chapter 1 the forrest gump syndrome -...

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C H A P T E R 1

THE FORREST GUMPSYNDROME

As I mentioned in my author’s note, I see the economy as anexperience-based science—one that improves with the

depth and spectrum of one’s experiences in life. Consequently, itisn’t all that surprising that I often feel like some sort of an eco-nomic Forrest Gump, the fictional character whom Tom Hanksplayed in the movie of the same name. He kept inadvertentlyshowing up in key moments in history, without realizing it. Ican’t say I was in as many places as he was, but it seems that I hadmore than my fair share of front-row seats to critical times ineconomic history, and those times had a fundamental impact onhow I view the economy.

The most memorable event to date was, not surprisingly, Sep-tember 11, 2001. It may seem a strange place to start, but I can’tthink of any single event in history that makes the powers of eco-nomics so clear as that fateful day. It not only had dramatic andimmediate ramifications for the U.S. and global economies, it also

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2 THE PASSIONATE ECONOMIST

demonstrated the dangers of a world economy that expandedunevenly.

Before I relive my experiences of that day and the insights theyprovide, I want to give some background on myself. For as longas I can remember, my father was only truly afraid of two things:flying and terrorism. He inherited his fear of flying from mygrandmother, who carried her fear of heights to her grave. Indeed,his fear was so deep that when my parents decided to vacation inMexico in 1973, we drove all the way from Detroit, Michigan, toMexico City in an Oldsmobile 98. (I’m not kidding!) Fortunately,that year the Olds 98 was the same size as the Cadillac, and Icould stretch out in the back without bending my knees.

His fear of terrorism was more deep-rooted and experience-based. My father was compulsive about foreign affairs, and whenOPEC (Organization of Petroleum Exporting Companies) exer-cised its might in 1973, crippling his beloved auto industry, hebegan focusing almost all his energy on the Middle East. Thehostage situation with Iran in the late 1970s only underscored theproblems with fundamentalist extremism in the region. I men-tion this because it somehow seems fitting that I found myself inthe midst of the events of September 11, 2001. In some ways, weall relive the sins of our fathers (and mothers), and I instinctivelyknew that we were under terrorist attack the moment the firstplane struck the building.

Perhaps it was fate, bad timing, or the consequences of ignor-ing my instincts. (My mother’s instincts were always very good;she could sense danger a mile away, yet I chose to ignore mine.)I had just chosen the Marriott World Trade Center as the site ofthe 43rd annual meeting of the National Association for BusinessEconomics (NABE), to be held in 2001. I was on my ascent to thepresidency, and this was one in a series of decisions I would maketo reposition the association. NABE had always been a player in

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economics, with a list of members that crossed the top echelonsof the economic elite, yet it seemed to be one of the “best keptsecrets” in town. My mission was to change that. I had my mis-givings about the spot, since it had already been a target of ter-rorism. Was I crazy to put others in such peril? Still, such fearswere easy to dismiss. The 1993 car-bombing had left the place afortress with guards everywhere, and the damages caused by thatbombing gave us a newly redecorated hotel in a highly visibleWall Street location. It seemed a perfect place to hold NABE’sannual meeting—its most prestigious event.

The following account of the events of that horrendous day waswritten for my family and friends on December 22, 2001, the firsttime I could put pen to paper, or my fingers to my key pad, toshare it. Some of the people mentioned were dear friends andcolleagues, others I met in the hours and days before. All of us,however, have found we are bound in some way for life by whathappened to us.

I hope to give a sense of what those moments were like, al-though the number of people mentioned represents only a frac-tion of those of who were actually with me. Art Murray is myhusband. Liza McCaulliffe is a Philippine student whose passportwas from the United Arab Emirates, the only one that I couldn’treplace. Jamie Dimon is the CEO of Bank One Corporation.Karen Fairbanks is his devoted assistant. Adolfo Laurenti is anItalian student, finishing his doctorate in economics. Tim O’Neillis the president of NABE and a good friend. Mike McKee, an-other treasured friend, is the economic editor for Bloomberg, afinancial news service. Anett Hansen is a NABE member fromNorway (her passport was issued September 11, 2001) and mysoul sister for life. Rosalind (Ros) Walker has worked with me formore than a decade and is more than a coworker could ever be.And Kathleen Hays, formerly the “Bond Belle” of CNBC, now

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with CNNfn and Lou Dobbs of CNN’s Money Line, is as good afriend as anyone could hope for in a time of crisis.

