"However, the current Treasurer has committed to maintain that strong dollar policy. The dollar has simply been falling due to market forces beyond even the President's control."
Watch what they DO, not what they say. Every Treas. Sec. must say he's for a strong dollar or there would be a precipitous collapse, which we have not seen. The idea is a gradual decline. This is NOT beyond political control, but rather a direct consequence of tax cuts, just as the Clinton/Rubin dollar rise came from their tax increase.
"I know the SPEND and LEND is the typical Keynsian answer to economic collapses, but a false one IMHO"
Keynes understood markets and market economics with great insight, even brilliance. For example, he was a brilliantly successful investor of his own and other people's money.
Here is a problem for economic conservatives. The twenties were an era of very low government intervention, bureaucracy, spending, and borrowing. There were very low tax rates. Yet the depression hit and hit hard. The great lesson of 1929 is that, when a bubble breaks, if action is not taken immediately, psychology will go sour, and a liquidity trap will develop. Once that happens, the government can lend and spend all it wants and it will not work because the liquidity they try to inject into the system will be "trapped" in the lowest risk investments (government bonds and under the mattress).
Even though they relied on the unpleasant tool of a tax increase and dollar rise,the early economic policy of Clinton/Rubin was not kooky. Rubin understood markets and gave them a nice boost. My biggest problem is that it amounted to a zero-sum game with producers such as farmers given the shaft while consumers and wall street got the benefit. But, hey, farmers didn't support Clinton, urban consumers did. What they did, at first, was reasonable coalition politics.
But where Clinton/Rubin went wrong is that they didn't cool things off when the thing began to go wild, which they could have easily done via moderate tax cuts. This would have lowered the value of the dollar and given pause to the foreign money that eventually inflated the preposterous dot-com bubble. I believe Clinton/Rubin neglected their duty deliberately because of the campaign contributions from the dot-com entrepeneurs who wanted to cash out their options, and who could only do so if the bubble stayed up as long as possible.
We are generally in agreement on bailouts, though it is the Mexican bailout that I am more familiar with. To me the proper levers are general fiscal and monetary policy, which shows less favoritism than direct bailouts.