the CREATE Distinguished Speaker Series

in Washington D.C.

presenting

Matthew R. Bettenhausen

Vice President of Security and Chief Security Officer for AEG Worldwide

Wednesday, May 23^rd, 2012

Lecture - 4:00 - 5:30 p.m.

CREATE Reception - 5:30 - 6:30 p.m.

U.S. Chamber of Commerce Headquarters

1615 H Street, NW

Washington, DC  20062

Lecture Title:

"2012 London Olympics -

Large Event Safety, Security and Counter-terrorism"

Register here! 

Biography: Matthew R. Bettenhausen is the Vice President of Security and Chief Security Officer for AEG Worldwide. AEG is one of the leading sports and entertainment presenters in the world.  They own or manage over 120 sports and entertainment venues such as STAPLES Center and the LA Live entertainment district in Los Angeles and the O2 arena and entertainment district in London, England.  They own sports franchises in professional basketball, hockey, and soccer.  AEG LIVE is the second largest promoter of concerts, live tours and special events in the United States.  Matt has overall responsibility for security, public safety and preparedness for AEG's domestic and global operations and facilities. 

Matt is currently a member of the Chief Security Officer Roundtable, Overseas Security Advisory Council, Domestic Security Advisory Council, a Board Member of the National Disaster Resiliency Center and is a graduate of the FBI Citizen Academy, among other safety and security organizations.

Previously, Matt was appointed by Governor Arnold Schwarzenegger to lead California's homeland security and emergency management operations as the Secretary of the California Emergency Management Agency (CalEMA). Matt was a member of Governor Schwarzenegger's cabinet for nearly six years and served as the Chairman of the Governor's Emergency Council.

He has held a number of senior leadership positions with many national and state organizations, such as the National Homeland Security Consortium, National Governors Association's Homeland Security Advisors Council and National Emergency Managers Association.  He is a board member of the Western Institute for Food Safety and Security and serves on the external advisory board to Sandia National Laboratory.

Prior to his appointment in California, Matt served as the first Director of State and Territorial Coordination with the U.S. Department of Homeland Security (DHS), where he was the Department's representative to the White House Office of Intergovernmental Affairs and was a member of both the Department's Emergency Response Group and its Interagency Incident Management Team.

From January 2000 to January 2003, Matt served as the Deputy Governor of Illinois and its Homeland Security Director. As Deputy Governor, Matt was responsible for coordinating the law enforcement and public safety functions and agencies of the State of Illinois. The agencies reporting to him included, among others: the Illinois Emergency Management Agency, Illinois State Police, Department of Corrections, State Fire Marshal's Office, Department of Nuclear Safety and the Department of Military Affairs.

For over twelve years Matt was a federal prosecutor for the U.S. Department of Justice. He investigated and prosecuted all manner of federal offenses from drug cases to complex financial fraud matters and long-term undercover investigations. He also worked on a number of terrorism cases and civil rights investigations. For most of his prosecutorial career he held supervisory positions with the U.S. Attorney's Office in Chicago, including Chief of Appeals and Associate Chief of the entire Criminal Division. Matt graduated summa cum laude from the University of Illinois with a B.S. in Accountancy and continued his education at the University's law school where he earned his J.D. degree with honors. He was recently privileged to receive the Patrick Henry Award from the National Guard Association of the United States.

