You accuse me of ignoring the high cost of Vietnam — but ultimately your own argument supports mine. Toyota and Volkswagen couldn’t have challenged the American automotive hegemony in the 1970s had it not been for the re-industrialization of Japan and Germany that allowed this to happen in the first place. The US got “stuck” in a 1950s mentality (cheap overseas oil, no significant international industrial competition), and re-industrialized countries that 20 years prior couldn’t compete had built up enough that they could.

The US wouldn’t have regained its edge even without Vietnam. At best, it would have slowed the slide — but ultimately every other country on earth was also going to grow its economy, and the re-industrialization that happened in countries with much cheaper costs of living (and yes, in some cases with regressive political regimes that worked to keep costs down) was always going to happen anyway, and no amount of US protectionism was ever going to prevent it from happening. As I pointed out elsewhere in this post (as one example), Australia in the 1950s bought the vast majority of its automobiles from US companies — but now they buy primarily from Asian manufacturers. The US lost that business because those other manufacturers focuses on cost and quality — and it’s not likely getting it back anytime soon. Multiply that by virtually every industry in existence today, and it’s not hard to see that the 50s and 60s were a special economic anomaly that won’t likely ever happen again.