The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- On Sept. 10, 2001, the U.S. economy was in a soft patch, partially due to the dot-com crash. The day after 9/11, it was softer. Ten years later, the U.S. economy is several notches softer again. Could the economy manage the shocks of a second 9/11?
In the soft economy that surrounded 9/11, the fed funds rate reached a low of 1%. Unemployment reached a high of 6.3%. Federal debt was about 56% of GDP. Shortly after the news of 9/11, gold prices skyrocketed 33% to $287 in London trading, and the
New York Stock Exchange
closed -- for four days.
When it reopened on Sept. 17, 2001, the
Dow Jones Industrial Average
plunged 685 points, its largest single-day point drop. In one week, the Dow dropped 14.3%. Consumer confidence had its biggest one-month drop, falling from 114 to 97.6.
9/11 no longer has the record for the largest Dow point drop. That was surpassed twice in 2008. 9/11 no longer has the record for a monthly consumer confidence point drop either. In October 2008, confidence fell from 61 to 38. Four years after the Great Recession officially began, unemployment is still over 9%, federal debt is 100% of GDP, the fed funds rate is 0.25%, gold is over $1,800, and consumer confidence is 59.5. The economy is much weaker today.
Bin Laden chose his targets for maximum effect, including the selection of America, the lone military and economic superpower. His targets were the country's greatest military and economic iconic structures.
Bin Laden, who fought against the Soviet Union during their failed 1979 to 1989 war with Afghanistan, took credit for taking the superpower status from the Soviet Union. If his surprise and savage assault on America went according to plan, the cascading events would take the superpower out of the U.S.
The costs of property damage, and lost wages and business income have been variously estimated between $50 billion to $100 billion. In bin Laden's 2001 residence of Afghanistan, these damages would have been 10 to 25 times GDP and crippled the nation. For the $11 trillion U.S. economy, the dollar losses were minimal. 9/11 included, the 2000 to 2001 recession was mild with a duration two months shorter than average. America's resilience was as strong as ever, but the economy was also much stronger than it is today.