THERE IS a symbolic significance to the Washington summit beyond economics, reinforcing as it does the place of the US at the heart of world affairs. "Without question the American economy is still as influential on the rest of the world as it was," historian Niall Ferguson says.
"There was this notion that some economies around the world, most notably China, had decoupled from the American economy. I think we're seeing just how unlikely that claim was."
The crisis represents some economic weakening of the US, but is affecting other countries more severely in relative terms; while the US stock market has fallen by a third, its Chinese equivalent is down two thirds.
The US has long derived as much power from its financial institutions as its military ones: "Wall Street is every bit as important as the Sixth Fleet to the American Empire," Ferguson says.
The US military, the biggest in the world, is not the most expensive in relative terms. "The defence budget will be squeezed, that's almost always the case in a recession, but as other potential rivals to the United States are going to be affected worse, including Russia and China, it may be that the United States doesn't need to feel too nervous . . . As long as potential rivals are hit harder than United States, the US cannot be said to be declining."
For the president-elect Barack Obama, this weekend may affect what he can achieve during his first term in office.
"There used to be a theory in political science classes that Republican administrations run large deficits in their final year to rein in the incoming Democrats," says Ferguson. "[US Treasury Secretary] Hank Paulson must have read that at college, because that's exactly what has happened."
There have been two bubbles during George Bush's presidency, the dotcom mania that burst as he came in, and the real estate bubble that is bursting as he leaves. There is a third - the Obama Bubble - which carries the hopes of people globally, and the shadow of which hangs over this weekend's talks. "If reality intrudes in this global love affair," says Ferguson, "it's going to be very painful waking up."