Matt's family has a long and extensive history in the fire service and law enforcement. His father has spent more than 50 years in the fire service and recently retired as the Fire Marshal for Tinley Park, Illinois. His brother is an officer with the Lemont Fire Protection District.

~~~

Established in 2004, CREATE is an interdisciplinary national research center based at the University of Southern California and funded by the U.S. Department of Homeland Security. The DHS Center of Excellence is focused on risk and economic analysis and comprises a team of experts from across the country, including partnerships with numerous universities and research institutions.

www.usc.edu/create

To register: http://www.regonline.com/Register/Checkin.aspx?EventID=1099744&lbrd=1&rtypeid=233297

On April 26, 2012, CREATE hosted Brian Michael Jenkins as part of CREATE's Distinguished Speaker Series for a special lecture entitled, "The Long Campaign: What Have We Learned about War and Ourselves since 9/11."

Abstract: While considerable progress has been made in degrading al Qaeda's operational capabilities, the terrorist threat inspired by its ideology could persist for decades. The terrorist group's efforts to inspire homegrown terrorists continue, but so far, have produced meager results. America's Muslims have rejected al Qaeda's exhortations while effective domestic intelligence efforts have prevented almost all domestic terrorist attacks. Both are now being challenged from opposite ends of the political spectrum. America's counterterrorist campaign has not savaged civil liberties, but our democracy in dancing on the edge of tyranny as America has laid the legislative foundation for a more repressive state. We now depend too much on the wisdom of our officials to show self-constraint, which the current political environment hardly permits. Meanwhile, a decade of unprecedented tranquility at home has only encouraged an unrealistic public expectation of zero risk. Americans have demonstrated that a tragic terrorist attack cannot bring down this republic. Only its frightened and divided citizens can.

Biography: Brian Michael Jenkins, senior adviser to the president at the RAND Corporation, is the author ofWill Terrorists Go Nuclear (2008, Prometheus Books) and of several RAND monographs on terrorism-related topics. He formerly served as chair of the Political Science Department at RAND. In anticipation of the 10-year anniversary of 9/11, Jenkins spearheaded the RAND effort to take stock of America's policy reactions and give thoughtful consideration to the future strategy. That effort is presented in The Long Shadow of 9/11: America's Response to Terrorism (Brian Michael Jenkins and John Paul Godges, eds., 2011).

Commissioned in the infantry, Jenkins became a paratrooper and a captain in the Green Berets. He is a decorated combat veteran, having served in the Seventh Special Forces Group in the Dominican Republic and with the Fifth Special Forces Group in Vietnam. He returned to Vietnam as a member of the Long Range Planning Task Group and received the Department of the Army's highest award for his service.

In 1996, President Clinton appointed Jenkins to the White House Commission on Aviation Safety and Security. From 1999 to 2000, he served as adviser to the National Commission on Terrorism and in 2000 was appointed to the U.S. Comptroller General's Advisory Board. He is a research associate at the Mineta Transportation Institute, where he directs the continuing research on protecting surface transportation against terrorist attacks.

Full article: http://onlinelibrary.wiley.com/doi/10.1111/j.1539-6924.2010.01567.x/abstract

A dirty bomb attack centered on downtown Los Angeles' financial district could severely impact the region's economy to the tune of nearly $16 billion, fueled primarily by psychological effects that could persist for a decade.

The study, published by a team of internationally recognized economists and decision scientists in the current issue of Risk Analysis, monetized the effects of fear and risk perception and incorporated them into a state-of-the-art macroeconomic model.

"We decided to study a terrorist attack on Los Angeles not to scare people, but to alert policymakers just how large the impact of the public's reaction might be," said study co-author William Burns, a research scientist at Decision Research in Eugene, Ore. "This underscores the importance of risk communication before and after a major disaster to reduce economic losses."

Economists most often focus on the immediate economic costs of a terrorist event, such as injuries, cleanup and business closures. In this scenario, those initial costs would total just over $1 billion.

"Terrorism can have a much larger impact than first believed," said study co-author Adam Rose, a research professor with the USC Price School of Public Policy and USC's Center for Risk and Economic Analysis of Terrorism Events (CREATE). "The economic effects of the public's change in behavior are 15 times more costly than the immediate damage in the wake of a disaster."

"These findings illustrate that because the costs of modern disasters are so large, even small changes in public perception and behaviors may significantly affect the economic impact," said Rose, who has published economic estimates of the 9/11 attacks, the Northridge Earthquake and other major disasters.

To estimate how fear and risk perception ripple through the economy after a major terrorist event, the researchers surveyed 625 people nationwide after showing them a mock newspaper article and newscasts about the hypothetical dirty bomb attack to gauge the public's reticence to return to normal life in the financial district.

