The Superpowers and Their Economic History In the late 1980s, the United States suffered from a series of economic problems that led some analysts to believe that Japan would soon became the economic hegemon. By the late 1990s the US economy was apparently in much better shape and the US was once again clearly the global hegemon. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Therefore, submit the question… What changes over the next decade explain this turnaround in America's economic fortunes? What were the most important characteristics of Japan that were missed in terms of assessing its overall power? While Japan's postwar economy prospered in the 1980s, the United States was not having the same success. A number of factors have led to the economic problems and successes that have led analysts to question the future of these countries and their economic position. By analyzing the events that led to these two situations, other external factors, and current events during that time period, you can make an informed decision about how these economic changes occurred. These factors and many others may determine why the United States, in a recession, was able to recover and become the leading economic superpower. In the 1980s the United States had three presidents, with Jimmy Carter for one year, Ronald Reagan for one year. for eight years and George Bush for one year. This decade was called the "Reagan Revolution" as the economy was simultaneously in recession, starting and ending in 1980. This recession was mainly caused by the energy crisis which led to a rapid increase in inflation, and resolved by Carter who reduced cuts and budget spending. The energy crisis was a time when oil supplies were low and prices were skyrocketing. Major countries and industrial areas have been heavily affected, such as the United States, Japan, Australia and Western Europe. The Arabs imposed an embargo, or ban, on oil sales to the United States because of our alliance and aid to the Israelis. This embargo lasted a year and highlighted the United States' great dependence and need for oil. This event was extremely important for the rest of the decade, as it had a lasting effect on the price of oil even after the embargo. Two years later it turns out that while there is an unemployment rate of 10.4%, there is also an increase of 11.4%. of the population since the 1970s (Thenlen, 2004). This is the highest unemployment rate in US history. In my opinion, these two rates are related and population is an important factor in employment rates. The percentages are actually quite similar, with only a 1% difference. It makes sense though, the amount of children in the world would increase starting in the 1970s and the amount of jobs in the 1970s is not enough to support families and there are not enough jobs for those coming of age to find a job. This is the result of the recession, and fortunately, by the end of the decade the United States will see the lowest unemployment rates since the 1940s. There have also been other misfortunes in the United States, related to internal and external issues. For example, Reagan had to ban the sale of grain and high technology to the Soviet Union due to the invasion of Afghanistan due to the Soviet-Afghan War. This, together with the race forarmaments, created a large loss of revenue for the United States along with rapidly increasing military spending that reached 400 billion per year and did not decrease until the 1990s. The stock market crash was another misfortune, losing 30 billion in market share (Thenlen, 2004). The United States is difficult to influence, but it seemed like one misfortune after another. Terrorism was quite widespread in the United States as they became more and more involved in Western politics. There were several hostage attacks and as many as 52 Americans were held hostage in Tehran. Eight billion dollars had to be paid to these Iranians to recover these Americans. Another example would be when the World Trade Center was bombed by Islamic terrorists in 1993 and they killed six people while injuring a thousand. Opinions were formed about these countries in which the United States was involved, both well-informed and otherwise, and they were usually not good. There were a lot of people even opposed to the way the United States handled some of these situations. Cases like these dampened American morale, with external and internal problems plaguing the country. The United States managed to recover in the late 1990s and regained economic dominance over Japan. This occurred through a multitude of events, however the main contributing factor was the end of the arms race and the dissolution of the Soviet Union. In 1980 alone, the United States had created 2,000 launch vehicles, 10,000 warheads, and 4,000 megatonnage, not including the actual stockpiles already created. This cost the government a lot to build places to make them, hire people to build them, and obtain the materials needed for these weapons. This enormous amount of money that was being poured for such a senseless purpose could now be directed elsewhere, towards more important issues within the United States. The United States was finally able to focus on itself and its internal struggles regarding the spread of communism. As mentioned, there were a couple of inconveniences in the United States in the 1990s, including wars, fraud, and terrorism. All of this has affected American morale and their opinion of our country and the people in power. One example is the Gulf War, code-named Operation Desert Shield, which began when Iraq invaded neighboring Kuwait. It was then that Iraqi leader Saddam Hussein invaded Kuwait and the Arab powers asked the United States to intervene. This war cost 61 billion, while the United States spent less than 20 billion of the total cost. Overall, there have not been many inconveniences that have significantly and negatively affected the US economy. The Japanese economy had great success during the 1980s and was defined as the 'Bubble Economy'. Japan first industrialized after World War I by creating industrial and financial groups called zaibatsu (Okina et al, 2001). These were usually created in groups of families and then others bought shares and formed strong business relationships. This, along with the US Marshal Plan, aided Japan in its economic reconstruction and prosperity. President Truman signed the US Marshall Plan to help post-war Europe rebuild their economies and prevent the spread of communism. The Bank of Japan also lent more money to people, stimulating the economy. All these factors have contributed to the growth of the economy in Japan. The Japanese lacked natural resources, however they adapted by creating innovative technologies and greater efficiency to compensate for this. They would make money by getting ideas’.