Does increased terror threat threaten US economy?


U.S. Cities Increasing Security Measures in Wake of Paris, Mali Terror Attacks

Suzy Welch:  Yeah. I mean, what's a bigger word than disaster? Calamity, or how about like catastrophe? Because that's what we're talking about here. When you're talking about terrorism, the biggest, worse hole is human. But they know they can't kill 300 million people, but they can kill our way of life by taking down our economy. And there's ample proof that terrorism can do that. Because when people are scared, they hunker down. 9/11. The economic impact of 9/11. Taking out physical damage and military cost was $123 billion. Consumer spending accounts for 70 percent of our economy. And when fear strikes, people stay home. And consumers massively decrease their travel, their eating out, their entertainment, their shopping, including big ticket items like cars and appliances. And I'm not even getting into the impact on the financial markets. So in a word, the economic impact of terrorism, and even just the fear of terrorism, it's deadly.

Gary B. Smith:  Well, Brenda, let me sum up even the past week. Capitalism won. You saw that in the markets. You saw that even anecdotally. I was out a lot this past week. Supermarkets, restaurants, retail. The problem with Suzy's argument is that I agree with everything she said. It happened over there. People say this is not in my backyard. 9/11 was in our backyard. Fear was rampant and justifiably. But it happened over there. If we got another D.C. Sniper kind of thing. Another god forbid 9/11, then yes, everything Suzy said is accurate. But as long as it's over there and people pick up the newspaper and then they flip over and they see oh, my gosh, the Dolphins lost, then they move on to the next thing. There will be no effect on any terrorism attack unless it happens here.

John Layfield:  I agree with Gary on this. I think you have to have an event. Unfortunately, terrorism has been around long enough that we have examples historically of how it affects markets and retail shopping. You had 9/11. You had the bombing attacks in Madrid in 2004. The London bombings in 2005. Now, all three times, the market was down 3 percent to 5 percent immediately thereafter and all three times the market was up single digits by the end of the year. Retail sales, the "Charlie Hebdo" attacks. They picked back up. What's been shown is long strife affects the market, so you have a situation like Egypt where you have continuous terror attacks, or the D.C. sniper. So far, single events, unless it's something catastrophic like 9/11, single events have not had significant impact on retail sales. I don't think it's going to happen this Christmas either, unless you have an event, it will affect that locality, but not overall retail sales.

Jonas Max Ferris:  I'm somewhere between Suzy and the other guest. If it's something you can visualize happening to you, I think it will impact your behavior. If it's an emerging market you would never go to, I think you can dismiss it. But people go to Paris. If you don't think tourism to Paris is going to drift down a little bit for a while because they don't seem to have this under control, I think it will do that, and I think the euro will weaken. I think the U.S. dollar will be strong because that will be money spent here. I think major cities that seem like possible targets for a while could see a little less tourism. I don't think the money is going to disappear. I think it's going to get spent somewhere else. I don't think the whole GDP is going to go into a recession. But I do think some cities in certain tourist destinations are going to take a hit, even though there hasn't been an actual -- the kind of thing you would think would drive people to change their behavior. People don't go to the ocean when there's shark attacks going on, even though there's no chance of them getting bit. So we'll have to see. I would look for an impact in Paris and New York and other major cities.

Chuck Rocha:  When I go outside to walk the world's cutest bulldog, I'm in the shadows of the U.S. Capitol. So if I'm walking down to the grocery store, I'm within 10 blocks of the U.S. Capitol, so I think about it every time. Every time I ride my bike to the gym in the morning, I see more police in the last week or two. So I've really been torn on this. I get like every other American, I forget about it for a little while, but as soon as something pops its head up, I try to think, do I react differently? I guess I do a little bit. If it's not in your backyard and you live in Washington and you're around it all the time, until you see oh, my gosh, there's more cops on the street corner when I'm just trying to walk to the capitol and walk my dog, it makes you think for a minute. We're buying more stuff online. Consumer confidence is at an all-time high. But what do you do now if something was to happen in New York City? I think it would affect the way everyday life acts.

New Calls for Private Companies to Help Track Terrorists in Wake of Recent Attacks

John Layfield: I do agree with secretary gates. I don't know why these companies would not agree to this. I understand this is an argument about what is a reasonable search and what is considered an open field where you have communications that should be allowed to be eavesdropped on. But the problem we have right now with ISIS is they're moving to an Al Qaeda model, where they're putting people in sleeper cells for years and planning big events. Unlike ISIS had done before, and because of that it's harder to detect what these guys are doing. We need a lot of coordination and a little bit of luck to be able to get these guys and I think these private companies have an obligation to our country to step up and do this.

