(FORTUNE Magazine) – IF THINKING makes it so, then the phantom recession of 1990 could well turn into the real thing. ''No question about it,'' says James Dresher, CEO of air- conditioning manufacturer York International Corp. ''Anyone who doesn't think we're in a recession isn't facing reality.'' But by FORTUNE's numbers- based reality test, the U.S. is not in a recession. Nor, according to this magazine's economic forecast, will it be in the coming year (see Fortune Forecast). But chief executives seem convinced otherwise. As Western Publishing Group's Richard Bernstein sees it, recession is not a question of numbers but ''a state of mind.'' The latest FORTUNE 500 CEO Poll found that 71% of respondents believe the nation is in a recession or will be in the next 12 months. Surprisingly, their predictions for the stock market are considerably less gloomy: On the theory that the market has already absorbed the idea of a short-lived recession, half expect the Dow to be somewhere between 2500 and 3000 a year from now; most of the rest predict it will be between 2000 and 2500, with a few seeing it above 3000. The independent opinion research firm Clark Martire & Bartolomeo spoke by telephone with 221 chief executives of FORTUNE 500 and Service 500 companies between August 29 and September 6. Just a year ago corporate chieftains had a much more cheerful take on things. When polled last September, only 38% of CEOs said they anticipated a recession in the next 12 months. In January 1989 a mere 16% saw recession in the offing. It isn't hard to understand why so many chief executives have changed their minds. No one disputes that the economy has slowed considerably in the past year or so. Inevitably some companies do better than the average while others do worse, and overall growth of real GNP is now so tepid -- only about 1.5% a year -- that some of the laggards may be contracting. In addition, eight years of economic expansion may have lowered executives' tolerance for the odd reversal. A marked slowdown, even if it does not exterminate growth, may seem a lot more alarming today than it would have a decade ago. The new tune -- make that dirge -- of CEOs varies in pitch depending on where they live and what trade they ply. Among the most dispirited is William O'Brien, head of Hanover Insurance Co. in Worcester, Massachusetts. ''I make my judgment on what I see in New England, not on what I read in the paper,'' he says. ''The contraction of credit is enormous. And banks are asking for a hell of a lot more collateral on loans. We are in a recession here.'' Surveying the economy from the deck of American President Cos., which makes shipping containers, CEO Bruce Seaton is only slightly less downcast than O'Brien. ''Economists wouldn't agree with me, but from my vantage point we're in a mild recession,'' he says. ''Consumption is off and our trade is off. There is a reduction of cargo flow from Asia to North America. We've been seeing it since last year.'' Back in the heartland, in Muscatine, Iowa, Hon Industries' Stanley Howe speaks for the more sanguine minority: ''I have trouble saying we're in a recession. Our state income tax collections are exceeding expectations. The Rust Belt has been unfairly maligned.'' As testimony to his optimism, Howe has ordered up four new plants for his office furniture business. While most CEOs surveyed are in the grip of recession psychology, not all of these have started to manage accordingly. Just 30% have lowered capital spending, and about the same percentage have laid off employees. Even fewer, 26%, have shed inventory, and only 24% have cut down on orders to suppliers. Nonetheless, nearly half have taken at least one of these steps, actions that in the aggregate could increase the chance of recession. John Bryan of Sara Lee Corp. this year will cut projected capital spending by 15%, or $100 million, though he has not bought into the recession scenario. ''We're not there yet, but we're coming in for a landing, and I don't know how rough it will be,'' he says. ''We're trying to prepare by paying more attention to cash flow, not just reported earnings.'' Dresher of York International has also begun to manage defensively. Believing a recession has already begun, he says that if it continues he'll cut inventories by as much as $40 million. And Forrest F. Stacy, CEO of Oglethorpe Power Corp. in Georgia, is nipping costs wherever possible. Example: He is trying to extend the life of company cars by more dutiful maintenance. Chief executives who are not cutting back offer astute -- if sometimes counterintuitive -- explanations. John Woodhouse, CEO of Sysco Corp., a food distributor and marketer in Houston, says his company will probably increase capital spending over last year, even though he says there might well be a recession sometime in the next 12 months. ''If you don't spend when times are still good,'' he says, ''you may not be able to build up capacity again when you are trying to emerge from a recession.'' Similarly, Western Publishing's Bernstein has raised capital spending to a new record this year despite his belief that a recession has already overtaken the commercial printing business. He explains, ''In light of the economy, we're trying to reduce costs and increase our productivity. So we're investing + in more efficient plants and equipment.'' Regardless of how they're managing, most CEOs have definite ideas about how Washington could help keep the country out of recession. Fully 67% are singing the budget blues, calling for the government to narrow the deficit one way or another. In the near term, of course, that may not make much sense as an antirecession measure. Reducing the deficit probably means raising taxes or cutting spending or both, and any combination would diminish the federal government's fiscal stimulus to the economy, slowing it even further. Some economists argue that cutting the capital gains tax, as President Bush advocates, would yield benefits without the bite, increasing tax revenues while spurring the economy. But enacting such a change will be politically tough, and at least some of the CEOs aren't thinking of it anyway. ''Reduce spending,'' insists Geico's William Snyder. ''When we're in a recession, reduce spending. When we're in an expansion, reduce spending. When we're level, reduce spending.'' Easing the money supply is the rallying cry of 63%. Bernstein speaks for many: ''Cutting interest rates would send a psychological message that the government is concerned and is doing something. That would make people feel better, and when they feel good, they spend.''

