WASHINGTON. — Washington -- How will Americans deal psychologically with the harsh economic events in Japan?
In 1987, when the American stock market took a plunge of 22 percent, it was regarded as an apocalyptic event, marking the end of a decade (of greed), the end of an era (the ''American Century'') and the end of a way of life (upward mobility). That sort of stuff went on and on, even after the market went back up, and even when the market went up even further, to where it is now.
The Japanese stock market did not go down 22 percent for just a few months. It went down over 2 1/2 years by more than 55 percent, which is enough percents to get you more than halfway to nothing.
It took a while for the Japanese economy to reflect the Japanese market (or vice versa). But economic growth in the first quarter of 1992 was negative. That is merely a signal of a recession, as are the record number of corporate failures, the crash of real-estate values, and the bigger deficits due as expected tax revenues evaporate.
But there is something more at work as well. The fabulous (and sometimes criminal) overpricing of Japanese stocks had helped finance a global Japanese binge of acquisitions. And so, it was said, endlessly, that ''the Japanese are buying up America.'' bTC Now, with market values decimated, Japanese banks will be calling loans secured by inflated stock prices, and investors will be unloading some American assets, S&L-style. (Get ready for: ''They're selling out America!'')
How will we deal with it? After all, for Americans this isn't just some two-bit, banana-split republic under cyclical economic strain. This is -- Japan! -- the nation that (we were told) was the next superpower, that would dominate the world, that would steal all our good jobs, that would ''manage'' America's decline -- the nasty nation that had become the personification of America's anticipatory anxiety.
This is -- Japan! -- subject of one of the world's silliest books, ''The Rising Sun,'' by Michael Crichton, which reveals in exquisite detail how the conniving and dedicated Japanese are shrewdly taking over America. (If they're so shrewd, why are they in the soup now?)
A much better job on the theme of Japanese economic aggression was offered (alas, briefly) on Broadway by ''Shimada.'' The play concerns a Japanese corporate takeover in Australia. A depressed Aussie emphasizes that there's no sense fighting back because ''they got the money, the power, they even got the Yanks on the hop.''
To be sure, the Yanks have been hop-headed about it, magnifying real problems to absurd levels. But why? Serious Japanese never deluded themselves that Japan could challenge America as the global superpower, economic or otherwise.
It's more an American psychological problem than Japanese. Obsessions fill felt needs, and psychiatrists look for reasons behind obsessions. (Why don't we have shrinks for countries?)
There are lots of reasons that so many Americans sold, and bought, the now-irrelevant myth of inexorable Japanese supremacy. It was a vehicle to urge us to do better, or to trash America, or for political use by the out-party. And it was a vehicle to let us ignore the responsibility of being No. 1 in the world.
What will we do now that Japan is only a very important country, not taking over the world?
Perhaps we will find another threat to American greatness. But where? Europe? A tough sell right now: Eurosclerosis is back, and even the common market may not fly high. Perhaps we will focus on unilateral American erosion -- the enemy is us -- centered on disintegrating values. It's a somewhat more credible case than Japan Ascendant, but it doesn't fill the bill.
It still leaves America, with all its real problems, as the dominant global economy and the dominant global culture, the sole surviving superpower. For good or for ill, we're No. 1. Which leaves the question: Having run out of excuses, will we shamelessly shrivel up on the couch, or act the part?
Ben Wattenberg is author of ''The First Universal Nation,'' published by The Free Press.