The Influence of September 11
On the American Economy
The atrocious attacks on New York's twin towers were aimed at an iconic symbol of US wealth and economic domination. Among the thousands of lives claimed by the suicide attackers were many low-paid cleaners, shop and office workers, and also undocumented immigrant workers laboring under the tyranny of neo-liberal economic laws. At the same time, the bombers did inflict massive damage on the world's biggest financial centre and on the important air transport industry, and sent shock waves through the US and world economy. What will be the effects on the world economy over the coming months and the next few years?
THE UNKNOWABLE CONSEQUENCES of likely US military action and its repercussions make it difficult to predict the trajectory of the world economy. Nevertheless, it is already clear that the events of 11 September will reinforce and aggravate the serious worldwide downturn into which the global economy was already rapidly sinking.
In periods of sustained economic upswing, the US and other major capitalist powers can sustain a serious shock and bear the economic overheads of a costly strategic response. Dealing with a similar crisis in a downturn, however, is a different matter.
This crisis has hit the US as it was already facing serious economic difficulties. Since the beginning of 2000 the US economy has been steadily moving towards a recession, probably quite a deep recession even without the recent events. This was not merely a cyclical downturn, but reflected the undermining of the conditions which gave rise to the 1980s boom and the even bigger boom of the late 1990s.
The recent boom was driven by financial speculation, unprecedented levels of debt, and a heavy dependency by the US on an inflow of capital from overseas. Even before 11...