Other quick fixes chief executives would like to see: an end to the crisis in the Middle East and an oil tax. Winston Wallin, CEO of Medtronic Inc., a medical equipment manufacturer in Minneapolis, believes that a ''hefty'' tax on gasoline and oil would ease U.S. dependence on foreign energy supplies and encourage the development of alternative sources. ''We've got a bunch of gluttons here,'' he says. ''If it's not Saddam Hussein we're dealing with, it will be someone else.'' SSHHHHH! That was the most poignant plea of the chief executives surveyed. If everyone, especially the media, would please be quiet and stop the incessant recession chatter, perhaps the economy would start to improve -- or at least stay out of quicksand. ''If we cry wolf on recession, we'll have one,'' says Jack Twyman, CEO of Super Foods Services Inc. in Ohio. ''The food business is one of the last to be affected in a recession. But I'm concerned about all the rhetoric and the prophets of doom. We can talk ourselves into a recession.'' As though recession were our penance, some CEOs argue we should do nothing to forestall one. Among them is Jerry Pearlman of Zenith Electronics. ''We | must get the deficit under control,'' he says. ''If reducing it means higher taxes and cutting spending and some recession, this may be the price we have to pay for living without restraints for so long.'' Others maintain that even attempting to stop a recession would be futile: What goes up must come down, they say, and down the economy is coming. ''When you fly so high, borrowing and fooling yourself as we did through the Eighties in the personal, corporate, and federal sectors, you have to expect to come down to the ground,'' says Sara Lee's Bryan. ''For eight years we have lived well in this country but way above our means. Housing and art are outrageously inflated, and our standard of living is supported by enormous debt. It's an absurdity to think that as a country we can live off borrowed money.'' A few executives, viewing recession as inevitable, would just as soon grit their teeth and be done with it. That's the view of Marion Sandler, president and CEO of Oakland's Golden West Financial Corp., one of the few bright spots in the savings and loan industry. ''The economy is like the stock market,'' she says. ''The longer you go without a correction, the bigger the blowout when it comes. We've had an eight-year expansion without a meaningful adjustment. That can't continue. Let's shake it out and get it over with.'' She expects a recession within a year and already sees the demand for money drying up.

BOX: Q Because of recession concerns, has your company . . . A Not sure/ doesn't Yes No apply Cut capital spending? 30% 65% 5% Reduced its work force? 30% 66% 4% Cut inventories? 26% 52% 22% Reduced orders to suppliers? 24% 58% 18% Done any of the above? 47% -- --

Q Has ''recession talk'' played a role in determining companies' business plans?

A Yes 87% No 9% Not Sure 4%

Q What one or two things should the federal government be doing to keep the nation out of recession?

A Deal with the federal deficit/ balance the budget/reduce government spending 67% Lower interest rates/ease the money supply 63% Avoid new taxes 10% Solve the Iraq problem 7% Impose an oil tax 5% Reduce government interference with business 4% Encourage more research and development 1%

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: Is the U.S. economy in recession or will one begin in the coming 12 months?

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: Where do you expect the Dow Jones industrial average to be in a year?