Just before hitting the sac, I switched on the idiot box to listen to some recent news, and then moved to C-span, Greenspan was on. He is becoming senile. He was asked about the ability of the economy to rebound from a terrorist act and went into hyperbole about the flexibility of the economy, the labor force globalization, etc and how that "allowed us" to rebound faster than we would have had otherwise. The fact of the matter, short of a nuclear event, all terrorist acts are just "mosquito bites", they cannot impact the economy long term, unless the fear seeded force people to stop doing what they are doing. And strangely enough, people even get accustomed to "fear". Israel has gone through 50 years of constant terror and in any year, the number of people killed and maimed relative to the population is greater than the catastrophe El quaeda caused with 9/11, and of course, typically smaller than highway deaths (both here and there). Yet, it keeps going and growing like that pink bunny in the battery ad. That Greenspan would not make that simple observation, and thus once and for all remove that "Terrorist premium" hanging over various markets (financial, crude etc.)is simple senility setting in. The additional cost to increase security (already well embedded in the Israeli economy) is easily absorbed by the absence of the costs of the cold war.
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