It's been a couple of weeks since the election and people like me are being asked to predict the future. How will Wall Street react to a second Bush term? Will Congress finally overhaul Social Security? What about a new tax system? What impact will the new administration have on corporate profits or even the value of the dollar? What does it all mean for L.A.?

It's flattering to be asked about these high-minded matters, but the truth is I haven't the first clue on most any of this. Sitting at my desk all day laying out news pages and editing copy typical fare for a news grunt doesn't exactly give me a front-row perspective on the affairs of Washington or the world economic scene. So, to state the obvious, my opinions are not based on late-night phone chats with senior members of the Fed or schmoozing it up legislative power brokers over a scotch.

But even from a distance, it's still possible to see the storyline. Actually, it's more of a shadow, and it hangs over our economic future, no matter what the White House is promising or the latest government data is showing.

It can be summed up in two words: Iraq and terrorism.

They may not always come up in discussions about fiscal policy or corporate expansion but their presence is being felt at most every level of economic life.

It helps explain why companies have been so slow to expand and hire, why the stock market has been stuck around the 10,000 mark all year, why the federal budget deficit has ballooned, and why the airline industry is on the verge of collapse.

It would be wrong to blame all our troubles on those two events. After all, records and movies would still have been pirated had the twin towers of the World Trade Center not come down or had U.S. troops not set foot in Baghdad. There also would be a health care crisis and corporate malfeasance would still be a big deal.

What those two events have done, however, is put us in a long-running funk. Think about life in the late '90s, when it was possible to sketch out a business plan on a Monday and get venture funding by the end of the week. We all realize that was a ridiculous way to do business, but it reflected a confident view of the world that has all but disappeared.

We're all so nervous. Some of it is based on very plausible scenarios, such as whether any additional losses the airlines might suffer from another 9/11-type attack would essentially put the industry out of business. But most of the worry, it seems, is indistinct almost as if everybody's mood rings have switched colors all at once. Businesspeople are used to linear worlds where problems get resolved and everyone can move on to make more money. But Iraq and terrorism? We're being told that these sagas will go on indefinitely and that's a very, very long time in the eyes of an ambitious entrepreneur or a calculating investor.

So yes, Social Security needs fixing, as does the tax code. The minimum wage should be raised, health care requires government intervention, something needs to be done about nuisance lawsuits, and the budget deficit must be contained to at least its current level. But what's really needed is for Americans to get beyond the shadows of Iraq and terrorism otherwise, our economic future stays stuck in low gear.

Mark Lacter is editor of the Business Journal.

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