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CNN Live At Daybreak

Terrorism Does Have a Price Tag

Aired November 08, 2001 - 06:29   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.
DARYN KAGAN, CNN ANCHOR: Terrorism does have a price tag, it has meant millions of dollars in losses for the travel industry. It has given a boost, though, to other industries.

CNN's Brooks Jackson explains how you could end up footing the bill.

(BEGIN VIDEOTAPE)

BROOKS JACKSON, CNN CORRESPONDENT (voice-over): The Ambassador Bridge between Canada and the U.S., before September 11, trucks used to breeze through here. Now every truck is inspected and U.S. bound trucks are delayed an average of one to two hours. Those delays come at a price.

STEPHEN RUSSEL, CEO, CELADON TRUCKING: The cost is roughly $40 at today's level of delays. That's comprised of driver pay, it's comprised of fuel that the truck consumes while it's idling or moving at a -- at a snail's pace, and of course some factor for the cost of the tractor itself.

JACKSON: Customs officials say more than seven million trucks crossed the Canadian border into the U.S. last year. At $40 a truck, that's $280 million a year in added cost from idled drivers and wasted diesel fuel. Who's going to pay, ultimately consumers.

(on camera): And that's just one of the hidden costs of terrorism. The hardening of America, like the construction of these new security barriers around the Capitol, is draining away money, making America safer but also making its economy less efficient.

(voice-over): Manufacturers of prefabricated concrete barriers report record orders, literally miles of them, at $20 a foot. Resources spent producing these can't go to new factories or hospitals or homes. Businesses are spending more resources on thousands of new guards, and experts say many companies also will be shelling out for expensive surveillance cameras and high-tech identification badges. The total cost is hard to estimate.

GENERAL BOB DISNEY (RET.), AMER. SOC. OF INDUSTRIAL SECURITY: But it's not cheap -- it's not cheap. We're not -- we're not talking about, you know, $5 or $10 or $15 per employee or per square foot, I mean we're talking considerably more than that. JACKSON: Security was already a $53 billion industry before September 11, a 50 percent increase would add more than $26 billion a year to America's cost of doing business without any increase in production of consumer goods or services. And some costs are invisible, like higher costs for insuring property and business against future attacks.

ROBERT HARTWIG, INSURANCE INFORMATION INST.: In the aftermath of September 11, the incremental cost for insurance is likely to be an additional 15 percent for many types of coverages purchased by businesses. That translates into approximately 20 billion additional dollars.

JACKSON: And that's just the added cost of premiums paid to insurance companies. Add in the cost of big companies that insure themselves and the total could reach $40 billion next year alone. The list goes on, half a billion dollars is being spent to produce smallpox vaccine that may never be used, money that won't be spent for other medicine.

The costs ripple through. The $2.5 billion cost of irradiating mail to kill bacteria will be borne by the public either through taxes or higher postage rates. A host of new costs, experts say, are not optional.

DISNEY: These are certainly hidden costs. I mean these weren't there before 9-11, and we're going to have to get used to this because this is the way we're going to have to operate.

JACKSON (on camera): Higher costs and less efficiency mean a less productive economy and slower growth in the U.S. standard of living, the hidden cost of terrorism.

Brooks Jackson, CNN, Washington.

(END VIDEOTAPE)

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