Edward Lotterman

President Donald Trump has backed off from his threats against Fed Chair Jerome Powell.

He has softened his tone on trade with China, alternately suggesting he would be “flexible” and “very nice” and yet also repeating threats. China has not yet budged from its harsh first responses.

All this appears to be a reaction to changes in financial markets. Prices of stocks and bonds, along with long-term interest rates, have oscillated up and down in response to the daily verbal sallies from the White House.

Prices of major foreign currencies have also varied — almost entirely up in terms of their value of the dollar. Let’s consider the impact of this.

It takes 9.1% more dollars to buy a euro than it did on Trump’s Inauguration Day; 7.8% more to buy a British pound, 9.2% more for a Japanese yen. However, the Canadian dollar is only 3.5% more expensive in our currency and the Chinese renminbi exchange rate has barely budged at all.

Aside from the impact on Americans traveling abroad, what do such variations in currency values mean for our economy in general? Potentially a lot.

Changes in the value of one currency versus another are more important than most Americans understand. What causes these changes and how such fluctuations affect farm or manufacturing employment or output are as opaque as whether higher import tariffs are good or bad.

Consider the confusion that arises from the phrase “the value of the dollar.”

People can generally see this reflected in how many dollars it takes to buy goods and services. When people say the value of the dollar fell sharply under President Joe Biden, they refer to consumer prices that were 18% higher when Biden left office than when he came in. More dollars needed to buy the same stuff means the dollar is worth less that is was before.

But in financial markets, “the value of the dollar” also refers to the number of dollars that are needed to buy one unit of another currency. It took $4.93 to buy a British pound as World War I broke out in 1914 and only $1.33 this week. The “value of the dollar” rose compared to the pound.

These two different “values of a currency” — in terms of the quantities of goods and services one can buy in one’s own country versus the quantities of the same items in another currency — are related, but are not the same.

Yes, a country with prolonged high inflation often sees the exchange value of its currency fall. And one with low inflation, say Switzerland, may see the exchange value of its currency rise against the money of countries with higher inflation.

This is not always true, however. Ronald Reagan’s first term saw continued high inflation from the Ford and Carter years. Consumer buying power fell in the U.S. but the exchange value of the U.S. dollar rose. Four years after Reagan’s first inauguration, a dollar only bought 82% of domestic consumer goods and services in the U.S. that it had when he took the oath of office in 1981. But a buck also bought 2.15 times as many British pounds, 58% more pre-euro German marks and 26% more Japanese yen. Pretty good, huh?

This means that a Volkswagen Jetta priced at 16,000 deutschmarks in January 1981 cost a U.S. buyer $7,958. One at the same deutschmark price four years later would have cost only $5,046. Going the other way, a $1.75 U.S. bushel of corn would have been 3.52 deutschmarks in January 1981, but 5.55 deutschmarks in 1985.

A ton of Japanese-made steel priced at 80,000 yen cost $395 in 1981 but only $315 in 1985. Going the other direction across the Pacific, a $280 ton of U.S. soybeans cost a Japanese buyer 56,660 yen at the beginning of the period and 77,170 at the end.

These examples show hard realities that few people realize, but with broad implications for our economy. A “strong,” or high-priced, currency makes its nation’s exports expensive to world buyers while rendering imports cheap. It effectively subsidizes imports and taxes exports. This is good for consumers who want to buy cheap goods. But it punishes domestic producers — farmers, miners, mill and factory owners — along with people who work for them, because in a global supply chain, U.S. export customers can shop for a better price from countries with “weaker” currencies.

Why was the dollar so “strong” in the first half of Reagan’s presidency, despite high inflation at home? Because U.S. interest rates were high and foreigners needed dollars to earn those high rates on long-term U.S. Treasurys.

How did this come about? First, federal budget deficits had exploded. They averaged 2.2% of GDP over 20 years, 1960-1980. For the economically troubled Carter years they had been 2.4%. But with sharply increased defense spending coupled with tax cuts under Reagan, deficits exploded, hitting 5.8% for the fiscal year starting in September 1982. This was twice what it was in 1968 at the height of the Vietnam War and NASA’s Apollo moon program.

