Shaken, but undeterred

The two commandeered airliners that felled New York's twin towers last week erased a powerful symbol of economic might from the skyline of the world's financial capital.

The cost of the attack in human terms is still being grimly assessed. That will take time.

And its economic impact will not be fully tallied until long after the last traces of ash are swept from Manhattan's streets.

Consider just a few examples of the peripheral fallout: Insurers will face the highest volume of claims ever: up to $40 billion, by some estimates. No other man-made calamity comes close; some natural disasters do. (Hurricane Andrew caused insured losses of $15.5 billion in 1992.)

Developers point out that in a city where office-space costs had already been climbing fast, some 10 million square feet have been summarily taken out.

Far beyond losses in New York - and Washington - the impact on the US economy is incalculable. There are huge costs, for example, related to the grounding of the commercial aviation fleet. Airlines could lose $2.5 billion this year.

Now, responses come into play.

The insurance industry, with many of its own firms based in the World Trade Center, offered assurances on Wednesday that its $3 trillion in assets meant that all claims would be paid.

Many firms - some hit by the attack, others many states away - have extended remarkable acts of compassion to their own employees, and toward others.

Next, the actions of consumers and investors are critical.

Consumer confidence, wavering of late, had stayed strong in key areas. Retail sales rose in August, the government announced Friday.

Investors, as Guy Halverson reports in today's lead story, appear willing to move forward.

Guy and I met in Manhattan for lunch last Monday. Two towers that I viewed as my train left the city were destroyed the next day.

But the might for which they stood remains.

Reach us at work@csps.com.

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