I just caught an item this morning in the Financial Times that reported that Senators Charles Schumer and Lindsey Graham had decided to postpone the bill they’ve wanted to push that would have imposed tariffs on China if it did not let its currency, the renminbi, rise faster in value. In theory, a rising renminbi would reduce China’s trade surplus with the U.S. because goods made in China would then be more expensive.

Well, I’ve made the argument here before that the U.S. has in its power the ability to accomplish the same thing: by lowering the value of the dollar, which has been quite high. There are three groups that benefit from a high dollar: tourists (when they travel abroad the dollar buys more), retailers like Wal-Mart (because a high dollar means they can get cheap goods from abroad) and Wall Street (a declining dollar would likely increase inflation, and those Wall Street types hate inflation–even a half a point difference means a lot of dough there).

But, for regular people and those tourists, too, lowering the value of the dollar would save jobs here because it would reduce the amazing cost difference between goods manufactured in China and here. I’m not ignoring the Chinese labor system that forces tens of millions of people to work for dramatically lower wages–that’s a serious moral issue, as well as economic challenge. But, a decline in the dollar would reduce a significant advantage posed by those low wages.

There is no question the dollar will have to fall at some point: the huge trade deficit cannot be financed forever without the dollar coming down. The issue is how fast and how much that will be felt here. If we keep putting this off, the fall will be much harder and severe.