BUSINESS

Strength Is Weakness

Paul Krugman of Princeton University, winner of the Nobel Prize in Economics for 2008, holds his Nobel lecture at the Aula Ma
Paul Krugman of Princeton University, winner of the Nobel Prize in Economics for 2008, holds his Nobel lecture at the Aula Magna of the Stockholm University, in Stockholm, Monday Dec. 8, 2008. Logotype of Swedish Academy of Sciences is in the background. (AP Photo/Fredrik Persson, Scanpix Sweden) ** SWEDEN OUT **

We’ve been warned over and over that the Federal Reserve, in its effort to improve the economy, is “debasing” the dollar. The archaic word itself tells you a lot about where the people issuing such warnings are coming from. It’s an allusion to the ancient practice of replacing pure gold or silver coins with “debased” coins in which the precious-metal content was adulterated with cheaper stuff. Message to the gold bugs and Ayn Rand disciples who dominate the Republican Party: That’s not how modern money works. Still, the Fed’s critics keep insisting that easy-money policies will lead to a plunging dollar.

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