Daniel Gross: All Related Content

Sounding an alarm bell about the nation's safety net -- "the system is not sustainable as currently structured" -- the report offered three potential options to set Social Security back on the road to insolvency. Each involved diverting a portion of Social Security payroll taxes out of government bonds (in which they're now invested) and into private accounts, which could hold stocks and bonds.

It concluded: "Carpe diem!"

Not Much Optimism Now

Since Sept. 11, investors have looked to Washington for leadership on three fronts: monetary, military and fiscal. Thus far, the Federal Reserve and the Pentagon have acquitted themselves admirably in meeting the first two challenges. The Fed aggressively slashed interest rates, and the military unleashed the fury of American air power on the Taliban.

This is the Golden Age of the self-made CEO. Michael Bloomberg, an up-from-the-bootstraps media mogul, was just elected mayor of New York City. Jack Welch, the General Electric CEO who trumpeted his working class origins even as climbed to the heights of power and influence, is a best-selling author. The business media loves stories of men and women who worked their way up from the proverbial mailroom to the corner office. Having broken free of the strictures imposed by birth, education, gender and class, they have thrived in the most competitive environments imaginable.

Back in the late 1990s, New Economy evangelists trumpeted the dawning of an era in which technologically backward governments and other authorities would yield to the unstoppable power of technology. There was always something ironic about this claim. For the Internet, along with the semiconductor industry that made personal computing possible, was incubated and nurtured by the federal government. And Internet service providers and software companies routinely lobbied government agencies in an effort to improve their competitive position.

Last week, two hijacked planes pierced the heart of New York's financial world, but inspired an outpouring of heroic and patriotic responses. To many observers, the events recalled the 1993 World Trade Center bombing or the 1941 Japanese attack on Pearl Harbor.

To this history-minded financial journalist, the terrorist attack on the Twin Towers and the reaction to it calls to mind a September 1920 tragedy that took place just across the street from TheStreet.com's headquarters. Until last week, that event stood as the deadliest terror attack in New York City's long history.

Things are looking bleak for the remaining publicly held content websites. San Francisco-based Salon's stock is trading for 43 cents. The grandly titled Salon Media Group is valued at a not-so-grand $6 million. Investors value financial news site theStreet.com, which had $58.5 million in the bank at the end of last quarter, at just $33 million.

A few months ago, politicians in Washington were arguing over what to do with the federal budget surplus, projected to total some $5.6 trillion over the next 10 years.

In recent weeks, the discussion has degenerated into a partisan food-fight about whether there is going to be one at all.

Due to the slowing economy, the federal government last week revised the 2001 surplus, figured as recently as January to be $281 billion, down to $160 billion.

Companies that supply, build and operate fiber optic networks are burning. Level 3 Communications, groaning under an $8 billion debt load, is cutting 25 percent of its staff. Last week 360networks ominously delayed an interest payment. Nortel Networks of Canada could lose $19.2 billion -- yes, billion -- in the current quarter.

The New York Times reported that advertising fell 16 percent from April 2000 to April 2001. At the Wall Street Journal, ads plummeted a shocking 37 percent.

The response to the short-term downfall has been predictable, and distressing. Newspapers across the United States have laid off thousands recently.

Venerable industrial companies like Owens Corning, W. R. Grace and Armstrong World Industries, a division of Armstrong Holdings, have all sought bankruptcy protection in recent months because of lawsuits from workers sickened by asbestos. But these companies have one common consolation: 18 years ago, another company blazed the asbestos-bankruptcy trail and survived.

With Nasdaq halved and the Dow flirting with bear-market territory, the idea of protecting your portfolio from downside risk may seem a little like buying flood insurance when your living room is under four feet of water. But there's reason to believe that the worst may not be behind us. Short interest on Nasdaq -- the number of shares investors borrow and then sell in hopes of repurchasing them later a lower price -- rose to a record level in March.

The market giveth and the market taketh away. Investors large and small have learned this homily in the past year. Washington politicians -- on both sides of the aisle -- may soon be singing from the same hymnal.

Republicans believe the declining markets will boost momentum for President Bush's tax cut, now referred to by Bush spokesman Ari Fleischer as an "economic recovery" plan.