Saturday, April 27, 2013

The Economics of Bombing Boston

Spring planting is done, and MeanMesa's garden is covered with brave little vegetable sprouts!  Now there's time for another visit to Short Current Essays

The Cost and Value of Terrorism
and a few other issues

If the three sinister pressure cookers with removable handles detailed in the reporting on the bombing were purchased at a thrift store, one could anticipate a check out total of around $30.  The "Super Blaster" high end, black powder Roman candles [buy one, get one free - 3 lbs. of black powder in each package!] added $200 -- plus, of course, the bus fare for the trip to the "year round fireworks convenience center."  The "high tech" fusing, detonator and triggering assemblies from the local electrical surplus shop looked like items worth around $20 worth for components including the solder and flux.

Coming up with "household shrapnel" usually entails no more than a quick search of the kitchen "junk drawer" or a trip to the basement.  Presumably, the brothers already had the back packs.

The home made IED "grenades" look suspiciously like combinations of "left overs" from the pressure cooker projects.  None of the net work coverage has really "spilled the beans" on where all the guns and bullets were acquired, but we can be confident that, as the last drops of "breaking news" blood slowly seep away from the "career opportunity" media event, the government intelligence crews will pony up just a few more, last, breath taking, "late breaking" revelations concerning the grim details.

In this country where half the front yard lemonade stands have semi-automatic pistols tucked away under the iced pitcher sitting on the box, those "revelations" about the guns will, most likely, not be particularly much more enlightening or "revelatory" than a hangover might be at noon tomorrow.

Balancing the Books

Roughly totalling the purchases necessary to pull off the Boston Bombings, we could arrive at some figure around $1,000 -- probably less, depending on where and how the guns were acquired.  As we estimate the cost of responding to the Tsarnaev brothers' bombing, a very different picture emerges.

The governments involved -- the City of Boston, the State of Massachusetts and the Federal Government in Washington D.C. -- showed up quickly, ready to write a very, very large number of over time pay checks, starting right away.  As the story unfolded, local police departments were added to that payroll.  The surviving suspect was captured in Watertown, a community a few miles west of the city.

The Feds didn't stop with just contributing the "on the ground" forces, either.  The CIA, it turns out, had already been talking to the Russians after the older Tsarnaev caught their attention during his visit to Dagestan.  Because this was an "in country" matter, some or all of those CIA folders were forwarded to the FBI.

Minutes after the Boylston Street explosions, hundreds of off duty law enforcement were back on the "ot" clock.  Warehouses full of police equipment emptied in minutes.  The security presence at the scene was immense.  Within the first hour that presence rapidly expanded to a larger and larger radius around the Marathon site.  State Police were arriving to bolster the force which had been routinely assigned to cover the race.

The count of police and FBI investigators sifting through the thousands of photos and video was mushrooming as citizens responded to pleas from the Mayor and Governor.

The point here is not about the emotion, fear or terror.  The point to be made here is about the cost -- about the money, about the general funds tapped to fund the effort.


Within minutes after the smoke from the explosions wafted off into the Boston sky, the price for the response, considered in whole, was easily topping several million dollars per hour.  Over the next week, that total cost would reach to around a billion dollars -- more or less -- depending on what all was included in the tally.  MeanMesa suspects that even that monumental price tag may be deceptively low.

In terms of economics, the terrorist brothers had transformed a $1,000 investment for an episode of terror into $1,000,000,000 worth of terror response.  Fortunately, at least for our peace of mind as tax payers, the powers that be do not account such totals primarily because there is no established chart of accounts which could accept all that data.

For the reasons previously cited MeanMesa can hardly expect to offer a definitive, highly accurate accounting, but we can pretty sensibly select a few of the biggest items to lay down for a start.   Hopefully, visitors will agree that even a "shot in the dark" is preferable to "no shot at all."

Gravity of Threat/Damage
US Domestic - Civilians      $5 Mn
US Domestic Damage        $1 Mn
Interruption of Commerce $3 Mn
Material Damage Total      $8 Mn

Scope of Response
Boston Bombing          $1,000 Mn
[$1 Bn]

The spectrum of possibilities for terrorist schemes is simply too broad for an accountant's normal "cookie cutter" approach to accommodate the task of sizing up the cost of the response.  Further, the full continuum of possible responses is so vast that there doesn't seem to be any set of rules for estimating such a cost beforehand, either. From lack of such data we find ourselves forced to forgo the logical process of deciding whether or not the cost of a potential response plan is "worth it."

Of course it's hardly a decision based on a business plan.  Generally, it cannot even be a decision based on the idea that all -- or even enough -- of the facts are known, either.   Will the threat be ended by the response or will more threat be revealed as the first process unfolds?  We've had some experience, but not nearly enough to comfortably anticipate additional, undisclosed conspirators or strategies which may not exist or patterns which may not be in place.

