Summer Of Mistrust

American confidence is more than a state of mind; it is a muscle, a westward-ho-ing, atom-splitting, moon-landing muscle, and Osama bin Laden's autumn ambush, designed to break it, seemed only to make it stronger. The markets reopened within a week after Sept. 11, swooned and then revived, and even as the fires still burned downtown and the soldiers headed off to war, more Americans said they believed the country was on the right track back in October than felt that way last week. Is it possible we could do to ourselves what our worst enemies did not manage?

The corporate criminals among us, the swindlers and profiteers, are now described in language once saved for bin Laden's legions. Business professors are staggered by the suicidal audacity of top executives--did they really think they would not be caught?--and marvel at the damage done. "It's as if we have given the CEOs weapons of mass destruction--at least economically," says accounting professor Brian Shapiro at the University of Minnesota. "The companies they run are bigger than ever. When something happens, thousands can lose their jobs--and more people than ever are invested in them. So a few can do a lot of damage."

And that damage may be lasting. A new TIME/CNN poll finds that fewer than one-third of Americans expect the economy to improve in the next year. It is not just that we have confronted in WorldCom the worst case of fraud in U.S. corporate history; today the bluest of chips, from Merck to General Electric, are being challenged about their bookkeeping. The perception of deception is so widespread, the stakes so high and the costs so great that investors are choosing to forfeit a game they now think is rigged. The markets skidded last week straight past their 9/11 lows into the most bearish forests in a generation. The dollar sank ever lower, and the Dow dropped through 9,000 toward a 7.4% loss for one week alone. Financial planners say many people won't open their 401(k) statements; they just can't look. But as we wait in the dark, a new reality takes hold, that our lives this year are being reshaped by enemies both foreign and domestic, and while the public did unite behind its leaders in the face of the terrorist threat, we have less faith that they can protect us against the villains we planted and watered in our own backyards.

The President spent much of the week working to catch up to the country, to show that he felt its pain and shared its outrage. But when White House aides talked about his anger, they made it sound as if he were more steamed about the decision to end baseball's All-Star game in the 11th inning. No matter how stern Bush looks when he declares that bad guys should go to jail, he has not erased charges that as an oilman in the '80s, he profited from the same kind of sweetheart deals he now decries. Public opinion is focused not on the Beltway but on the boardroom, and the President's career, lineage and aspect all put him in one of the fancy leather swivel chairs. "CEO," an adviser warned the President, "has become a dirty word."