The study translated these survey results into estimates of what economic premiums would be put on wages and what discounts shoppers would likely require in the aftermath of a terrorist attack. After six months, 41 percent of those surveyed said they would still not consider shopping or dining in the financial district. And, on average, employees would demand a 25 percent increase in wages to return to their jobs.

"The stigma generated by dirty bomb radiation could generate large changes in the perceived risk of doing business in the region," said co-author James Giesecke of the Centre of Policy Studies at Monash University. "However, with regional economies in competition with one another for customers, businesses, and employees, it takes only small changes in perceived risk to generate big losses in economic activity."

The paper relied on one of 15 planning scenarios - the detonation of a dirty bomb in a city center - identified by the Department of Homeland Security in an effort to focus anti-terrorism spending nationwide.

Other authors of the study are Paul Slovic with Decision Research and the University of Oregon; Anthony Barrett of ABS Consulting in Arlington, Va.; Ergin Bayrak of the USC Annenberg School for Communication and Journalism; and Michael Suher of Brown University.

This study is part of a larger special issue of the international journal Risk Analysis which showcases USC CREATE's research on risk assessment research of terrorism events, natural disasters and their economic impacts. The special series, entitled "Risk Perception Behavior: Anticipating and Responding to Crisis," was born from a special workshop organized by USC CREATE to explore possible avenues of research leading to insights in risk analysis and includes 11 different studies.

The research was funded by the the National Science Foundation and by the U.S. Department of Homeland Security through USC CREATE.

About USC CREATE
Established in 2004, CREATE is an independent, interdisciplinary national research center based at the University of Southern California in the Price School of Public Policy and the Viterbi School of Engineering and funded by the U.S. Department of Homeland Security. CREATE's mission is to improve our nation's security through the development of advanced models and tools for the evaluation of the risks, costs and consequences of terrorism and to guide economically viable investments in homeland security.

But as Dr. Tambe and his research team at CREATE leveraged their expert knowledge of game theory while tackling some of homeland security's toughest challenges, there was no definitive source for information on what they have done and how they have done it.

That changed in December when Cambridge University Press published Dr. Tambe's Security and Game Theory: Algorithms, Deployed Systems, Lessons Learned.

"This was and is the first and only long-term deployed set of applications of game theory for security, leading to new innovative research and simultaneously newer and newer applications," he said.

The first goal Dr. Tambe had was bridging the gap between theory and practice. To do this he employed the help of homeland security experts such as Erroll G. Southers, CREATE's Associate Director for Research Transition, and Dr. Joseph DiRenzo III, the chief of Operations Analysis Division for the Coast Guard Atlantic Area.

"Having seen our research transition to multiple applications, it was important at this stage to publish one comprehensive book that had all these publications and chapters from key world-leading experts in security to present this work to other security professionals in the field," Dr. Tambe said.

Southers, a former Deputy Director of the California Office of Homeland Security and a member of President Obama's Homeland Security Policy Group during his 2008 campaign, wrote a chapter on the terror threat at Los Angeles International Airport (LAX) and other airports.

"My chapter outlines the scope and importance of the need to address the terror threat at LAX," Southers said. "It clearly defines LAX as the number one airport terror target in the U.S."

"Contributions of Erroll and U.S. Coast Guard are crucial in providing a 'problem statement' on security of critical infrastructure or maritime security," Dr. Tambe said.

One misperception of the work done at CREATE is that by publicizing it adversaries will be able to study it and create countermeasures.

"This is one of the most important advantages of our research," Dr. Tambe said. "Our algorithms are public domain knowledge. So understanding our research will not lead to any benefit to the adversary.

"Indeed, if the adversary runs the exact same algorithm with the exact same data as input, due to the inherent randomness, they will get a different answer," Dr. Tambe continued. "So unless they capture the exact computer that generates our scheduling patterns, they will not be able to figure out the patterns in use."

 Since the establishment of CREATE in 2004 as a partnership between USC's Price School of Public Policy and the Viterbi School of Engineering, the federally-funded CREATE has worked on projects for LAX, the Federal Air Marshals Service, the Transportation Security Administration, and the Coast Guard, among others. Dr. Tambe believes Security and Game Theory is a product of the prodigious partnership that has flourished at CREATE.

"I am grateful to CREATE for all the generous support of the research reported in the book, without which the book would not have been possible," Dr. Tambe said. "I am also grateful to CREATE for the continuous advice, support, encouragement, and domain expertise to lead to the success we seem to have enjoyed."

The book is available on Amazon: http://www.amazon.com/Security-Game-Theory-Algorithms-Deployed/dp/1107096421

About the book:
Game theory provides a sound mathematical approach to deploy limited security resources to maximize their effectiveness. This book distills the forefront of this research to provide the first and only study of long-term deployed applications of game theory for security for key organizations such as the Los Angeles International Airport police and the U.S. Federal Air Marshals Service.

