The Almighty Dollar
Dean Crutchfield Article, February 16th 2009, Brand/Media/Adweek
Brand America, Champion Obama and the Mighty USD
For many of us, America’s new brand champion is Obama, who is without doubt, our great faith for improving our reputation at home and abroad, as well as dealing with the current crisis that ranges from energy, immigration, national security to tax cuts, Iraq, Iran, Afghanistan through to education, healthcare, Guantanamo and the economy.
Not to be lugubrious, but it’s a tall order and rebuilding confidence won’t be easy. The approach to these monumental challenges is not black and white either: it’s green, because the outcomes will bear down upon the symbol of our great economic doubt: the mighty greenback.
Brand America needs more work abroad than at home. So whilst it’s essential to spread the wealth around in the US and prevent a deepening recession with (temporary) increased government spending, some of the campaign promises must be put on the waiting list while full attention is paid to the critical condition of the economy, Brand America and the USD.
The mighty greenback is an American icon whose value comes in part from the fact it’s one of the most recognized brands in the world. Since WW2, the USD has fueled growth, allowed countries to do business and enabled globalization on an unprecedented scale whilst simultaneously playing an unwitting ambassador for Brand America around the world. People have not just loved the dollar; they have loved what it has enabled them to do. In many regards, it is so much more than many of today’s respected brands.
For a brand to be strong (like its leader), it relies not just on emotional levers, clever messaging and iconography, but it also must have a unique functionality. Apply that to the majority of the world’s currencies (and leaders) and they are by in large prosaic. They lack (worldly) presence, style, intrigue, desire and charisma. In contrast the dollar has a profound global function, elegance and unique beauty combined with myth, legend, adventure and mystique.
What we know has now changed and the quality behind the brand has been stymied. The US dollar accounts for 68% of global currency reserves and the world’s central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation. So for example, if there’s pressure to devalue a particular currency, the more dollars the central bank must hold, thus the dominance of the USD.
Over the last year, around the world, there are demands that US dollar hegemony has got to go. Just take a fleeting glance across an array of media and you’ll groove to a hip hop music video with Jay Z clutching a handful of euros, learn about supermodel, Gisele, last year publicly refusing payment in dollars and hear about Iran’s Ahmadinejad mocking the dollar as a worthless piece of paper.
Just last month, Putin was demanding a wider use of national currencies saying “we all know this well, the whole world based on the dollar is experiencing serious problems” and simultaneously, China accusing the US of plundering global wealth by exploiting the dollars dominance.
No wonder the trust and respect in the dollar has plummeted. It was hanging by a thread when this financial tsunami roared across the globe. Even though the dollar has staged a rally as this crisis has been unfolding – there are platitudes of reasons for the perceived role of the dollar declining, but we must acknowledge that the dollar, as a brand, has afforded the world unique opportunities as the international (reserve) currency and Brand America, the most prosperous country on earth.
It’s a catch-22 situation for Obama (our brand champion) and the USD. As Churchill once said, “it’s only when you risk losing what you can least afford to lose that you learn to play the game.”
It’s not just the country’s future that’s on the line…the US sets the tone for much of the world and Brand America is inextricably tied to the USD brand. Therefore, it is not just an economic problem, but a brand problem: we have a battered reputation, no trust in our leadership, erosion of our market share, pummeled profits, crippled projected revenues, dwindling customer loyalty and a severed stock price.
The solution is not solely an economic one, it’s a need for marketing and brand building that only our new brand champion, Obama, can do. As the 19th Century French politician, Tocqueville Fraud, once said, “when America is good she is great and when she is not good she is not great.”
With Obama at the helm we show to the world our unrivalled ability to renew ourselves and be great – brand revitalization if you like – but can it be the same for the dollar? Clearly trust is an essential ingredient of all brands and their reputations, including currency. And the notion of trust (in the commercial world) has been mainly centered on the transaction itself, but not any more. The notion of trust around the world has dramatically moved on from trust in the product to trust in the people behind the product: the dollar.
So will Obama seek to obviate the dollar’s fall from grace and its global role as the world’s reserve currency or does he acquiesce (too much) to domestic pressure and persist in bailing out everything from too big to fail businesses, banks hoarding their lucre, relief to credit crunched Americans and investors desires for increased corporate profits?
We are at a crossroads with far reaching consequences and denying our basic economic woes will erode credibility and exacerbate the pain. As brand champion elect, Obama needs to ameliorate the fears of the nation and capitalize on the tension between the great faith (we have in him as our brand champion) and our great doubt.