices of its members.

Obviously the second stanza here is why nobody listens to the UN. I too think that thinking about the problem is a good idea, but they don't publish a news release about that.