"Reducing Costs and Increasing Effectiveness in the Maritime Environment"
University of Southern California, Los Angeles, CA

The United States Coast Guard (USCG) Research and Development Center and the University of Southern California's (USC) National Center for Risk and Economic Analysis of Terrorism Events (CREATE) once again have partnered on the third symposium/workshop focused on risk and economic assessments, and risk management/resource allocation methodologies applicable in the maritime domain. The theme this year will be Reducing Costs and Increasing Effectiveness in the Maritime Environment.

The symposium/workshop will include traditional lectures and presentations, panel session discussions with experts, and hands-on exercises in decision-making. Based on feedback from previous MRS events, the workshop will feature extended breaks to enable in-depth discussions among participants, and hands-on demonstrations of tools, models and technologies.

This invitation-only event will be held on the campus of USC and the BSU San Pedro. Participants will include representatives from DHS, Army Corp of Engineers, FBI, FEMA, HSI, MORS, NPS, the Ports of LA/LB, BAH, ABS, NORTHCOM and SOUTHCOM. This year, we will further expand invitees to include increased industrial participation so as to explore Academic-Government-Industry (AGI) partnerships in the maritime domain.

For general information and attendance requests, please contact the symposium facilitators: Dr. Isaac Maya (imaya@usc.edu) or Dr. Joe DiRenzo (Joseph.DiRenzo@uscg.mil). For specific presentation information or questions, please contact the program directors: Mr. David Boyd (David.H.Boyd@uscg.mil) or LT Kathryn Moretti (Kathryn.A.Moretti@uscg.mil)

Goals:

Evaluate risk and economic consequence assessment methodologies and tools, assessment results, and policy implications and impacts, focused on the Maritime Domain. How can academia, government and industry share best practices and lessons learned, and apply research and advanced technologies to reduce costs and increase effectiveness of maritime operations?

Symposium Facilitators and Co-Directors:
Dr. Isaac Maya (imaya@usc.edu)
Dr. Joe DiRenzo (Joseph.DiRenzo@uscg.mil)

Co-Program Directors:
Mr. David Boyd (David.H.Boyd@uscg.mil)
LT Kathryn Moretti (Kathryn.A.Moretti@uscg.mil)
Mr. Bert Macesker (bert.n.macesker@uscg.mil)

Steering Committee (Invited):
Dr. David Alderson (dlalders@nps.edu)
Dr. Tayfur Altiok (altiok@rci.rutgers.edu)
Dr. Jim Boutilier (Canada) (boutilier.ja@forces.gc.ca)
Mr. Gene Brooks (gbrooks@mllnet.com)
Dr. Michael Bruno (michael.bruno@stevens.edu)
Dr. Curtis Charles (ccharles@uncfsc.edu)
CPT Bill Csisar (william.f.csisar@uscg.mil)
Mr. George Cummings (gcummings@portla.org)
Mr. Matt Cutts (matthew.e.cutts@usace.army.mil)
VADM Peter Daly (phdaly@usni.org)
Mr. Owen Doherty (owen.doherty@dot.gov)
Dr. David Ebert (ebertd@purdue.edu)
Dr. Margo Edwards (margo@soest.hawaii.edu)
Dr. Patrick N. Forrest (PForrest@apus.edu)
Mr. Theophilos Gemelas (Theophilos.Gemelas@dhs.gov)
Dr. Michael Greenberg (mrg@rci.rutgers.edu)
John Helmick (helmickj@usmma.edu)
Dr. Rob Huebert (Canada) (rhuebert@ucalgary.ca)
CPT Jim Jenkins (James.D.Jenkins@uscg.mil)
Dr. Rick Luettich (rick_luettich@unc.edu)
Mr. Michael McMullen (mcmullen@polb.com)
Dr. Allen Miller (Allen.Miller@dhs.gov)
Mr. Jon Miller (jonathan.p.miller@cbp.dhs.gov)
CPT David Moskoff (moskoffd@usmma.edu)
Mr. Richard Nelson (rnelson@csis.org)
Dr. Michael Orosz (mdorosz@isi.edu)
Mr. Cosmo Perrone (cosmo@cosmoperrone.com)
Mr. Neil Piper (Australia) (neil.piper@customs.gov.au)
Dr. (Colonel, USAFR) Chris Reynolds (creynolds@apus.edu)
Lorne Richardson (Canada) (richalo@tc.gc.ca)
Dr. Fred Roberts (froberts@dimacs.rutgers.edu)
Mr. Jeffrey Robertson (Jeffrey.Robertson@hsi.dhs.gov)
Dr. Adam Rose (adamzros@usc.edu)
Dr. Jim Savard (jsavard@ncu.edu)
Dr. Scott Savitz (ssavitz@rand.org)
Mr. Laurence Smallman (smallman@rand.org)
Dr. Henry Willis (hwillis@rand.org)

Watch Podcast

Title: "Maritime Security in 2012 - Challenges Faced By The U.S. Coast Guard"

Abstract: In 2012 the United States Coast Guard, as the lead federal U.S. agency for Maritime Homeland Security, faces a host of threat vectors. Many of these vectors continue to evolve posing an ever increasing asymmetric challenge from new smuggling methods including self-propelled semi-submersibles to the release of Asian Carp in Lake Michigan. The presentation will review these challenges, place them in historical context, and offer ways forward including growing engagement with the academic community.

Presenters:
Dr. Joseph DiRenzo III
Chief, Operations Analysis Division Coast Guard Atlantic Area
Coast Guard Chair, Joint forces Staff College
Dr. DiRenzo serves as the Division Chief of the Operations Analysis Division Coast Guard Atlantic Area and as the Coast Guard Chair at the Joint Forces Staff College in Norfolk VA. A retired Coast Guard Officer and former cutter Commanding Officer who has authored or co-authored over 300 articles on Maritime Security, Terrorism and Strategic Initiatives. He has lectured on these subjects at the Naval War College, the Canadian War College, and Dalhouise University. An author or co-author of five book chapters Dr DiRenzo also teaches for American Military University and Northcentral University.

Mr. David Boyd
Lead Operations Analyst Coast Guard Pacific Area
Mr. David Haukur Boyd serves the U.S. Coast Guard, Pacific Area, as the lead analyst in the Strategic Plans Division. He has a MS in Public Administration (California State University, East Bay) and a BS in Mathematics (U.S. Coast Guard Academy). Mr. Boyd has over 30 years of combine military and civil service in the U.S. Coast Guard.

CREATE Year 9/FY2013 Call for White Papers

