America -- like every other country -- has had its inept economic managers. No political party has a monopoly of economic incompetence. But without a doubt Obama and his crew are rapidly shaping up to be the biggest bunch of incompetent economic managers since the 1930s, irrespective of what yelping leftwing historians assert. And I do include Bernanke, Geithner and the rest of those economic geniuses. (The idea that Bernanke is some kind of expert on the Great Depression is an absolute joke.)

Obama's leftwing obsession with permanently expanding the size of government, now matter how much it damages living standards, is deepening and prolonging this recession. In fact, given the official unemployment rate of 10.2 per cent (it translates into 17 to 20 per cent if we include short-time working, discouraged workers and part-time workers who want a full time job), which looks to rise even further, I think it's safe to say that the US has now moved from being in recession to being in a depression.

What is the Obama's solution? More regulations and more taxation. What a genius. The capital gains tax is set to leap by 69 per cent, all the Bush tax cuts -- and I do mean all -- are going to be repealed, massive spending programs are in the pipeline, the deficit is exploding along with debt, and the most irresponsible and financially reckless Congress in American history is trying to dream up new ways to extract even more money from the hapless public. Believe you me, Americans have seen nothing yet. (Bernie Madoff must be wondering why his fellow Democrats are not sharing his cell block with him.) The costs of this economic lunacy -- if left unchecked -- will be a permanently sluggish economy, if not outright stagnation, plus a higher rate of lasting unemployment

Americans will not be the only ones to suffer. The intellectually scintillating Bernanke, Geithner and their galere of economic hanger-ons have hit on the brilliant scheme of trying to export America's unemployment by depreciating the dollar. (In the 1920s and '30s this was called "exchange dumping".) If you print enough dollars you will eventually force down the exchange rate.

Foreigners only have to look at Obama's spending to realize that there is no way taxation can pay for it. Moreover, the sheer scale of the Democrats' profligacy rules out sufficient borrowing. This leaves only the printing press. However, this raises a problems for those pesky foreigners. If they allow the dollar to slide then it will hit their export industries. Fewer exports means more unemployment. This they would not like. They might decide that depreciating the US dollar was a sneaky way of raising tariffs -- and they would be right. (Americans shouldn't get the daft idea that a cheaper dollar won't affect their standard of living.) This would explain why Asian countries have been buying dollars. It's an attempt to protect their exports. But they know Ol' Bernanke can churn out them dollars faster than they can buy 'em. Hello, suckers.

Another problem is that some Asian countries have unofficially pegged their currencies to the dollar. What this means is that for every dollar that enters the country the central bank must print the equivalent in the local currency. Bernanke's monetary policy has led foreigners to borrow US dollars at a ludicrously low interest rate. They then use these dollars to speculate at home. Liquidity (a fancy name for the money supply) expands, fueling speculation in shares and real estate. Brilliant. Unable to spark a boom at home Bernanke and his fell economic mountebanks help trigger one in Asia.

Nevertheless, these foreigners have nothing to worry about. Honest Tim Geithner -- the man who cheated on his taxes and was then given a clean slate -- assured them that he really, really, really does believe in a "strong dollar" and even "market oriented exchange rates"*. So their concerns about the incredible shrinking dollar are totally misplaced because anybody who is anybody just knows Honest Tim would never tell a fib.

"Market oriented exchange rates" is a weasel phrase when uttered by someone like Geithner. It says nothing about whether Bernanke will continue to debase the dollar, only that it will be sold at the going rate, which will get lower and lower as the printing presses work overtime. Bernanke and Geithner are using inflation to raise US exports and curb imports. The result will be to further distort the pattern of international trade and perhaps even spark a trade war. And for what? To try and save the Democrats' political skins and their destructive economic policies.

A country can no more devalue its way to prosperity then it can spend its way into solvency. The combined effect of Obama's economic policies will be lower real wages, which means a lower standard of living for Amreicans. But look on the bright side: Buffett will still be fabulously rich as will be all those super rich Hollywood Democrats. For them the American Dream will continue

*The question of exchange rates is not a straightforward one. See Will the exchange rate kill manufacturing