Bad enough, but President Jimmy Carter had appointed Paul Volcker as chair of the Federal Reserve Board. To end inflation, Volcker had made clear he would stamp the brakes on the money supply come hell, high water or anything Congress or the White House did. He kept his promise and interest rates soared. Some 30-year Treasury bonds went over 15% while prime rates for sound business loans hit 21.5%.

These were the highest real interest rates in the world. Investors everywhere wanted to earn them. So foreign money poured into the United States. With hordes of German and Japanese investors figuratively waving wads of marks and yen at anyone offering dollars, the value of the U.S. dollar set new records. This clobbered the U.S. steel industry, the U.S. auto industry and U.S. farming.

Granted, all three sectors had created some of their own problems.

Farmers had reacted to the 1972 devaluation of the dollar — when President Richard Nixon ended the Bretton Woods international payments system — by bidding up land prices year after year. Sales were financed by contracts-for-deed insulated from commercial mortgage requirements.

Complacently monopolistic steel and auto companies had entered into mutual suicide pacts with their unions, shunning new and cheaper steel processes and quality-control methods being introduced elsewhere with the short-term goal of saving jobs.

These problems had been evident for years, but with Reagan-era deficits and Volcker interest rates, “the wolf finally came” as noted in the title of an excellent history of steel’s demise.

What does that have to do with 2025, and today’s currency markets’ influence on White House policy changes?

Well, since a “strong” currency promotes imports and stifles exports, one can reduce this imbalance with tariffs, as Trump is attempting to do, but also by reducing, or “weakening” the exchange value of one’s currency. That is the “currency manipulation” for which we long have condemned other countries.

Trump Treasury Secretary Scott Bessent, erstwhile adviser Steve Bannon — disreputable but still influential — and other Trump whisperers argue that beyond raising tariffs, we need to make it more difficult for trade-surplus nations like China to invest dollars in U.S. bonds. That would drive down the value of the dollar, reduce U.S. imports and increase employment and output here. But, like tariffs, it also would raise inflation. More on this in future columns.

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St. Paul economist and writer Edward Lotterman can be reached at stpaul@edlotterman.com.

By ANITA SNOW, Associated Press

What would Joan think?

Reading the newly released “Notes to John,” it’s hard not to wonder how the late author Joan Didion would feel about having her personal notes from a series of painful therapy sessions converted into a book after her death.

Discovered in a small filing cabinet in Didion’s office after she died in 2021 at age 87, the 150 loose pages formed a kind of journal she kept for her husband, writer John Gregory Dunne, about her meetings starting in late 1999 with psychiatrist Roger MacKinnon. The writer of such cult favorites as “The Book of Common Prayer” (1977) and “The White Album” (1979) was an assiduous notetaker and recordkeeper who explained her lifelong compulsion to write things down in her well-known essay, “On Keeping a Notebook,” to remember what certain moments had meant to her.

Still, the pages weren’t exactly a secret. They were included in papers that were placed by Didion’s heirs, her late brother’s children, without restrictions on access in the Didion/Dunne archive at the New York Public Library.

This cover image released by Knopf show “Notes to John” by Joan Didion. (Knopf via AP)

Much of the writings in the book released by Knopf center on the couple’s adult daughter, Quintana Roo Dunne, who was adopted as a baby and named after a Mexican territory that later became a state.

In the notes to Dunne, the famously guarded Didion details her worries and guilt about Quintana’s chronic alcoholism more openly than she did in the books she later wrote on that painful period.

“The Year of Magical Thinking” (2005) focused on Dunne’s fatal heart attack in 2003, and “Blue Nights” (2011) mourned her death just two years later at age 39 from acute pancreatitis.

“He wanted to know how old Quintana was when we got her, the details of the adoption,” Didion writes to Dunne about one session with MacKinnon. “We talked at some length about that, and I said I had always been afraid we would lose her. Whale watching. The hypothetical rattlesnake in the ivy on Franklin Avenue.’

