The Price of 9/11

I think we can safely say that Joseph Stiglitz's recent essay about the cost of our policies following 9/11 is the best piece he has ever written.  I don’t think he is an exceptionally good economist and generally he is very bad when it comes to macroeconomics, but I want to give him his due with this piece. His opening paragraph is right on the money: 

The September 11, 2001, attacks by al-Qaeda were meant to harm the United States, and they did, but in ways that Osama bin Laden probably never imagined. President George W Bush’s response to the attacks compromised the United States’ basic principles, undermined its economy, and weakened its security. 

The vast majority of what is excellent. His recounting the economic and personal (as well as moral) cost of the war is right on the money (no pun intended). It seems that his main goal is to vilify Bush, but his analysis seems sound to me. I am particularly gratified that he is not trying to argue that the war is a great boost to the macroeconomy.

I only have a couple of quibbles, it makes no sense to blame Bush for war expenditures and then also argue that he underfunded the military. At most what could be said is that certain materials that should have been purchased were not. Also the second to the last paragraph about consequences that were not disastrous is pretty cold comfort. The idea that our current ridiculous deficits have forced us to be fiscally prudent seems a pretty high price to pay for fiscal sanity.

All in all, this is an excellent commentary on the economic and personal costs of our government's response to 9/11/01. What happened on that day was a murderous tragedy. I share Stiglitz's concern that in our government's response, we have incurred very heavy costs.