Last winter, America's central bank - the Federal Reserve - was busy patting itself on the back. The Fed's cut in its basic interest rate to 1.75% per year seemed to have worked: the recession was ending. Despite sobered expectations about the high-tech revolution's impact on productivity and profits, as well as the jitters inspired by the terror attack on the World Trade Center, American businesses, it was believed, would soon start investing again big-time because borrowing money at 1.75% was too good a deal to pass up.
By late spring, those expectations had disintegrated alongside the collapse of Enron, WorldCom, and Arthur Andersen. Suddenly, everyone doubted the integrity of the financial accounts of American companies. Suddenly, everyone saw just how much America's system of corporate surveillance and control had deteriorated during the bubble of the 1990s.