Data: Cone Inc. One of the most important questions of this whole terrorism mess is one that defies answer: How much is it costing in lost output? For the last decade, productivity gains by American workers have fueled the spectacular growth of the New Economy. The attacks, at least temporarily, have thrown that into reverse. The U.S. ground to a halt on September 11, as businesses shuttered and millions watched their TV sets in horror. Since then, regular commerce has been returning, but not without security delays--at airports, at U.S. borders, in office buildings, on roadways, anywhere the public must congregate or pass.
The time demands are virtually impossible to measure. But consider a simple exercise that economists say gives an idea of the losses: An estimated 70,000 passengers now board planes at O'Hare International Airport every day. If half of them are business travelers making an average $80,000, and they spend an extra hour passing through security, the value of their time is $40 per person--or $1.4 million a work day. In a year, that's $365 million in Chicago alone. Now multiply that for every business traveler in the country. It's a huge drag on any economy. The e-mail sounded scary, warning of blue envelopes randomly mailed to people, containing a deadly dysentery virus. Another warned of new dates for new attacks. At a time when our shattered nerves will let us believe almost anything, we are being bombarded by warnings: some well intentioned, some malicious, and many--like these--bogus.
Before you spread panic by forwarding warnings to everyone you know, try to make sure the threat is legitimate. Fortunately, it's easy to check. The government's Centers for Disease Control & Prevention maintains a Web site, www.cdc.gov/hoax_rumors.htm, for health-related hoaxes. It knocks down the virus-in-the-mailbox hoax, which has been around since spring but gained new currency after September 11. Computer viruses, easily spread by e-mail, have seen a spate of both hoaxes and genuine threats. Again, the government offers a Web site: Hoaxbusters, run by the Energy Dept.'s Computer Incident Advisory Capability (hoaxbusters.ciac.org). In addition, antivirus software makers such as Symantec (www.symantec.com/avcenter) and McAfee (www.mcafeeb2b.com/avert) offer info and advice on current threats. So next time you get a scary message, check it out before sending it on. In a hallway conversation at The Justice Dept. on Sept. 21, antitrust chief Charles James was asked if the terrorist attacks would increase the odds of a settlement of the Microsoft (MSFT
) case. Prior Administrations have used foreign policy and national security arguments to justify ending lengthy antitrust litigation. But James dismissed the idea, saying: "Show me the foreign policy implications of the Microsoft case."
The new judge, however, has brought the issues together. Citing the events of September 11, Judge Colleen Kollar-Kotelly directed the two sides to start immediate settlement talks and devote every available hour to reaching agreement. "In light of the recent tragic events affecting our nation, this court regards the benefit which will be derived from a quick resolution of these cases as increasingly significant," she wrote.
Will that make the trustbusters weaken their demands on Microsoft? While it does give the Bush Administration political cover to settle a case it never liked anyway, difficult issues remain to be ironed out. And Microsoft has shown little sign of budging. Hollywood, reflecting the change in the public mood, has delayed release dates, cut content deemed inappropriate, and scrapped projects. Some examples:Movies...TRAINING DAY (Warner Bros.)
Denzel Washington cop drama; delayed two weeksMEN IN BLACK 2 (Columbia Pictures)
Will Smith and Tommy Lee Jones sequel; new ending won't feature WTCCOLLATERAL DAMAGE (Warner Bros.)
Arnold Schwarzenegger plays a firefighter avenging the deaths of his wife and child in a bombing; delayed indefinitelyBIG TROUBLE (Touchstone)
Tim Allen comedy; delayed indefinitely due to scene involving a bomb on an airplaneTV Shows...THIRD WATCH (NBC)
Filming delays push back season premiere of show featuring NYC firefighters and policeTHE AGENCY (CBS)
New show revised its pilot; old plot involved terrorism, mentioned Osama bin LadenLAW AND ORDER (NBC)
Special miniseries, Terror, about bioterrorism against NYC was scrapped; posters changed24 (Fox)
Show's premiere had featured an explosion on an airplane; scene cutTHE WEST WING (NBC)
Season premiere delayed and rewritten to reflect tragedy Part of the economic fallout from the terrorist attacks is that the nation's 9,000 daily and weekly newspapers are certain to see fewer ad dollars over the next year. Under a revised forecast, released on Sept. 19 by media newsletter The Meyers Report, ad spending in newspapers is expected to decline 5% in 2002, vs. a pre-attack estimate of a 2% drop.
For now, though, some of the dive in advertising has been buffered by slews of memorial and condolence ads taken out by everyone from Saudi Arabia to Tiffany. At a time when publications feared that advertising would halt after the attacks, condolence ads have poured unexpected revenue into advertising coffers. "I'm not sure the memorial ads have made up the difference, but they've certainly helped," says Steve Howe, vice-president for advertising at The Wall Street Journal, which has run more than 100 of the special ads since September 11. A full-pager costs $162,000, but regular advertisers get discounts. "This was necessary to do," says Massimo Ferragamo, president of the U.S. operation of fashion house Salvatore Ferragamo. Its 7-inch-high ad read simply: "We salute the United States of America" and ran in The New York Times, the Los Angeles Times, and the Chicago Sun-Times. "In our case, we felt less would say more," he says. Even small-town papers have been helped by ads from local businesses.
The memorials also have given advertisers time to figure out how to proceed with marketing. "There's almost an intangible fear on the part of anyone to appear as if they are profiteering," says John Kimball, marketing director for the Newspaper Association of America. In the meantime, member newspapers are grateful for the temporary boost. With uncertainty in the markets and interest rates falling, many investors are wondering if there's any refuge for their money. Some think they've found it in gold. The U.S. Mint sold well over 60,000 gold coins in the two weeks after the September 11 attacks--10 times the amount sold in September last year. Those numbers may even understate the demand for the coins, since gold that was hoarded in anticipation of a Y2K disaster has been coming out of desk drawers and mattresses and back into the market since Jan. 1, 2000.
The "survivalists" are certainly doing their share to buoy the gold market. A somewhat older crowd living mostly in Western states, they're intent on being self-sufficient if the U.S. government collapses, and they want to own gold in small-denomination coins in case the financial system fails. Their purchases are up at least fivefold since the attacks, says Leonard Kaplan of commodities broker and money manager Prospector Asset Management.
But most of the recent demand for gold comes from wealthy investors who are using the coins as a hedge. Sure, gold has been a lousy investment for the past 20 years, concedes Richard Smith, president of the Coin & Stamp Gallery in Phoenix. But with the stock market reeling, an investment that's merely "lousy" is starting to look pretty good. Charity Web sites usually record only modest amounts of traffic. But since September 11, those accepting online donations have been among the most viewed Web sites in the U.S.Site and number of visitors:Redcross.org: 1,658,000Helping.org: 1,472,000Tributetoheroes.org: 1,212,000Libertyunites.org: 560,000September11fund.org: 168,000* Sept. 10-23
Data: Nielsen/NetRatings, Jupiter Media Metrix