My pamphlet-sized agenda for the “NABE in a New YorkMinute” Annual Meeting read:

SEPTEMBER 11, 20017:30 A.M.–12:15 P.M. Exhibit Hall Open

Liberty

8:00–9:30 A.M. NABE Leaders in Business Breakfast

Grand Ballrooms I & II

Robert Scott, president and chief operating officer of MorganStanley Dean Witter, was slated to provide the keynote address,while Dick Berner, U.S. chief economist for Morgan Stanley DeanWitter, NABE’s 2000–2001 president, provided the introduc-tions. (See Exhibits A and B.)

The sun was shining. The weather was beautiful. Would I havetime to enjoy it? Not today—my schedule was too hectic. I hada television interview and was late to the breakfast. I wound myway through the ballroom to a table near the front, where thestudents were seated. One young woman brought her camera totake a picture of me to show her friends. It didn’t seem that longago that I was looking up to the few women in my profession.

Then it hit. Was it a bomb? The crystal above us gentlychimed. The floor shook. Bread spilled from preciously dressedtables. All hesitated, waiting for the moment to stop . . . it didn’t.The attack had just begun. My stomach sunk. When lightning

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Exhibit A NABE brochure cover (reprinted with permission)

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Exhibit B Page 15 of brochure (reprinted with permission)

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strikes twice, the second time should not be a surprise. I knewfrom the first moment that the room moved that this was noaccident.

What to do? Get out, with as many people as possible. Keepthe students calm. Stay focused . . . the horror of it all would haveto be dealt with later. Now was the time to act. Thousands ofpieces of paper are gently floating to their graves below. Glass isshattering, and pieces of debris are falling to earth. The magni-tude of the damage is temporarily masked by the chaos that sur-rounds it.

Focus. Run to the water—no high buildings there. Call Art.He informs me that it was not a bomb, a plane . . . the bodies, theparts, no time, must get away from danger. We are cut off. Lizacan’t move, paralyzed by fear and asthma. Her medication, witheveryone else’s belongings, is in the hotel.

The sirens are loud, and there is another noise . . . anotherplane. It’s so loud, and then it hit. Bodies flew with bits of glass,plane, and more papers . . . so many papers for an informationage.

Closer to the water, urban legend is flying. A small radio re-ports that the Pentagon was hit. Was the Empire State Buildingalso attacked? Military jets are in the air. The island is secure, atleast that is what I tell the others and myself.

Call, call, call again . . . find a line out . . . any line out. Jamie’soffice rings and answers. Karen patiently takes numbers of allthose around us . . . it is our only link out. I ask about the NewYork office. It is still open. We had a home base, if we could onlyget to it.

Then the true horror begins. People jump to escape the infernothat burns inside the Twin Towers. They leave in pairs, someholding hands all the long way down. What races through their

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minds as they drop? At least they are not alone. We are all pain-fully there with them, every second of their decline.

The first building falls, as if hit by an enormous bomb. Adolfowatches the wind. He is a sailor and sees it shift. He knows thedebris is coming our way. We try, but there is no escape. The sundisappears. Panic strikes and we lose some of our people to astampeding group of high school students. A woman pushing awheelchair tries to get help, but people ignore her pleas. A mobscene breaks out at a glass restaurant. We move away as quicklyas possible.

Somebody is handing out face masks. Liza gets as many as shecan. People are tearing their shirts, breathing through ties, any-thing to filter the debris from their lungs. We find more from ourgroup as we move toward FDR Drive. Find as many as possible,hold hands, don’t lose any more.

Mike appears from the shadows. He was on his way to themeeting when the first plane hit and began reporting the scenefor Bloomberg. He was there when the building collapsed. (Cov-ered in an inch of soot and blood, he finds us in the chaos.) Grassis embedded in his clothes, presumably from the impact as he hitthe ground. We try to clean his wounds. Anett feebly tries tocover his injuries with a bandage she found in her purse.

Soon, he is off. He runs to catch the Bloomberg truck and keepworking. The show must go on.

The air is still thick, but we can see the sky again. A womanin front of us is struggling on a crutch. The panic-stricken self-ishly push her to move faster. I give up my mask, and Tim andI fasten it to her face. The tides of refugees now fill the roads andare crossing the bridges. I stop an ambulance—too many asth-matics already—no help for Liza.

It is a long walk to our midtown offices, but we can make it.Then a bus stops. The passengers usher us on. Everyone inside isso clean. By now, the soot is embedded in my being.

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It is still a long trek to the office, with many stops along theway. Why are people so hesitant to ask for help? I bang on a doorto get to a bathroom. A restaurant provides water and a place forLiza to rest.

We make it to our midtown offices. It is a place to rest, getfood, and medication. We organize to find transportation, hous-ing, passports. I know the consulates and start working on replac-ing the passports. Others work on housing and transportation. Iget the incidentals: toothbrushes, toothpaste, makeup remover,deodorant, and the precious medication that Liza needs to battleher asthma.

