President Barack Obama told the nation at 10.30pm on Sunday (1 May) that American commandos had killed Osama bin Laden at his fortified home in Pakistan. Spontaneous celebrations, fuelled by Twitter and Facebook, erupted in New York’s Times Square and in front of the White House in Washington, among other places. They were still going strong the next morning: My commuter train to work was crowded with people carrying US flags and wearing US T-shirts, bound for a hastily convened demonstration at the site of the World Trade Center bombing.
The festive feeling infected some of the nation’s best-known journalists as well. Television anchor Geraldo Rivera, announcing the news on Fox, blurted, “This is the greatest night of my career.” The usually level-headed Jonathan Alter, writing for Business Week, compared Osama’s death to a key American victory in World War II and went on to declare: We should see the veil of fear and bitterness that has afflicted us for the last decade begin to lift. The old can-do competence that beat the Depression and won World War II isn’t dead yet. Happier days may be here again.
That’s a lot of hope to hang on the death of one ageing mass murderer. Does Osama’s elimination really change things that much?
Terrorism is no less a threat before: US officials have argued that the documents and computers removed from Osama’s hideout show he was still actively plotting attacks, and that his death therefore makes the US safer. I spoke with John Arquilla, a professor of defence analysis and an expert in special operations at the US Navy Postgraduate School, who doubts it. Arquilla pointed out that Al Qaeda had long since evolved from Osama’s private strike force to a network of cells operating autonomously. “A network is a hydra,” he says. “Cut off one head and another one grows back. The death of Osama has almost no effect on Al Qaeda’s operational capabilities.”
In fact, the aftershock of another terrorist attack could actually be magnified by Osama’s death, if Americans get overconfident. A study of 75 terrorist attacks between 1995 and 2002 found that terrorism’s business impact (measured by stock returns) was strongest when the targeted country was rich, well-educated and democratic. It’s easy to see why: Wealthy economies have more to lose, and open societies are harder to defend.
Most important, countries that don’t expect to be attacked suffer the most loss of confidence when they are—one reason the September 2001 attacks on the World Trade Center and Pentagon shattered the American world view. In the weeks that followed those attacks, US stocks suffered their worst downturn since 1933. And while stocks recovered within a few weeks, not all economic indicators have. Consumer confidence, for example, still hasn’t regained its August 2001 level. To the extent that Osama’s death makes Americans feel too secure, the next terrorist attack—and there will be one—could once again shake their confidence badly.
Also read | Eric Schurenberg’s earlier columns
India, by contrast, is only too aware of its exposure to terrorism. In the seven years cited in the study above, India alone suffered 26% of the world’s incidents of terrorism, and that doesn’t include 26 November 2008 in Mumbai. Shocking as that attack was, it was one of half a dozen incidents that year. And when the markets reopened the day after the Mumbai attacks, the Sensex index actually finished with a slight rise.
US politics continues to be dysfunctional: Obama’s approval rating jumped seven points in the aftermath of the successful raid, and 53% of voters now say that he deserves to be re-elected, up from 39% last November. But there has been no thaw in the relations between the President and the Republicans in Congress. This week Congress will miss a crucial legal deadline for granting the US treasury permission to continue borrowing. If Congress fails to give permission by 2 August—what the treasury says is the absolute last deadline—the US will default on its bonds, with disastrous consequences for the US economy. Even so, congressional Republicans adamantly refuse to allow further borrowing without massive, unspecified cuts to the federal budget first. So much for the hope that victory over Osama would change Washington’s poisonous political animosities.
Perhaps America will get an image upgrade, but not from Osama: Essays such as Alter’s express a longing for a restoration of America’s fading reputation. The Christian Science Monitor hopefully quotes a French intellectual, Dominique Moisi, on Osama’s death: “This is part of the return of America. The story a few years ago was of America’s relative decline, but this shows a return.” No nation wants to be regarded as “in relative decline” as a matter of pride, and when that country owns the world’s largest economy and reserve currency, there’s a financial penalty as well, as the economist Ed Yardeni explained: “My view is that the dollar’s weakness and gold’s strength have been related to the perception that America is in decline. If that (perception) changes now, then the dollar might continue to strengthen and gold might at least stop going straight up for a while.” Similarly, an uptick in the cachet of the American “brand” might make others more willing to buy Buick automobiles (already a top seller in China), Boeing airplane, Napa Valley wines, and Apple computers.
Whether the death of Osama will change minds about America, however, isn’t clear. In one sense, the raid on Osama revealed no new information. No one should be surprised to learn that Americans have mastered radar-evading stealth technology, and anyone in the world who watches Hollywood movies probably believes that commando raids happen all the time. Meanwhile, America’s invasion of Pakistani territory without permission and celebrations over the death of a human being may actually confirm some unflattering stereotypes about Americans.
In the end, if the current period does change attitudes, that development may have nothing to do with US Navy commandos, spy satellites or stealth helicopters. The Arab spring in Tunisia, Egypt and Libya suggests that ideals espoused by America (if not always lived up to) had already won the battle for Muslim hearts and minds, even before Osama was found. American-led democratic ideals inspired the protesters and rebels in those countries, and peaceful US communications technology made it possible for them to organize resistance.
So maybe American Twitter followers were right to be dancing in the streets in that first week of May. They were just celebrating the wrong victory.
Illustration by Shyamal Banerjee/Mint
Eric Schurenberg is editor-in-chief, CBS Interactive Business Network, and former editor of Money.
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