At the conclusion of the 20th century, America’s leadership was uncontested. We had the world’s strongest economy and most powerful military, bolstered by an unequaled system of alliances. Americans from the bottom to the top enjoyed rising real incomes. The federal budget ran a surplus for four consecutive years, from 1998 to 2001. Despite their differences, the political parties were able to reach agreement on important issues, including on fiscal policy, education, welfare, the environment and protecting Americans with disabilities.
An era of folly began in the new century. Leaders of both political parties supported China’s entry into the World Trade Organization on terms that allowed a flood of cheap imports, contributing to a loss of 5.7 million manufacturing jobs (one-third of the prior total) between the end of the Clinton administration and January 2010. Few displaced workers received help making the transition to new jobs, and many suffered a decline in their standard of living, laying the foundation for an era of populist resentment.
The 9/11 attacks devastated the nation. President George W. Bush’s overreaction was also damaging. Any president worth his salt would have struck back against the terrorists who killed thousands of Americans. But the Bush administration went much further, launching a prolonged war in Afghanistan and Iraq and eventually proclaiming the grandiose goal of “ending tyranny in our world.” By focusing so much attention and resources on the “global war on terror,” America all but ignored the rising threat from China, whose economic gains were translated into a massive military buildup. The Mideast campaigns soured many Americans on international engagement.