CREATE, the DHS-sponsored Center of Excellence at the University of Southern California, seeks 2-3 page White Papers on research projects in risk analysis, economics, and operations research in risk management. Awards of up to $100,000 per award are expected. The anticipated period of performance is 10/1/12 to 9/30/13.

White Papers must conform to the format provided below, and are due by
5pm PST February 17, 2012 to CREATE@USC.EDU.

CLICK HERE FOR OFFICIAL ANNOUNCEMENT

Download Report from the Journal

Abstract

Throughout history, disasters have had a defining impact on individuals, governments, and society as a whole. The terrorist attacks on September 11th, 2001 and several catastrophic hurricanes in the gulf region have brought disaster response and emergency management to a new level of visibility and importance in the United States. The increased media coverage of international disasters, such as the Indian Ocean Tsunami in 2004 and the Earthquake in Haiti in 2010, have resulted in international disaster response and recovery efforts becoming a larger part of foreign policy for developed countries. The changing scene of disaster response and recovery has also resulted in a rapid increase in the number of private organizations emerging to assist in the wake of such catastrophes. There are significant cross-cultural dynamics and interoperability issues that become apparent when new actors (governments, businesses, organizations, etc.) enter an unfamiliar disaster environment which could reduce the operational efficacy of both local and foreign actors.

In this project we propose an approach to support and guide decision makers in emergency environments on how to select and develop relationships to improve resource utilization and project outcomes in the wake of a disaster. Using game theory, we provide an initial approach for the development of a decision support framework for emergency managers entering a disaster environment.

Prepare yourself, natural disasters will only get worse, The Washington Post, September 15, 2011
By Erwann Michel-Kerjan
"Unless we start to get serious about making the country more resilient to natural disasters, we won't be prepared for what the 21st century has in store for us."

Dealing with large-scale risks, The Daily Pennsylvanian, September 9, 2011
By Howard Kunreuther
"The 10th anniversary of 9/11 provides all of us who experienced the event to use it as an opportunity to take stock of how we dealt with the terrorist attack and what we may want to do differently in the future when facing disasters that have a small chance of occurring but have severe consequences if they do."

Are Extreme Events Roadblocks to Growth? Huffington Post, September 9, 2011
By Erwann Michel-Kerjan
"In OECD countries it takes an average of 16 days to open a business and 5 percent of the average income per capita to do it. In Haiti it takes more than 100 days and costs proportionally 40 times more (or about 200 percent of the average income per capita).
So when a 7.0 magnitude earthquake hit Haiti on January 12, 2010 and destroyed a substantial portion of Port-au-Prince, the losses were truly devastating."

To Dodge Blame, Officials Prepare Public For Worst, NPR's All Things Considered, August 31, 2011
If you're an elected public official, should you focus on truck bombs, which are more likely, or airline security, which makes the public more scared?
Radio interview with Howard Kunreuther about the public's reaction to disasters and its effect on policymakers.

Does politicians' fear of blame hinder the war on terror? Washington Post, August 26, 2011
Wharton Risk Center research underscores policymakers' dilemma.

East Coast Gets 'Irened', CNBC, August 25, 2011, 7:40 PM ET
Howard Kunreuther discusses the worst case scenario of Hurricane Irene

To buy or not to buy? When do companies choose terrorism insurance? Canadian Insurance Top Broker, May 24, 2011
Wharton Risk Center research suggests that price has little impact on demand.

Time to switch off nuclear? In The Black (Australia), July 2011
Howard Kunreuther and other experts give their differing opinions on the future of nuclear energy.

Click Here to View New York Times Feature

Al Qaeda spent roughly half a million dollars to destroy the World Trade Center and cripple the Pentagon. What has been the cost to the United States? In a survey of estimates by The New York Times, the answer is $3.3 trillion, or about $7 million for every dollar Al Qaeda spent planning and executing the attacks. While not all of the costs have been borne by the government -- and some are still to come -- this total equals onefifth of the current national debt. All figures are shown in today's dollars.

CREATE's Adam Rose wrote the following article which further explores which costs should be included and excluded from the total cost of 9/11.

ECONOMIC RESILIENCE TO THE SEPTEMBER 11 TERRORIST ATTACKS

by

Adam Rose
CREATE and SPPD
University of Southern California
September 17, 2011

During the weeks leading up to the 10-year anniversary of the 9/11 terrorist attacks, I received calls from several news organizations asking me about the economic impacts of the tragic event. The calls were related to eight studies I had coordinated two years prior, conducted by a group at the Federal Reserve Bank of New York, a leading risk management consulting firm, a leading provider of regional macroeconometric models, a leading university research center specializing in general macroeconomic impact studies, a DHS economist, and three faculty research teams in Southern California, including one of my own. The consensus bottom line estimate of five of the six studies that focused on the business interruption impacts was between $40 and $110 billion (in 2011 dollars) in lost Gross Domestic Product (GDP).

