You could feel the power shifting from the 43rd to the 44th President as Barack Obama stepped onto the stage in Chicago to announce his new economic team and reiterate his priorities for America. Even though the transfer of power will not occur officially until January 20th in Washington, the United States now has two Presidents.

Arthur Levin, former head of the Securities and Exchange Commission, commented afterward: We have a shadow administration in power, in play, acting in a constructive and cooperative way with the Secretary of the Treasury Hank Paulson. We cannot afford a lost two-month period where public confidence would disappear.

This wasn't the way Mr. Obama had originally intended to manage his accession to the most powerful job in the world. The mantra of his transition was “America has only one president at a time.” He wanted to remain on the sidelines until he had all his ducks in order. He would name his national security team first, to prepare for what was thought to be the most dangerous threat during this period of transition. Then he would roll out his economic team. But events made him scrap his well-ordered plan.

As Mr. Levin bluntly put it: We have an administration that is virtually powerless, certainly a President whom nobody listens to. So, with hundreds of billions of stock market dollars vanishing into thin air and more big banks threatening to collapse, the next president decided he couldn't wait any longer. Two months before his official inauguration, Mr. Obama grabbed the reins from the feeble hands of Mr. Bush.

In effect, it is Mr. Bush who has become the shadow president. From now on, Mr. Obama will be setting the national priorities and making the big decisions. He consulted with Secretary Paulson on the new bailout of Citigroup, when the huge bank was about to collapse. And he gave the next Congress its marching orders: put Americans to work and create 2.5 million new jobs. He intends to hit the ground running.

The rest of the world is anxiously watching to see how this transition will play out. The foreign leaders who gathered in Washington earlier this month for the economic crisis summit were deeply disappointed when Mr. Obama refused to meet with them. They knew where the power really lies. It's on the shoulders of a 47-year-old ex-first term Senator who is about to be tested as no other American president has been tested since World War Two.

They also know that all their talk about the failure of American-style capitalism and the downfall of the world's leading economy is mostly just talk, aimed at electorates who are seeking a scapegoat for the pernicious recession that is dragging down the world economy and trashing most countries' economic plans. Despite the recent prediction of the U.S. National Intelligence Council that the United States will no longer be the sole superpower by 2025, it is still the world's biggest, most inventive and robust economy. The United States may have led the world into recession, but it will also lead it out.

And the wishful thinking by other nations' central bankers about the dollar losing its position as the world's leading reserve currency is also premature, to say the least. Just ask all those Russians and French and Brits who have been selling their national currencies to buy dollars. Even the Chinese, who manufacture most of our goodies and whose economy is predicted to surpass America's some day, put more faith in the dollar than in their renminbi.

To get back to Arthur Levin - who seems to be a no-nonsense, blunt-spoken man who knows what he is talking about - his reaction to Mr. Obama's seizing the initiative this week was unequivocal. He called it a smart move. Let's hope he is right.