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W e believe that the same would be likely after a

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Unformatted text preview: orecast, Protecting the Nation’s Seaports: Balancing Security and Costs, www.ppic.org/content/pubs/report/r_606jhr.pdf ) Of course, a labor action is not the same as a terrorist attack; labor actions can be anticipated to some extent, whereas lack of anticipation is intrinsic to terrorist attacks. However, similarities remain. The labor actions of the sixties and seventies were often marked by wildcat strikes and work slowdowns, deliberately created to reduce or prevent mitigating actions on the part of the companies involved. Furthermore, there cannot now be an unexpected, surprise terrorist strike at U.S. ports. Because of the terrorist threat, many businesses have put in place redundancies and contingencies that will help mitigate the disruption caused by a port attack, just as they undoubtedly did in anticipation of the port strikes that loomed in the 1960s. [___] Other sectors offset Edward E. Leamer and Christopher Thornberg, professor of statistics at UCLA and senior economist with the UCLA Anderson Forecast, 2006 (UCLA Anderson Forecast, Protecting the Nation’s Seaports: Balancing Security and Costs, www.ppic.org/content/pubs/report/r_606jhr.pdf ) Our results do not say that no business was hurt by port labor actions or that profits were not adversely affected by the increase in transaction costs. Some industries, some firms, and some regions were surely adversely affected. Nor do we claim that a terrorist attack on the ports and the resultant disruption to the supply chain would not harm any region or company—certainly some firms and regions would be affected. However, as is often the case in a modern complex economy, when one industry or area suffers as a result of some economic disturbance, another prospers as a resu lt of an offsetting shift in demand: There are winners and losers. Our main point here is that these past disruptions were insufficient to cause any noticeable change in the aggregate flow of the economy: Either the losses were small compared with the overall economy or they were largely offset by gains elsewhere. W e believe that the same would be likely after a terrorist attack on a port: Its effects are not likely to show up other than in imports and exports. 5|Page Port Security Negative BDL Low Risk of Port Terrorism [___] [___] Risks decreasing, alternative transportation methods solve, catastrophic impacts empirically denied Edward E. Leamer and Christopher Thornberg, professor of statistics at UCLA and senior economist with the UCLA Anderson Forecast, 2006 (UCLA Anderson Forecast, Protecting the Nation’s Seaports: Balancing Security and Costs, www.ppic.org/content/pubs/report/r_606jhr.pdf ) Although the United States is considerably more trade-dependent today than in earlier periods, this potential vulnerability is offset by a number of factors. One is the shift from ship to aircraft for delivery of many high-value, time-sensitive goods, particularly on the export side. Second, countermeasures to a terrorist strike, such as increased...
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This document was uploaded on 02/06/2014.

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