Rewriting the script for the U.S. economy.

Position:Statistical Data Included

As the country tries to sort through the confusion of a disaster without precedent, economists and policymakers have their own worries when it comes to the near-term future for the U.S. economy. Given the fragile state of economic growth, both in the U.S. and abroad, this new jolt to our collective confidence was certainly a step in the wrong direction. With the precedent of the 1991 recession following Iraq's invasion of Kuwait staring us in the face, the fear of a loss of consumer confidence producing another painful downturn is well justified.

Already the more fundamental, and thus more frightening, challenge to our collective confidence has been met. Despite the shattered infrastructure of lower Manhattan the business of trading, investing, and financing the economic activity of our country continues, after a very reasonable interruption, restoring a sense of normalcy that had been suspended to that point.

More significant for the economy is our collective confidence in the sustainability of the economic expansion. As every banker knows a belief that investments today will pay dividends in the future is the glue that holds our economy together. With new uncertainty over the global political climate, not to mention a reassessment of the logistics of trade, travel and commerce, our vision of the picture is decidedly murkier than before.

The timing of this disruptive attack is especially unfortunate for the economy. With business spending already down, and exports driven down by the strong dollar and slumping economies abroad, consumer spending has been the one steadying force that helped keep the fragile expansion alive. The stubborn confidence of consumers in their own economic security will be sorely tested, even as more bad news about our economic performance rolls in.

As anyone who watched the scene outside Indiana gas stations recently can attest, confidence can be a fragile thing. The vivid images of wanton destruction served up so copiously by our electronic and print media, however, are of very little help in putting these tragic events in perspective. With the passage of time, consumers will have a clearer picture of how, if at all, the events that began September 11 have impacted their jobs and their welfare. When that focus is regained, what will they see?

In all likelihood, they will see some sort of military conflict. War clearly deals a blow to the interconnectedness of the global economy, threatening commerce and disrupting...

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