- The Washington Times - Thursday, August 10, 2006

Americans are getting used to the idea that their country is a terror target.

Wall Street showed remarkable resilience and actually rallied yesterday on news that British authorities thwarted a terrorist plot against U.S. airlines. The rally was aided by a steep drop in oil prices, which fell on expectations that canceled travel plans would mean lower demand for fuel. Safe-haven investments such as gold and Treasury bonds also gained, lowering interest rates and making the terror busts a minor net plus for the economy.

Both Wall Street and Main Street have grown accustomed to the idea that the United States is a favored target of extremists since the September 11 terrorist attacks, analysts say, and Americans are inclined to react only if something bad really happens.

One factor contributing to their unflappable attitude: No terrorist attack has occurred on American soil since 2001.

“Very little has changed, because this terrorist plot was stopped,” said Lawrence Kudlow, head of Kudlow & Co. and a Republican economic adviser. “The Brits delivered us an incredible blessing,” he said, adding that the hundreds of billions of dollars the U.S. government has spent on thwarting terrorist activity also seems to be paying off.

“Our defense is working,” he said. “Nothing happened, thank God.”

Yesterday’s foiled attacks against U.S. airlines ferrying passengers from London to New York, Los Angeles and Washington at the height of the summer travel season should have a “benign” impact on consumer confidence because “the vast majority of American consumers don’t travel internationally for pleasure or business,” said Mary Brett Whitfield, a senior vice president at Retail Forward, a retail analysis firm.

“There was more chaos, more interruption in Europe than in the U.S. So for most Americans it will be a nonissue because it’s not part of their world,” she said.

Chuck Gannon, bartender at American Legion Post 108 in Cheverly, said the incident will not affect his plans to fly to Salt Lake City next week.

“I flew shortly after 9/11, and there were some extra delays at the airport. I expect some hassle at the airport this time, but I’m still going,” he said.

Political analysts say worries about terrorism have declined in the past five years and many Americans have become downright defiant in the face of terrorist threats.

John Zogby, president of Zogby International polling firm, said the newly discovered threat “will put some damper on short-term travel, especially less-than-necessary travel.

“It heightens the fear factor, but Americans have come to live with the fear factor,” he said. “They know there will be another terrorist attack.”

Terrorism fears have been trumped by the “convenience factor” in the thinking of many Americans, Mr. Zogby said.

“People don’t like inconvenience,” he said, noting how fast-food customers will “bump fenders to get out of the drive-through first.”

Would-be travelers have been warned they could be facing delays at airports at least for the next few days. This will be enough to cause some to postpone travel plans, he said.

“But barring another [terrorism] announcement next week, things should be back to normal in three weeks to a month,” he said.

The biggest adverse economic impact will be to the U.S. airline industry, particularly to the targeted airlines — United, American and Continental. The setback comes as the industry was mounting a convincing comeback from the devastating losses, layoffs and bankruptcies caused by the September 11 attacks.

“This should put a chill on travel and result in less of a call for oil,” said John Kilduff, vice president at Fimat USA. The price of premium crude fell $2.35 to $74 in New York trading yesterday.

But many analysts predicted the impact on oil prices and even the airline industry would be fleeting.

Mike O’Hanlon, a senior fellow at Brookings Institution, said he anticipated Americans “will be nervous for a while,” but he expected most will resume flying quickly.

“Americans proved to be level-headed about the 9/11 threat,” he said, and he expects them to show the same spunk in this situation. He predicted only 5 percent to 10 percent will remain unwilling to board airplanes in the aftermath of yesterday’s threat discovered in Britain.

Peter Brookes, a senior fellow at the Heritage Foundation, was also optimistic most people will overcome their fears rapidly.

“This will give them pause. People are going to pay attention in the short-term, since they have been reminded a terrorist threat still exists in our country, and we’re still in the cross hairs,” he said. “So they will be thinking about this a lot the next few days, and they will be cautious. But, ultimately, they will be defiant.”

Jen Haberkorn contributed to this report.

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