Walter Schreiner should be as sour as his kraut. Thanks to the dollar's long slide against Europe's currency, the Glendale deli owner is continually forced to raise prices on his imported jams, dumplings and pickled cabbage.
That ought to put a crimp in business. But Schreiner says sales haven't slowed. "People accept higher prices, if it's an item they definitely want," he said.
Doug Youngdahl, who runs a cooperative of 4,000 California almond growers, should be thrilled that the dollar is expected to keep falling. That will make the nuts more competitive in foreign markets.
Instead, he's worried. There's a finite supply of almonds, which means increased demand overseas will boost the price paid by U.S. consumers. That might permanently slake their appetite.
"You can win in Germany and lose in San Francisco," Youngdahl said.
As the almond executive and deli proprietor illustrate in their different ways, the falling dollar might not benefit the economy as much as the Bush administration hopes.
The administration has offered tepid support of a strong dollar but is widely described as quietly urging its fall. Its apparent hope: that an orderly devaluation will stimulate the economy by boosting exports and trimming imports.
But Schreiner, Youngdahl and others on the front lines of importing and exporting say the dollar's influence is often overrated.
The dollar has been declining for several years, with an especially pronounced drop of more than 50% against the euro.
Yet imports are still rising faster than exports. Many things Americans covet, such as computers, TV sets and name-brand clothing, aren't made in the United States anymore.
If the factories have fled, the farms remain. But even America's agricultural exports, which have made a positive contribution to its balance of trade for decades, will be roughly equal to its imports in 2005, thanks in part to a surging appetite for exotic foods, the government recently calculated.
"If we're looking for a weak dollar to be a silver bullet, to fix our deficits and make all of our businesses competitive again, we'll end up no better off than we were when the dollar was strong," said Al Lubrano, president of Technical Materials Inc., a Rhode Island specialty metals manufacturer.
It's possible, of course, that the latest dollar decline simply hasn't lasted long enough to have much effect. It's also possible that it is already making a difference, and that the trade deficit, monstrous as it is, would be even more out of whack without the 3-year-old decline.