But more important is the reason behind these numbers. Most of the reporters I spoke with were surprised that the estimates were so low (even though this makes 9/11 the largest disaster in U.S. history to date). They immediately brought up the cost of the Afghanistan and Iraq wars, and the U.S. Department of Homeland Security budget, and cited figures by other analysts in the trillions of dollars. I pointed out that our group study focused on the short-run macro effects of 9/11 itself, and that one has to be careful about including the expenditures thereafter. First, were they really the costs of 9/11 or money spent to prevent future attacks? Wasn't spending on national security already following an exponential trend in the years prior to 9/11? Was the war in Iraq really a response to 9/11, or, as the Bush administration stated, mainly a concern about Saddam Hussein's possession of weapons of mass destruction. As to the DHS budget, don't forget that many government agencies included under its umbrella, such as FEMA, existed prior to the tragic event.

Still, one is struck by the focus of stories that dominated the news last week. Many articles focused on the costs of 9/11 in terms of the broader definition of related expenditures, ignoring many of the issues just mentioned. Most of the rest focused on the resilience of the U.S. and its people, but devoted very little space to the resilience of the U.S. economy itself.

Economic resilience is the missing story of the 10th Anniversary. It helps explain why the short-run macroeconomic impacts were relatively small, less than one percent of the U.S.GDP. It is why Osama Bin Laden did not succeed in achieving one of his major stated goals: to destroy the U.S. economy.

Resilience is a popular buzzword these days and not often defined. However, a consensus among researchers and practitioners in this field is that it refers to the capacity to maintain function and to recover quickly. This is accomplished by using remaining resources as efficiently as possible and investing wisely and expeditiously in repair and reconstruction. Although pre-event mitigation (stopping the terrorists before they attack) is part of the broad definition of the term, the unique feature of resilience is on minimizing losses after the event occurs. Property damage occurs at the point of the attack, but business interruption (lost GDP) just begins then and continues until the economy has recovered.

The short-run impact of 9/11 was so low because of the various facets of economic resilience. The key was that 95 percent of the firms operating in the World Trade Center area did not just fold, but reopened in new locations. Had relocation been immediate, there would have been no business interruption. However, the relocation did take time. Still, our study found that 72 percent of potential business interruption losses were avoided by the relocation effort, amounting to a savings of $45 billion in direct impacts and another $50 billion in multiplier effects throughout the U.S. What was the source of this resilience? One factor was the surplus office space in the New York-New Jersey region. Others were the inherent motivation of businesses to survive and the indomitable human spirit. Dan Chung, chief executive officer of Alger, a financial house, which lost the largest percentage of employees in 9/11, took over with a zeal to keep his company afloat as a tribute to his lost colleagues. Howard Lutnick, president of Cantor Fitzgerald, recently mentioned that his firm's customers did not abandon it, but rather quickly rallied to do business with the firm despite the fact that it was hobbled.

Other forms of resilience include the spirit of New Yorkers and Americans in general to return to life as usual, which essentially proved very successful. The one exception was the nearly two-year decline in airline travel and related tourism, which turned out to be the largest single short-run negative impact of 9/11.

Another consideration was the inherent resilience of our market economy, whereby price changes signal shifts in resource reallocations to highest value uses. Also, the U.S. economy is one large supply chain, and various improvements in supplier-customer relations over the years paid dividends.

Another typically unheralded factor was U.S. government policy. This included the Federal Reserve injecting an unprecedented $100 billion into the banking system to enable the continuation of inter-bank payments. Another wise move was closing the stock exchanges for the remainder of the week following the tragedy. Additional actions included reducing the federal funds rate to one percent through June 2003. Some on-going policies, including the Bush tax cuts, helped provide a stimulus to the economy.

In sum, economic resilience in the aftermath of 9/11 was very strong and will continue to be so in the future. While our nation has taken major steps to stop terrorist attacks before they take place, it is impossible to stop them all. In these instances, resilience is our best second line of defense.

Adam Rose is Coordinator for Economics at the USC Center for Economic Analysis of Terrorism Events and Research Professor in the School of Policy Planning and Development.

"In the Shadow of 9/11" explores the local impact of the 2001 terrorist attacks. Judy Muller investigates changes in security, examining LAX and the Port of Los Angeles; Brian Rooney looks at the critical role California has played in Iraq and Afghanistan; and Michael Okwu reports on the rise of "Islamophobia" across the U.S. In addition, Global Watch anchor Reza Aslan (bestselling author of No god but God: The Origins, Evolution, and Future of Islam) leads panel discussions about terrorist threats, the future of our military, and how we've changed as a nation.

Link to KCET

CREATE Distinguished Speaker Series

presenting

Daveed Gartenstein-Ross

August 4, 2011

12:30 p.m.

University of Southern California
Davidson Conference Center
The Embassy Room

