The first casualty of the coming economic decline will be the long-held myth that the D.C. region is recession-proof. Not only do we lack immunity, we may end up worse off than other parts of the nation.

Last month the Federal Reserve cited the mid-Atlantic region as one of the weakest economies in America. A similar FDIC report said the recession plaguing New England has spread to the D.C. area. And a Moody's survey ranked the mid-Atlantic region as the second riskiest banking environment in America.

During this year's second quarter, Maryland banks led the nation in the percentage jump (122 percent) of past-due real estate loans.

A lot of bad things are happening to our economy all at once. Most worrisome, our two economic cornerstones, real estate and defense, are in simultaneous decline.

Real estate is in the dumpster. With 28 million square feet of vacant suburban office space around the Beltway (a three-year supply), the construction pipeline is going dry.

In Montgomery County housing permits are down 62 percent, commercial permits down 54 percent and office construction permits down 55 percent from last year. Single-family home sales are off 25 percent from 1988, and in June shock waves rocked the county when the median value of single-family homes actually decreased one percent (from $223,000 to $220,000).

It was a violation of the 11th Commandment, "Thy home shalt not depreciate."

In metropolitan Washington, when the real estate industry sneezes, the regional economy catches cold. Almost as many Montgomery County residents work in real estate as for Uncle Sam. And one-third of the area's top 100 companies are in real estate development, construction, design or sales. A host of others are directly related, including banks.

Now the real estate bust is creating a new kind of unemployment. During the '81 recession, layoffs were largely confined to blue-collar industries. But 75 percent of the 485,000 American workers laid off this year were professionals, technicians, administrators and clerical workers. Unemployment is hitting white-collar workers.

The recession spells particular trouble for Montgomery County, already viewed by the rest of the state as Maryland's Kuwait -- flush with White Flint, Potomac and miles of assessable tax base ripe for plunder. Look for Gov. William Donald Schaefer to cure his budget deficit at the county's expense. When the Linowes Commission unveils its recommendation next month (after the election) most of its "reforms" will hurt Montgomery County. Schaefer will simply incorporate the Linowes recommendations into his budget and toss it to the assembly for Round 1 of the haves vs. the have-nots, Maryland style. It could be brutal. But it could also be what it takes to shake Montgomery out of its isolation.

In the past, Montgomery ignored the rest of Maryland. We made it obvious that we preferred the federal fast lane to Annapolis's unstylish, polyester politics. We didn't need to play state politics, because we didn't need the state. What Annapolis didn't send us we could pay for ourselves.

But like the '80s, those days are gone. The coming hard times will remind Montgomery countians where the money comes from -- or is supposed to come from -- for our roads, schools and all the rest we've taken for granted.

Recession politics will finally make us start playing state politics because we can't afford not to.

The writer is vice president of a Silver Spring development firm and a frequent contributor to this page.