The falling dollar has finally brought down another Treasury Secretary. First it was Paul O’Neil, who was ousted because his inconveniently candid remarks, thought to have contributed to the dollar’s decline, seemed to run counter to the Bush Administration’s supposed “strong dollar policy.” His replacement, John Snow was brought in to pledge his support to the mythical policy and to talk up the sagging buck. No such luck, and back to the bull pen we go. One potential candidate is former Texas Senator Phil Gramm. Perhaps the administration feels the “strong dollar policy” would be more effective if delivered with a southern drawl. If Mr. Gramm does in fact get the nod, currency traders will likely dismiss his remarks as being “all hat, no cattle.???

The reality is that when the message is so blatantly hollow and contradictory, the choice of messenger hardly matters. By ousting Snow, the administration hopes to tear down a straw man, disguised as a snowman, just in time for Christmas. This type of form over substance maneuver is one of the few options available to defend an all-form-no-substance policy. It remains to be seen just how big a diversion this sleight of hand creates, or how much time it buys the administration before it reaches into its frayed hat for yet another rabbit.