What Caused the 2001 Recession?
Five weeks ago, as many observers noted, the U.S. economy approached a fork in the road. A mild uptick in new orders for manufacturing goods, positive signals from the Index of Leading Indicators, and continued stimulus from the Fed all pointed in the direction of an impending turnaround. But low levels of business spending, poor earnings reports and the stagnation of the stock market suggested a continued slide into recession. The terrorist attacks have changed all that. The issue for most analysts is not whether the economy is in recession, but how long and painful the downturn will be. Every piece of news fits nicely into the emerging picture of economic decline. But is it really as simple as that? The scenario of four renegade aircraft within the space of a few hours bringing down a $10.2 trillion dollar economy is dramatic and compelling. It’s also a bit far fetched. As painful as the losses suffered on September 11 were, the case for extending their effects into the pocketbooks o
