Is America the new Japan? Or more precisely, Japan circa 1990, just as it was staggering into its Lost Decade. As recently as six months ago, the notion that the United States would face a decade or more of Japanese-style economic malaise seemed preposterous. But after the last few weeks of financial turmoil and political ineptitude, you could almost argue that America would be fortunate to end up with a downturn akin to Japan’s. That’s because in several key ways, Japan was much better equipped to withstand its financial lashing in the 1990s than Americans are today.

A little history: During the post-World-War-II era, the Japanese economy often lived up to its Homeric epithet: the Miracle Economy. It rose from the ruins of the war to become the world’s second-largest economy. By the mid-1980s, America and Japan accounted for a staggering 40 percent of the global economy. Picture Ronald Reagan and Prime Minister Yasuhiro Nakasone belting out “We Are the World” in some fancy karaoke bar in the Ginza.

Then, in 1986, Japan shifted into overdrive. It was a time of super-easy credit, frenzied financial speculation, and blistering industrial expansion. During the second half of the 1980s, the Tokyo Stock Exchange’s compass seemed permanently stuck on north. Between 1986 and 1991, Japan had expanded by roughly the equivalent of France’s gross domestic product, then $956 billion. Japan was also outshining the United States, whose consumers bought most of its products and whose military provided its protection. In fact, its rise seemed to coincide with America’s slide.

The United States appeared to be a spent power, done in by imperial overreach, as Paul Kennedy put it. Anything we could do, Japan could do better. We made Pintos; they made Accords. We made “Ishtar”; they made Walkmans. But mostly we made things like greenmail and leveraged buyouts and they made, well, a lot of stuff  widgets the world loved.