After the Fall: Being American in the World We've Made

by Ben Rhodes

My British friend in Singapore—the one who described the “elongated reason cycle”—recalled to me the moment when he believes the seams finally popped. It was a few weeks after the Beijing Olympics, when Alan Greenspan testified before Congress as the American financial system was melting down. Here was the man who presided over the massive economic growth in the two decades after the end of the Cold War, the maestro who was the invisible hand behind the Federal Reserve for much of that time, the steady, competent force who could be depended upon in financial capitals around the world even when American politics resembled a playground of dysfunction. Even the Chinese implicitly accepted the premise that they had to defer to Americans of Greenspan’s stature on the basic operation of the global financial system. During his testimony, Greenspan was asked, in essence, How did this happen? “I have found a flaw,” Greenspan responded, referring to his basic worldview. “I don’t know how significant or permanent it is. But I have been very distressed by that fact.” “Bam,” my friend said, describing the moment. “Shivers-down-the-spine moment. That was the intellectual gunshot that was heard very loudly in Asia.” He called it “a hinge of history.”