At various times we have responded in fairly cost effective ways, but in other instances we have blown away even a vestige of sensibility like fall leaves in an October wind. The recent examples of these varied responses -- especially the bad ones -- don't paint a pretty picture.

Post Explosion Psychological Economics

We've had some experience with this part of the equation.  The scope of the response is naturally measured by the scope of the damage from terror or threat, but that is only the beginning of the calculation.  Even in the dwindling tatters of a representative government, the public response is also a factor.

In fact, the psychology of the public response is -- or can be -- just as material a parameter as the scope of the material damage.  When the public is frightened or hopeless, politics will drive the scope of the response to higher and higher levels of investment regardless of a more rational appraisal of simply considering "what it's worth."

We can look at a few recent examples.  While in each case a multitude of "additional considerations" may immediately present themselves, we want to focus on the highly simplified, limited parameters of:

the gravity of the material threat
the severity of the perceived threat
the scope of the response

Those "additional considerations" tend to include quite a collection of emotional reactions to terror or threats of terror.  After an event such as 9/11 or Boston, these can crowd into our thought model as understandable, yet not particularly constructive, adjustments to fundamental values we might have held with cooler minds.

Vietnam War

The actual, material threat used to justify the disaster in South East Asia was, believe it or not, primarily no more than another rehearsal of the well tested "domino theory" popular during those times. It quite comfortably founded upon carefully presented ideology and mind numbing fact manipulation [which suffered even more as the conflict progressed] offered up as a grave material threat while still being painted in only the most abstract form.  The American response to that "threat" was, perhaps most importantly, amateurish.  The balance between the actual "gravity of the material threat" and the "scope of response" was neither valued highly nor even well planned.

After a few years of North Vietnamese intransigence there were more than half a million conscripted US troops in the country.  MeanMesa, a real life observer during those decades of constant war, suspects that any number of other approaches might have served US interests just as well at a substantially lower cost in both blood and treasure.

The psychology of the war effort there was a quite "out of focus" mix of cultural memories of the WWII and Korean conflicts along with Cold War propaganda.  It went on for around twenty years at a cost of 60,000 dead Americans, 200,000 with casualty injuries and at an average cost of $1,000,000 per minute [1970's value dollars].

The "whether it was worth it" question remained one starkly based on the already tenuous logic of "domino theory."  That kind of explanation rapidly wore out both its usefulness and its welcome.  The price? Each North Vietnamese casualty cost around $70,000.

The Vietnam War is noted here to fill in the measurement of both the "scope of response" question and to provide a glimpse of past forms of justification.


Now, the longest war in the history of the United States, this one was initiated immediately after 9/11.  The US population was thoroughly terrified by the attacks in New York and Washington -- a terror further embellished by the dramatically fearful response of the current government.

The next unfortunate side to unroll was the replacement of al Qaeda by the Taliban in the "enemy" slot.  The early military moves against al Qaeda and specifically against Bin Laden were very poorly handled, perhaps on purpose.  The "scope of response" was left to expand uncontrollably after that.  The mission, originally to deny al Qaeda an Afghan "safe haven," gradually shifted to "fighting anybody who would fight back" and finally into "they can't throw us out" no matter how hard they try.

Afghanistan was also the "first time tried" for massive contracted services for the military.  Touted as cost savings and as a necessity with the limited personnel of a volunteer military, the contract costs sky rocketed while services were steadily degraded.  Oligarchs had always loved war profiteering, but this was the first time that the process had been allowed to move from domestic factories to also encompass the cash flow previously found only on the battlefield.

Estimated final cost of the Afghanistan military adventure could easily exceed $2.5 Tn [$2,500,000,000,000].  Comparing that cost with the expense of incurring the initial damage on 9/11 is discouraging. Comparing this figure with even a coarse estimate of the monetary damage of 9/11 -- the ostensible justification for the response -- is more discouraging. 

Pentagon 9/11(image source)
The value of the World Trade Centers, generously, might amount to $3 Bn.  The damage done to the Pentagon perhaps amounted to another billion -- especially with repairs performed by the Pentagon's favorite contractors with the necessary "security clearances" and conventiently tight lips.

The four jet liners full of passengers who became "liability suits" could possibly add another $3 Bn.  The remainder of the cost which can be attributed to the Afghan War derives from money we spent in our response to this damage.

Gravity of Threat/Damage
Trade Centers                $3 Bn
Pentagon                       $1 Bn
Airplanes and liability     $3 Bn
Material Damage Total   $7 Bn

Scope of Response
Afghan War              $2,500 Bn
[$2.5 Tn]


Having seen the public discomfort with both the war's painful longevity, its uncomfortable inefficiency, its obvious "mission creep" and its "exit policy" failure in Afghanistan, the "threat" for invading Iraq received significantly more attention and preparation. In hindsight, this may well have been the most scandalous feature of the historic disaster.

