2002 will be remembered as a year of spectacular failures. The political mistakes that became front-page news were glaring, but they were often the product of miscalculation. Those that dominated the business headlines were the result of greed and larceny. Painful as all those blunders were, there are lessons to be learned from them. While individuals have been hurt and businesses destroyed, the damage has been contained: both national economies and the global trading system have proven more resilient than many had feared. The political mistakes were often well-intentioned gambles that did not pay off. Politicians need to be better prepared for uncertainty; they cannot -- should not -- take the safest option at every turn.

Bankruptcies dominated 2002. It seemed that each month a new record was being set by a corporate collapse. The first to fall was Enron, the Texas-based energy company that fabricated trades in an attempt to boost its bottom line. Enron's implosion also claimed accounting firm Arthur Anderson, which signed off on the Enron trades and then shredded documents to obscure the paper trial.

Markets had barely a chance to catch their breath before WorldCom made history by becoming the biggest U.S. company ever to file for bankruptcy protection. The telecom company admitted that it, like Enron, had inflated earnings. The original gap was estimated to be $3.85 billion over five quarters; that estimate was eventually revised upward to reach $9 billion. Global Crossing soon joined WorldCom in the Chapter 11 pantheon. In England, Vodafone announced a $19.3 billion loss, the largest annual loss in British corporate history. Those jaw-dropping failures confirmed for many that the Internet "bubble" and the talk of a "New Economy" were just so much more market hysteria and hype.