Dollar's strength giving U.S. industry and Bush team headaches

WASHINGTON -- Blame the high-flying dollar for the prolonged economic slump that has cost 800,000 manufacturing jobs in the past year, company chiefs say.

The dollar's high value, compared with the currency of other countries, prices U.S. goods out of foreign markets and makes for fiercer competition at home from imports, the argument goes.

The strong dollar, says General Motors chief financial officer John M. Devine, "is frankly destroying the manufacturing capability" of the country.

Not so, say many economists and critics of that thinking: Americans are getting travel bargains abroad and inflation is staying in check, helping the economy.

This divide presents the Bush administration with a big headache and exposes the chief economic spokesman, Treasury Secretary Paul O'Neill, to charges he is sending mangled messages on just what Washington's dollar policy is.

O'Neill's reply: "There is no upside in talking about the dollar, except to say we have a continuing, continuous policy and that's all there is to say."