The poor performance of Wall Street and America regulators has cost America a good deal in terms of the soft power of its economic model’s attractiveness, but the blow need not be fatal if, in contrast to Japan in the 1990’s, the US manages to absorb the losses and limit the damage. The World Economic Forum still rates the American economy as the world’s most competitive, owing to its labor-market flexibility, higher education, political stability, and openness to innovation.