Do Terror Alerts work?

I think we all know that they don't work but Bruce Schneier delves into why they don't. Poking holes in "Lousy Security Theatre" is a bit of a theme for Scheier but his words ring very true:

And the alerts don't result in a more vigilant America. It's one thing to issue a hurricane warning, and advise people to board up their windows and remain in the basement. Hurricanes are short-term events, and it's obvious when the danger is imminent and when it's over. People can do useful things in response to a hurricane warning; then there is a discrete period when their lives are markedly different, and they feel there was utility in the higher alert mode, even if nothing came of it.

Schneier points out that Israel (which has terrorist attacks weekly if not daily) doesn't use a warning system because they don't work. The current system ("Something might happen somewhere so go about your business") smacks of bureacratic CYA. When there is a terrorist attack, the administration will be able to say - "Ah, it was Code Orange! The system works!"