~~~
Presentation Title:

"Bin Laden's Legacy"

Abstract: Though Osama bin Laden's death was a significant blow for al Qaeda, it did not end the fight against jihadi terrorism. Indeed, his strategic ideas for beating the United States have permeated his organization, and for years to come America will be grappling with the strategy that he forged. There have been two critical prongs to this strategy: undermining the American economy, and making the battlefield on which the U.S. has to fight al Qaeda as broad as possible. This presentation examines the evolution of both of these strategic strands. It demonstrates that the United States never had a strong understanding of al Qaeda's strategy, and as a result has had systems of both offense and defense that have been ill suited to defeating this adversary. Indeed, at critical junctures America's own actions have helped to significantly advance al Qaeda's objectives.

~~~

Daveed Gartenstein-Ross, the author of the forthcoming book Bin Laden's Legacy (Wiley, 2011) has been described as "a rising star in the counterterrorism community" by the International Herald Tribune. He is often featured as a speaker at conferences sponsored by academic institutions, policy institutes, and the U.S. military, and has been called upon as a consultant to deal with problems ranging from hostage negotiations and border security to story development for major media companies. Gartenstein-Ross frequently leads training for the U.S. military and domestic law enforcement, and has designed educational curriculum dealing with terrorism for the U.S. Department of State. His writing has appeared in The New York Times, Foreign Policy, The Atlantic, Reader's Digest, and The Review of Faith and International Affairs, among other publications.

