Where to now?
Fear-mongering drives warnings of global recession
By Marshall Loeb, CBS.MarketWatch.com
Last Update: 8:08 PM ET Sept. 11, 2001
NEW YORK (CBS.MW) -- For an idea of what may happen to America and its economy now, consider
how people on the scene responded to this Day of Infamy. There was no panic in the blasted area
around the World Trade Center, nor in the vicinity of the shattered Pentagon, nor in Western
Pennsylvania, nor anywhere else in the U.S. Instead, there was quiet, steely resolve. And controlled
anger. We shall persevere.
People in lower Manhattan were remarkably, almost strangely polite. In grocery stores, no one complained
about two-per-person limits on bottled water. For the first time in memory, one woman shopper was asked
by men time and again, "May I help you with those packages?"
Knots of people stood on street corners and stared up into space, incredulously. Something was
dramatically missing, like a gap in the sky. Gone were the twin towers, for so long a steel and concrete
symbol of American capitalism. Their absence left a hole in the heart that cannot be filled for at least years
to come.
The economic consequences also will be profound in certain industries. Airlines stand to be hurt; sky travel
will become even more uncomfortable, and probably costlier. Insurers will confront greater risks, and
higher bills. The insurance industry, says AIG Chairman Hank Greenberg, faces "significant losses" in
property, casualty, workers' compensation and other coverage. On the other hand, defense contractors will
find it easier to win support. Whatever your politics, it now becomes harder to argue against President
Bush's anti-missile defense system.
Taken all together, however, this ugly series of Kamikaze attacks should not turn the current global
economic slowdown into a global recession. In the immediate aftermath of the attacks, the decline of
European stock markets, the fall of the dollar against the yen, the increase in the price of oil were relatively
muted.
And citizens could gain confidence from how smoothly the government and private business functioned in
a moment of unparalleled crisis. The Federal Reserve proclaimed that it would supply the money to keep
the banking system moving. The U.S. President, Cabinet members and Congressional leaders were
whisked out of harm's way. Businesses quietly closed for the day, and people quietly went home.
Of course, the blank space where the World Trade Center stood yesterday signaled a loss of innocence for
us. No longer can we take our personal security for granted. We shall see even more security guards and
more X-ray machines blocking the entrances to airports and offices, factories and even schools. And we
will need even more computers and systems to store fail-safe duplicate and triplicate and perhaps
quadruplicate copies of our personal finance records at banks and investment firms.
A personal note: I lived through something like this before. Sixty years ago, my father and I were leaving a
Chicago Bears football game when crowds of newsboys greeted us hawking papers with headlines
screaming that the Japanese, without warning, had attacked Pearl Harbor.
Within hours, tens of thousands of young men lined up to enlist in the armed services. (Today, in the area
around Manhattan, countless people signed up, too -- crowding into hospitals to give blood for the victims.)
Back in 1941, those men who enlisted -- indeed, the nation's people at large -- soon faced grave challenge
from sophisticated enemies in bitter places like Bataan and Guadalcanal and Bastogne. But this nation
proved stronger than all those enemies.
We shall again persevere. |
