Marshall McLuhan, the Canadian media theorist who told us that "the medium is the message," and predicted that electronic media would turn our planet into a "global village," has been dead for 18 years. For all his prescience about broadcasting and the impending role of bits and bytes in disseminating information, McLuhan managed to miss the IBM PC, the Internet and Jerry Springer, though some would say he predicted all three. But I think McLuhan would have been totally flummoxed by the World Wide Web.

Yes, flummoxed. In 31 years of writing for pay, I've never once used the word "flummoxed," and here I've used it three times already. And I'm only two paragraphs into this column. Flummoxed. I mean it, and I think McLuhan would, too.

What is it that would have flummoxed McLuhan about the World Wide Web? It's this: The World Wide Web violates his underlying assumptions about media ownership and social conscience. At a time when "computer" meant punched cards and a mainframe in a refrigerated room, McLuhan predicted nearly everything about today's media except for Matt Drudge. Alas, Drudge has become the most significant part.

For all his innate understanding that "any new means of moving information will alter any power structure," McLuhan had a hard time thinking past the cost of entry for would-be media barons in his day. He was entranced by broadcasting — so much so that he believed it was "too late for the written word." Clearly, McLuhan had no inkling of electronic mail's ability to revive correspondence, if not civility. Even more damning, he thought in terms of broadcast licenses, transmitters and printing presses — devices of a scale and cost that matched his notion that we'd all soon be watching and listening to the same information. Therefore, we'd all be drawn into the same social discourse, like a village, though one of global dimensions.

But what if the broadcast license, transmitter, and printing press are replaced by a $20 per month Web site, accessible worldwide by more than 100 million Internet users? The power structure is still going to be altered, but that alteration goes beyond anything even McLuhan imagined.

And so it is with the saga of Monica and Bill. Drudge pulled this story from the waste heap at Newsweek. The magazine had considered running the story and rejected it. If Drudge hadn't picked up the scent, there's the real possibility that the story might never have made it in the mainstream press. This is the part that wasn't anticipated by McLuhan, who couldn't seem to get past the idea that media barons or editorial committees or some other group of nominal adults would make the call on story suitability.

Drudge is a phenomenon unique to the Web, a global publisher on a beer budget. News space is suddenly cheap thanks to the World Wide Web, and as a result, the quality of news is dropping. If the news hole is infinite in depth, any story can qualify.

This is not all bad, of course. President Clinton's actions can, on some level at least, be seen as the nation's business. Whatever the guy does is news and now the Web has expanded what qualifies as news to include, well, anything and everything. News judgment no longer exists.

The impact of this trend goes far beyond the White House, and this is where I see the most significant cause for concern. This same trend away from discrimination and gatekeeping on the part of the media is at the heart of our current global economic crisis.

Six months ago, there was a financial crisis in Asia, but the media said it wouldn't affect America. We were too strong, our economy too robust. Turbocharged by sales of computers, software, and communications gear, we were going to ride out the financial squall. That's what "they" said, and generally, we believed "them." Long after the Asian crisis began, long after the Russian crisis followed, the Dow was still cruising to new heights, cracking 9,000 last July.

Today the Dow is 1,200 points lower, but the economists still see little problem with the underlying fundamentals of the U.S. economy. The Japanese economy is more crippled than ever, and the Japanese government is incapable of taking action to fix the problem. Yet the yen is rising against the dollar. What the heck is going on here? And what has changed since July?

People have been talking. At a time when the experts say there is no cause for panic, when our leaders urge us not to panic, we are panicking. Much of this is fueled by information, and the major source of timely information in the world today is the Internet. Just as with Matt and Monica and Bill, there are no longer editorial committees at major newspapers, magazines and networks deciding for us what we ought to know or not. In fact, the media outlets have become reactive, more often than not following the Internet, rather than leading it.

The result is instability. This is new territory for all of us, and we don't yet know how to read it. How do we decide whether or not to believe what we read on some Web site, even this one? Nobody knows. Over time, we may come up with some conventional wisdom in this area. But until we do, people will continue to panic, to see conspiracies where there probably are none, to sell all their holding on a whim and suggest that their neighbors do the same. Some of these prophesies are self-fulfilling, which scares me. As a guy who has been breaking stories in this area for more than a decade, the power of the published word is scary. And I like to think of myself as a responsible journalist. But what if the journalist is a Ted Kazinsky?

There's no going back, of course. We couldn't shut down the Internet if we wanted to. Nor would we want to. The only culture disciplined enough to consciously reject technology for social reasons was 17th century Japan, which rejected firearms as a preferred alternative to having all the samurai killed off in shooting matches. But that was 17th century Japan — not today's Japan, which has to take some responsibility for causing this mess in the first place.

The upshot of this is that it puts real strain on the tools of international financial management. The G-7 and the International Monetary Fund have come under attack for ineffectively managing the world economy. And it's true: They ARE ineffective. Their total fixation on using the supply of money to control inflation — the basic precept of Keynesian economics — doesn't stand up in the Internet age. This is because the hearts and minds that mattered to Keynes were those of a few dozen rich men who met in smoke-filled rooms. Those were the days when a public works program — or a world war — could handily drag a country out of recession, even depression. But no more. We've got too many people managing their own money, keeping an eyeball on e-trade, and asking themselves, hour-by-hour, whether it's time to cash out. Governments can't affect economies if their citizens are actively working against them.

It may be a global village, but nobody has control of the village's money.

We're flummoxed.

Film at 11.