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CNN Live At Daybreak
Economy Took Direct Hit in 9/11 Attacks
Aired September 10, 2003 - 05:39 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: The economy took a direct hit in the 9/11 attacks.
CNN's Kathleen Hays looks at how the economy has been changed.
(BEGIN VIDEOTAPE)
KATHLEEN HAYS, CNN CORRESPONDENT (voice-over): As the dust settled on the 9/11 attacks, Osama bin Laden issued a chilling message. One of his goals in toppling the towers and smashing the Pentagon was to flatten the U.S. economy.
OSAMA BIN LADEN (THROUGH TRANSLATOR): That this huge superpower, America, is based on a main economic power but this economic power is soon collapsed after the attack.
HAYS: Two years later, the U.S. economy has proven it can rebound from terror attacks and more. But the impact has been profound.
DIANE SWONK, BANK ONE: It's scar on the U.S. economy and a scar much like a scar we get in childhood that will fade over time, but a scar that will permanently refigure our face as a nation because of the choices we've made that have followed it.
HAYS: First came aggressive financial first aid. The Federal Reserve's interest rate cuts drove auto sales forward, as zero percent financing lured buyers. The president easily got Congress to agree to tax cuts to keep consumers spending. Next came a cash transfusion for hard hit industries like the airlines, who were decimated when tourists and businesses stopped flying. But now, even though the economy has escaped recession, the impact of the attacks is still being felt.
JIM CORRIDORE, STANDARD & POOR'S: Only very low fares urged travelers to fly in the first few months after 9/11 and they became accustomed to that kind of fare sales and now they've been very loathe to pay for high fares to fly. And that's, you know, changed the dynamics in the industry.
HAYS (on camera): As for the broader economy, the dynamics of business, finance and government have been profoundly altered. Some say it's the biggest shift in the nation's priorities in decades.
(voice-over): War in Afghanistan, war in Iraq, the war on terror at home -- economists say these have all contributed to a lingering sense of caution by businesses that reduces the appetite for risky investment and is a subtle drag on growth.
CHRIS VARVARES, MACROECONOMIC ADVISERS: There is no question that the economy has taken a dramatically different path than it would have taken had 9/11 not occurred.
HAYS: The mounting cost of war has pushed the budget deficit to record highs and many fear this will sap spending on other domestic needs like education and Medicare.
As for the jobless recovery, economists say 9/11 was only part of the problem. They also blame the corporate scandals, tech meltdown and SARS scare that dragged down consumer and business confidence. And Wall Street's betting that with those traumas behind it, the U.S. economy will be creating jobs again soon.
Kathleen Hays, CNN Financial News, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired September 10, 2003 - 05:39 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: The economy took a direct hit in the 9/11 attacks.
CNN's Kathleen Hays looks at how the economy has been changed.
(BEGIN VIDEOTAPE)
KATHLEEN HAYS, CNN CORRESPONDENT (voice-over): As the dust settled on the 9/11 attacks, Osama bin Laden issued a chilling message. One of his goals in toppling the towers and smashing the Pentagon was to flatten the U.S. economy.
OSAMA BIN LADEN (THROUGH TRANSLATOR): That this huge superpower, America, is based on a main economic power but this economic power is soon collapsed after the attack.
HAYS: Two years later, the U.S. economy has proven it can rebound from terror attacks and more. But the impact has been profound.
DIANE SWONK, BANK ONE: It's scar on the U.S. economy and a scar much like a scar we get in childhood that will fade over time, but a scar that will permanently refigure our face as a nation because of the choices we've made that have followed it.
HAYS: First came aggressive financial first aid. The Federal Reserve's interest rate cuts drove auto sales forward, as zero percent financing lured buyers. The president easily got Congress to agree to tax cuts to keep consumers spending. Next came a cash transfusion for hard hit industries like the airlines, who were decimated when tourists and businesses stopped flying. But now, even though the economy has escaped recession, the impact of the attacks is still being felt.
JIM CORRIDORE, STANDARD & POOR'S: Only very low fares urged travelers to fly in the first few months after 9/11 and they became accustomed to that kind of fare sales and now they've been very loathe to pay for high fares to fly. And that's, you know, changed the dynamics in the industry.
HAYS (on camera): As for the broader economy, the dynamics of business, finance and government have been profoundly altered. Some say it's the biggest shift in the nation's priorities in decades.
(voice-over): War in Afghanistan, war in Iraq, the war on terror at home -- economists say these have all contributed to a lingering sense of caution by businesses that reduces the appetite for risky investment and is a subtle drag on growth.
CHRIS VARVARES, MACROECONOMIC ADVISERS: There is no question that the economy has taken a dramatically different path than it would have taken had 9/11 not occurred.
HAYS: The mounting cost of war has pushed the budget deficit to record highs and many fear this will sap spending on other domestic needs like education and Medicare.
As for the jobless recovery, economists say 9/11 was only part of the problem. They also blame the corporate scandals, tech meltdown and SARS scare that dragged down consumer and business confidence. And Wall Street's betting that with those traumas behind it, the U.S. economy will be creating jobs again soon.
Kathleen Hays, CNN Financial News, New York.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
