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TERROR HAS REIGNED SINCE CRASH

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In the 20 months since the stock market crash of October 1987, the American economy and the workers, investors, managers and others who contribute to it have been repeatedly terrorized.

No individual will admit to being the terrorist, and no culprit has been jailed, but there has indeed been a reign of terror. As one threat passes, another takes its place. Always a test, never a rest.The first of the threats flashed across America within minutes of the crash. America, it was said, was about to plunge into recession. Not just an ordinary one, but something that would make the 1930s seem like boom times.

It sounded convincing. A trillion dollars or more of value cannot disappear without repercussions; consumers, who make up two-thirds of the economy, will be unable to buy; producers without buyers will be forced to shut down.

Learned journals prepared articles on the amazing similarities between 1987 and 1929. Popular essays spread and enforced the gloom. Prophets orated from the mountaintops. Seers claimed to have looked into the pit.

Time passed, and people adjusted to fear. They conceded that judgment day might be postponed, but in the meantime there would be terrible times. The economy would overheat! Interest rates would rise! Inflation was on the way!

That threat seemed good for a few months; there was enough supporting evidence to convince the "experts" that this time they were onto something substantial. Inflation now, they said, and then the economic crash.

Whether it was through the intervention of divine power or the Federal Reserve, or because the threat wasn't real to begin with, the economy escaped the wild inflation that had been foreseen. And maybe even the crash.

Whatever, the old fear eroded into a new thesis: This economy has some guts after all, it was said. We will have a soft landing; the economy will parachute back to reality rather than crash in ruins.

It could not be, said others. When has an economy that has risen for so many months with so many aberrations - the federal deficit and the imbalance of international payments, for example - come down to a soft landing?

Soft landings, it was said by erudite ecomomic watchers, are for astronauts, not economies. Space ships are controlled vehicles, economies are nothing but meteors racing through space under no human control whatever.

Meanwhile, another threat emerged: stagflation. If by chance the economy came down like a feather instead of a rock, it wouldn't be able to rise again. It would stagflate; prices would rise, but jobs and payrolls would shrink.

So accustomed were people to threats that they almost failed to observe that one by one the threats were evaporating like steam on a dry day. A fragile thread of optimism even wove its way through the economy. The economy, it was said, is reaccelerating.

Reaccelerate? When? You mean, grow again? Impossible! Why we haven't had our great recession yet. Punishment first and then acceleration, perhaps, but not before.

Terrorism in pursuit of goals generally ignores everything, including the facts, but it also seizes opportunity. And if the reacceleration theory had to be accepted by the terrorists, then they would make use of it.

They are reminding us now that the economy is cyclical, that ups are followed by downs and that whenever the economy accelerates it is heading for a fall.