It was an utter surprise, striking directly at the most prominent symbol of Americana. It changed the way Americans think about themselves, and set off a chain of events that will continue rippling through the American economy for years to come.
No, we don't mean the acts of terrorism that brought down New York's Twin Towers exactly a year ago. We mean the fall of Enron, the American energy company, two months after the collapse of the World Trade Center. We mean the wave of financial scandals that has rocked Wall Street since then.
When the Twin Towers fell a year ago, if somebody had told you that there was about to be a wave of economic scandals that would affect the world even more - you'd have scoffed. You might even have been offended, because in the days following that surge of terror in New York, it seemed as though the United States and the entire Western world had changed beyond recognition. Economists feared that the economy would be paralyzed, that globalization would freeze in its tracks, that the tourism industry would collapse.
A year has passed. It is astonishing to see how fast the economy went back to business, in the United States and everywhere else too; how fast the terrible attack on New York became marginalized in most of the business world, and in the decision-making process of investors and managers.
It isn't as though the 12 months that have passed since September 11, 2001 were a period of affluence and growth. Far from it. They were terrible months for most of the world's economies and companies. They were a period of uncertainty, cutbacks, layoffs, losses, and diving share prices.
But the September 11 events were but a small part of the global problem, and an even smaller part of the difficulties the business sector and stock markets were feeling. The roots of the crisis lie in two processes that began years before the towers collapsed. One was the unbridled gala of investments and consumption at the end of the 1990s. The other was the twisted accounting practices adopted by so many companies.
The accounting scandals and sky-high salaries lavished on managers, and the fall of some of the most esteemed companies on Wall Street, destroyed the faith and security of America's investors and consumers just as much, maybe even more, than the fall of the Twin Towers did.
One after another, all America's most sacred symbols of capitalism tottered and crashed. It started with Enron in the energy sector, moved on to WorldCom in communications, reached Tyco in industry and it now threatening to reach the biggest and brightest of them all General Electric, a company that certainly is not about to go bust, but that won't be growing at the pace of the last thirty years.
A year after the Twin Towers crashed, America is still waiting for George Bush Jr to bring them the head of Osama Bin Laden. A year after the deadly terror strike, the U.S. is gearing up for another attack on Iraq. A year after September 11, 2001, the question marks and fears in America just keep getting bigger.
But today, Americans realize that the real challenge facing their economy isn't just the fight against terrorism: it is to restore the faith of investors in the system in the financial markets, in the managers of the business world, and in the regulators and politicians who are supposed to oversee them.
Each month that passes brings another thundering collapse of another giant symbol, and more question marks over some axiom of the markets. The latest example is the terrifying forecast released last week by Pimco's Bill Gross, the manager of the world's biggest mutual fund.
Bill Gross was the first to point a finger at GE, saying that it too could be hiding losses and controversial financial practices in its balance sheet. This week he said that the Dow Jones could drop below 5,000 points because the market is still selling at high multiples of phony earnings.
In other words, Gross dared cast doubt on the most prevalent of American basic assumptions namely, that over time, stocks are the best avenue of investment.
"Stocks historically return more than almost all other alternative investments but only when priced right when the race begins," Gross wrote. They have to drop substantially before achieving yields close to that of bonds, which have been yielding 5% a year. Nobody can promise stocks will achieve that, he ended cynically.
Other distinguished pundits, including Prof. Paul Krugman, have also been saying that the bitterest blow American capitalism has taken wasn't from Osama Bin Laden, it was from the Americans themselves. The responsibility for the greatest harm to the American economy and markets belongs to the managers and regulators of America, not to al Qaeda.
In Israel too, we may wake up one morning and find that the damage done by the Israeli-Palestinian conflict is a flea bite compared with the long-term harm done by corruption, irresponsible economic management, unsound social policy and the gradual disintegration of proper practice of government.