Distribution of Losses From Large Terrorist Attacks Under the Terrorism Risk Insurance Act [NOOK Book]


The pending expiration of the Terrorism Risk Insurance Act (TRIA) of 2002 is the impetus for this assessment of how TRIA redistributes terrorism losses. The authors find that the role of taxpayers is expected to be minimal in all but very rare cases and that, even with TRIA in place, a high fraction of losses would go uninsured in each of the attack scenarios examined.
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Distribution of Losses From Large Terrorist Attacks Under the Terrorism Risk Insurance Act

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The pending expiration of the Terrorism Risk Insurance Act (TRIA) of 2002 is the impetus for this assessment of how TRIA redistributes terrorism losses. The authors find that the role of taxpayers is expected to be minimal in all but very rare cases and that, even with TRIA in place, a high fraction of losses would go uninsured in each of the attack scenarios examined.
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Product Details

  • ISBN-13: 9780833041036
  • Publisher: RAND Corporation
  • Publication date: 11/16/2005
  • Sold by: Barnes & Noble
  • Format: eBook
  • Edition number: 1
  • Pages: 152
  • File size: 5 MB

Table of Contents

Ch. 1 Introduction 1
Ch. 2 Approach to the problems 5
Ch. 3 Estimates of the future population of New Orleans 13
Ch. 4 Conclusions and next steps 33
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First Chapter

Unconquerable Nation

Knowing Our Enemy Strengthening Ourselves
By Brian Michael Jenkins

Rand Corporation

Copyright © 2006 RAND Corporation
All right reserved.

Chapter One

How We Prevail

Secret Service agents gunned down the first team of assassins before they got to the President, but it was a close call. A second team of gunmen managed to get into the House of Representatives, where they wounded five congressmen. A terrorist bomb caused damage but no casualties at the Senate. Troops took up positions at the Capitol and the White House, both of which had been set ablaze. By sundown, Washington was sliding out of control; columns of black smoke could be seen for miles. Authorities were unable to save the White House, which was completely destroyed by fire.

In New York City, a huge vehicle bomb exploded on Wall Street, killing 33 people and wounding more than 400. Another bomb exploded in downtown Los Angeles, killing at least 20. Yet another bomb killed and maimed hundreds in the heartland. An explosion leveled a Texas town, while fires destroyed most of Chicago and San Francisco.

That was not as bad, however, as an inexplicable deadly epidemic that hit the nation's capital in the summer. By autumn, one-tenth of the city's population had died. Similar deadly outbreaks swept across the country. Nationwide, 1 in 200 Americans died. Cities announced their own blockades against those fleeing the stricken areas. The fabric of society was unraveling with riots and looting.

Following riots, theArmy patrolled the streets in Washington, Detroit, and Los Angeles; 120,000 people were interned as potential subversives. The worst crisis, however, was the receipt of a credible nuclear threat. All this is not some hypothetical future terrorist scenario invented by the U.S. Department of Homeland Security to test preparedness, the screenplay for a new Hollywood disaster thriller, or a survivalist fantasy. All of the events listed above, in fact, occurred during the course of America's history.

In 1950, assassins tried to rush Blair House, where President Truman was staying while renovations were under way at the White House. In 1954, terrorists opened fire on the House of Representatives. A bomb caused heavy damage to the Senate in 1983. And British troops burned down the White House and part of the newly constructed Capitol building in 1814, when only a rainstorm saved the rest of Washington.

A horse-drawn cart filled with explosives (an early vehicle bomb) blew up on Wall Street in 1920, and suspected members of the Dynamite Conspiracy set off a huge bomb in Los Angeles in 1910. Timothy McVeigh's bomb killed 168 people in Oklahoma City in 1995.

In 1947, a ship loaded with nitrate fertilizer blew up, leveling Texas City. The city of Chicago was destroyed by fire in 1871. San Francisco was destroyed by fire following the 1906 earthquake.

In 1793, yellow fever killed 5,000 people, one-tenth of the total population of Philadelphia, which at the time was the nation's capital. Subsequent yellow fever and cholera outbreaks killed thousands in American cities during the nineteenth century, but none of these outbreaks compared with the Spanish flu epidemic of 1918-1919, which killed approximately 600,000 people in the United States and between 25 and 50 million worldwide.

Race riots required calling out the National Guard and federal troops in a number of cities in the second half of the twentieth century. I personally watched the columns of smoke through a train window as the train pulled out of Union Station in Washington, DC, on April 14, 1968, at the beginning of the widespread race riots following the assassination of Rev. Martin Luther King, Jr. During World War II, 120,000 Japanese-Americans were interned.

The most terrifying incident of the Cold War, the Cuban missile crisis, occurred in 1962, when the two superpowers stood nose to nose, armed forces on high alert on both sides, nuclear weapons at the ready.

