From somewhere in the middle of the Arizona desert, as he was making his legendary drive to our city in 1994, Jeff P. Bezos called a start-up lawyer to discuss his Internet superstore idea. The lawyer, attentive to practical details by trade, asked Bezos a simple question: What would this new business be called? Bezos thought he knew the perfect name: Abracadabra. Obviously, he ended up going with the more innocuous-sounding Amazon.com.

Would Jeff Bezos have been as successful if he had gone with his original choice--Abracadabra? If he had used such an appropriately brazen name, would Bezos have unwittingly tipped off the rest of the world to the underlying mirage of his business plan?

Bezos is a magician with a classic act: making the incredible appear credible. Until now, Amazon.com has gotten away with this illusion--in turn, defining the New Economy. Indeed, the New Economy (and Seattle itself) was lit by the glow of Bezos' fantastic, magical exaggerations of the future. By a trick of misdirection, Bezos spent the last five years charming employees and Wall Street alike with grand illusions of tomorrow's New Economy.

However, thanks to last week's reality check--when Amazon laid off 15 percent of its workforce--we've finally arrived at the future, and it's not as heavenly as Bezos had conjured up. In fact, employees and investors have been equally duped (after spending so much time and money, respectively, on Amazon), only to find themselves with worthless shares in a struggling superstore.

As of last week, Bezos' premier and longest-running magic show, in which a big business company disappears only to reappear as an enlightened cooperative, is over. By laying off 1,300 people, Bezos finally dropped the illusion that Amazon operates on a magical new paradigm that can afford to treat employees with the respect usually reserved for investors. Bezos the businessman has returned to the fold: Amazon.com is an Old Economy company now, and Old Economy companies lay employees off in order to curb their losses. (Old Economy giants like General Electric and DaimlerChrysler both announced massive layoffs last week--50,000 and 26,000 jobs gone, respectively.) As Gary Hamilton, an economic sociologist at the University of Washington, told me last week, "The dichotomy of the Old Economy and New Economy is converging."

This, of course, is terrible news to the employees of Amazon.com, whether or not they were laid off last week. The myth of part ownership was one of Bezos' most compelling illusions. He was depending on it to finesse a 30-million-customer base (if not a net profit) from employees' collective overtime. His trick was to convince his workers that they were Amazon itself. The inclusion of stock options in employee salaries (in lieu of market pay) gave rise to the concept of employees as "part owners" of the company. Employees' personal financial fates were tied to Amazon's stock price, and it was demanded, constantly and explicitly, that they "be an owner"--working thousands of hours of overtime to keep the company going.

But in last week's brash, overnight turnaround, the truth was revealed: The workers were never Amazon at all. Abracadabra! Thirteen hundred "owners" disappear!

Darren Higgins, a doomed employee in the Special Operations Group, Tier 3, and a member of the Day 2 union efforts, was one of the 850 Seattle employees who were asked to report to the Westin Hotel on January 30. Between the "report in five minutes" e-mail messages and the manila envelopes of purposely convoluted termination information, Higgins found the whole process so baldly crass that he feels like he's "been fired from a company that I never worked for."

Not surprisingly, the disillusioning of Amazon has left in its wake a permanent paranoia. This dark psychological state of employee mind fatigue has been induced by odd severance agreements, layoff survivors' guilt, the possibility of longer work hours, and the reality that remaining employees can still be fired. A dark fear-sickness is rolling through Amazon like blackouts through California--as many people are expected to remain without power.

Employees aren't the only folks emerging from the somnambulant spell cast by Seattle's grand illusionist. The paranoia surrounding Amazon is darkening Wall Street as well. In the past, Wall Street overlooked Bezos' blasé dismissal of placing a date on real profitability because he was flashing such beautiful pictures of huge, impending future riches. On Wednesday, January 31, The New York Times reported that "Rather than [using] conventional measures of profits or losses, Amazon prefers investors to use its [own] measure."

But Wall Street is tired of the magic show. Bezos had to go straight: Laying off core employees and replacing them with cheaper labor is classic big business, which is vastly reassuring to the people Bezos still needs to impress. Wall Street analysts are no longer confident that Bezos can, at the very last second, escape from his heavily locked and chained underwater chamber of worthless stock and immense debt and surface to the top of a great success.

Crazily, with his absurd laugh still intact, Bezos is still trying to fool us all, even though the investors have forcefully asked for financial truth. Pushing Amazon math, Bezos maintains that the company lost only $90 million in the latest fourth quarter, compared to $185 million a year earlier--a seeming success. Unfortunately, this turns out to be more abracadabra. By traditional accounting standards, Amazon lost $545 million in the fourth quarter, compared to a loss of $323 million a year earlier.

Bezos' strangest New Economy stunt was to set aside $2.5 million worth of stock for Amazon's departing employees. Baffling both Wall Street and the laid-off workers themselves, his offer appears absurdly confident and generous. But as Bezos has proven, such acts are not to be trusted. This might appear to be a nice end to laid-off workers' years of service. However, ex-employees will now have to face the twisted psychological dilemma of being invested in Amazon's financial decision to dismiss them.

Amazon.com came to Seattle to offer itself as one of the identity pillars of this city. That we ever believed in Amazon as somehow more significant than one of the giant stores out on Aurora is a shame. Seattle will now have to reshape itself and fill the empty psychology of Amazon's "opportunities," adjusting our city's self-image accordingly.