Commentary

What Price Security?

By Charles V. Peña
August 22, 2004

Since the end of July, certain financial institutions in the U.S. have been on a heightened state of alert. The terrorist threat level was raised to orange - a “high” risk of terrorism and difficult to distinguish from yellow, “significant” risk, because the two words are synonymous - in those cities based on intelligence that the New York Stock Exchange and the Citigroup buildings in Manhattan, Prudential Financial in Newark, and the International Monetary Fund and World Bank in Washington, D.C., might be the objects of al Qaeda terrorist attacks.

The response was to increase security but, like with every previous change in the threat level or warning of terrorism, Department of Homeland Security Secretary Tom Ridge encouraged people to go about their business as usual. In other words: be vigilant but don’t worry, be happy. Citigroup in Manhattan might be a target, but your local Citibank ATM is safe to withdraw money from and go shopping.

Americans seem to be willing to follow this advice largely because the only people who are really affected by the increased security are those who work at or near the targeted institutions. So most people don’t think twice about the cost of raising the threat level.

But it’s not cheap and everyone has to pay for it. If the government is providing increased security, it comes at taxpayer expense. If the companies are paying for guards and additional security measures, that becomes a cost of doing business that is passed on to consumers in the form of higher prices. It’s costing New York City an additional $5 million a week. The bill for U.S. Capitol Police overtime is $3 million more a month. And one of the targeted institutions is spending $1-2 million a week for additional security.

However, there are costs beyond the direct dollar costs of more security. When security in Washington was expanded beyond the World Bank and International Monetary Fund to include Capitol Hill, which involved street closings and checkpoints in the vicinity of the Capitol, city leaders expressed concern about the potential for gridlock and that it would send the wrong message to tourists and residents. According to a spokesman for D.C. Mayor Anthony Williams, “It scares people. This is not Beirut.”

Restricted routes into Manhattan increase the time it takes for trucks to make deliveries. Time spent waiting at checkpoints eats into the time drivers can work. Because the number of hours a truck driver can drive is restricted under federal law, if the time spent not driving adds up to enough hours, a driver may only be able to work four days instead of five, thus depriving him of a day’s pay. That’s just one of many hidden costs that has ripple effects throughout society and the economy.

According to economists, it’s impossible to put a price tag on the cost of all the increased security imposed by raising the terrorist threat level because of all the hidden costs. But here’s one number for it: $115.

That’s the fine at La Guardia Airport in New York for slowing down at curbside at passenger arrivals to look for the person you’re picking up. I recently flew into La Guardia and that’s what happened to my sedan driver before I stepped out of the terminal.

It’s understandable that unattended cars would pose a security risk. And if parked cars with drivers in them are also considered an unacceptable risk, then common sense would say for the police to simply tell the driver to move (which is what they do at Reagan National Airport in D.C.). But writing tickets with hefty fines to people who make their living picking passengers up at the airport because they’re driving slowly, or even parking to look for their passenger, smacks of raising the terror alert level to line the coffers of the local treasury to pay for increased security.

It cost my driver the $65 he would be paid for the job by the sedan company plus another $50 out of his pocket. That’s a real economic cost. And an unnecessary one because imposing the cost did not make anyone safer from terrorism. To add insult to injury, the police mixed up the paperwork with one of the other drivers for whom they had written a ticket and who had already left to pick up his passenger. As I sat in the car while the police tried to figure out what to do, I pondered the ironies. First, I’m a terrorism analyst for MSNBC (the reason I was flying to New York). Second, the whole time the police were issuing the tickets (and two police cars were involved) and then trying to rectify the mixed up paperwork was time they weren’t actually patrolling and looking for real security threats.

If the terrorist threat wasn’t so serious, the incident would have been comical. But paying for increased security that is more illusory than real is hardly a laughing matter.

Charles V. Peña is the director of defense policy studies at the Cato Institute, a co-author of Exiting Iraq: Why the U.S. Must End the Military Occupaton and Renew the War Against al Qaeda, and a terrorism analyst for MSNBC television.