If you think the US dollar looks wobbly now, just wait until Barack Obama becomes president. At least that’s how billionaire investor Carl Icahn envisions a United States run by the Democratic front-runner. Icahn says an Obama presidency would bring higher interest rates and a loss of international confidence in the dollar.

“I personally think he would be a terrible president,” Icahn said at an investors’ conference in New York last week. Obama would probably go on a “huge spending spree” that “the country can’t afford right now.”

Coupled with the higher tax rates that the Illinois senator has already endorsed, “you would have a loss of confidence in the dollar,” leading to accelerating inflation and “much higher interest rates,” Icahn said.

Now let’s return to planet Earth, where confidence in the dollar could scarcely be lower if the Marx Brothers were in charge. Between rampant government spending, the disastrous invasion of Iraq, the subprime-loan debacle and unsustainable environmental policies, it’s unclear why anyone would have great trust in the world’s reserve currency.

Are Obama’s proposed policies really the recipe for disaster Icahn suggests?

“It would be devastating,” Icahn said, adding that, “I don’t think Obama really understands economics.”

Unsustainable policies

What Icahn ignores is the extent to which many of the investors who control the dollar’s value lack confidence in the administration of President George W. Bush. Traveling around Asia and Europe, one hears much carping about US policies that seem as short-sighted as they do unsustainable.

While Treasury Secretary Henry Paulson maintains the illusion that the United States favors a strong dollar, he seems unperturbed by its decline. Both the euro and yen are up more than 17 percent against the dollar in the last 12 months. Bush also has passed the proverbial buck to the Federal Reserve to stabilize a slowing economy. The lowest short-term interest rates since late 2004 are undermining the dollar.

Obama is currently leading Sen. Hillary Clinton in the race for the Democratic presidential nomination. Could either do any worse than the current White House occupant when it comes to protecting the value of the dollar? It’s doubtful.

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The action in Bali over the weekend wasn’t at the Indonesian island’s famed beaches, swanky resorts or teeming nightclubs. It was at the gas stations.

Gas lines in the Nusa Dua region backed up into streets, halting traffic. Scattered protesters carried placards reading “Save Our Subsidies.” The reference was to the government’s May 24 increase in fuel prices by 33 percent, the first in almost three years.

The step was aimed at cutting subsidy costs and luring investors back to the nation’s bonds and currency. While necessary from a fiscal standpoint, it was a risky move by President Susilo Bambang Yudhoyono.

It was the increasing cost of living that ended Suharto’s 32-year dictatorship in Indonesia in 1998 amid violent protests. Student demonstrations over the weekend prompted the government to deploy about 300,000 policemen nationwide to guard shopping malls, gas stations and public buildings.

Rising fuel and food prices put the fourth-most-populous nation on the frontlines of a dangerous trend in Asia: poverty. About 600 million Asians survive on less than $1 a day. Accelerating inflation also will hurt families making $2, $3 or even $20 a day.

Any sudden return of social instability will spook investors betting on Asia’s rapid growth. It also will test Yudhoyono’s leadership as rarely before. If he fails, the almost 12-percent drop in the Jakarta Composite Index this year will accelerate, perhaps scaring away the investment that the country needs.

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What’s $3.2 billion between friends? Ask investors in Japanese stocks. That’s how much that friendly ties between companies cost shareholders last fiscal year.

The loss, compiled by Nomura Holdings Inc., says much about what’s wrong with Japan six years after it began recovering from the banking crises of the 1990s and early 2000s. Executives in Asia’s biggest economy are still more concerned about protecting their turf than shareholder value.

Cross-shareholdings in Japan go back to the 19th century. In 2008 one would have thought the practice had long ago been shelved. Yet, it has made a comeback in recent years as companies shored up defenses against hostile takeovers. It’s part of a bigger problem.

‘Most closed’

“Foreign direct investment is extremely important,” Haruo Shimada, head of a government advisory group, said on May 19. “Japan needs to work harder as global competition is becoming intense.”

In April European Union Trade Commissioner Peter Mandelson called Japan the developed world’s “most closed” market. For executives, it’s all about control. Friendly companies investing in each other think they are doing what’s best for Japan Inc. Things may not turn out as planned.

“The irony,” said Kengo Nishiyama, a strategist at Nomura in Tokyo, “is that companies do cross-holdings to prevent takeovers, but as that can cause their stock prices to fall, it may make a buyout attempt more likely.”

The dictionary defines “tuition” as “a sum of money paid for instruction [such as in a high school, university, or college].” Its plural form is “tuitions.”

Hillary Clinton said she would stay in the Democratic Party’s presidential primaries all the way to the end. There’s nothing wrong with that. It ain’t over till it’s over, and her supporters expect her to put up a good fight. Unfortunately, she’s fighting dirty in order to win.

If you think the US dollar looks wobbly now, just wait until Barack Obama becomes president. At least that’s how billionaire investor Carl Icahn envisions a United States run by the Democratic front-runner. Icahn says an Obama presidency would bring higher interest rates and a loss of international confidence in the dollar.

Sway: The best way to save on fuel

Do you want to save on fuel? Students at the University of the Philippines (UP) in Diliman, with the support of the UP administration, recently initiated a program that is sure to help student-motorists (and their parents) lower their fuel costs, as well as save on parking fees. Even those commuting can benefit from the program, as it can also mitigate rising transportation fares.

The Way Forward: The lesson of Puerto Princesa

Over the weekend, I made a three-day visit to Puerto Princesa City—my very first to the island of Palawan. Having traveled to some of our most prized tourism sites, I must say I came away from Puerto very impressed and also very thoughtful.

Market Files: Pangasinan’s economy hard hit

While the headlines, for the past 10 days, continued to center on the searing “power” controversy that is the Manila Electric Co. (Meralco), much of Pangasinan is still without electricity, and residents in that rice-producing province  continue to grapple with the effects of Typhoon Cosme, such as rain-drenched—and possibly spoiled—rice. And the unkindest cut of all: the seeming lack of government presence.