If you lived in the United States in the mid-1980s, there was one overwhelming geopolitical fear: Japan was going to buy the world. Japanese automakers like Toyota and Honda were annihilating Detroit. Sony and Panasonic dominated electronics. Japanese conglomerates were flush with so much cash they literally bought the Rockefeller Center in New York and major Hollywood studios.

American manufacturing was dying, and Washington panicked. But rather than fighting a traditional trade war, the US deployed a much more elegant, devastating weapon: macroeconomics.