Wandering around the World Economic Forum in Davos, Switzerland, Daniel Gross noticed that things felt different—especially for Americans. "In normal times, Davos—which attracts Type A's the way Florida attracts retirees—isn't very relaxing," Daniel said. "But this year, it was particularly not relaxing because of the turmoil in the global markets all week. Tuesday, pre-opening, is a good time for private-equity types to get in some skiing. The mountain was closed, though, due to poor visibility. Just as well, since most were too busy on the phone with brokers, portfolio managers and colleagues, following the market's gyrations, to ski."

Understood as widespread contractions in economic activity, recessions are officially defined only in retrospect, when financial data is later analyzed. But with the subprime-mortgage effect still rippling through the economy—leading to defaults, foreclosures and ultimately tens of billions in write-downs for big firms like Citigroup and Merrill Lynch—many believe we are well on the road to recession, and the story of how we got to this point sheds light on America's role in the world economy and on the hidden risks that we face.

"Given the complicated financial machinery that now connects the world's market, will a U.S. recession quash the booming growth we've seen in emerging markets like India and China and tip European economies over the edge?" Daniel writes in a package that includes essays by Robert Samuelson and Fareed Zakaria. "We are, of course, far short of a Great Depression now," said Nouriel Roubini, professor of economics at New York University's Stern School of Business. "But in terms of systemic risk and the risks of a financial meltdown, you almost have to go back that far to find a good analogy."

Daniel worked from Davos, where, he reported, "I've heard very little talk about the U.S. primary elections, very little talk about Iraq or terrorism, and lots of talk about systemic risk and technology. Hard not to feel, as an American, that the world is, if not passing us by, getting on with its affairs at its own pace. The indispensable nation seems a little dispensable here. But some U.S. figures who are respected on the world stage are still here: I just cut in front of Tom Friedman at the bar."

There was, in fact, conversation at Davos about war as well as commerce. In two exclusive interviews, Lally Weymouth talked with Afghanistan's Hamid Karzai and Israel's Ehud Barak about the perennial issues of terror and security, including the essential but mysterious question of Iran and its nuclear ambitions—reminders, if any were needed, of the serious matters that, like the economy, await whoever emerges from the hurly-burly of the presidential campaign.

Finally, a word of farewell. Richard Darman died last Friday at 64—too young and too soon. A distinguished public servant in the administrations of Nixon, Ford, Reagan and George H.W. Bush, he fought a characteristically brave fight against the leukemia that killed him. The father of NEWSWEEK writer Jonathan Darman, the elder Darman loved his family and his country; a student of power and an intellectually rigorous thinker, he saw public service as a noble undertaking. Late last week, when we were weighing where to run Evan Thomas's obituary of his friend in this issue, we decided to put Darman right in the center of the action, in the heart of the magazine, amid stories of political strife and economic crisis. It is where he would want to be.

© 2008