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Something to Fear: Fear Itself

The long run-up to a possible war in Iraq is exacting a heavy toll on psyches and economies from Orlando to Shanghai to Jerusalem.

March 01, 2003|Shawn Hubler | Times Staff Writer

Because of the war that may happen tomorrow -- or in two weeks or six weeks or, then again, not at all -- Joan McCullers has spent months deciding whether to fly from Virginia to Reno to see her sister. Richard Heckmann has put expansion of his Los Angeles-based sporting goods business on the back burner. Gail Devers, the two-time Olympic gold medalist, has warned that she may not travel from Atlanta to England for this month's world indoor track championships.

Sony Computer Entertainment in Tokyo has canceled the free trips it was offering as a PlayStation 2 prize promotion. Hiring has been frozen at Walt Disney World in Orlando, Fla. NBC has delayed production on "Around the World in 80 Dates," a global "reality" series, and 20th Century Fox has postponed its new "Mad Max" sequel, which was to have been shot in Namibia, until autumn. In Hong Kong, an elementary school with a big American enrollment has called off the fifth-grade class trip to mainland China. In Tehran, Farnoosh Salehi is giving his daughter gold coins rather than an apartment as her wedding present, on the hunch that as violence rises in the vicinity of his country, the price of real estate will dramatically fall.

In actions large and little, local and global, the world's bystanders are bracing for an imminent invasion of Iraq. Long months of debate and deadlines -- an extraordinary public run-up to possible armed conflict -- have put on hold lives and livelihoods worldwide in ways that are turning out to be as demoralizing in some respects as war itself.

"It's hard to find a historical analogy for what's been happening," said David M. Kennedy, a professor of history at Stanford University and author of "Freedom From Fear: The American People in Depression and War, 1929-1945."

"You'd look a long way to find a war that's had this much foreplay."

And this time, Kennedy notes, the conflict at hand affects a world shot through with connections. The impulse to hunker down has been triggered, not just in New York and Washington and Baghdad, but also in Tokyo supermarkets and San Francisco rug outlets. The Dodgers are skittish about going to Mexico City for exhibition games later this month. Tiger Woods says he may pass on this month's Dubai Desert Classic, never mind the loss of his standard $2-million overseas appearance fee.

Domestic packages have become the new hot travel item. "Alaska for this summer is really moving," reported Tama Taylor Holve, who heads a cooperative of 200 travel agents from her Studio City agency.

In a CBS/New York Times poll released Sunday, 55% of Americans said they wouldn't take a trip overseas in the next six months, even if they had the time and money. Asked why, 51% cited fear of terror, fear of war or fear that it has become unsafe for Americans to go abroad.

Not that they feel so secure at home either: In a Time/CNN poll, 56% of Americans said they expect more Al Qaeda attacks on U.S. soil if this country sends troops into Iraq. Meanwhile, the research firm estimates that war fears are costing the U.S. economy 900,000 jobs and $75 billion in goods and services that might have been produced if concern over Iraq weren't depressing business investment and inflating oil prices.

"Peace is certainly the answer, but resolution, however we achieve it, is critical," said Steve Cochrane, senior economist at the Pennsylvania-based forecaster. "Having this hang over us with no end in sight could be worse for the economy than going to war."

In corporate America, for instance, merger activity has plunged. In the week ended Feb. 21, just 54 mergers were announced by U.S. companies, according to data-tracker Thomson Financial in Newark, N.J. That was the lowest weekly total since the holiday week ending Dec. 28, 2001, Thomson said. The number of merger deals so far this year is down 27% from last year.

"Things are just grinding to a halt," said Richard Peterson, Thomson's chief market strategist.

Investors are nervous. At City National Bank in Beverly Hills, which specializes in business lending and managing investments for wealthy individuals, "there is clearly an element of psychological caution" among borrowers and investors, said Chairman and Chief Executive Russell Goldsmith.

In tourism, demand for travel insurance, up since 9/11, has been soaring as the possibility of war has complicated personal and business travel. At Walt Disney World -- where hiring was frozen last month because of the economy and war fears -- executives say vacation bookings have softened and travelers who used to book months in advance are now booking only 14 to 30 days ahead.

The cancellation of Sony's PlayStation 2 prize trips deprived 410 winners of five-day vacations in Naples, Manchester, Heidelberg, Rome and San Diego. In Paris, visitor cancellations have so worried the government that the city's Office of Tourism has commissioned a study, and City Hall has urged hotels and travel agencies to cut their prices.

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