Rebuilding a shattered market

Regardless of what happens now politically and militarily, the financial toll of last week’s terrorist attack is set to climb into the billions of dollars, mainly for insurance claims and lost business.

   It’s a shame that while the death toll is still being tallied in New York City, we can’t help but wonder how last week’s horrors will play out in the world’s economy. Before the unprecedented events of Sept. 11, the United States had begun to show the first inklings of economic recovery, with some even predicting a clear upturn in the fourth quarter. All that has been dashed. On the lips of everyone now is no longer, “When will the U.S. economy bottom out?” but “How could this happen?” and “Are we at war now?”

   Such is the way old worlds are broken and new ones begin.

   Regardless of what happens now politically and militarily, the financial toll of last week’s terrorist attack is set to climb into the billions of dollars, mainly for insurance claims and lost business. The U.S. will have no problem covering these costs, but what the United States can’t budget for is a bottoming out of the consumer and investor confidence that has made it the No. 1 producer and buyer in the world. Confidence will take some time rebuilding.

   If viewing the collapse of the World Trade Center (WTC) over and over again on TV works to unhinge America’s zen-like belief in itself and its place in the world, for the first time in years Americans may begin to feel so uncertain about the future that, among other things, they will no longer spend the way they used to. Such a result would certainly spell disaster for world markets. When the United States doesn’t buy, it, and all economies around the world, spiral into recession.

   But even if that happens in the short term, the U.S. economy, and other economies around the world, will bounce back – although it could take time. Those who had hoped that by destroying the ultimate symbols of capitalism and Western military power, and slaughtering thousands of innocent people in the process, would make us think twice about who we are and how we live, are wrong. If anything, the sheer irrationality of the tragedy should only serve to fuel further support for democracy and free trade around the world. Perhaps even those Westerners who so fiercely condemn globalization will look at violence as a means to an end in a different light. Perhaps many will now realize that globalization is an essential good for the world.

   But as for how the markets will fare in the coming weeks and months, we can only wait and hope for the best. Right now it’s about rebuilding confidence. Let’s hope the spirit of free enterprise and international trade was not buried in the rubble of the WTC along with so many of its advocates.