He was probably right. New York's cops routinely deal with demonstrators, but now there is heightened post-September 11 anxiety. Fears abound of future major terrorist attacks on U.S. soil. There could be thousands of terrorists at large. They could strike anywhere at anytime.

As the White House sees it, our trump card in the face of terrorist attacks is American toughness, resiliency and basic optimism. Our gravest risk is complacency as we fail to maintain a constant state of high alert.

Almost daily President Bush is making speeches, giving interviews and stressing to Americans that homeland security calls for around-the-clock vigilance. But the rhetoric is far ahead of effective action.

Opinion polls show that Americans feel vulnerable and that domestic security and fighting terrorism are their highest priorities. But we have never faced this kind of domestic threat. Federal, state and local authorities lack the organization and experience to move fast to make the nation more secure.

A member of one national security commission is aghast at the bureaucratic slowness that is impeding actions. On a background basis he said: "Our ability to protect ourselves is undermined by our lack of organization. We face multiple internal threats and we have exceptional skills to confront them, but we have not even started. We are not scratching the surface. We can create the necessary reserves of vaccines; we can revamp our healthcare services to respond to huge emergencies; we can make every fire brigade and police force learn from the lessons of the World Trade Center calamity. I see a lot of talk right now, but little action."

The widespread concern centers on the human toll of more attacks. But the economic costs could be devastating, plunging the U.S. economy--and inevitably the global economy--into a traumatic recession through the combination of three factors:

* First, the direct costs, such as massive business dislocation if there was a major attack on the telecommunications systems of some major cities, or if the postal system was hit. An example of the cost and our unpreparedness is the anthrax letter that was found at a major Washington DC post office sorting center a couple of months ago--that center is still not functioning normally and mail deliveries to the heart of the nation's capital continue to be delayed.

* Second, the psychological costs of personal and business behavior. The last attack brought the travel industry to its knees, another attack would send thousands of businesses into bankruptcy. The last attack forced costly changes in work habits and routines. Concern about security has been heightened in millions of workplaces. Another attack could have deeper and longer-lasting effects.

* Third, the long-term efficiency costs could be vast. Making all U.S. entry points subject to far tighter security inspections could be crippling. Nobody has yet figured out how to inspect the tens of thousands of containers that arrive in the U.S. each day. Securing our nuclear power stations, chemical plants, water treatment plants and communications systems could involve enormous direct costs and severe impediments to current business efficiency.

We would find ways to prosper in a more security-dominated environment, but it would take time. Creative people are already hard at work. For example, one suggestion doing the rounds sees all of us registering a variety of personal facts with a central security authority and receiving an "EZpass" identity card that would enable us to move through airport security in a fast lane. This kind of solution, however, raises another set of deeply troubling concerns--the impact on civil liberties of governmental anti-terrorism actions. Will we grant the FBI and the police and the immigration services more draconian rights to invade our privacy that set aside basic laws and curb some of our freedoms?

The good news is that Americans are tough and basically optimistic. They stand behind their leaders in times of crisis and their leaders have an uncanny ability to rise to meet the challenges, however great. Many Americans listened closely to President Bush last Tuesday evening. They understood that he, like they, see no grounds for complacency. I believe, most Americans share the President's conviction that, as he said "in this great conflict, my fellow Americans, we shall see freedom's victory."