Another factor was that from the end of the war until perhaps the middle '60s, American manufacturers had a ready made market for practically anything they could produce while Europe and Japan rebuilt their war-ravaged economies.  And I think it is no accident that, from about the mid '60s on, European and Japanese companies began to out innovate and out compete the Americans with newer, more modern facilities and newer, more modern management structures.  Deming tried to sell Total Quality Management to Detroit first and got no traction whatsoever.  They were entirely too fat, dumb, and happy with the status quo.  The Japanese, on the other hand, bought into TQM wholesale.  The rest, as they say, is history.

We all bleed the same color.

I don't know this as well as I'd like - I put my academic career as a historian focused on the US in the 1960s on hold just as I was starting to investigate the economics of the era - but what I do know is that spending on the Vietnam War helped produce significant inflation across the US by 1967-68.

Lyndon Johnson refused to seek a tax increase to pay for the war, hoping to keep the war's impact from being felt by most Americans, and this apparently led to the inflation as well as screwing with the balance of payments system set up with Europe at the end of the war.

There's likely more to the story, but that's a piece. While we have a good understanding of economic policy history from 1980 to the present, it seems that the era from 1960 to 1980 is less well understood.

And the world will live as one

of the West

I think the economic policies of the industrialized Western European economies (except Britain) after WWII are a much better model for how the the West should revive their economies. Deficit spend till full employment, for example. Have an incomes policy and understand that strong and nearly universal unions are an element of that. Lead, protect and encourage industry into high-employment and international quality production. There is no re-invention involved.

An important understanding is that whatever is done you will not get the growth rates of Europe recovering from WWII or the U.S. without much competition in the 40s and 50s, or of China over the last decade. Mature economies don't grow very fast, they're not where 'the market' wants to invest. So governments of mature economies have to force that investment.

fairleft