The police evidently had the situation in hand. The crowd was curious, but might as well have been watching a busker for all the tension in the air. Some onlookers snapped photos. Some left as others arrived. The scene was perfectly calm.

It was only when I turned on the TV an hour or so later that I realised the magnitude of our dimwittedness. We were supposed to be terrified.

The Prime Minister led in shaping our responses. He called a press conference but had no information to offer on the incident except that he had held a meeting to discuss it. He took only one question, to explain that he had no details but that the NSW police did.

"We don't yet know the motivation of the perpetrator," he said, then freely speculated that he was politically motivated. It was "very disturbing".

And if the family and friends of the hostages in the café were not already worried enough, Abbott announced that "I can think of almost nothing more distressing, more terrifying, than to be caught up in such a situation."

A stampede of politicians, State and federal, took to the airwaves to tell us how to feel. The incident was "horrifying" said Bill Shorten. Attempting a Churchillian gravitas, the opposition leader declared that "Australians are shocked, but won't be shaken."

But it was the State premiers who most clearly illustrated the paradox that governed political reaction: The further from the incident, the greater the distress.

Victoria's Daniel Andrews declared that it was a "terrifying incident". He gravely assured Victorians that the gunman in Martin Place posed no known threat to the people of Victoria.

Queensland's Premier Campbell Newman ordered "all available police out there" to "protect Queenslanders".

The reaction of most media for most of the day was to cheerlead the hype and to provide a ready platform to any politician who wanted to insert himself into the event.

Meanwhile, in Sydney, public transport was rerouted, buildings kilometres away were shut down and school excursions throughout the city cancelled. In all, hundreds of thousands of Sydneysiders were affected.

Why do political activists turn to terrorism? Australia gave the world a lesson today.

They turn to terrorism to win attention, to cause fear, and to use that fear to produce an overreaction. That overreaction is the measure of their success.

Terrorism is a tool of the weak against the strong. It is designed to turn the enemy's strength against itself. One man showed how to get extraordinary attention and inflict serious disruption using only a gun and a Muslim prayer banner.

Successful terrorism is so rare in Australia that the overreaction is perhaps understandable. The police response seemed exactly right. But our political and media systems need to get better at measured reaction.

Abbott said on Monday evening that the incident had been "profoundly shocking". He added: "I think I can also commend the people of Sydney for the calmness with which they have reacted". With no help from the politicians.