There can be little doubt that the twentieth century had become, by the 1950s, the American Century. In 1948 the United States economy accounted for roughly 45 percent of total global industrial production while real U.S. gross domestic product was nearly twice as large as the sum of real GDP in the U.K., Germany, France, and Japan combined. Building on the Bretton Woods system, the power of U.S. corporations and the structure of postwar global finance assured that the dollar – backed by gold – was the pivotal international currency. U.S. military and nuclear power not only waged the Cold War against the Soviet bloc but was also deployed to keep the world safe for democracy and capitalism, mostly capitalism.

It seemed, indeed, that the sun might never set on the American Empire. “World opinion? I don't believe in world opinion,” financial and presidential adviser John J. McCloy remarked scornfully in 1963. “The only thing that matters is power.”

Sic transit gloria imperiae. By the early 1980s the U.S. economy was no longer hegemonic, barely still dominant. The dollar had fallen from its pinnacle and U.S. trade deficits were beginning to soar nearly out of control. U.S. productivity growth lagged far behind its pace in other leading competing economies such as Japan and West Germany. The dreams and aspirations of U.S. workers and households were becoming clouded with hardship and uncertainty.