He lists 3 reasons. Here's the first one:
Terrorism causes fear, and we overreact to that fear. Our brains aren't very good at probability and risk analysis. We tend to exaggerate spectacular, strange and rare events, and downplay ordinary, familiar and common ones. We think rare risks are more common than they are, and we fear them more than probability indicates we should.
Our leaders are just as prone to this overreaction as we are. But aside from basic psychology, there are other reasons that it's smart politics to exaggerate terrorist threats, and security threats in general.
The first is that we respond to a strong leader. Bill Clinton famously said: "When people feel uncertain, they'd rather have somebody that's strong and wrong than somebody who's weak and right." He's right.
The second is that doing something -- anything -- is good politics. A politician wants to be seen as taking charge, demanding answers, fixing things. It just doesn't look as good to sit back and claim that there's nothing to do. The logic is along the lines of: "Something must be done. This is something. Therefore, we must do it."
The third is that....
You'll have to click over here for the last reason and some more fascinating analysis.