The economic and human costs of 9/11 attack
One of the major consequences of 9/11 attack has been its dreadful impact on the world’s conception and experience of freedom and its core secular values
It has been said that for Baby Boomers and Millennials, 9/11 is their equivalent to Pearl Harbor. Twenty years back,19 men hijacked four fuel-loaded US commercial airplanes bound for west coast destinations. A total of 2,977 people were killed in New York City, Washington DC and outside of Shanksville, Pennsylvania. At the World Trade Center (WTC) site in Lower Manhattan, 2,753 people were killed when hijacked American Airlines Flight 11 and United Airlines Flight 175 were intentionally crashed into the North and South Towers. At the Pentagon in Washington DC, 184 people were killed when hijacked American Airlines Flight 77 crashed into the building. Near Shanksville, Pennsylvania, 40 passengers and crew members aboard United Airlines Flight 93 died when the plane crashed into a field. It is believed that the hijackers crashed the plane in that location, rather than at their unknown target, after the passengers and crew attempted to retake control of the flight deck.
$500,000 was the estimated amount of money that costed to plan and execute the 9/11 attacks by the terrorists. The economic losses to the US and the world were in trillions of dollars, even though it is difficult to ascertain the exact losses and costs.
$60 billion was the estimated cost of the WTC towers site damage, including damage to surrounding buildings, infrastructure and subway facilities. $123 billion was the immediate estimated economic loss during the first 2-4 weeks after the WTC collapsed in New York City, as well as decline in airline travel over the next few years. Even though the immediate impact of the 9/11 attack was to reduce real GDP growth rate of US in 2001 by just 0.5%, the losses to the world economy, stock market crash, increased homeland security costs and war expenses were in trillions.
Anticipating market chaos, panic selling and a disastrous loss of value in the wake of the attacks, the NYSE and the Nasdaq remained closed until September 17, the longest stock market shutdown in the US since 1933. Moreover, many trading, brokerage, and other financial firms had offices in the World Trade Center and were unable to function in the wake of the tragic loss of life and collapse of both towers.
On the first day of NYSE trading after 9/11, the market fell 684 points, a 7.1% decline, setting a record at the time for the biggest loss in exchange history for one trading day (this has since been eclipsed by the market reaction during the global coronavirus pandemic). At the close of trading that Friday, ending a week that saw the biggest losses in NYSE history, the Dow Jones was down almost 1,370 points, representing a loss of over 14%. Major stock sell-offs hit the airline and insurance sectors. Stock markets in many other countries also crashed. Gold prices leaped from $215 an ounce to $287, reflecting the uncertainty and flight to safety of nervous investors.
Some economists contend, perhaps justifiably, that many of world's economic problems are indirectly related to 9/11 attacks - the US wars in Iraq and Afghanistan, heightened security and intelligence efforts, and the ongoing global fight against terrorism, are all expenses resulting from the attacks of that fateful day.
Afghan war was viewed as a 'war of necessity' by the world, as Afghanistan was a safe sanctuary for terrorist organisations like Al-Queda. Iraq war turned out to be a 'war of choice', as the country hoarded no weapons of mass destruction, nor was it a safe haven for terrorist organizations. Dictator Saddam Hussain was caught and hanged, for which it cost $1.9 trillion in war expenses for the US.
After the 20 year-long war in Afghanistan, the country is back to square-one. It was taken over from Taliban 1.0 and handed back to Taliban 2.0. The US spent $2.26 trillion on the 'forever war' in Afghanistan. The post 9/11 U.S. wars in Afghanistan, Iraq, Syria and Pakistan have cost American taxpayers $6.4 trillion since they began in 2001. However, a new generation of people came of age in more open societies in Iraq and Afghanistan.
It is difficult to capture the costs to human life in a wide range of US war efforts over two decades in dozens of countries. In post-9/11 military operations, the United States lost 7,074 troops killed in action and another 53,303 wounded. We may never know how many civilians were killed in the US War on Terror. More than 363,000 civilians have been killed in the US War on Terror in Afghanistan, Iraq, Syria, Pakistan, Yemen and other post-9/11 battlefields, according to an estimate by the Brown University.
The protective actions taken over 20 years by the US have produced important gains in security at home - but these gains came with major human and financial costs. The cost to operate the Department of Homeland Security of US since it was created in 2002, is estimated to be in the range of $50 billion per year.
One of the major consequences of 9/11 has been its dreadful impact on the world’s conception and experience of freedom and its core secular values.
( V Venkateswara Rao is an alumnus of IIM, Ahmedabad and a retired corporate professional. Views are personal)