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With stock markets reeling after the rejection of President Bush's $700 billion rescue bid, the economic picture seems bleaker than ever.
As the world looks to the White House for leadership, the President now cuts a helpless figure.
It is a far cry from the Great Depression of the 1930s, when American politics produced one of the greatest leaders of the century, whose New Deal became a byword for government activism.
Like President Bush, Franklin D Roosevelt was a scion of America's political aristocracy, but there the similarities end. After a life of pampered luxury, he was struck down with polio in 1921, losing the use of his legs. Yet he fought back to become the Democratic governor of New York and, in 1932, with the Depression in full swing, he was elected president.
When FDR took office in March 1933, the economic situation could hardly have been bleaker. Banks were collapsing daily, millions were out of work and on Inauguration Day itself the banks in New York and Chicago closed their doors. “When we arrived in Washington,” an aide said later, “terror held the country in its grip.”
Yet while Roosevelt knew little about economics, he was a natural leader. “All we have to fear,” he famously told the nation, “is fear itself.” In the first of many radio “fireside chats” he told Americans that the government would ensure their money was safe. In his first few days he gave federal support to the struggling banks and cheered everybody up by ending Prohibition — and that was just the start.
What followed became known as the Hundred Days, a legend in American history. Roosevelt set up new mechanisms to regulate banks and give aid to farmers; he established a massive Civilian Conservation Corps to put the unemployed to work; he handed out $500 million in relief to the poor; and he spent billions more on public works.
But the New Deal was about more than economics. It supported such painters as Mark Rothko and Jackson Pollock, while a federal photography project produced some of the most famous images of the 1930s. And FDR's Hollywood allies pumped out films that supported the ethos of the New Deal, from gritty social documents like The Grapes of Wrath to musicals such as the Ginger Rogers classic Gold Diggers of 1933.
While conservatives reviled FDR as a class traitor, his breezy, dynamic leadership made him a hero to most Americans. He won a record three more elections, and his legacy of active government, social security and welfare for the poor became the cornerstone of American democracy.
The world badly needs someone to match FDR's vigour, yet President Bush has fallen well short. We must hope that either John McCain or Barack Obama proves a more fitting heir to America's greatest leader.
