A year ago this weekend, Americans were awaiting the dawn of the year 2000. Some, convinced that the rise of those three zeros would mean the end of civilization as they knew it, had stockpiled food, water and ammunition; others scoffed, but they were watching warily nevertheless.

The world survived Y2K, partly because of sensible precautions and partly because of a refusal to panic. That practice may soon come in handy.

President-elect George W. Bush, who ought to believe he has considerable control over the future of this country, has been prophesying recession. His reasons for issuing such dire predictions may be somewhat self-serving; he’s inheriting a healthy economy from the Clinton Administration, and he knows (or at least his advisors know) that what goes up must eventually start to spiral downward.

For the past eight years, good Republicans have claimed that the robust economy is the result of good groundwork by past administrations and continuing sound decisions made by the Republican Congress. By that reasoning, a crash any time during the next eight years can be laid at the feet of Bill Clinton and his fellow Democrats.

The trouble with that scenario is that Bush would have a difficult time taking credit for anything positive that happened during his administration. By warning of impending doom, he’s hedging his bets. If the market dives, he will be vindicated. If it doesn’t, he’ll be able to claim, as did the Y2K doomsayers, that disaster was averted by his quick and insightful actions.

That’s all well and good – after all, it’s the essence of politics – but what’s an investor to do?

The best answer may be to keep doing what savvy investors have always done – watch carefully – and pay close attention to the reasons Bush cites for his predictions as well as the action he takes to support continued prosperity. The warning signs are likely to be different for the diverse geographic regions of the country. The Interior West, for example, is largely dependent on federal participation in its economy. Much of the Midwest depends on agriculture; the Great Lakes states on manufacturing, and the Northeast, we often suspect, on the sheer velocity of commerce driven by population density.

Texas and Alaska will rise or fall with oil, a commodity dear to Bush’s heart, and the ripples of those economies will be felt across the entire country, in the prices of gasoline and heating oil and, in the cost of every item that must be manufactured or transported. A wrong decision on petroleum policy alone could stall the economy. A poor decision on foreign policy could affect oil prices very quickly.