The Cost of Living Dangerously

As this article is being written, the threat of a horrific preelection terrorist assault against the United States has yet to materialize. Unfortunately, the news this summer that al Qaeda operatives have painstakingly targeted major U.S. and international financial institutions only underscores the likelihood of more attacks. Politicians, economists, and ordinary citizens rightfully worry that terrorism—beyond the tragic human costs—could derail economic growth in the United States and around the world. What also worries me, however, is the potential economic impact of antiterrorism efforts. Forget the long lines at airports. The global economy has become so dependent on the free flow of goods and people across borders that even a little additional security can have a greater impact than most might think.