As an American, a New Yorker by birth and a resident of Washington DC until a month ago, Tuesday's terrorist attacks were especially surreal for me.
That I still don't know how many friends or family members I lost back home is one reason. So is knowing that tens of thousands of people, some of whom I may have shared subway cars and taxis with, may have lost their lives. Seeing landmarks in cities I hold dear reduced to rubble hardly helps.
Viewing the carnage from 12,800km to the east, I was struck -- and a bit embarrassed -- by how much I wanted to be there. By how much I longed to be in New York, experiencing this awful act along with citizens of a place I still consider home. Not that I could've done anything to help, but to understand what happened. To comprehend it in some way. If that's even possible.
PHOTO: AFP
I was equally struck -- and a bit disturbed -- by how much I cared about the terrorists' New York target. It's a building, for heaven's sake. It's the victims that matter, I remind myself. Forget the columns and beams.
Yet the World Trade Center wasn't just a building, but a symbol of America. It was the heart of the US economy and soul of the capitalist world. The further you're away from home, the clearer that becomes. Hence the attempt by terrorists to topple the twin towers in 1993. And hence the extremes -- hijacking commercial jets and crashing them into the 110-story structures -- to which terrorists went to finish the job this time around.
Those who sent the towers to the ground not only succeeded in changing life as we know it for Americans, but also their lifestyles -- at least in the short run. If there were ever a push strong enough to thrust an economy into recession, the US saw it yesterday.
The human toll of the attacks on New York and Washington will take time to sort out. So will the economic effects. But for an economy already teetering on the edge of recession, the horror of seeing the World Trade Center crumble and the Pentagon burn could very well tip the US into contraction.
That fallout will be felt far beyond US shores. The American economy accounts for a quarter of global trade, something investors had in mind yesterday when they sent the Nikkei stock average as low as the Dow Jones Industrial Average for the first time since 1957. The selling reflected fears the attacks will devastate global growth.
It's a rational fear at an entirely irrational moment in world history. US consumers are the glue holding together a fragile US economy. With scenes of planes flying into national landmarks filling television screens, it's doubtful Americans are thinking about shopping. That's where the trouble begins.
Consumer behavior is as much about psychology as economics. A family in Cleveland may not feel safe flying to California for vacation. Joe Six-Pack in Peoria, Illinois may not feel financially secure enough to visit auto dealerships this weekend to look at SUVs. Folks in Seattle may think twice about buying that new home.
People in New York may not be eating out very much in the weeks ahead. Once consumers stop spending, the US falters.
Nowhere will the closing of American wallets be felt more than here in Asia. Japan, for example, is pinning its hopes on an export-led economic recovery. Tokyo is actively trying to weaken the yen versus the US dollar to boost demand for Japanese goods abroad.
The rest of Asia also is hoping to export its way out of recession.
But if the US hits a wall -- which is far more possible today than yesterday -- Asia will have to look elsewhere. That risk grows if the Dow follows the Nikkei's lead and plunges when New York markets reopen tomorrow. Some analysts are even buzzing about a Federal Reserve rate cut as soon as yesterday. The move would be aimed at calming fears about a US meltdown.
US Treasury Secretary Paul O'Neill, who was stranded here in Tokyo earlier yesterday, already is going through the motions. "In the face of [Tuesday's] tragedy, the financial system functioned extraordinarily well, and I have every confidence that it will continue to do so in the days ahead," said O'Neill, who called US financial markets "strong and resilient."
Such reassurances are coming in Asia too. The Bank of Japan today added an extra ?2 trillion (US$16.8 billion) to the world's second-biggest economy. The move was aimed at keeping markets functioning smoothly. Central bankers from Australia to Hong Kong to Korea to Singapore pledged to do the same. The Reserve Bank of New Zealand also is keeping tabs on things.
It's comforting to see policymakers are awake at the controls.
Economics courses don't include much instruction on dealing with the financial repercussions of terrorist attacks. Perhaps they'll begin to, considering officials are now faced with those very challenges as never before. For not only has the world changed in the last 24 hours, but so has the range of variables economic authorities need to keep on their radar screens.
In the meanwhile, we here in Asia will keep victims and families in New York and Washington in our thoughts. I can't speak for everyone, but my heart is certainly 12,800km away from Tokyo at the moment.
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