The U.S. economy has extended its sparkling performance into a ninth year, albeit attended by sentiments of rising caution on Wall Street. The contrast with Japan's decline in the 1990s is so strong that events in the United States look as though they are happening on another planet. In a global era, however, this is a patent illusion. The two economies interact closely, even now generating new stress points in the areas of trade and finance.
Advanced market integration has already virtually eliminated the options of either comfortable isolation or resistance carried on behind the shields of sovereignty or national systems and cultures, much less distance. One momentous consequence of the end of the Cold War is that today governments and businesses feel growing pressure to meet the largely U.S.-set norms of market-driven capitalism -- momentous in the sense that the released forces of change directly test leaders' claims to power and touch the everyday lives of people around the world.
The Japan-U.S. performance gap is there for anyone to see in terms of macro- and micro-economic numbers across the board, from growth and unemployment rates to consumer and business confidence and stock prices and corporate earnings. No less striking are the nuances shading leaders' policy-shaping convictions and avowals.