Jacob,
Are you implying that there may be a silver lining in this tragedy for the IT sector, as videoconferencing becomes our virtual airline, e-mail (despite virus fears) replaces anthrax mail, and video gaming replaces tourism? Let a thousand surveillance systems bloom, but I just don't see terrorism as a killer app.
The market's superfast recovery from 9/11, whether due to an excess of patriotic zeal or the televised pyrotechnics over Afghanistan, rather reminds me of the market's initial explosive reaction to the Fed's first rate cut, a reaction that soon gave way to snores.
In spite of the recent resilience of the stock market, my sense is that the economy is in much worse shape than it was on 9/10. You are correct to inquire about the indirect effects of the tragedy, but in my view they are even more negative than the direct effects. Many of these effects are rather far reaching and distant from next year's income statement.
My concerns are (in no particular order) the risks of rearming Pakistan, China, India, Russia and any other state that professes to help us fight "terrorism"; being further drawn in to the powderkeg of mideast politics as bin Laden forces us to face the unpleasant contradiction in our foreign policy of supporting undemocratic regimes which may be viewed as increasingly offensive to their own citizens; the end of the "open society" and its civil liberties that we took so much for granted; increased suffering for Afghanistan as we respond to their destructive tactics with more destruction.
As for the market, I suspect it will not only retest the post 9/11 lows but continue to sink as the Taliban take refuge in their mosques which no missile will dare to attack and as it becomes apparent that even if we were to destroy every "terrorist camp" in Afghanistan, they would just pop up elsewhere as graduate schools for the madrassah.
I'd like to be much more optimistic, but I just don't see the silver lining at present. Just as with Iraq, I fail to see an endgame in Afghanistan. |
