In the three months after 9/11 there were 1,000 extra traffic deaths in the U.S.

We would surmise that the threat of flying caused more people to drive and that driving is much more dangerous than flying.  But the additional deaths occurred on local roads in the Northeast close to the terrorist attack, and these fatalities were far more likely to involve drunken and reckless driving.  9/11 led to alcohol abuse and post-traumatic stress that led to extra driving deaths among other problems.

140 U.S corporations abused the stock market decline after the attacks to back date stock options.  Police resources were shifted from anti-Mafia units and other crime prevention including chasing financial scoundrels. 9/11 could have contributed to the financial meltdown.

Due to less air travel, influenza – which travels well on planes- spread less.  In DC the extra police on the street during terror alerts decreased crime.  Marijuana became one of California’s most valuable crops as imports from Canada and Mexico was squeezed by tighter border restriction .

From Superfreakonomics by Steve Levitt and Stephen Dubner.

Economic externalities are  a fascinating subject. Recall how unexpected and unpredictable many of these externalities seem and imagine how many externalities will result from the government’s widespread legislation.