America Will Overcome Madoff, Blagojevich Scandals and the Crash

There is less talk these days of anti-Americanism on foreign shores. The world once highly regarded our ideals, it was said, but we had squandered that affection with our expedition into Iraq and with the zeal with which we prosecuted the war on terrorism. The American brand had to be repaired, we were told.

No need for excessive worry now: That anti-Americanism was mostly driven by envy, and nowadays the world is less envious of our ways. Our economic meltdown has gone a long way toward draining those sentiments of anti-Americanism.

In the fabled 1990s, we battered other lands with the success of our economic model. We had a confident ideology, globalization, and its gurus held out to other nations a cruel choice: submission to that ideology or the prospect of being stampeded by the "electronic herd." Nations would follow our example, take the prescription dictated by that Wall Street-Treasury nexus, or risk becoming "roadkill" in that race of nations. This was before the Bush years, before Gitmo and Abu Ghraib, and before American soldiers were on the soil of Iraq.

It will not suffice to say that the nation's fundamental strength will pull it through this time of panic and uncertainty. That consolation may be true, but it is too easy. For beyond today's crisis looms an essential question: What has become of American exceptionalism?

For much of this nation's history, that belief in the differentness of America was central to the American creed. The Old World shared in that belief as well, pined for American ways or derided them, but took it on faith that America was an experiment apart. Our markets were transparent, we told ourselves and others, our politics driven by a sense of civic responsibility and, by and large, free of the corruption of foreign lands.

Not to worry: The Bernie Madoff and Rod Blagojevich scandals have gone a long way toward battering the belief in the uniqueness of America. So our markets may be riddled with corruption, and our politics may resemble the ways of South America and the Balkans and the Middle East. I spent my formative years in Lebanon, so these ways are thoroughly familiar to me. In my naiveté, in the fantasy I carried with me into this great, open country, I had assumed that the Old World ended where America began. Still, the Blagojevich accusations aside, we are not a banana republic, and we remain a government of laws. As for Madoff's scandal, it reminds us that at the heart of the most sophisticated economic transactions lies the eternal human drama: the nature and the makeup of those caught up in economic activities.

In a simpler world and in a landmark statement about economic matters, the legendary banker J. P. Morgan, testifying before a congressional committee in 1912, dismissed the notion that commercial credit was based primarily upon money or property. "No, sir; the first thing is character," he said to that congressional committee's counsel. "Because a man I do not trust could not get money from me on all the bonds in Christendom." Mathematical models and "derivatives" have mystified our economic transactions, but the truth of J. P. Morgan's observation endures.

On December 8, on the front page of the New York Times, there was a picture from Detroit that told of our distress: an SUV on the altar of Greater Grace Temple, a Pentecostal church, with congregants around it praying to save the auto industry. We have come a long way; the belief in miracles and in divine intervention in the workings of daily life we tend to associate with older, prescientific cultures. The congregants began with a verse from the Book of Romans: "I consider that our present sufferings are not worth comparing with the glory that will be revealed in us."

I am irredeemably secular, although I recognize that other men and women need the solace of religious faith. But I could not help feeling that we are now in a different world. The economy seems like the realm of faith and magic and deities. We are let down by the Bob Rubins and Alan Greenspans of the world. In Alan we trusted, but he turned out to be the Wizard of Oz, just a disciple of Ayn Rand. He did not really know what ailed us. His medicine and magic failed. Those congregants in Detroit praying for "God's bailout plan" had been thrown back on an older magic. The masters of the universe had turned out to be mere pretenders.

It is a characteristic of the American pendulum that it rarely stops in the middle. Hence we have periods where we believe that we have annulled the very law of gravity, then times when we believe that the apocalypse is at hand. We need no miracles. We need to catch our breath, setting aside the sort of hubris that overtook us in the 1990s and the current despair that is driving some of the more vulnerable among us to pray for heavenly deliverance. So Alan Greenspan was not a God, and his pauses before congressional committees were only, well, pauses. Beyond magic and derivatives, we may return to simple reason and to J. P. Morgan's belief in character.

• Read more by Fouad Ajami.
• Read more about the economy.
• Read more about globalization.