Today, the editorial pages are full of discussion over the falling value of the dollar and what to do about it.

As could be expected, the fundamentalist preacher of a rigid, dogmatic Keynesianism, Paul Krugman, has his say in the New York Times this morning (see "Misguided Monetary Mentalities": http://www.nytimes.com/2009/10/12/opinion/12krugman.html?_r=1). As is typical of someone that is locked into a reductionist view of the world, Krugman spends as much time calling people names as he does putting forth his dogma.

In the Financial Times we find two other points of view presented, views that are backed up by experience and historical support.

The first comment is by Roger Altman, who was in the Treasury Department during the Carter administration and was deputy US Treasury secretary in the Clinton administration. He also is an investment banker and private equity investor. Altman was present when the international investment community moved against the dollar in the latter half of the 1970s. He was also present in the 1990s when the Clinton administration had to calm international markets that had battered the dollar from 1985 until attention was given to its falling value. He has seen, at first hand, how international sentiment can respond to fiscal irresponsibility and monetary ease to force a country to adjust its economic policies. And, as he says, it is not a pretty sight.

In his comments in the Financial Times, Altman recognizes that there are still short term economic ills that need attending to (see "How To Avoid Greenback Grief", http://www.ft.com/cms/s/0/8bdc802e-b675-11de-8a28-00144feab49a.html). But, he argues, "the dismal deficit outlook poses a huge longer-term threat. Indeed, it is just a matter of time before global financial markets reject this fiscal trajectory."

Washington, right now, is in "a nearly impossible fiscal position." Amen, to this.

And the problem is exacerbated because no one believes what America's leaders are saying. In the other commentary in the Financial Times by Wolfgang Münchau (see "The Case for a Weaker Dollar": http://www.ft.com/cms/s/0/7a6b599c-b679-11de-8a28-00144feab49a.html) the author states "I do not buy the strong-dollar pledges by Tim Geithner, Treasury secretary, and Larry Summers, director of the National Economic Council. They have to say that. It is the official policy line. The bond markets would go crazy otherwise"

But, Altman is right. There are two problems, the short run and the longer run. In the short run, attention must be paid to the weaknesses in the economy.