It is said that in 1929, when the stock exchange on Wall Street collapsed, hundreds of speculators jumped to their deaths through the windows of the Manhattan skyscrapers in which they worked. In reality, only a few suicides actually occurred. The real blow was felt three years after the stock exchange fell, when a large-scale crisis in the banking sector plunged the U.S. economy into an economic depression that nearly lasted until the end of the decade. In 1932, the number of suicides in the U.S. reached a record high.

Nobody is committing suicide now on Wall Street. Those who are not economists are treating the chaos in Congress and the collapse of the financial institutions as just another event. The absurdity is that in 1929, a minority within a minority of U.S. citizens invested in the stock exchange. In 2008, almost every American worker is invested either directly or indirectly, and is thus affected by the ringing collapse of the banks, insurance houses and investment firms. Thus it is difficult to understand the indifference in which this past month's economic developments have been received. After three days of tense negotiations, the U.S. Congress this past weekend blocked an emergency bailout plan proposed by the treasury. In fact, it was the Republicans who opposed the series of measures approved by President George W. Bush. Meanwhile, another banking giant collapsed - Washington Mutual.

The repercussions of these developments are immediate and painful also for Israel. Losses in the stocks and bonds market hurt investors as well as anyone putting aside money for retirement. The forecast for the intermediate term is no less threatening: higher unemployment, less growth, a drop in the standard of living, a decline in the real estate market. The situation here is as it is there.

The United States, the largest political, economic and military superpower since the Roman Empire, is undergoing an existential crisis. In economic terms, the scope of the crisis is the largest since Franklin Delano Roosevelt entered the White House. In ideological terms, it is the largest since the Civil War. The house of cards that rests on the pillars of financial witchcraft - lies based on the assumption that what goes up will continue to go up, and that one may extend loans on an unlimited basis and not have to pay them back by the end of the month - came crashing down before our very eyes over the course of the past year. The layer that is now collapsing with the nationalization of mortgage and insurance companies together with the bankruptcy of Lehman Brothers, is the one which serves as the foundation of the financial system in the U.S. and its capitalist ideology.

Capitalism is not dead, yet the way it was practiced in America this past decade is fading away. The emergency unit treatment that the U.S. government is now proposing is highly problematic. The rescue plan being championed by the treasury secretary includes the same troublesome measures of the kind that gave birth to the crisis, yet it appears that there are not that many options available. America is on the path to decline, together with those who shared in the fraudulent belief in free credit.

How ironic it is that the president during whose term the credit bubble burst and the crisis hit, is the son of the president who promised a new world order. That promise is being realized, yet in a manner not intended by Bush senior. In November, a new American president will be elected. The challenge awaiting him is monumental - to heal the empire, whose arteries are becoming clogged having just undergone a heart attack. The time has come for America to rediscover the best it has to offer - the creativity, the industriousness, the freedom and the strength for innovation that made it a role model for the rest of the world.