~~~

U.S. Projects Should be "Necessary, Achievable, and Sustainable"

Link to June 7, 2011 report, Evaluating U.S. Foreign Assistance to Afghanistan pp. 31 and 32

Below is a summary of key report findings.

Washington, DC - As part of the Senate Foreign Relations Committee's
ongoing efforts to examine progress in Afghanistan, Chairman John
Kerry (D-MA) today released a report that evaluates how the United
States is spending civilian assistance in Afghanistan. The United
States currently spends more on aid to Afghanistan than any other
country. With the upcoming transition to an Afghan security lead in
2014 and the increased responsibilities U.S. civilians will absorb
from the military, there is a critical planning window to make any
necessary changes to support a successful transition.

Evaluating U.S. Foreign Assistance to Afghanistan is the most
comprehensive Congressional investigation to date of U.S. foreign
assistance to Afghanistan and focuses on funding appropriated by
Congress to the State Department and the U.S. Agency for International
Development (USAID). This report is the product of two years of staff
research and travel. It is intended to provide constructive and timely
guidance for administration officials at every level who are working
to guarantee that U.S. taxpayer-financed aid to Afghanistan is spent
in the most effective and efficient manner possible.

"We're using assistance to build the capacity of Afghan institutions
and their economy which is critical to our national security
objectives in the region. There are real success stories from our
assistance efforts. But the administration acknowledges that serious
challenges remain and that's why we've conducted a thorough review of
civilian aid investment in Afghanistan," said Chairman Kerry. "Given
the unprecedented levels of aid in Afghanistan and the Committee's
oversight responsibility, we offer this report because we owe it to
American taxpayers to spend limited money as effectively as possible
and the administration is looking for the most effective approach.
This report contributes to their own review process by arguing that
assistance should meet three basic conditions before money is spent:
our projects should be necessary, achievable, and sustainable."

Evaluating U.S. Foreign Assistance to Afghanistan offers three
overarching recommendations for the Obama administration to pursue a
more effective assistance strategy in Afghanistan:

1) Consider authorizing a multi-year civilian assistance strategy for
Afghanistan. The administration and Congress should consider working
together on a multi-year authorization that includes: (a) a clearly
defined assistance strategy; (b) the tools, instruments, and
authorities required for a successful development approach; (c) a plan
as to how U.S. funding will leverage and partner with Afghan domestic
policies, with multilateral efforts - including the World Bank, Asian
Development Bank, and Islamic Development Bank - and with private
sector financing; (d) the civilian resources needed for a successful
military drawdown and transition; (e) the steps needed to ensure
accountability, oversight, and effectiveness; and (f) metrics that
measure performance and capture outcomes. The strategy should also
establish benchmarks for the Afghan government to fulfill its
international commitments, outline goals for improving donor
coordination, and include specific annual funding levels. This process
would clarify the U.S. assistance strategy, offer greater
predictability on future funding levels, and provide Congress with
robust tools for oversight.

2) Re-evaluate the performance of stabilization programs in conflict
zones. We must challenge the assumption that our stabilization
programs in their current form necessarily contribute to stability.
The administration should continue to assess the impact of our
stabilization programs in Afghanistan and reallocate funds, as
necessary.

3) Focus on sustainability. We should follow a simple rule: Donors
should not implement projects if Afghans cannot sustain them.
Development in Afghanistan will only succeed if Afghans are legitimate
partners and there is a path toward sustainability. The Afghan
government must have sufficient technical capability and funding to
cover operation and maintenance costs after a project is completed. A
sustainability strategy would consolidate our programs, increase
on-budget aid, streamline our rules and controls, and pursue a limited
number of high-impact programs that do not require complex procurement
or infrastructure. We should also focus on raising domestic revenue,
reducing aid dependency, and developing partnerships with the private
sector to create jobs. Success should not be measured by outputs or
the amount of money spent, but by the ability of Afghan institutions
to deliver services, the Afghan private sector to generate jobs and
grow the economy, and Afghan civil society and public institutions to
provide avenues for citizens to hold their government accountable and
participate in political and civic life. More thought should be given
to the type of projects we fund. Our aid should be visible among
Afghans, and we should have a robust communications strategy in place
so Afghans know what U.S. civilian aid in Afghanistan is
accomplishing.