Quote of the Day: Currency Devaluation is a Subsidy to Cronies

currency devaluation is merely a transfer of wealth from all of a nation's citizens to politically favored industries, usually export industries. It is no different from giving a subsidy to any domestic producer. The subsidy is paid by all the citizens of the subsidizing country, not by the foreigners who buy the subsidized good. They get a bargain. 

Furthermore, devaluation does not make a nation more competitive. It does nothing to spur increased domestic saving or external capital investment, which lead to the increased application of capital per capita, the only sources of increased worker productivity and the only sources of increased real wages. Devaluation does not reveal the onerous, wealth-destroying effect of economic regulation, not does it reveal the true costs of the welfare state, which relies on high taxes to fund present consumption at the expense of future prosperity. What the state spends cannot be saved and invested, no matter how cheap the currency. 

This is from Patrick Barron at the Mises Institute who talks about bad economic prescriptions, by a recently awarded expert, on the European crisis. 

It is important to point out that even the major proponents or advocates of inflationism-devaluation recognize the baneful effects from such policies. 

The inflationist advocacy represents more about heuristics and oversimpflication of reality which has been masked as pretentious economic analysis (through the fixation to aggregate based statistical models). 

Nonetheless, the mainstream who subscribe to such snake oil nostrums have  been blinded or brainwashed by political ideology (where they see social solutions as only coming from the "moral authority" of government through the quackery of pseudo-science models) or have been duped by the propaganda or machinations from vested interest groups or wishes to attain social desirability through conformity with popular "feel good" talking points, or have been afflicted by sheer ignorance.

It takes sheer common sense and real world observations to debunk such fallacies, which ironically, in the world of politics have been uncommon.