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April 21, 2013

Terror Bombings and the Broader Economy

Along with the sadness and anger that accompanies the Boston bomb explosion should come the realization that this could well be our lot for decades to come. Though we might hope that it is the work of single madman, not an organized terror cell, we should expect and prepare for the worst.

With the exception of 9/11, we Americans have been spared much of the bombing terror that is a part of life in much of the world through the past half-century. This is hardly isolated to poor and desperate places. In London, during the first seven years of the 1990s, the Irish Republican Army managed to detonate one bomb roughly every three months, while dozens more were defused. At least three of these were more deadly than the Boston attack; all were designed to be. In my travels abroad, I have been within a few hundred yards of bomb explosions planted by the Red Army Faction and African National Congress and a third defused bomb set by the Irish Republican Army. For many in the world, including Americans serving the military overseas, bombings are as much a part of life as severe weather alerts here in Indiana.

For a resilient and committed nation, these bombings appear to have little residual economic effect. This should be unsurprising because even well-orchestrated military bombing campaigns take considerable time to slow economic activity. German military production actually peaked more than two years after the start of our heavy bombing campaign of World War II.

There is very little evidence that terror bombings elsewhere have had much lasting effect beyond the immediate though painful loss of life and property. Moreover, these sorts of terror campaigns rarely have commendable results for antagonists, no matter the merit of their cause. For example, the success of the African National Congress was conditioned on its moral stance, not its bombings. The more than 10,000 IRA bombings have done nothing to thwart the wishes of actual voters in Northern Ireland.

Still, the terror bombing in Boston was clearly designed to scare us. Targeting sporting events, malls and the like are intended to make us alter our daily lives. In places very much under the cloud of war, such as Iraq, this may prevent a legitimate government from forming and taking control. Our enemies cannot believe that will happen here. Instead, what they want is for us to take extreme and costly steps to stop these attacks. From our fellow citizens we will hear calls to change our ways. Some will say we should spend so much on security so no one ever dies from a terror attack. Others will say we should carefully watch foreigners in our midst, while others will say that we should withdraw from the world and worry only about ourselves. We should listen respectfully and dismiss these options. The enemy that bombed us in Boston hates us not for what we do, but for what we are. We mustn’t change ourselves for them.

Link to this commentary: https://commentaries.cberdata.org/673/terror-bombings-and-the-broader-economy

Tags: public, military and veterans, economic impact, terrorism


About the Author

Michael Hicks cberdirector@bsu.edu

Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University. Note: The views expressed here are solely those of the author, and do not represent those of funders, associations, any entity of Ball State University, or its governing body.

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