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Some of the most poignant passages are about the numerous dreams she described to the psychiatrist about her daughter’s addiction.

The hopelessness and vulnerability she acknowledges belie Didion’s cool and controlled public image.

“I told him about the dream I had this week in which Quintana and I were sharing a room and every time I woke during the night she wasn’t in her bed, she was sitting by the window and she was getting drunker and drunker,” Didion writes. “And there was nothing I could do about it. She couldn’t see me watching her.”

By Natalie Krebs, Iowa Public Radio, KFF Health News

Even by rural hospital standards, Keokuk County Hospital and Clinics in southeastern Iowa is small.

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The 14-bed hospital, in Sigourney, doesn’t do surgeries or deliver babies. The small 24-hour emergency room is overseen by two full-time doctors.

CEO Matt Ives wants to hire a third doctor, but he said finding physicians for a rural area has been challenging since the COVID-19 pandemic. He said several physicians at his hospital have retired since the start of the pandemic, and others have decided to stop practicing certain types of care, particularly emergency care.

Another rural hospital is down the road, about a 40-minute drive east. Washington County Hospital and Clinics has 22 beds and is experiencing similar staffing struggles. “Over the course of the last few years, we’ve had not only the pandemic, but we’ve had kind of an aging physician workforce that has been retiring,” said Todd Patterson, CEO.

The pandemic was difficult for health workers. Many endured long hours, and the stresses on the nation’s health care system prompted more workers than usual to quit or retire.

“There’s a chunk of workers that were lost and won’t come back,” said Joanne Spetz, who directs the Institute for Health Policy Studies at the University of California-San Francisco. “For a lot of the clinicians that decided and were able to stick it out and work through the pandemic, they have burned out,” Spetz said.

Five years after the World Health Organization declared COVID a global pandemic and the first Trump administration announced a national emergency, the United States faces a crucial shortage of medical providers, below the projected need for an aging population.

That could have lasting effects on care, particularly in states like Iowa with significant rural populations. Experts say the problem has been building for a while, but the effects of the pandemic accelerated the shortages by pushing many doctors over the edge into early retirement or other fields.

Keokuk County Hospital has 14 beds, which makes it one of Iowa’s smaller hospitals. (Natalie Krebs/KFF Health News/TNS)

“Some of them made it through COVID like ‘Let’s get us through this public health crisis,’ and then they came out of it saying, ‘OK, and now? Now I’m exhausted,’” said Christina Taylor, president of the Iowa Medical Society.

“Iowa is absolutely in the middle of a physician shortage,” Taylor said. “It’s a true crisis for us. We’re actually 44th in the country in terms of patient-to-physician ratio.”

A 2022 survey by the Centers for Disease Control and Prevention found a significant jump in health workers who reported feeling burned out and wanting a new job, compared with 2018. The number of people in health care has grown since the start of the pandemic, said Janette Dill, an associate professor at the University of Minnesota’s School of Public Health, but the growth has not happened fast enough.

“We have an aging population. We have a lot of needs,” she said.

The Association of American Medical Colleges projected last year that the U.S. faces a shortage of up to 86,000 physicians by 2036 — if lawmakers don’t invest more money in training doctors.

These shortages could push more people to seek care in ERs when they can’t see a local doctor, said Michael Dill, director of workforce studies at the AAMC.

“We’re already at a point where tens of millions of Americans every year can’t get medical care when they need it,” said Dill (no relation to Janette Dill). “If the shortage is sustained or gets even worse, then that problem gets worse too, and it disproportionately negatively impacts the most vulnerable amongst us.”

Iowa lawmakers made addressing the shortage a priority in the current legislative session. They introduced bills aimed at increasing medical student loan forgiveness and requesting federal help to add residency training slots for medical students in the state.

Last year, Gov. Kim Reynolds signed a bill into law that drops the residency requirement for some doctors who trained abroad to get a medical license. Lawmakers in at least eight other states have approved similar changes.

