Magazine article Insight on the News

Weathering Attacks on the U.S. Economy. (the Business)

Magazine article Insight on the News

Weathering Attacks on the U.S. Economy. (the Business)

Article excerpt

More than a year after Sept. 11, the economists still are trying to calculate the costs to the U.S. economy of the terror attacks. Most had thought the immediate impact would be to prolong the recession: Merrill Lynch had forecast it would last until the first quarter of 2002 and others had projected negative growth could last even longer.

But the U.S. economy proved more resilient than was expected. (Okay, Greenspan can take a small bow for that.) And the strength is all the more surprising when you add on the second blow to the economy: the massive corporate wrongdoing that started to emerge in December 2001 with the collapse of Enron Corp.

The bigger question now is: What long-term impact will the war on terrorism have on the U.S. economy? Derek Leebaert, author of The Fifty-Year Wound, a book analyzing the economic costs of the Cold War, worries that a prolonged conflict could hold back innovation and entrepreneurship because of a "return of big government, big labor, big business--with minimal attention to the market." In a fascinating interview with Brian Mitchell of Investor's Business Daily, Leebaert warns of the "bad habits" of the Cold War lingering to influence the war on terrorism--"like the temptation to paint with a really broad brash. …

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