Americans fired back at Engdahl's statement, obviously, with David Remnick, editor of The New Yorker, saying, "'You would think that the permanent secretary of an academy that pretends to wisdom but has historically overlooked Proust, Joyce, and Nabokov, to name just a few non-Nobelists, would spare us the categorical lectures." Remnick added, ''And if he looked harder at the American scene that he dwells on, he would see the vitality in the generation of Roth, Updike, and DeLillo, as well as in many younger writers, some of them sons and daughters of immigrants writing in their adopted English. None of these poor souls, old or young, seem ravaged by the horrors of Coca-Cola.'' 
Well, lo and behold, the winner of the prize was named yesterday and it was, unsurprisingly, a European: French writer Jean-Marie Gustave Le Clézio. What I find ironic about this is that Le Clézio's "work reflects a seemingly insatiable restlessness and sense of wonder about other places and other cultures." Apparently, despite the fact that "Europe still is the center of the literary world" (according to Engdahl), it is those European writers who write about other cultures who are the most impressive. 
I don't feel qualified to remark on the merit of Le Clézio's win (never having heard of him before yesterday because America is so insular), but I will say this: American literature is different from European literature. For example, there is an entire American Literature department at UCLA, with different requisite courses and an emphasis on sociology and cultural studies. The literature is in tune with American culture, which is vastly different from most of Europe in many ways. This country is still in its infant stages from a literary standpoint, and the weight of the past is much less prevalent here so that we can focus on where we are rather than where we are in relation to where we've been.
The problem is that Engdahl mistakenly assumed that this difference is a bad thing, obviously forgetting that "variety's the very spice of life." What good would literature do if it completely disregarded the culture of the people reading it, instead focusing on the "center of the literary world"? America has different problems that Europe does, different issues and tensions, and it is by addressing those problems that writers prove themselves great.
I guess my point is, do we as Americans really care what the European "academy" thinks of us? We never have before, as far as I can tell, and though Joyce Carol Oates might be disappointed by the loss of the Nobel Prize in Literature to a European, I am not.
 "Nobel Literature head: US too insular to compete." The New York Times. 30 September 2008. http://www.nytimes.com/aponline/world/AP-EU-Nobel-Literature.html?ref=weekinreview
 Lyall, Sarah. "French Writer Wins Nobel Prize." The New York Times. 9 October 2008. http://www.nytimes.com/2008/10/10/books/10nobel.html?ref=books