by Bill O’Grady
Fifteen years ago, al Qaeda terrorists used commercial airplanes to attack the World Trade Center in New York and the Pentagon in Washington. Another aircraft crashed in rural Pennsylvania; it was believed to be en route for another attack but passengers on the plane prevented the terrorists from achieving their goal.
The events of 9/11/2001 were the deadliest terrorist attack in world history and the most devastating foreign attack on U.S. soil since Pearl Harbor. In the aftermath, the Bush administration launched a military incursion in Afghanistan when the Taliban, which controlled most of the country, refused to extradite Osama bin Laden, the leader of al Qaeda. A war against Iraq soon followed. The Patriot Act was passed in late October 2001, which gave security officials great leeway in monitoring Americans’ communications. The Department of Homeland Security was established; several agencies were put under this cabinet-level body, including Customs and Border Protection, Immigration, the Coast Guard, the Secret Service and the Federal Emergency Management Agency. In addition, passenger air security was nationalized with the creation of the Transportation Security Administration.
Following 9/11, there was great fear at the time that additional attacks were almost certain as al Qaeda appeared to be a dangerous and formidable foe. Given the tenor of the times, a strong reaction was perfectly reasonable.
However, as time has passed, it does appear that 9/11 was an outlier. Although terrorist attacks remain rather frequent, nothing really compares to the events on that clear September morning. But now, a decade and a half later, the question of how to provide security against terrorism remains.
On several occasions, we have discussed 9/11 in Weekly Geopolitical Reports near the anniversary of the event. In light of the recent anniversary, we will discuss terrorism in this report, putting it into historical context. As always, we will conclude with the impact on financial and commodity markets.