I n a war economy, the public obligation is to do what is necessary: to support the military effort, to protect and defend the home territory, to stabilize the economy itself, and, especially, to maintain the physical well-being, solidarity, and morale of the people. These may not be easy tasks in the months ahead. We are facing an economic war--but not exactly a war economy. That means we get the dislocation without the usual growth. The impact of the September 11 attacks now includes a 14.4 percent drop in stock prices in the first week and collapse in sectors related to travel and leisure, notably airlines, hotels, and resorts. As these events cascade through the economy, they will weaken fragile household balance sheets and precipitate steep cuts in consumer spending. This, in turn, will deepen layoffs and depress economic activity. The ensuing recession could be severe. This is not merely a shock to a healthy system, requiring only limited measures to restore confidence and...