Then, last week, President Trump left his trial in Manhattan to visit a bodega in Washington Heights, a mostly black and immigrant community on the Upper West Side of Manhattan and received a hero’s welcome from the working people there.

Whether the Chick-fil-A event was staged or not is open to debate. What is undeniable, though, is that polling shows Donald Trump has upended much of the black and Hispanic voting support Democrats have enjoyed since at least Lyndon Johnson’s “Great Society” and, at least in some instances, back to FDR’s New Deal.

A Wall Street Journal poll showed that President Trump’s support among black men in swing states had moved to 30 percent earlier this month compared to just 11 percent of black men nationally in 2020. Among black women, those same percentages went from 6 percent in 2020 to 11 percent in April.

‘It’s the Economy, Stupid!’

Political pundits and editorial pages all seem flummoxed by President Joe Biden’s erosion of support among the traditional Democrat coalition.

But no one seems more upset by the erosion of black support than Democrat political strategist James Carville, “the Ragin’ Cajun,” who engineered Bill Clinton’s 1988 victory over incumbent George H.W. Bush. That’s ironic, because it was Mr. Carville who added the memorable phrase “It’s the economy, stupid!” to the American political lexicon when he pinpointed President Bush’s greatest vulnerability 36 years ago.

Between January 2021, when President Biden took his oath of office, up to March of this year, average rents have increased by 20 percent. By comparison, residential rents increased just 12 percent during President Trump’s entire term. The increased costs hit blacks and Hispanics disproportionately because of the vast disparity in home ownership, as illustrated below.

Blacks and Hispanic workers also disproportionately occupy positions in production and transportation/material moving jobs at higher rates (17.8 percent and 16.7 percent, respectively) than whites (12.1 percent). But those are the jobs most vulnerable to being taken by the influx of the purported asylum seekers who typically work for less and are less likely to join unions or file complaints with the authorities against their employer. The asylum seekers have exploded since President Biden lifted U.S. border restrictions.

As Well as Crime …

Blacks and Hispanics tend to be disproportionately affected as victims of recidivist criminals let go by criminal justice initiatives championed by leftist Democrat “progressives” in so-called “blue” states. As shown in the chart above, black victims of crime actually decreased during the Trump presidency. (The chart is from a study that has not been updated for later years.)

By the same token, black-owned businesses were among the many businesses looted and destroyed by “progressive” George Floyd rioters in 2020.

… and Education

President Trump made permanent a commitment of $255 million in annual funding for historically black colleges and universities, and he increased funding for the Federal Pell Grant program by signing the FUTURE Act.

Within the states, Republican legislators and governors have championed school choice and a “back-to-basics” approach to K-12 that even Democrats acknowledge. Jorge Elorza, the CEO of Democrats for Education Reform and its affiliate Education Reform Now, a think tank, said: ”We’ve lost our advantage on education because I think that we’ve failed to fully acknowledge that choice resonates deeply with families and with voters.”

Meanwhile, Education Week, the Left-leaning magazine for K-12 teachers, summarized President Biden’s policies as follows:

“[He] passed stricter rules for charter schools seeking federal grant funding; awarded $1 billion to boost school safety and students’ mental health; and proposed an overhaul of Title IX that would give LGBTQ+ students explicit protection under the landmark sex discrimination law and bar outright bans on transgender youth who want to join athletic teams that align with their gender identity.”

Summary

Black and Hispanic voters are moving toward President Trump for a simple reason: their pocketbook and their well-being. The viewpoints of mainstream media pundits—college educated, overwhelmingly white, and mostly liberal—have long maintained a soft bigotry of racial expectations without understanding much of the economy of people who work in blue-, pink-, and green-collar jobs. The pundits don’t understand that blacks and Hispanics, like the rest of the country, have experienced a near 20 percent cumulative erosion in the purchasing power of their dollar and rising crime. They see K-12 education policies that deny school choice and that serve teachers’ unions, special interests, and Democrat party gender identity dogma far more than children and parents.

Black and Hispanic voters have every reason to depart from their traditional voting patterns.

It’s common sense.

It’s telling that during World War II, neither the United States nor the United Kingdom—when the British pound sterling was the world’s reserve currency—ever considered weaponizing their currencies against Germany, Japan, or Italy. But wiser heads were running the allied nations then.

But President Joe Biden and Secretary of State Antony Blinken, along with Treasury Secretary Janet Yellen, did exactly that. And they lost.  In the immediate aftermath of the Russian invasion, the ruble fell, as expected. But then for much of last year, the ruble actually gained strength relative to the dollar—stronger than it had been before the invasion! 

It has only declined again since the winter, after Russian battlefield setbacks in the Donbas and the mutiny of the Russian mercenary Wagner Group.

Far worse, though, is that Biden’s reckless foreign policy failure has damaged—perhaps irrevocably—the status of the U.S. dollar as the world’s reserve currency.

