During the second half of the twentieth century, the United States emerged as the preeminent power in the world, dominant in its economic and technological achievements as well as in terms of military hardware. Although the Soviet Union was a serious competitor in the arms race engendered by the Cold War, its economic achievements paled in comparison with those of the U.S. behemoth. Beginning in the 1970s, Japan began to rival the United States in the realm of industrial production, but the challenge faded in the 1990s, when structural weaknesses began to tarnish the Japanese miracle. The worldwide dominance of the United States was a product of a combination of political, economic, and cultural factors and showed no signs of abating as the new century began. But there were some warning signs that bore watching: a growing gap in the distribution of wealth that could ultimately threaten the steady growth in consumer spending; an educational system that all too often fails to produce graduates with the skills needed to master the challenges of a technology-driven economy; and a racial divide that threatens to undermine America’s historical role as a melting pot of peoples. As the new century dawned, America’s global hegemony was also threatened from abroad in the form of a militant terrorist movement originating in the Middle East. So far, the U.S. response, led by the administration of President George W. Bush, has been primarily military, but whether the politics and social forces driving the movement can be defeated by such means alone has been a matter of vigorous debate. As Americans become increasingly concerned about the threat to national security, the future remains in serious doubt. For most of the nations elsewhere in the Americas, U.S. dominance has mixed consequences. As a vast consumer market and a source of capital, the dynamism of the U.S. economy helped stimulate growth throughout the region. But recent studies suggest that for many countries in Latin America, the benefits of globalization have been slower to appear than originally predicted and have often flowed primarily to large transnational corporations at the expense of smaller domestic firms. At the same time, the U.S. penchant for interfering in the affairs of its neighbors has aroused anger and frequently undermined efforts by local governments to deal with problems within their own borders. At the end of the twentieth century, the United States was still finding it difficult to be a good neighbor.