The falling dollar (Booo! In case you didn’t know I get paid in $ and yes, the devaluation hurts) finds someone with a solution:

A model for this is the so-called Plaza Accord negotiated by the Reagan administration with

Germany
and Japan in 1985. Then, as now, the United States was running large
trade deficits and wanted to devalue the dollar. But rather than
talking down the currency or letting it fall on its own, President
Reagan’s team got key trading partners to share the burden of adjusting
policies to correct the imbalance. It worked. America’s trade gap
slowly narrowed, and foreign lenders did not demand significantly
higher interest rates on Treasuries. If Washington negotiated a similar
accord today, countries like China and Japan could slow the dollar’s
slide by revaluing their currencies. The pact could also involve policy
commitments to support the currency realignments.

For
example, rather than just assert that economic growth will reduce our
budget deficits, the Bush administration might postpone or trim
permanent tax cuts. It could also agree to partly privatize Social
Security only after creating a plan to finance the $1 trillion to $2
trillion in transition costs without deepening the deficit. It could
announce measures to improve our export performance – starting,
perhaps, with more support for certain research and development
programs and a plan to lower health-care premiums for employers by
offering reinsurance for catastrophic-illness costs.
For their
part, European nations could pledge to accelerate deregulation to
further open their economies and become bigger importers. And key
countries could agree to intervene in currency markets to keep the
dollar’s decline gradual and orderly.

Well, yes, I suppose so. If China revalued the renmimbi, Europe awoke from it’s EU inspired torpor, well, yes, the world would indeed improve, as of course would the US trade deficit. The real nugget is here:

The problem with the administration’s devaluation policy is that it
doesn’t treat the root causes of America’s economic imbalances. Our
need to borrow so much from abroad is caused by our enormous
consumption and our anemic savings. Today, Americans save just 0.2
percent of their disposable income, practically the lowest level in 45
years. Since we have so little savings to finance capital investment,
we borrow from savings pools abroad.

Yup. The US has double taxation of dividends. Once when the corporation pays tax on all profits, whether retained or distributed, then on the dividends as they are paid out (our system, in contrast, taxes dividends as they are paid, a sort of advance on the income tax payable, and then imposes corporation tax only on retained profits). Higher taxes on the return to savings meaning lower savings levels….no, there’s no one all that surprised by that. In fact, reducing that was part of Shrub’s tax reforms….one which all right thinking people deplored of course.
Yes, the low savings rate is a problem, yes, reducing taxation on the returns to saving will help that so, the answer it would seem to be is to reduce taxes on investment returns even further. Don’t hold your breath for the NYT to advocate that though.