Many who oppose Bush and Blair's anti-terrorism and foreign policy initiatives have seized upon this meme that said politicians and their ilk have created a culture of fear in order to get their way. It is certainly true that much of what Bush has done would've been utterly impossible before 9/11. The administration realizes that and has been quite vocal in expressing what they believe to be different about the post-9/11 era. Critics charge that this is fearmongering used as a means of control.
Fear, of course, is not always irrational. Fear might keep a pilot from attempting to scud run in mountainous terrain, and that would be wise. When there is a real danger, fear is an excellent motivator to save ourselves from bodily harm. On the other hand, fears can be imagined. As critics point out, the average American has far greater chance of dying from a car crash or cancer than an act of terrorism. Unless you regularly walk the streets of Baghdad, terrorism simply is not a significant threat to your life.
The thing is, I think this sort of irrational fear is a straw man. I sincerely doubt that the citizens of Kansas are cowering in fear of planes being flown into their grain elevators. I do think that many people are concerned about terrorism in general and Islamic fanaticism specifically, but moreso for the future of the nation and Western civilization as a whole than their personal wellbeing. Up to a point, these fears are not irrational; they represent questions that have been ignored for too long, and we in the West need to openly discuss these questions.
Several of Aviatrix's commenters charged that fear is not misplaced when radical Islam constitutes a threat to the very survival of the West. One expressed fear of his granddaughter being brought up under Shar'ia (Islamic) law. This is an overstatement of the threat in the United States and Canada, I think. Our numbers of muslim immigrants are relatively small and reasonably well integrated; the native populations are demographically sound. There is a threat that alienated members of the Islamic community will turn to extremism, but there's no possibility of an Islamic States of America anytime soon.
Europe is, perhaps, another matter. Many countries there have relatively large populations of unassimilated Muslim immigrants increasingly prone to radicalism. These immigrants have birth rates several times that of the native populations, which are actually shrinking and aging. A recent survey within Great Britain showed that a majority of Muslims there wanted Shar'ia law; in some urban areas, they make up a majority of voters. If current trends continue, some European countries could have Muslim majorities within 100 years. That said, it is quite possible that these population's birth rates will decrease, the average age will increase, and radicalism lose it's appeal. Europe will no doubt become more Islamic but I don't think it'll turn into the Middle East soon.
If radical Islam does not constitute an existential threat to our civilization, it still has the very real ability to do significant damage economically. The several thousand deaths on 9/11, while tragic, were a blip on the overall mortality rates in the US. The effect on the economy was much more pronounced; a more severe terrorist attack could be crippling. Our dependance on middle eastern oil is also a major weakness and a potential point of economic attack. Simply the threat of Iran closing the straight of Hormuz would cause oil prices to skyrocket.
Basically, I think that the heightened concern over terrorism & Islamic fanaticism isn't a bad thing. The threat was there long before 9/11, with counter-terrorism experts perenially lamenting the lack of public consciousness. That said, it's important to be realistic about what exactly the threat is, define it, and look at the best options for dealing with it. Overhyping the threat does a disservice, as does denying that the threat exists.