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September 11 and Its Aftermath

The four hijackings on 11 September 2001 (hereafter, 9/11) represented a watershed transnational terrorist event for many reasons. First, the consequences of the event in terms of casualties far surpassed any previous terrorist attack. Nearly 3,000 people died on 9/11, whereas fewer than 500 died in the deadliest terrorist event prior to it. Second, the financial losses and repercussions of 9/11 were far greater than any previous terrorist incident or insured natural disaster (Kunreuther and Michel-Kerjan 2004). For 9/11, these direct and indirect costs are estimated to have been between $80 and $90 billion. Third, the hijackings on 9/11 made the global community more aware of the potential threat posed by modern-day transnational terrorism, for which high casualty counts are an objective. Fourth, 9/11 locked rich countries into a large and growing outlay on defensive measures that could increase further. US spending on the Department of Homeland Security (DHS) is $40 billion for fiscal year 2005, of which 61 percent goes to homeland security (DHS 2004; Enders and Sandler forthcoming). The US budget for DHS is growing at 10 percent per year and does not include spending on intelligence or proactive operations (for example, the war in Afghanistan). Fifth, 9/11 demonstrated to the global community that catastrophic damage could stem from conventional means—that is, the crash of a fuel-laden commercial aircraft. The bomb attacks on the commuter trains in Madrid further underscored that horrific consequences can follow from conventional bombs planted where casualty counts will be high. Sixth, 9/11 set the bar for future terrorist attacks as terrorists escalate carnage to capture and maintain media and public attention. To outdo the newsworthiness and shock value of 9/11, terrorists must resort to an even larger conventional attack or weapons of mass destruction (WMDs), most likely chemical or radiological in nature. …