America's Dark Moments

There have been many dark moments in America's history. Almost everyone's short list includes the destruction of the World Trade Center towers on September 11, 2001; the December 7, 1941, attack on Pearl Harbor and World War II; the Civil War; the 1929 stock market crash and the Great Depression; the assassination of President John F. Kennedy. Most Americans would also include the burning of the nation's capital by British troops in 1814, the Chicago fire, the Johnstown flood, the San Francisco earthquake, and the Spanish flu and other epidemics.

Loss of life is the common element in all these crises. For a nation seen by many in the world as bellicose, Americans themselves see the casualties of war as disaster. The Civil War, in which 558,000 died, tops the list, followed by World War II with 407,000 Americans dead, World War I with 117,000 U.S. deaths, the Vietnam War with 58,000 Americans dead, and the Korean War with 37,000 Americans dead. And whatever criticism we may heap upon our presidents while they are in office, we are angered and dismayed when they are physically attacked.

We also include poverty and suffering among our darkest historical moments. Noteworthy are the events that represent the lack or loss of values: slavery and continuing racial discrimination, the annihilation and dispossession of native Americans, the ruthless suppression of striking workers in the nineteenth century, the internment of Japanese-Americans during World War II, the "witch hunts" for communists in the 1950s, the Watergate scandal in the 1970s. The singling out of these events as America's dark moments reflects the values Americans hold dear: life, the inalienable rights of all people, equal justice for all, security in its broadest sense, fair play, political morality.

Just as noteworthy are the omissions. Americans do not dwell much on abstract issues such as past humiliations (including those in Vietnam and Iran), perceived insults to national honor, challenges to the nation's rightful place in the world, assaults upon our religious beliefs and moral values. These are the types of concerns voiced by our terrorist adversaries.

It is also noteworthy that Americans view the nation's dark moments as summons to courage, opportunities to reflect and to do what is right. Each dark moment is seen as a challenge, awful at the time, but ultimately met-not a descent into darkness.

As the United States faces a new array of threats that arose at the end of the Cold War and were so stunningly clarified on September 11, 2001, Americans are again summoned to demonstrate courage, to draw upon deep traditions of determination in the face of risk, to show self-reliance and resiliency. There has been too much fear-mongering since 9/11. We are not a nation of victims cowering under the kitchen table. We cannot expect protection against all risk. Too many Americans have died defending liberty for us to easily surrender it now to terror.

We should heed the admonition that President Franklin Delano Roosevelt delivered in his 1933 inaugural address: "Let me assert my firm belief that the only thing we have to fear is fear itself-nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance."

It should not be fear that propels us, but confidence that we will ultimately prevail. We have never been driven forward by fear. At our best, we have been defined by our visions.

Strategy for an Unconquerable Nation

The title of this book is Unconquerable Nation. The phrase derives from a quote by the ancient Chinese strategist Sun Tzu, who 25 centuries ago wrote, "Being unconquerable lies with yourself." The choice of this title does not signal an attempt to apply the principles of Sun Tzu's ancient treatise on the art of war to the current war on terrorism. Sun Tzu's passages tend to be abstract, cryptic, sometimes opaque, and therefore subject to continuous interpretation, which may, in part, explain their enduring appeal.

Sun Tzu offers inspiration, not precise instructions. His philosophy of war is straightforward. Warfare, which had by the 5th century B.C. become a large-scale enterprise, requires popular support and proper strategy. That strategy must be based on a thorough understanding of the enemy and of one's own strengths and weaknesses. "Being unconquerable" means knowing oneself, but as understood by the ancient strategists, "knowing" means much more than the mere acquisition of knowledge. "Knowing oneself" means preserving one's spirit, a broad term. "Being unconquerable" includes not only disciplined troops and strong walls, but also confidence, courage, commitment-the opposite of terror and fear.

One can easily see the appeal of this construct in the context of current circumstances. This philosophy alters Americans' mental model of today's conflict. It elevates the necessity of knowing the enemy, something we have not made sufficient effort to do. It moves us from relying almost exclusively on the projection of military power and viewing homeland security as physical protection to mobilizing our spirit, courage, and commitment. While we strive to destroy our terrorist enemies by reducing their capabilities, thwarting their plans, frustrating their strategy, and crushing their spirit, we must also rely on our own psychological strength to defeat the terror they would create. Instead of issuing constant warnings and alarms, we must project stoicism and resolve. Instead of surrendering our liberties in the name of security, we must embrace liberty as the source and sustenance of our security.

Looking Back

This book is based in part on objective research, particularly as it applies to knowing the enemy, and it also includes the personal reflections of someone who has thought about terrorism for a long time. I initiated RAND's research on terrorism in 1972 with a simple memorandum, which observed that this phenomenon was likely to spread and increase and could create serious problems for the United States and its allies; I proposed that we should therefore take a serious look at it.

It required little prescience to make that statement in 1972. By then, Palestinian extremists had already begun to sabotage and hijack airliners; urban guerrillas in Latin America were regularly kidnapping foreign diplomats and demanding the release of their imprisoned comrades, a tactic that quickly spread to Europe and the Middle East; the first terrorist groups had appeared in Europe and Japan; and terrorist bombings had become increasingly common. One had only to take a few small steps beyond the headlines of the day to see these disparate tactics merging to form a new mode of conflict.

