AMERICA’S GREAT CONTRIBUTION IN THE TWENTIETH century was to champion a set of institutions and an economic paradigm that would promote open markets and economic stability around the world. The US-led order paved the way to globalization and produced prosperity unimaginable only a few decades before. As the core of the system, the United States served as the world’s economic locomotive, fueled by its innovation economy, first-rate institutions, and global economic vitality. But as the Great Crisis of 2008–2009 unfolded from America across the world, a chorus of critics rose to declare the United States a declining nation and call an end to the American order.1
The US-built Group of Eight (G8) leading economies was indicted for ignoring the crisis warning signs and succeeding only at groupthink. The International Monetary Fund (IMF), the US-conceived guardian of global stability, was called too meek to prevent the debacle and too slow to halt it. American financial regulations, the blueprint for countless nations, stood accused of serving the regulated. The dollar’s reign was declared over as America’s deficits soared and China launched a bid for a new global currency. Confidence in independent central bankers, trusted stewards of price stability, eroded as the housing bubble was linked to years of low interest rates and the Federal Reserve’s bank bailouts burgeoned. With forecasts failing to herald the disaster, the very premises of modern macroeconomics became unhinged.