What 9/11 didn’t, and did, change about America
I don’t go in much for 9/11 retrospectives. I’ve never seen any documentaries about it, never seen any movies about it, never read any books. I don’t need to. I saw the event itself.
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In 2001, I was working as an editor at Dow Jones Newswires in a newsroom on the Jersey City waterfront directly across from the World Trade Center. Sept. 11, 2001, is as clear in my head today as it was 25 years ago. You just don’t ever forget something like that. I’m sure some of you know exactly how I feel.
What’s harder to discern is how the attacks changed us. I don’t know how well appreciated it is now, but the ’90s were a very distinct, different time. Even the ’80s existed under the shadow of the Cold War and the threat of nuclear annihilation. But the Soviet Union collapsed, the Iron Curtain came down, the wall got torn to bits. The United States was the world’s lone superpower. We’d won.
And then the internet came along and turbo-charged the whole thing. The economy was very strong in the ’90s. In April 2000 the unemployment rate fell to 3.8%. That isn’t too far off from the current 4.1%, but there is one big difference: the labor force participation rate in 2000 was 67.3%. Today it is 61.3%. If the 2000 participation rate was applied to today’s work force, it would more than double the unemployment rate.
And wage growth was well outpacing inflation back then. In April 2000, average weekly earnings rose 4.4% from the year prior; this past August average weekly earnings rose 3.7%. But
the CPI inflation rate in April 2000 was 3%. In July, the most recent reading, it was 3.3%.
Things were so good that President Bill Clinton said in his 2000 State of the Union address that “the state of our union is the strongest it has ever been,” and he wasn’t even exaggerating. The economy was so strong that not only was the federal budget in balance, the national debt was on track to be eliminated within a decade. Alan Greenspan literally sat in front of Congress and had to talk about the challenges of “zero federal debt.” The Treasury stopped issuing the 30-year Treasury bond for this reason. Nobody was going to take a 30-year flyer on U.S. debt when there wasn’t going to be any U.S. debt.
And New York was the epicenter of all that. I used to take the ferry across the river and arriving at the World Financial Center terminal felt like arriving at the gates of ancient Rome (I know ancient Rome wasn’t a port city, it was the sentiment that counted), the capital and center of the world. We had Wall Street, we had the Yankees, we had Seinfeld. I distinctly remember thinking, this is it, we won. America was on top of the world, New York was on top of America, and it honestly felt like we were never, ever, ever going to not be on top. It was a giddy feeling.
Read more of American Banker’s 9/11 anniversary coverage:
The wheels were already coming off the economy, of course. Some critics argued the government killed the long bond to force rates down to keep the housing market afloat. The stock market crested in March 2000 and then collapsed. The credit market would get its own dose of pain later with the implosion of the telecom market (ahem, AI proselytizers). And then came Sept. 11, 2001.
The economy didn’t collapse after 9/11, though it was actually in a shallow recession in 2001. As regulators in office at the time, such as
The terrorists didn’t win. America moved on. We rebuilt the financial center and repaired the Pentagon. An entire generation of people have now been raised who don’t remember the attacks or weren’t even alive for them. Many of them work for American Banker’s readers.
But I don’t think we ever recaptured what we had before the attacks, either. There were a few years after that where we tried to regain the spark of the ’90s, but in reality we were just creating the tinder for the biggest economic conflagration of our lifetimes. We had the long, slow recovery from the financial crisis, and then the pandemic hit.
The Sept. 11 attacks certainly did not destroy New York, the financial system, or America. But they did mark the beginning of a long period of struggle that in many ways I think we are still in.
