http://www.forbes.com/columnists/forbes/2008/0128/017.html Bush's Big Boo-Boo Steve Forbes The dumbest, most destructive economic policy of the Bush Administration has been its weak-dollar position--letting the dollar slide in value against the euro, the yen, the pound and gold. The repeatedly disproved theory in operation here is that cheapening your currency will improve your trade balance and that an improved trade balance makes your economy stronger and wealthier. Put aside the meaninglessness of the trade balance as a measure of economic health or sickness--the U.S., after all, has had a trade deficit with the rest of the world for 350 years out of the last 400. A weak-currency policy has disastrous economic and political consequences--most immediately, our tumultuous equity markets. Look at what's happened since the Federal Reserve began creating excess money in 2004. The already booming housing market was, in effect, shot up with steroids as lending standards were lowered to put all the excess liquidity to work. We are still feeling the effects of the subprime mortgage crisis, as banks tighten up on lending (they don't even want to lend to each other, which tells you something), which in turn has sharply slowed the economy. Banks themselves engaged in a binge of creating off-balance-sheet structures, most notably with so-called SIVs (structured investment vehicles). The idea was that you could generate juicy fees packaging subprime mortgages and could finance them with commercial paper and not have to set capital aside. Voilà! Returns on capital blossomed! Now many of these institutions are scrambling for infusions of capital from Asia and the Middle East, as circumstances force them to put these bizarre, loss-laden vehicles back on their balance sheets. The banks' behavior is inexcusable. But, as with bartenders who continue to ply drunken patrons with drinks, the Federal Reserve bears a heavy responsibility for creating loads of excess capital in the first place and the Bush White House for winking and nodding while the dollar was being debased. The geopolitical fallout from the weak dollar is all around us: Terrorist Iran gets massive windfalls for its oil; ditto Venezuela under its wounded but still reigning lunatic, Hugo Chávez; Russia becomes more truculently anti-American with each uptick in the price of oil; so-called sovereign funds buy up U.S. corporate assets at fire-sale prices; China, which outsourced its monetary policy to the Fed in the mid-1990s when it tied the yuan to the greenback, now faces increasingly destabilizing inflation; and oil-lacking developing countries, many of them fledgling democracies, are being hit with potentially destabilizing economic squeezes. The prices of oil and other commodities are surging primarily because of the weak dollar. Between mid-2003 and the beginning of 2008 oil has zoomed from $25 a barrel to almost $100. Real demand in oil didn't suddenly massively increase to justify a nearly fourfold rise in price. The best indicator of inflation is gold. In this same time period the yellow metal has zoomed from around $350 an ounce to more than $800 an ounce. More than $50 of the per-barrel price of oil today comes from inflation and the speculation that inflation induces. President Bush should promptly reverse the government's destructive course by boldly declaring that the U.S. will now actively support the integrity of its currency ( see Current Events). Bush aides might say that the President is no economist and must therefore rely on advice from the Treasury Department and the Federal Reserve, even if it is manifestly misguided. John Kennedy was no economist either, yet he didn't hesitate to declare that the dollar should be as good as gold. Bill Clinton was no economist, but he understood that a weak dollar and the ensuing inflation it begets destroyed Jimmy Carter's (nyse: CRI - news - people ) presidency. Ronald Reagan actually did study economics, and he was willing to pay a severe but, thankfully, short-term political price to break the inflation fever gripping the country in the early 1980s. If President Bush is too befuddled or fearful to act now to shore up the dollar, the markets will force him to do so fairly soon. It would be better to act ahead of events than to be seen responding to them defensively and belatedly. Poisoned Bulbs The idiocies emanating from congress have made its popularity ratings even worse than those of the current White House occupant. The latest example: Our national legislators are banning traditional incandescent light bulbs, which were invented by Thomas Edison more than 120 years ago. By 2014 these bulbs will be illegal. Instead, we'll be coerced into paying six to eight times the price of incandescents for supposedly more "efficient" compact fluorescent light bulbs (CFLs) that last longer and consume less electricity. Well, if CFLs are so great, why do we need a law to force us to buy 'em? Why can't politicians set aside