Reading the full range of studies, I have concluded that the direct physical effects of such a horrific attack had been smaller than most people expected. Perhaps $25bn of buildings were destroyed; the lifetime wages of the victims would have been about $10bn, which is a crude way of calculating the narrow economic impact of a mass murder. But beyond that, there seem to have been few immediate economic consequences for New York City. The additional costs to the country as a whole were largely psychological: job losses because of a loss of confidence, for instance. There is a reason such acts are called terrorism.I wonder how much extra the ensuing regulation and bureaucracy has cost? Should we add the cost of the war in Iraq and Afghanistan as well? Can we at least add the benefit of the humorously comforting 9/11 issue of the Onion?
Friday, September 11, 2009
Cost of September 11th
From British economist Tim Harford:
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What about the nationwide recession we experienced post 9/11? What about the massive hit the airline industry took?
ReplyDeleteI'm guessing those were just short run losses. However I bet there is a huge cost to government mandated airline safety regulations. Although it's possible that they may be worth the cost.
ReplyDeleteI don't think the airline industry has ever really recovered. But he does mention that in the article.
ReplyDeleteBut the recession hurt everyone. Sure it was short term, but it was a LOT of money. I think just looking at physical effects is kindof a narrow view.
Plus all the things Bush did as a result of the attack - started a new governmental agency, launched a war in Afghanistan and the war on terror. Arguably we never would have gone into Iraq without 9/11 - so there's that.
I think if you took everything into account, the cost of 9/11 would make this guy's estimate look like pocket change.