Patterson, of the Washington County hospital, appreciates that Iowa lawmakers are trying to increase the pipeline of doctors into Iowa but said it doesn’t address immediate shortages.

“You have a high school student who’s graduating right now; they’re probably nine to 11 years away from entering the workforce as a practicing physician. So it’s a long-term kind of problem,” he said.

For nurses, workforce experts say, the projected national outlook isn’t as dire as in recent years.

“Nursing education is back up. Nursing employment rates are back up. I think, for that workforce, we’ve largely nationally recovered from all the dislocations that occurred,” said Spetz, of the Institute for Health Policy Studies.

But getting nurses to move to the places that need them, like rural communities, will be difficult, she said.

Some rural hospitals in Iowa say an even bigger challenge right now is finding nurses to hire.

Keokuk County Hospital needs three physicians to staff its emergency room but has just two. (Natalie Krebs/KFF Health News/TNS)

Some of that can be traced to the pandemic, said Sara Bruns, nurse manager at Keokuk County Hospital and Clinics. She recalled that some COVID patients in critical condition died when they couldn’t be transferred to larger hospitals with more advanced intensive care unit equipment, because those hospitals didn’t have the staff to take on more patients.

“We had to make the horrible decision of ‘You’re probably not going to make it,’” Bruns recalled, saying many patients were then listed as DNR, for “do not resuscitate.”

“That took a big toll on a lot of nurses,” she said.

Another problem is persuading the area’s young nurses to stay, when they would rather live and work in more urban areas, Bruns said.

Her hospital still relies on contracts with travel nurses to fill some night shifts. That’s something the hospital never had to do before the pandemic, Bruns said. Travel nurses are more expensive, adding stress to a small hospital’s budget.

“I think some people just completely got out of nursing,” Bruns said. The pandemic took a special toll “because of the hours that they had to work, the conditions that they had to work.”

Policymakers and health care organizations can’t focus only on recruiting workers, according to Janette Dill at the University of Minnesota. “You also have to retain workers,” she said. “You can’t just recruit new people and then have them be miserable.”

Dill said workers report feeling that patients have been more disrespectful and challenging since the pandemic, and sometimes workers feel unsafe at work. “By ‘unsafe’ I mean physically unsafe. I think that is a very stressful part of the job,” she said.

Research has shown health workers reporting higher levels of burnout and poor mental health since the pandemic — though the risks decreased if workers felt supported by their managers.

Gail Grimes, an intensive care nurse in Des Moines, felt more supported by her employer during the worst parts of the pandemic than she does now, she said. Some hospitals offered pay bumps and more scheduling flexibility to keep nurses on staff.

“We were getting better bonus pay,” Grimes recalled. “We were getting these specialized contracts we could fulfill that were often more worth our time to be able to come in, to miss our families and be there.”

Grimes said she’s seen nurses leave Iowa for neighboring states with better average pay. This creates shortages that she believes affect the care she gives her own patients.

“A nurse taking care of five patients will always be able to provide better care than a nurse taking care of 10 patients,” she said.

She thinks many hospitals have simply accepted staff burnout as a fact, rather than try to prevent it.

“It really is significantly impactful to your mental health when you come home every day and you feel guilty about the things you have not been able to provide to people,” she said.

This article is from a partnership that includes IPR , NPR , and KFF Health News .

©2025 KFF Health News. Distributed by Tribune Content Agency, LLC.

By Olivia Rudgard, Bloomberg News

Cities around the world trying to limit driving have faced objections — namely that the measures would limit personal freedom, cost too much, destroy commerce or have negligible effects on air quality.

Now the first data from these experiments in New York, London and Paris is trickling in. They offer some clues about whether cutting speed limits, charging traffic for entering a city center and penalizing drivers of the most polluting cars can reduce congestion and improve air quality, without causing too much disruption.

These lessons are helpful because cities, where problems with traffic and poor air quality are frequently more severe than in less urban areas, are often moving more quickly in restricting vehicle emissions than countries or states. In Europe, cities are outpacing laws and national regulations to cut traffic pollution, according to the think tank Transport & Environment. In total, 35 cities have committed to introducing “zero emissions zones” — where diesel and gasoline-powered vehicles will be banned.

