Economic winners, losers in post-9/11 era
The 9/11 attacks were a geopolitical gut punch that did little to mute the overall economy on the mend from the dot-com bust.
Putting dollars-and-cents analysis on that tragic day 20 years ago is hard for this native New Yorker. Thankfully, the long-term damage to the overall business world has been modest. Even my hometown enjoyed, until the pandemic, a business revival.
My trusty spreadsheet — filled with government economic data from the fateful day through this summer — reveals a somewhat sluggish post-9/11 economy, both locally and nationwide. Let’s not forget that these two decades included the mortgage meltdown and ensuing housing crash creating the Great Recession, plus the job-slashing business limitations of the pandemic era.
So here’s how some key economic benchmarks performed — before and after 9/11.
Jobs? California employment grew at an 0.9% annual pace from 2001 through prepandemic 2019, slightly better than the nation’s 0.7% growth. But look at 1990-2001: 1.5% annual growth statewide and a 1.7% U.S. hiring pace.
Paychecks? Per capita income in California grew 4% a year, 2001 to 2020, topping the national rate of 3.4%. Again, this is down from 4.3% annual growth statewide in the ’90s and a 4.4% U.S. pace.
Inflation? Slow growth muted cost-of-living increases. The national consumer price index rose at a 2.1% annual pace in the 20 years ending in June versus 2.9% in the ’90s.
Homes? Low inflation and slow economies pushed down interest rates. For example, 30-year mortgages averaged 8% in 1990-2001 and 4.8% afterward. Even with the pain of the real estate collapse not long after 9/11, California price gains averaged 4.8% annually in 2001-2021 and 3.7% nationally. Compare those jumps to 3.7% annual price statewide in the ’90s and a 2.4% U.S. appreciation rate.
Now the relatively meek post-9/11 economy didn’t treat all industries equally.
When my spreadsheet used a Wall Street lens — an analysis of stock performance in 83 industries by Charles Rother of American Strategic Capital of Costa Mesa — you see huge variances in 20 years’ worth of stock total return, that’s price gains plus dividends.
For example, is it a shock that war is often profitable ground for defense contractors?
The 9/11 attack sent American troops first to Iraq and