Against the Grain

The Downsizing of America

Wall Street is no longer the world's financial center.

Conventional wisdom holds that the financial mess will be the cause, and not a symptom, of American economic decline, but what if the opposite is true? Zachary Karabell makes the case in a worrisome column in The Wall Street Journal. In recent years, as capital shifted to freer markets overseas, American investors were forced to pursue risky and absurd investments. Karabell recommends, unsurprisingly, deregulation (it's the Journal here). "Once, when the U.S. was the engine of global growth, when the world needed Wall Street for funding, capital could be taxed and controlled by the fiat of the U.S. government. No longer,' he writes. "The U.S. may have the will; it does not have the power."