In the years leading up to the 2008 financial crash, an influential subsection of the American political class became convinced that a major economic crisis was on its way. Serious Washington players like Robert Rubin, who served as head of Bill Clinton’s National Economic Council from 1993 to 1995, Peter Orszag, another heavyweight Clintonite economist, and Larry Summers, who served as Treasury Secretary between 1999 and 2001, all raised the alarm.

The crisis would have two causes, they claimed: the federal government’s mounting budget shortfall (the Bush administration was pouring billions of tax dollars into the War on Terror at the time) and America’s trade imbalance with China, which had grown exponentially over the past decade or so.

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