Take, for example, the idea of Anthropogenic Global Warming (AGM). Just a decade or two ago, the idea was in its ascendency, building popularity like wildfire. I remember all of the “green” hype as an architecture student in the late 80s. I didn’t buy it then (thankfully), but it’s been shown now to be largely hype. Even the U.K. is now outlawing certain ads because they are too exaggerated. AGM is on a decline. The bubble – the fad – has burst.

I believe China’s media-enshrined status as an all-powerful counterpoint to American capitalism is a bubble that will at some point burst as well. Yes, China has had a great run when it comes to economic growth and ascendency to power on the world stage. But whether in stocks or political fortunes, all trends at some point reverse and come down off their highs.

I remember when everyone feared the ascendency of the Japanese. Their economy was on fire and they seemed unbeatable. Their cars were better, their companies better run without the overhead of fat-cat union contracts. Everyone feared that Japan would own every piece of American real estate.

It didn’t happen. Bubbles burst, the Japanese got ahead of themselves, and misjudged the market. They agreed to build plants here and unionize, losing much of their competitive edge. Real estate prices took a hit back in the 80s and again in 2005, resetting market forces and neutralizing a lot of Japanese “malinvestment.”

The same is bound to happen with China. The invisible hand of economics is a much more powerful force than government planners, and no matter how smart those planners are in their centrally planned economy, they cannot outsmart the market. They will make bad investments and become inefficient, as all big government will eventually do. China is not a juggernaut.

American doesn’t need to fear the Chinese simply because they own a lot of American debt, although we should be ashamed of ourselves for letting our politicians get away with the ferocious spending they’ve practiced for decades. However, we do need to fear them if we don’t get our act together and become competitive again as a nation.

If we can scale back the forces in American that are trying to build a big, inefficient European style government, we have a chance  to regain our economic footing in the world economy and compete with China. If we continue down a path of centralized government control of our economy, we’ll end up in the malaise that Japan and Europe have been in for quite some time.