That is the topic of my latest Bloomberg column. After talking through some traditional economic reasons, here are some cultural reasons:
In addition, American soft power is far more robust than many criticisms would indicate. English is increasingly entrenched as the global language. The world’s major internet companies are still largely American, with the exception of some Chinese ones. If the internet continues to become more important in our lives, that is another plus for the US — and the dollar.
America also sets a good deal of the global intellectual agenda, for better or worse. The #MeToo movement, Black Lives Matter and wokeism, among other topics, are debated around the world. A US presidential election is akin to a global presidential election, in terms of interest and maybe impact. No other country can say the same.
Perhaps, in view of the larger moral picture, this is all a mixed blessing. But in terms of keeping the dollar as a focal reserve currency, it is a major plus.
There is a reason why the global intellectual chattering classes find it hard to be bullish on America, and so to them a strong dollar is counterintuitive. When one country is so much the center of global attention, it is hard for that country to look good. As my colleague Martin Gurri argues, anything studied and discussed long enough on the internet tends to lead to disillusionment. People focus on the vices more than the virtues, and lose trust.
And so it is with the US. Both abroad and domestically, on both the left and right, there seems to be less faith in the American dream than there was three or four decades ago. In some quarters the US is seen as on the verge of collapse, or at the very least moral and intellectual ruin.
…Most people around the world can recite the defects of America far more easily than they can those of, say, Paraguay.
As a related side note, with both nominal incomes and the dollar up, now is a remarkably inexpensive time for Americans to travel abroad.