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Economic
Repercussions
While
government struggles with reform to meet the threat of future
terrorist actions, individuals and families are understandably
worried about the negative economic impact of the attacks, which
came just as the nation seemed to be slipping into a cyclical
recession. Dean Palmer sees reason for optimism on this account.
A widely recognized expert on economic management, he is a public
trustee of the Social Security and Medicare funds and has served
as an assistant cabinet secretary.
Palmer sees no evidence to doubt the structural
well-being of the economy in the attack’s aftermath. Moreover,
he disputes the notion that the American economy was struck
at a particularly vulnerable moment. “The biggest long-term
consequences of this disaster will need to be dealt with through
government financing,” he says. “Despite the fact that expenditures
for clean-up operations, new security measures, and overall
defense will be up while revenue is down, we’re in an excellent
position to move rapidly in these areas because of our sizable
surpluses. We’re fortunate as a country at this moment in our
history in that we can make a determination of need and realistically
say, ‘We will appropriate $40 billion for these purposes.’ The
surpluses will let us get right to the jobs at hand.”
"We
are in a battle between those who love individual
liberty, human diversity, and greater opportunity for everyone,
and
those who don't."
The availability of government surpluses, however,
requires political will. Asked whether Congress, after two decades
of reverence for “shrinking government,” is likely to provide
necessary funding, Palmer says: “The fiscal discipline of recent
years is what got us those surpluses. But fiscal discipline
for its own sake is not something you want to blindly maintain
during an emergency, just in the service of an abstract ideal.
Prudent economic management requires that we err on the side
of stimulus, in terms of both expenditures and monetary policy.”
J. David Richardson, the Gerald and Daphna
Cramer Professor of Global Affairs, is similarly optimistic about
the international economy. Since 1990, Richardson has served as
a fellow at the Institute for International Economics in Washington,
D.C. An early and vocal advocate of free trade, he is currently
working on his 17th book, Why Global Integration Matters Most!
and has closely monitored the international economic and political
implications of the World Trade Center and Pentagon bombings.
“World trade has not been uniquely interrupted nor damaged by
the attacks,” Richardson says. “It hasn’t declined any more than
one might expect during any period of reduced overall economic
activity.”
Richardson is also encouraged that he sees
“‘no evidence of any government anywhere in the world trying to
close its borders to reverse its own slump. The technical momentum
of the way that global production and distribution methods have
spread around the world is just too great.”
The only long-term negative effect on world
trade patterns that worries him is the slowing of the movement
of people across borders. If the situation becomes protracted,
it could hinder international commerce, even though “the entire
service sector accounts for less than 15 percent of world trade,”
he says.
Richardson is confident that border crossing
tie-ups encountered since September 11 are a short-term glitch
that isn’t likely to hinder the North American Free Trade Agreement.
“New customs inspection technologies are available and will
be brought into service,” he says. “You’ll see pre-certification
of goods right at the factory point, which will allow trucks
with sealed cargo to move right through. These things will make
border crossings dramatically faster, even as greater vigilance
is maintained.”
Unifying
View
Impressive
faculty involvement in such a broad range of concerns is not
the entire story of the Maxwell School’s special value during
this time of crisis. As an integral part of the student-centered
research university, Maxwell faculty members teach more than
5,000 undergraduates each year in courses offered by the College
of Arts and Sciences. This allows for a level of student-professor
interaction that is rare at comparable schools.
Political science professor Rogan Kersh,
whose first book, Dreams of a More Perfect Union was
published this year, perhaps epitomizes Maxwell’s institutional
insistence on a unified view of the global and the local. In
the September 12 meeting of his mostly freshman course, Introduction
to American Politics and Government, Kersh—who was left “sleepless
and heartsick” by the attack and the loss of a friend—found
inspiration in the words of a World Trade Center survivor who
said in a radio interview, “We must go on...we have to go on.”
“I took that as my text,” Kersh says. “The
next morning I faced a more silent and watchful group of students
than I’d ever taught. I wanted to discuss events, but the nightmare
seemed out of proportion to anything I might say. I told the
class about my friend, and I reminded them of the sad potential
for lashing out spontaneously at minority groups in response.”
Kersh, with the students’ approval, then
turned to his planned lecture about civil liberties in the United
States. He says he struggled through his remarks, but was heartened
later that day by an e-mail he received from one of his students.
“I needed something normal to hold on to,” the student wrote.
“I was glad you gave your regular lecture. And I’m really sorry
about your friend.”
Other faculty members were equally inspired.
Professor Terrence Guay, director of graduate studies for the
International Relations Program, found hope in the “compassion,
generosity, and civic-mindedness of this country’s citizens,”
he says. “Such characteristics are now needed at the international
level to bring the perpetrators of these terrorist acts to justice.”
Senior Associate Dean Robert McClure agrees, offering this standard
for measuring combatants in this new kind of warfare. “We are
in a battle,” he says, “between those who love individual liberty,
human diversity, and greater opportunity for everyone, and those
who don’t.”
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