their Nanny Bloombergesque dispositions and let the markets work? But there's a more immediate problem: Each CFL bulb contains about 5 milligrams of mercury, a highly toxic and indestructible substance. It's like bulbs with asbestos. Billions of these bulbs will be everywhere. If one drops and breaks, you've got a problem, especially if you have small kids or pets roaming around. Here's a harbinger of the crisis to come from an item in Investor's Business Daily: "According to an article in the Apr. 12, 2007 issue of the Ellsworth [Me.] American, [Brandy] Bridges was installing one in her daughter's bedroom when it dropped on the floor and shattered. Luckily, Brandy knew CFLs contained mercury and called the store where she bought hers for advice. She was advised to call the Poison Control hotline, which in turn directed her to the Maine Department of Environmental Protection. DEP showed up and found that mercury levels in her daughter's room were six times the state's 'safe' level. The DEP specialist gave her a 'low-ball' estimate of $2,000 to clean up the room." Think about the challenge of disposing of all this mercury when the bulbs ultimately burn out. Too bad Edison isn't around to invent a suitable punishment for the dim bulbs who passed this legislation. Safer Skies One of the few pieces of positive news concerning our crisis-plagued airline industry is that--many years late--Washington has finally raised the mandatory retirement age for commercial pilots to 65 from 60. Virtually every other nation in the world beat us to the punch on this one. In fact, if Congress hadn't enacted special legislation, which the President signed last month, the retirement age would have remained at 60 for the foreseeable future. Incredibly, the Federal Aviation Administration--a dysfunctional government entity--said it would take up to two years to rewrite the retirement regulations it had arbitrarily invoked back in the late 1950s. This move is right, morally and practically. Pilots are in short supply, and to keep forcing these experienced hands to retire was harmfully capricious. Some 3,000 pilots reach the age of 60 each year; more than half are now expected to stay on, as long as they continue to pass their frequent physicals and regular piloting exams. There is, however, one more thing Congress could do on this front: work out a deal for those pilots who turned 60 before this legislation was enacted and are not yet 65. As things stand, they cannot reclaim their jobs or seniority if they want to go back to work. Under current rules these individuals would be treated as spanking-new hires instead of the seasoned veterans they are. It's no surprise that a number of them are signing up for foreign airlines instead of domestic ones. Why not let them work for our carriers, with their seniority intact, as long as they pass those vital exams? Unnerving But Necessary AfterShock: What to Do When the Doctor Gives You--or Someone You Love--a Devastating Diagnosis--by Jessie Gruman, Ph.D. (Walker & Co., $16.95). Here's a book you are not going to want to read but can't live without. You, a relative or a close friend is going to need it. Amazingly, even though tens of millions of us will be given a ghastly medical diagnosis during our lifetimes--cancer, heart disease, MS, among others--there's very little comprehensive, easy-to-access information on what to do once we're given that bad news. Between the ages of 20 and 50 Gruman received such grim news four times--three for various forms of cancer and one for a serious heart ailment. Each time she was thrown into emotional turmoil, feeling as if she'd been "drop-kicked into a foreign country" where the occupants spoke a strange language. Gruman sensibly and courageously decided to put together this book, based on her experiences and those of more than 250 interviewees who had been given devastating diagnoses or were health care professionals. Gruman presents a host of potential situations. She carefully walks you through the steps you should take, particularly those during the first 48 hours, when you are reeling. Key among them is not to panic and not to rush into making decisions about treatment. If a quick decision is really required, you'll most likely be hospitalized. Otherwise, you have time to get the essential second opinion and to learn about the adequacy of your hospital and credibility of your doctor or doctors. For most illnesses there is no single set treatment. We also must recognize that not all physicians and medical institutions are up to speed on all serious illnesses. Even if you're diagnosed with something that's currently incurable, there are things that can be done, including steps to reduce discomfort. Each of us is different. Some will want to involve family and friends; others may want, for the most part, to get their treatments alone. Especially helpful are the book's appendixes on everything from finding the right doctors and hospitals to handling your finances.