Still, early results from some cities show reducing traffic is not enough. Take Oslo, which has pioneered lower speed limits, car-free zones and improvements to public transport, walking and cycling. Norway’s widespread adoption of electric cars has also helped reduce smog. But the city still suffers from high levels of particulate pollution from tire wear, wood-burning stoves and dust from gravel and salting on icy roads.

While restricting fossil-fueled vehicles won’t solve those problems, there is evidence that it helps clean the air and has other benefits too.

Here’s what policy makers and city dwellers can learn from other early adopters.

New York

The city introduced a policy on Jan. 5 charging cars up to $9 a day to enter certain parts of Manhattan. Travel time data from the first three months of the charging zone suggests commuting times are down on some of the busiest routes, in particular the bridges and tunnels that connect Manhattan with New Jersey, Brooklyn and Queens.

A site run by student brothers Joshua and Benjamin Moshes has been tracking travel times based on Google Maps traffic data on various routes affected by the New York congestion pricing since the policy was introduced in January. They found travel times have also dropped during weekends, while there’s been little change on other routes going from one part of Manhattan to another. That suggests people are choosing to take public transport or cutting out less urgent travel, they say.

In Boston and Chicago, which the Moshes use as a control, traffic levels have not changed significantly. A separate review released in January by the traffic data provider Inrix echoes their findings, while a Bloomberg analysis released around the same time found fewer private cars and more taxis on the road.

Paris

Mayor Anne Hidalgo introduced 50kph (30 mph) speed limits on the city’s outer ring road in October, despite opposition from France’s transport minister and conservative opponents.

A report from the city’s urban planning department found that the new, lower speed limit, introduced on Oct. 1 last year, has already had some positive effects. In the following five months, air quality improved by 12% and traffic accidents dropped by 17%, compared to the same period in the previous year. There are also signs that congestion is lower.

Hidalgo, who has said she won’t seek re-election next year, isn’t finished with her plans to reduce car traffic and encourage walking and cycling in Paris. In addition to charging higher parking fees for SUVs, the local government has reserved one lane on the main highway encircling the city for public transport and carpooling. Her office also banned motorized through-traffic from the center of the city in November. Local workers, residents and taxis are still able to drive into the zone, but anyone passing through to go somewhere else will be fined €135 ($153) once enforcement begins.

London

The city’s ultra-low emission zone has been in place for over five years. The restrictions, which place a daily charge on driving old gasoline or diesel vehicles, initially covered a small area of the city center. It was subsequently expanded to cover an almost 600 square mile area, making it the largest in the world. London has had a separate congestion charging zone, which means almost everyone who drives into the city’s core must pay, since 2003 (electric cars are exempt until December this year).

When London mayor Sadiq Khan announced the expansion in 2022, the decision was met with warnings that high street shops would wither away and small businesses would struggle to survive.

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ULEZ, as the area is known for short, became a contentious topic in local elections, and Khan’s opponent, from the right-wing Conservative Party, made it a central part of her pitch to voters in the mayoral election last year. (Khan won).

In March, the mayor’s office released data suggesting that ULEZ had a positive impact on air quality, while causing little disruption to shops in the outskirts of London, an area which was only included in the zone in August 2023. In particular the change has cut emissions of nitrogen oxides, air pollutants linked to lung problems, asthma and inflammation, by between 33% and 39%, while footfall and spending in shops has not dropped, according to data from Mastercard Inc.

Almost 97% of vehicles driven within the zone are now compliant with the emissions standards, the report said. Vans, which were much more likely to be caught up by the changes, have been slower to switch, but over 90% are now compliant, compared with just 12% in 2017, before the zone was introduced.

“Everyone in the capital is now breathing cleaner air because of ULEZ,” said Christina Calderato, Transport for London’s director of strategy, commenting on the report.

©2025 Bloomberg News. Visit at bloomberg.com. Distributed by Tribune Content Agency, LLC.