Economic historian Phillip Magness wasn\u2019t expecting to go viral last week when he posted a clip of Vice President JD Vance criticizing the US dollar\u2019s status as global reserve currency.<\/p>\n
While researching tariffs, Magness unearthed 2023 footage of Vance telling the populist group American Moment that he\u2019s \u201cnot sure\u201d it\u2019s \u201cactually good\u201d that dozens of foreign central banks store their reserves in dollars. The then-senator called reserve-currency status \u201ca resource curse\u201d like \u201ccoal in Appalachia\u201d because it allows \u201cconsumers to consume very cheaply.\u201d<\/p>\n
Magness shared that video<\/a> on X, followed by another clip<\/a> in which Vance says that forsaking reserve-currency status could allow the US to \u201cmake enough weapons\u201d to help Ukraine. Now \u201cit\u2019s all over the place,\u201d he told Semafor: \u201cI\u2019m shocked.\u201d<\/p>\n A self-described \u201ccritic\u201d of Vance on trade, Magness is something of a libertarian gadfly among MAGA economists. But for allies of a vice president who\u2019s uniquely willing<\/a> to feed his online trolls, Magness struck a nerve by elevating Vance\u2019s comments that the dollar\u2019s reserve-currency status could be hurting the US\u2019 ability to export goods.<\/p>\n Vance\u2019s backers sense a growing campaign by free-market Republicans to discredit his economic policies ahead of a potential 2028 presidential bid \u2014 even as they double down on their concerns over the dollar\u2019s reserve-currency status, later embraced by<\/a> former Trump White House Council of Economic Advisers Chair Stephen Miran.<\/p>\n \u201cThe fact that you still have this bizarre kind of rump-libertarian right that thinks it\u2019s \u2026 absurd mostly just speaks to how far behind the contemporary issues they really are,\u201d Oren Cass, founder of the populist-conservative group American Compass, told Semafor.<\/p>\n Yet even as he derided Magness\u2019 critique as \u201chalf-baked and pathetic,\u201d Cass acknowledged that \u201cit clearly is starting to kind of lay out some of the contours for the conflicts that are going to emerge in the Trump administration over what right-of-center economic policy and thinking looks like in the future.\u201d<\/p>\n Vance, who will travel to his home state of Ohio for a Friday speech on the economy, hasn\u2019t explicitly called for displacing the dollar as reserve currency \u2014 nor is he in a position to act on it. His office did not comment for this story.<\/p>\n Importantly, his boss has vowed to<\/a> protect the dollar\u2019s reserve-currency status despite occasionally paying lip service<\/a> to the related benefits of a weaker dollar, instead prioritizing tariffs aimed at boosting US exports.<\/p>\n President Donald Trump\u2019s second-term administration has shown little appetite for deterring foreign central banks from holding their reserves in dollars, indicating that officials \u201cmay have been persuaded not to go that way over time,\u201d Harvard University professor Kenneth Rogoff, author of \u201cOur Dollar, Your Problem,\u201d told Semafor.<\/p>\n Vance\u2019s economic identity as the Republican presidential frontrunner for 2028, however, remains unclear. He spent his time on Capitol Hill flexing populist bona fides<\/a>, teaming up with progressives as he touted proposals to penalize bank executives and rein in credit card companies (even if he later cooled on the latter<\/a>).<\/p>\n That track record added weight to Magness\u2019 posting spree.<\/p>\n