Gary B. Smith: I do not agree with it and I don't agree with john in this case. I think we're solving the wrong problem here. I agree with the threat and everything that john said in that regard. But this is once again -- it's the same with government cannot spend their money wisely. We spend in this country $11 billion a year on cyber security. The problem is the bureaucracy is spread out amongst homeland security, CIA, Defense Department. So we're not spending it wisely. Look, if you want to say we're fighting a war, then you have to do it like Roosevelt did in World War II and conscript entire industries like rubber, and they did with the auto industry where they're only making a couple hundred cars a year. The rest went to the defense effort. Then do that. But don't go hat in hand when you can't even spend your own money and say help us out. That's just silly.

Suzy Welch: I think the answer to this question all depends on if you believe we're at war, and I believe that we are. If you say okay, we're at war, then the time for the ideological debates, it's over, and it's time to act in the kind of ways that will allow us to win this war so we can go back to the way of life that allows us to have freedom to have ideological debates. I've heard tech industry leaders saying they can't do what the industry is asking them. Like Tim Cook of Apple saying we can't build a back door. That's the first time we've ever heard Apple say it couldn't do something. I think Silicon Valley is afraid of the politics of this debate, but I wish they wouldn't be because we don't have time for it. I'm with john on this one.

Jonas Max Ferris: Look, if I can't send an encrypted picture that disappears of my private parts, the terrorists have really won. In all seriousness, these products have a legitimate use 99.9 percent of the time. Encryption is important, not just to dodge snooping. It's not like saying bitcoin should be illegal because terrorists use it because no one really needs bitcoin at the end of the day, or some technology that was designed just to do a crime like DVD copyright removal software. That only exists to break laws. Encryption doesn't exist to dodge scrutiny by the regulators or the FBI. It's for the public we benefit for. You can't just make all those technologies go away. It will just drive it into the black market anyway. It won't be chat slam or whatever.

Chuck Rocha: I'm down in Atlanta with 200 elected Latino officials, Democrats and Republicans. I went around today asking them questions about what was going on in their neighborhood. People on both sides of the aisle. It was a debate on people who felt strongly about the fourth amendment, and then people who really made some great points about today's modern terrorists are using this to their advantage. It's the difference of where we are today, than back in the day when a terrorist had to send a letter over through the U.S. Postal Service to ask somebody if they wanted to join some bad guys. At the end of the day, when somebody has a car that's racing another car, I want the guy who's got the fastest car and say let's win this thing.

Bipartisan Push in D.C. to Revoke U.S. Passports of Americans Fighting for ISIS

John Layfield: This is absolutely amazing to me that we are discussing this. Look, these people are waging war against the United States. Article 3, section 3 of the United States Constitution defines this as treason. The U.S. Code gives treason that you are able to punish that by death. I think they should be welcomed back. I think they should keep their passports. And I think right after that we should take them to the gas chamber or the electric chair or whatever it is. These people are waging war against Americans. That is treason. I can't believe we're doing something so stupid as arguing about passports with this.

Suzy Welch: I thought who could possibly disagree with this? I mean, I am a writer by trade and I couldn't even think of an analogy for this one. Living in the United States is an incredible privilege. This seems to me like a complete no-brainer. If you leave the United States to destroy the United States or train other people to do so, I think you've lost the privilege of living here. The only reason to let them back in would be to follow them around and spy on them and find out where their cells are hiding and arrest them. But let's just revoke these passports, it's nonsense.

Chuck Rocha: How do we lose them? That's my question. I keep track of my dog and I can track him all over the country. But we lose people? We have two to three people a month that come back. Look, everybody knows I'm a liberal, I'm a red neck, I'm a Latino, all those things. And it may surprise some of you, but I agree with my good east Texas buddy John. Because we are supposed to protect our country at all costs, and you should do everything under the law to punish these people to the extent of anything that you can do, redneck-style. Gary B. Smith: Exactly. I guess we're all singing out of the same hymnal on this one. I want them to come back for the reason that john said. If they can't come back, we can't try them for treason and we take advantage of what the Constitution says in that case. Anything I would say would be redundant right now. I can't even understand the points that would be made for not revoking their passports.

Jonas Max Ferris: It's a faux action, for politicians to look like they've got this under control and they're taking the lead on this. This is the biggest problem with terrorism. You have solutions that are not solutions. It's not like we're going to sound tough like yeah, but at the end of the day, this is what dictator regimes do. They don't actually do anything about the threat. If you've got security problems where people can come and go and join a terrorist organization, tearing up their passport, it's like if your kid steals your car, drives it through the neighbor's house and cut his allowance for a week. It doesn't make any sense, it's so ridiculous. We have to really watch out for the bad laws to fix our terrorist problem. You're not going to legislate away this problem.

Stock Picks

Gary B. Smith: I like DOG, shorts the Dow.

John Layfield: It's good for the price of copper. COPX is a copper ETF. I think it's up 20 percent on the year.

Jonas Max Ferris: Fascinating research out of Cornell this week. Men eat more food around women, 93 percent more pizza, according to the study. That, plus Internet dating is great for an upscale high-class restaurant like The Cheesecake Factory.