War On Our Economy

5 Pages 1223 Words

“War On Our Economy”

The flag that stands for freedom still stands! But what does not stand any longer is the Twin Towers in New York. On September 11, 2001, terrorism hit the United States not with missiles, but our own airplanes. Terrorists took control of aircrafts on this sad day and flew them into the Pentagon and Twin Towers leaving many dead and the rest of us crippled.
Three major indicators of economic conditions are 1) the gross domestic product (GDP), 2) the unemployment rate, and 3) the price indexes. Unemployment jumped a half-point to 5.4 percent in October and will reach to 6 percent in coming months. Even the most common job openings like McDonald’s took down the signs “Now Hiring.” Airlines took the hardest fall. Indianapolis alone had 300 layoffs. September alone carried over 150,000 layoffs for this country. Fortunately, layoffs have slowed to a trickle, but Bruce Steinberg, chief economist at Merrill Lynch in New York, say profits are likely to plumb post-World War Two lows in the fourth quarter, and the job cuts are far from over.
That being said, there’s no question were being hurt by the terrorist attacks. Production is centered on the ability to anticipate consumer demand. When a shock like September 11 occurs, consumer behavior changes radically. For example, the demand for travel and related services falls, while the demand for security rises. It takes time for both the government and the private sector to adapt to these changes, although an impressive array of government monetary and fiscal ammunition has been brought into play. But after the readjustment is made, there is little reason why corporate profits should be any lower than they were before the terrorist attacks.
Few sectors dodged fallout from the attack. Dow headed for the worst week since the Depression. Panic struck the market. Since resuming on Monday, a week after the attacks, after four post-attack down days, the Dow industria...