Suddenly, the bubble popped. Financial institutions on Wall Street collapsed like dominoes. The fallout is being felt far and wide, across the oceans to Asia and Europe. The crash of the stock market in New York on Monday set off a chain reaction worldwide, including Taiwan's jittery bourse that nose-dived to a new low.

Belatedly, economists have discovered the obvious. The boom of the financial markets was not sustainable because it was like a sand castle without a solid foundation. It was Wall Street magic played by a group of geniuses who were able to invent "derivatives" to swindle ordinary investors who did not understand what they were buying with their hard-earned cash.

How could the government watch this kind of game going on with folded hands? Well, it's because the Bush administration believes that "Wall Street can regulate itself." This hands-off policy is based on Reaganomics of supply-side trickle down theory that adopts a laissez faire position of deregulation.

For years, the credit bubble became larger and larger as Wall Street's investment banks like Bear Stearns, Lehman Brothers and Merrill Lynch sliced mortgages thinner and thinner to "spread risk" and sold pieces all over the world. At the same time, Fannie Mae and Freddie Mac were awash with liquidity, giving zero-down or low-down mortgages to lenders with disregard for financial risk, known as "moral hazard" in the parlance of the insurance industry.

Allowing Wall Street to regulate itself is risky. It's more so when the "fat cats" saw little risk doing crazy things, knowing that they could seek government help if they lose. Investment bankers nowadays are not like J.P. Morgan in the old days, who was honest and scrupulous. Now these fat cats are broke and seeking a bailout by the government with the taxpayers' money.

The financial storm is not expected to die down any time soon. Suddenly, America got the epiphany that de-regulation is to blame; that Wall Street needs policing and the financial markets must have oversight. It may take a decade, if not longer, for the United States to rebuild its financial markets.

The current crisis could well change the world's financial order. The unipolar financial world dominated by the United States may loosen up as a result. The dollar has been weak, and the U.S. national debt has been climbing steadily to close to US$10 trillion. A tri-polar financial order may emerge in Europe, Asia and America.President Bush, who came into office with a bang eight years ago, is certain to leave the White House with a whimper. It is almost certain that he will go down in history as the worst U.S. president. The baseless Iraq war he started five years ago is his legacy, as is the Wall Street meltdown, which is being seen as a financial 9/11.

The Bush presidency represents a lost decade because he squandered the eight years on an ill-conceived war that has already cost nearly US$1 trillion, and may need another US$1 trillion for the aftermath.

The lost decade saw America's decline. National building has either been delayed or put on hold. No bridges, freeways, public parks or schools were built. The national economy was sustained on the expansion of credit, or "financial engineering," instead of solid work that produces real jobs. The 43rd president of the United States has failed to provide leadership at a crucial time when U.S. national and financial security is being challenged.

Hopefully, the financial tsunami on Wall Street can act as a rude awakening for the United States. It will be up to Bush's successor to put the house in order and make up for the lost decade by working hard to make the country great again. Will it be Obama? The young Democrat certainly has an edge because a McCain victory on Nov. 4 would mean a third Bush term -- a spooky scenario for many voters.