Paul Leonard can be reached at pleonard@vbjusa.com
The price of security
After what seemed only a short reprieve, the ugly specter of terrorism is firmly back in place on the frontlines of media coverage, kitchen table conversations and water-cooler gossip.
The near-miss on Flight 253 on Christmas Day, foiled only by the quick-thinking of fellow passengers and flight crew, made me think about the fragile nature of our sense of security and what that might mean for an equally fragile economic recovery.
What I’ve come up with is a shortlist of winners and losers in a business environment dogged by persistent security concerns such as those that have reemerged in the last few weeks.
One of the big potential winners is Richmond-based engineering firm L-3 Communications, which stands to benefit from the increased use of full-body scanners like its ProVision system, enabling airport screeners to catch items hidden underneath clothes like the explosives bombing suspect Umar Farouk Abdulmutallab’s used to get through security by tying to his thigh.
Others like security consultants, working both in the physical and electronic sector, also stand to benefit, as will those trading in so-called safe-haven investments like silver and gold.
And if experience living in New York City in the wake of the Sept. 11 attacks is any indication, an increasingly security-conscious public tends to hit either the local watering-hole or the nearest 15-screen multiplex. Case in point: the $45 million take by 2001’s biopic about a faux-male model, “Zoolander,” or more recently, the $270 million record-breaking box office over Christmas weekend.
On the other side of the coin, the list of losers seems to include everything and everyone else.
First, the airline industry stands to lose big if the flying public, especially business travelers, decide to stay home due to concerns, not only about terrorism, but of cumbersome and increasingly-rigid security regulations. As would the ports, potentially bogged-down by a decline in trade and heightened freight screening requirements.
And as in all times of uncertainty, investors in everything from stocks, certain kinds of mutual funds and commodities like oil would be in for an even bumpier ride – as if that were possible given the volatility in most major markets in the last few years.
So it’s no surprise that we’ve got lots to lose in a business environment weighed-down by an insecure public.
Security is a funny thing – it being equal parts perception and reality.
Which makes the continued vigilance of the U.S. government against all terrorism threats, large and small, as well as a thorough accounting of all the missteps that led to the Flight 253 debacle, all the more important.
