Chugging toward a Slowdown: How the Economy's Greatest Strength-Our Faith in the Boom-Could Become Its Biggest Vulnerability for the Next President and Federal Reserve Chief Alan Greenspan

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The president-elect--whoever he is--cannot be watching the economy with much serenity. What's driven this economic boom has been confidence in the boom itself. People have acted as if it could go on forever, and they have spent accordingly. But we are now seeing the first signs of fraying confidence, following several weeks of adverse economic news. Last week a Gallup poll reported that 48 percent of Americans believe the economy is getting worse, up from 29 percent in July. A NEWSWEEK survey had mixed results. Only 26 percent thought the stock market would drop in the next year, but 54 percent thought a recession "very likely" or "somewhat likely." If confidence unravels, the mild economic slowdown that's now unfolding could deteriorate quickly into a nasty slump.

The specter must spook the administration-in-waiting. It would threaten the new president's popularity, play havoc with budget planning and, possibly, create conflicts with Alan Greenspan's Federal Reserve. For the record, few economists yet forecast a recession, and Greenspan last week hinted that a weaker economy might allow the Fed …