The fabrication of the "gravity of the material threat" was clearly overdone, most likely as a misjudgement of the credulity of the American public.  The voters were more or less manageable while being relentlessly plied with jingoistic maxims such as "They hate our freedom" or "Cut and run or stay the course," but fairly rapidly the "product" of that media investment was transformed from its intended role as a "manipulation asset" into a "suspicion debit." 

Oligarchs at work (image source)
By year eight or nine of the thing, the cash rushing into the "scope of response" continued at full bore while the public acceptance of the "gravity of the material threat" uncontrollably subsided, further aggravated by the Republican Economic Collapse of 2008.  While VP Dick Cheney's Halliburton, desperately failing at the war's onset, was now logging historically high profits from $35 Bn of "no bid, emergency" contracts, the endless war itself had become a public opinion tooth ache.

The same dilemmas which were plaguing the "cost benefit" cycle analysis of the Afghan War quickly visited the adventure in Iraq.  The cost steadily expanded to around $4 Tn.  The little accounting table in the discussion of the Afghan War could not be duplicated for the Iraq War because there were no justifying, initial, "grave material damages or threats."  This left the thing stranded without material validation, a void at first clumsily filled with propaganda, but one which later became a void so "perfect" that the resulting public opinion vacuum could no longer be filled with anything.

Gravity of Threat/Damage
Damage from Exported Terror  $0 Bn
US Domestic Terror                  $0 Bn
US Domestic Civilian Damage   $0 Bn
Material Damage Total             $0 Bn

Scope of Response
Iraq War                            $4,000 Bn
[$4.0 Tn]

By the way, the fact that Iraq sits on the fifth largest proven reserve of sweet crude on the planet does NOT constitute a "grave material threat."

Facing Facts

The Wahabist billionaires in Saudi Arabia who picked up the tab for the nineteen hijackers to come to the US for a year or more before 9/11 probably spent a maximum of around $4 Mn for living expenses, travel, pilot school and the rest.  However, the al Qaeda's lead guy on the project, bin Laden, had also made some remarkably perceptive assumptions of his own.

These "assumptions" -- viewed in the cost basis approach of this post -- are not particularly similar to the hyperbolic versions with which we are familiar.  In fact, becoming "acquainted" with these "assumptions" turns out to be, actually, rather painful.

Yet, these are the essential foundations of both 9/11 and Boston.

First, bin Laden anticipated that the tragically effeminate US President, already on record expressing his rehabilitative fantasy of being a "war time" President, would instantly "take the bait" after the World Trade Towers and the Pentagon.  Further, well known for a catastrophic lack of imagination, bin Laden also correctly anticipated that Bush W. would pursue his "revenge" in the most expensive, least effective military plan possible.

The Saudi mastermind was well aware of the salivating war profiteers surrounding the President as well as also correctly anticipating their suffocating influence on the White House.

All of this unfolded to make Afghanistan not only possible but inevitable. However there was more in bin Laden's mind.

Once the Afghan War's financial "bull had wrecked the first China shop," all restraint  vaporized.  The invasion of Iraq might have been triggered by Sadam's intelligence service's assassination attempt on Bush Sr., but its real foundation rested with the quite predictable behavior pattern of oligarchs.

That would be the quite "predictable behavior pattern" of oligarchs who smell blood available for the taking.  Once past that "garden's gate," all bets were off.

As the White House took out the check book to pay for Afghanistan, the oligarchs also eagerly "took the bait," but for them the "bait" was the prospect of the untold fortunes to be extracted from owning the Iraqi oil fields.  All of this was in bin Laden's basic plan.

The "painful" part of all this emerges from the fact that Americans had elected all the incompetent and exploitative stooges required to be present to complete bin Laden's "materials list."

This discussion is relevant here because one of bin Laden's main ambitions was to sucker the United States into a "spending spree" which would serve to cripple its economy for years to come.  That worked.  We simply don't know if a similar ambition was among the "dreams of damage" which coaxed the Tsarnaev brothers into their terrorism, but it may as well have been.

The United States is, frankly, horrible with respect to designing appropriate "scopes of response."  Somewhere, the same day that Boston exploded, American military forces killed and wounded far more than the casualties on Boylston Street.  Somewhere, the same grief and anger of Boston were also duplicated, possibly to a lesser degree due to the frequency of such events, but still quite materially.

Believe MeanMesa on this one.  That "materiality" will be waiting for us.  That day to day materiality of grief and anger has become a formidable, durable glacier of materiality of grief and anger with new additions every day.

As for the nation, we should probably do what we can to mature past the "hair on fire" screaming which validates "restoring security at any price."  Internationally, other places which have experienced Boston style terrorism frequently have developed their own, effective, affordable "scope of response" in a way which should definitely "catch our eye."

As a final note, we are watching President Barack Obama utilizing his notable rationality as plans for "the scope of response" to events in Syria are being developed.  We are also watching people like Senator McCain reveal their predictable jingoist penchant for war making and suspect torturing.

MeanMesa's compliments to the President.

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