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To: deibutfeif who wrote (143396)	9/13/2001 1:33:34 PM
From: tcmay	Respond to of 186894

"Will Terrorism Resuscitate the U.S. Economy?" By Timothy Noah Posted Wednesday, Sept. 12, 2001, at 3:34 p.m. PT slate.msn.com. "The Wall Street Journal and Washington Post both predict in their Sept. 12 news columns that the havoc wrought by yesterday's events may bring on a recession. Chatterbox thinks they couldn't have it more wrong. While the destruction of the World Trade Center, the multiple plane crashes, and the damage to the Pentagon are morally obscene because of the (probably thousands) of deaths and countless injuries they caused, economically the net result of the terrorists' actions is likely to be beneficial to the United States. " I believe the WSJ and WP are correct: this event will trigger a recession. Economists disagreed whether the country was already in a recession or not, but most agreed that things were _tipping_ toward recession. The Red September event pushed in enough areas to make the difference. The airline industry _alone_ is losing a billion dollars a day in the U.S., according to reports this morning (see Yahoo news). More if European and Asian operations are considered. Restoration of limited travel will not restore the rates to pre-WTC levels. (Anecdotally, I don't plan to travel for a long time. I rarely do, but now I am even less likely to. LAX is telling _domestic_ travellers to arrive at LAX "2 and half hours before departure time." This turns a business trip from LA to SJ or SF into a major chore. Expect a lot of "unnecessary" business travel to be cut way back. Patterns of travel will be disrupted for months to come...and once the security forces have gotten lax again, no pun about LAX intended, a slightly different attack will happen. A cargo jet leased by the terrorists, for example. Now that they've seen how effective such jets are, buying them or leasing them becomes highly cost-effective!) What about other industries? I can't see many people rushing out to buy the latest big-screen t.v., or to replace their 4-year-old SUV with a newer one. This is anecdotal, not based on detailed "consumer confidence" surveys. But it doesn't take much to realize that most people are rattled, not thinking about buying big screen televisions. Rudy is telling New Yorkers to "get out there and _spend_!" Consumer confidence has been shaken, and America is an economy that runs primarily on what my brother in LA dubs "consumage": the filling of the megamalls with people who are buying more than they can really afford. Hence the mounting personal debt, hence the spectacle of dot commers who have lost their jobs nevertheless eating at expensive restaurants "to make myself feel better." This consumage mentality has been shaken. Politicians exhorting consumers to go out and spend, to hop on airplanes so that Boeing can sell more planes, to buy brand new minivans...this will not work. (What _would_ work is eliminating the capital gains tax so that those who saved and invested in the past don't get penalized compared to bozos who went out and "consumed.") Will rebuilding the World Trade Center and parts of the Pentagon stimulate the economy? Sure, locally. But the boom in construction in those particular cities will also correspond to flight of companies out of the New York area--I did another post on this, suggesting this is a wake up call for the financial industry to reduce its concentration in one tiny part of the country. Will companies like Intel benefit from helping to replace the 10,000 or so PCs lost in the WTC? A drop in the bucket. Maybe they'll benefit from increased telecommuting, especially teleconferencing to reduce airline travel. (This will help to devastate the airline industry, as seems to already be happening.) Events like this are wake up calls for preparedness over consumage. Time to "hunker in the bunker." More actions by those who pulled off the WTC attack are coming. I expect biological agents to kill at least 30,000 people in some dense-packed urban area soon. Read up on "soft targets." Save your money, don't travel unless necessary, keep your powder dry, and buy a gun before the politicians ban them (along with box-cutter knives). --Tim May