The air attack reduced edifices of U.S. power to rubble and sent a black cloud of smoke into the sky, hampering the work of rescuers as they sought survivors in burning ruins.
Already, comparisons to Pearl Harbor are inescapable, even when evaluating the attack’s effects on the financial market and U.S. economy. But experts say that although the toll on human life will be massive, the effects on the economy will be minimal.
The attack forced the closing of all U.S. markets as Wall Street and the rest of New York’s financial district were evacuated. The Federal Reserve remained at work, along with most banks.
“We’re probably going to see more casualties than Pearl Harbor,” said Alfred Marcus, a professor of strategic management at the Carlson School of Management.
But despite what is sure to be a horrific loss of life, Marcus predicted the U.S. economy will suffer only a short downturn and might even receive an ironic shot in the arm as the nation rallies in the aftermath.
Marcus said he believes the prolonged effects of the attack on the U.S. and world economy will be intangible and unquantifiable.
“It’s a break with the relative peace and prosperity of the 1990s and a very rude shock,” said Marcus, who predicted borders and security in the U.S. will tighten and remain that way indefinitely.
“It will cast a cloud of fear on everything we do,” he said.
The World Trade Center contained a number of companies involved with stock trading and evaluation, including Credit Suisse, Deutsche Bank and Morgan Stanley, Marcus said.
Reserves of the information and documents contained in the buildings probably exist in other locations, he said. The real loss was in human capital.
Finance professor Tim Nantell agreed the effects would be short-lived but cautioned the situation was hard to evaluate.
“With these kinds of big macro-events, the market gets nervous and people start selling,” Nantell said. “Eventually news gets out that the world isn’t going to end, and people start buying back in. It’s hard to imagine it could be big enough a real effect on the economy, but who knows.”
The U.S. and world economy will have to overcome uncertainty and bolster consumer confidence, Marcus said.
He added that the world economy thrives on stability and international business relies on secure air travel. The attack has shattered a false sense of security in both areas.
Students in the Market Research Lab at the Carlson School watched both CNN and the stock tickers. Second-year master of business administration student Jeremy Alinder said he was working at Piper Jaffray when news of the attacks broke.
He said a lot of people there were upset, trying to contact colleagues in New York.
Three undergraduate students said some of their classmates had been personally affected by the attack.
They told of a student’s girlfriend who, at the last minute, changed her flight from Boston – where one plane was hijacked. A visiting faculty member rushed to a phone, concerned her husband had been on one of the planes that crashed.
Marcus said the economy will overcome the attack as the country comes together to regroup and rebuild, especially if the country has to put resources into war.
“People will come together like you haven’t seen before,” he said. “We haven’t had an event like this in my lifetime.”
Seth Woehrle welcomes comments at [email protected]