Certainly, I was not able to foresee the remarkable trajectory of terrorism over the next three and one-half decades. I did not forecast terrorists holding hostage Olympic athletes, OPEC oil ministers, hundreds of passengers aboard a cruise ship, guests at an embassy party in Lima, or hundreds of theatergoers in Moscow; bombs on trains and subways in Paris, Moscow, Madrid, Manila, and London; nerve gas on Tokyo's subways; the Senate Office Building contaminated with anthrax; huge truck bombs exploding in the center of London and the middle of Oklahoma; suicide bombers strapped with explosives walking into restaurants, shopping malls, buses, and hotel lobbies or driving trucks into embassies, synagogues, and mosques; jumbo jets blown out of the sky; hijacked planes flown into skyscrapers. Any predictions of these terrible events would have been dismissed in 1972 as the stuff of fantasy and hysteria.

Longevity in a particular subject matter does not guarantee wisdom or insight, but it does permit perspective. It provides a firsthand opportunity not only to recall events, but to recall what else was going on during each event-a difficult war in Vietnam, a crisis in the Middle East, another Cold War confrontation-providing a context that newcomers to a subject sometimes miss.

It is wrong, for example, to view the history of America's previous efforts to counter terrorism through the dust and debris of the 9/11 terrorist attacks, as some government officials have done. The scale of those attacks completely altered the context in which subsequent decisions were made. Responses that were unimaginable before 9/11 became mandatory afterwards. The world changed. Yet we had also learned valuable lessons during the three decades of counter-terrorist efforts prior to 9/11. While 9/11 demanded new responses, all that we had done beforehand was not mistaken or futile.

At the same time, longevity imposes humility. Thirty years ago, I thought I knew more about terrorism and knew it with far greater certainty than I do today. Beneath the patina of authority that comes with time, a long perspective obliges one to review and revise one's own earlier forecasts and conclusions.

The Growth of Terrorism Research

Terrorist tactics have a long history, but contemporary international terrorism is a relatively recent phenomenon. The first airline hijacking for political ends occurred in 1968, and the first successful kidnapping of a diplomat by urban guerrillas in modern times took place in 1969. The two events that galvanized worldwide concern and led, in the United States, to the creation of the Cabinet Committee to Combat Terrorism-the Lod Airport massacre in Israel and the murder of athletes at the Munich Olympics-occurred in 1972. These events mark the beginning of terrorism as a new mode of conflict.

The term "international terrorism" was not created by its practitioners; it was an artificial term invented by analysts. In the early 1970s, participants in ongoing wars sometimes employed terrorist tactics; indeed, the entire repertoire of some small urban guerrilla groups fell into the category of terrorism. Some terrorist events spilled over into the international domain in the form of hijackings, attacks on foreign targets, or terrorists themselves going abroad to pursue their campaigns. All these events were aggregated into a separate field of political violence.

The initial concern of Americans was not the conflicts themselves; rather, we were concerned with preventing the conflicts from spilling over into the international domain. Uruguayans kidnapping other Uruguayans in Uruguay was unfortunate, but it was a matter for the local authorities. Uruguayans kidnapping foreign diplomats, on the other hand, became an international matter. I mention this as a caution to those who may reach too far in attempts to correlate the incidence of terrorism with social, economic, or other attributes of society. Terrorism, particularly international terrorism, which is our main concern, is a small, artificially defined segment of political violence. Moreover, it represents the actions of very small groups. We must keep that in mind when looking for root causes.

Looking back, it seems now that the analysts of terrorism not only defined the issue, but also may have given terrorism greater coherence than the terrorists did themselves. Carlos Marighella, the leader of an urban guerrilla group in Brazil, wrote the Mini-Manual of the Urban Guerrilla, and a few other early veterans offered advice, but the first generation of terrorist practitioners seldom viewed their own employment of terrorist tactics as a distinct mode of armed conflict or thought of it in terms of a coherent strategy. It was the analysts who put terrorist tactics into a broader context and, in so doing, contributed to a theory of terrorism.

How Terrorism Has Changed

Terrorism has changed dramatically since the events of the late 1960s. There appear to be fewer conflicts and fewer terrorist organizations today. Traditional political ideology, the engine of conflict in the 1970s and 1980s, has declined as a motivating force, while the force of ideologies drawing upon religion has increased.

The most dramatic change has been the escalation of terrorism. More than 30 years ago, I wrote that "terrorists want a lot of people watching, not a lot of people dead." The phrase became an aphorism. It meant that terrorist concerns about self-image, group cohesion, not alienating perceived constituents, or provoking public backlash imposed constraints on their actions.


Excerpted from Unconquerable Nation by Brian Michael Jenkins Copyright © 2006 by RAND Corporation. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
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