Hitting the USA Like a Ton of BRICS

In August, the BRICS countries—Brazil, Russia, India, China, and South Africa—will meet in Johannesburg, South Africa, and “de-dollarizing” the global economy is on the summit agenda. While nobody expects the dollar to be displaced anytime soon, the rise of digital currencies—and particularly CBDCs, central bank digital currencies—will make it much easier to bypass U.S. Treasury and SWIFT (Society for Worldwide Interbank Financial Telecommunication sanctions, the incumbent means of transferring funds globally) sanctions. At least one study says this could be achieved, given CBDCs and other blockchain alternatives:

“Our analysis suggests that the use of new financial technologies (e.g., blockchain, digital currencies, and cloud-based financial infrastructure) can propel the formation of a revisionist de-dollarization coalition and strengthen the credibility of collective mobilization. Such a coalition could lead to the creation of new market instruments and infrastructure that exclude the incumbent power [i.e., the United States], serve as global public goods with a broader buy-in, and divert global financial traffic away from the incumbent system.”

‘Two Ways: Gradually, Then Suddenly’

Ernest Hemingway’s quote about how one goes bankrupt—“gradually, then suddenly”—seems apt given the rapidity with which de-dollarization has been occurring since the Biden administration imposed its dollar sanctions on Russia.

While there was talk of de-dollarizing for years, geopolitical and U.S. domestic factors over the last nine months have exacerbated it.

First, obviously, sanctioning Russia last year using the dollar and SWIFT has led countries that are less closely aligned to the United States to consider alternatives to the dollar. Then, in October 2022, Brazil’s left-wing president, Luiz Inácio Lula da Silva, who has sought closer ties to China, won a narrow victory (by less than 2 percentage points) over conservative incumbent president Jair Messias Bolsonaro. Then, in  November 2022, U.S. elections delivered a Congress narrowly divided between the two major parties. Finally, in January, the failure of the U.S. House of Representatives to promptly elect a House Speaker showed how divided America is not only between the two major parties but even within the majority House Republican party.

Given the circumstances, a whole wave of transactions were announced in the first half of 2023 that sought to de-dollarize several bilateral and regional trading arrangements that have traditionally been conducted in dollars:

1. In January, Saudi Arabia said it would consider accepting Chinese yuan for oil sales, although the Saudis will likely rapidly convert the yuan receipts to gold, euros, or dollars.
2. In early February, China and Brazil agreed to a clearing agreement to use Chinese yuan in cross-border transactions. By the end of March, the yuan had surpassed the euro as Brazil’s second-leading currency reserve, after the U.S. dollar.
3. At the end of March, China and France completed their first liquefied natural gas (LNG) using yuan.
4. Around the same time, Russia increased it holdings of Chinese yuan as a reserve currency.
5. Just days earlier, Saudi Aramco inked a deal to build a refinery for 83.7 billion Chinese yuan ($12.2 billion) in  Liaoning province, China.
6. In April, India and Malaysia agreed to conduct trade in Indian rupees.
7. In May, South Korea and Indonesia agreed to undertake trade in their respective currencies, cutting out the dollar.
8. Also in May, the Association of Southeast Asian Nations (ASEAN ) agreed to de-dollarize commerce among themselves and use their local currencies.
9. In June, Pakistan paid Russia for discounted oil in yuan.

To Lead the World, Lead the World

It’s unlikely China, local and bilateral agreements, or even a new currency will supersede the dollar as the world’s reserve currency anytime soon. Global reserves are denominated overwhelmingly in dollars for the time being. That’s because our markets are far larger and better regulated than virtually anywhere else in the world. The dollar is seen as “safe,” relative to other currencies.

Moreover, our per capita GDP is far greater than most any other major economy, although China’s economy is expected to eclipse the United States in pure dollar terms because of its larger population.

But the United States cannot just rest on its laurels, or other countries will continue to lose confidence in our currency. That would have a tremendously deleterious effect on U.S. trade, prestige, and global leadership. It would also undermine what former French president Valery Giscard d’Estaing once called our “exorbitant privilege”—that is, our means of obtaining an interest-free loan from other countries that hold our dollars as reserves.

Summary

We have been reckless in our money printing and deficit spending and our leaders have also failed to create a single, unified set of budgetary priorities to which both parties can more readily agree. All that makes the dollar, over the long term, a riskier bet for other nations to hold as a reserve. So “de-dollarizing” their transactions can serve their interests.

Cartoonist Walt Kelly, creator of the long-running “Pogo” comic strip, wrote, “We have met the enemy, and he is us.” Kelly was talking about climate risk on the first Earth Day. But his comments are equally applicable to the U.S. fiscal and monetary situation.  Our deep political divisions, our chronic inability to live within our means, and our reckless tendencies to write checks and make commitments overseas that we cannot cover and cannot meet are the biggest enemy of the dollar’s fiscal integrity and its utility as the world’s reserve currency.

In January, I wrote here about the kind of tough choices the United States needs to make to ease our deficits and help restore the credibility of the dollar, both for our own nation’s betterment and to ensure the dollar’s continuing credibility among other nations as the world’s reserve currency.

But Americans need to do more than that.

Just as we have sworn off the use of poison gas and biological weapons on the battlefield, we must also forever foreswear “weaponizing” the dollar against our enemies and our adversaries. We can certainly embargo critical materials, as we did with oil with Japan when it invaded Indochina in 1941. We can certainly freeze U.S.-based foreign assets of offending nations, as we did with Iran after it seized the U.S. embassy in Tehran in 1979. However, the “unprecedented and expansive” currency and banking sanctions the Biden administration proudly imposed on Russia over Ukraine created a greater threat to the world’s confidence in the dollar as a reliable reserve currency than an impediment to the Russian war machine.

We should never repeat doing so again, absent total war with an enemy.

Article cross-posted from our premium news partners at The Epoch Times.