"The world has to stand up and say, It's not China, it's all of us," Roach explains. "This is a global industrial problem. Sixty percent of the Chinese export growth is not China. It's coming from all the multinationals that put production in China--Western companies, European, Japanese, American. This is big stuff. A big change is coming, I don't know when."

What might world leaders do if they had the courage to act before crisis engulfs the system? As an economist, Roach describes the imbalance as a simple accounting problem. Americans must consume less and save more, while export-led economies must do the opposite--shift more of their national savings into domestic consumption, including for the purchase of more American-made exports. His description is accurate as far as it goes but skips over the hard part--how to get there in present circumstances. If US consumption were severely restrained right now, the economy would crater, but so would those of Europe, Japan, China and the rest of the world. "Americans aren't going to like that," Roach acknowledges. "But bad as it will be for Americans, this situation will seem truly awful in the rest of the world."

A less brutal, more politically plausible response requires a two-stage strategy--first, a shared agenda of economic stimulus to restore global growth, but accompanied by enforceable commitments to reduce the exporting nations' lopsided reliance on the US market once stable growth is restored. In other words, the United States has to acknowledge its weakness (not an easy pill for Washington egotists to swallow), but America must also be prepared to force the issue of its swelling trade deficits; that is, to employ emergency measures that do indeed reduce the US dependency whether other nations wish to cooperate or not. The mere mention of such trade measures would stun the world--and might convince trading partners that the old order is truly dead.

Even with global agreement, this strategy will take years to fulfill, because it requires virtually every economic power, starting with America, to reverse long-used practices of industrial policy. The global factories exist. Realigning global production to insure more balanced trading relations cannot be achieved by simply lowering the US dollar or punishing a few outstanding economies like China's. US trade policy was born in the cold war, when national-security strategy encouraged a generous flow of economic subsidies to allies. That rationale, long out of sync with reality, requires our trading partners to grow up a bit, while Americans experience some belt-tightening too. Above all, the governing elites have to abandon the fiction that what's good for US multinationals is good for the US economy. It ain't necessarily so.

American politics is not ready to face the bad news--neither probably are the American people. And the Bush presidency, founded on false triumphalism, is certainly not going to disturb the myth of America as the supreme economic powerhouse. Perhaps the best we can hope for right now is that a few brave voices, maybe among the Democratic candidates, will begin the hard task of truth-telling. Globalization is papered over with so many fallacies that any politician who describes reality risks ridicule. Nevertheless, the country badly needs to hear the truth. Win or lose, a politician who finds the courage to shatter failed myths is admired in the long run, remembered as a true statesman.

Frankly, having described what I think ought to happen, I am most doubtful that it will. Deep, wrenching shifts in political thinking do not usually occur without lots of painful friction first. I expect US elites and others around the world will have to see some strong, bloody evidence that their system is broken before they'll act. We can be sure of this much: None of these grave matters will be discussed at Cancún.

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