We call other midtown offices to locate friends and reunitehusbands and wives. Art calls me at the very moment I was call-ing him. Ros calls just to hear my voice. I am confused. Why theworry? I am fine but have more work to do. Must not stop . . .must not think.

I am the last to leave. Kathleen will take me in, but her apart-ment is still a long walk. I move up Manhattan. The children areplaying in Central Park. There is something surreal in the scene,given the horrors of the day. A doorman notices the soot on myclothes. He walks me to the corner. Others direct me the rest ofthe way.

Kathleen is waiting outside. She runs to me and holds me asthe shock of the day takes over. She helps, gives me clothes, steak,wine, and bourbon. Finally I shower. The warm water washes thesoot from my skin, but I can still feel its residue in my lungs. Italk to my family. The conversations are short. (How can I speakof the horrors I have seen?) I must reassure the children, and Grif-fin is sick again. Will he be in the hospital tonight? Art has ahuge job at home.

I lay my head to rest that night, knowing that sleep would

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elude me. The pictures of the day flash through my mind. Thehorrors that will haunt me for years to come begin to take shapeand form. We are at War, a war like we have never known in thiscountry. We have hit a new turning point, one from which wewill continue but not recover.

The sun rises, and many challenges lie ahead. A piece of mysoul rests with all those lost that day. The months pass and, ashumans, we adapt. The holidays come, and coffee table books ofthe disaster become best-sellers. Life goes on, capitalism prevails,and all but a few know and feel what we have truly lost. Inno-cence lost is at its best wisdom gained and not much more.

Now that I have had some time to digest the events of that day,I am struck with how much I knew about what could happen yetignored because of my own insecurities . . . and fears that peoplewould think of me as a nut case. One experience sticks out mostclearly. I took an undergraduate course while at the University ofMichigan that was supposed to be one of those filler courses youtake for easy credit. This one was in sociology, and most of theprojects were designed to replicate “real life” experiences so wewould be more prepared to handle those experiences once wegraduated.

One exercise was unique from the rest. The professors of sev-eral classes divided us into different social and economic groups.The goal was to simulate possible scenarios that might arise in aworld of gross income inequalities. The “winning” group was theone that obtained the greatest number of “happiness” and“wealth” chips from the others. I was in the wealthiest group, soour task seemed pretty easy: Preserve as much wealth as possible,while also trying to maintain and gain some happiness chips. Theonly problem was that other groups also wanted our wealth chips.

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We quickly discovered we could trade some wealth for happinesschips. First, we did this because we thought we were being “nice.”Later, we found ourselves responding with charity to ward offwhat appeared to be a growing discontent among the under-classes.

Looking back, I guess we were just paying them off to stayquiet for a time, and then we would cross our fingers that theywould stay in their place and leave us alone for the rest of thegame. We even had diplomats who tried to reason with them.

Over time, however, the uprisings by the lowest income stratagot more frequent. Moreover, they seemed to be building alli-ances with other groups, and their demands were escalating. Theydidn’t want charity. They wanted access to jobs, dignity, and op-portunity in their own right. They wanted into our club. Thisseemed silly to us, since we were the well-educated economy, withlots of resources. Wasn’t it just natural selection that we do well,while they struggled? Particularly notable was our callousness,given the liberal bent of the university and the fact that none ofus was wealthy in the first place.

Ultimately our charity fell on deaf ears, and a revolution en-sued. (They turned their wealth chips in for weapons.) The upperclass was ousted, factions in the lower class struggled for power,and the world that we created ended in a sort of Mad Max typeof chaos. (For those who don’t know the “Mad Max” sagas, theyrevolved around a chaotic world, which was reduced to fightingfactions when the world ran out of oil. Of course, my love of themovie probably centered on my attraction to the young MelGibson, who starred as the good guy in an evil world.)

I can’t say that I believe such a simple game in a classroom is100 percent enlightening, but it seems notable that every time itwas played, from Harvard to community colleges, it ended thesame. At least, that is what our professors told us. The message


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was clear: The ending could have been different if the lowest in-come classes were given access to opportunity as well as suste-nance, and that would require economic as well as social reform.The only hope we have of truly eradicating or at least mitigatingterrorist activity will require intervention in the workings ofimpoverished nations that goes well beyond military support.How does that old saying go? Give a hungry man a fish, and youcan feed him for a day. Teach him to fish, and he can feed himselffor life.

Who would have thought that I would have gained so muchinsight out of a filler course? Later, I realized that much of whatI was truly passionate about in my studies came easiest and some-how linked to my own personal experiences as a human being.Economics epitomizes that to me. I came on it almost by acci-dent; it was intuitive rather than abstract and seemed to provideso much order to a world that I previously saw as chaotic.

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