{"id":9429,"date":"2020-03-13T06:09:56","date_gmt":"2020-03-13T13:09:56","guid":{"rendered":"https:\/\/worldcampaign.net\/?p=9429"},"modified":"2020-03-13T06:09:56","modified_gmt":"2020-03-13T13:09:56","slug":"this-time-really-is-different-the-new-york-times","status":"publish","type":"post","link":"https:\/\/worldcampaign.net\/?p=9429","title":{"rendered":"“This Time Really Is Different”, The New York Times"},"content":{"rendered":"

By Jeff Sommer, Strategies, March 12, 2020<\/span><\/p>\n

The pandemic is a transformative global event, requiring fresh thinking and a public generosity that has not been a hallmark of recent American life, our columnist says.<\/em><\/p>\n

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\u201cThis time is different.\u201d People always say that as markets spiral, but time usually proves them wrong. Boom and bust, expansion and debt, exuberance and collapse \u2014 perspective shows that these are common patterns, as constant as human nature.<\/p>\n

\u201cWe\u2019ve seen it over the centuries,\u201d said Kenneth Rogoff<\/a>, a Harvard economist who actually wrote the book on this \u2014 he\u2019s a co-author of \u201cThis Time Is Different: Eight Centuries of Financial Folly.\u201d And yet Professor Rogoff told me this week that, in some ways, the crisis of 2020 might really be unique.<\/p>\n

\u201cI\u2019m not a virologist,\u201d he said. \u201cThis is <\/em>something different, and you need scientific expertise that I don\u2019t have to really assess what\u2019s going on.\u201d<\/p>\n

I am afraid that we may be barely grasping the transformative nature of the global calamity that is the novel coronavirus. It helps, a little, to think in meteorological terms. View it as a major hurricane \u2014\u00a0one that still appears to be gathering force.<\/p>\n

Consider the storm\u2019s scope.<\/p>\n<\/div>\n<\/div>\n

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Corporate earnings are falling, and broad sectors of the stock, oil and commodity markets have taken fierce punishment. With a decline in American stocks of more than 20 percent from their peak, the 11-year American bull market died<\/a> on Wednesday. All on its own, that would be monumental. So would the virtual halt of major sporting events, the cancellation of conferences and the banning <\/a>of flights, to say nothing of the great diaspora of office workers who have been sent home, to work at a presumably safe remove from nodes of infection.<\/p>\n

Yet even these developments seem trivial in the face of the rising death toll, with mind-boggling predictions of millions of additional infections and thousands of further deaths before the disease is expected to have run its course.<\/p>\n

It is impossible, at this early stage, to adequately quantify the economic effects of so much illness \u2014 and of the mass quarantines, lockdowns and voluntary \u201csocial distancing\u201d in so many communities, companies and countries. Whether this event really turns out to be a storm<\/a> from which the economy rebounds, or a cataclysm that wreaks far more consequential changes, cannot be easily answered.<\/p>\n

The epidemic\u2019s outcome in the United States may hinge on whether the country can muster a spirit of public generosity and a trust in government transparency, neither of which has been conspicuously present.<\/p>\n

Add those to the tally of important but unknowable factors.<\/p>\n

But a few things can be said with a high degree of probability.<\/p>\n<\/div>\n<\/div>\n

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Professor Rogoff estimates that a global recession is \u201cat least 80 percent likely,\u201d with China bearing much of the brunt and other emerging-market countries likely to be severely pounded.<\/p>\n

Compared with most other countries, the United States is in good shape, despite its evident problems, several economists said. The U.S. dollar has again been a haven, said Eswar Prasad, a Cornell and Brookings Institution economist. If anything, he said, \u201cthe financial power of the United States has grown in stature since the 2007-2009 financial crisis.\u201d<\/p>\n

That power would be wasted, Professor Rogoff said, if the United States did not use its resources both to aid other nations and provide succor to the impoverished people within its own borders.<\/p>\n

\u201cI wouldn\u2019t blink an eye if we spent $500 billion or $1 trillion on fiscal stimulus, if it is directed at the people who need it most,\u201d he said.<\/p>\n

Central banks<\/a> are providing relief by lowering core interest rates. But rates are already near zero in the United States, and even lower than that for many European and Asian bonds. There\u2019s only so much the banks can do. So some officials and scholars are contemplating even more radical experiments than the banks have engaged in over the last decade, like buying corporate debt in the United States<\/a> or even<\/a> issuing digital money<\/a> that would pay variable interest rates, targeted to the borrower.<\/p>\n

Governments are beginning<\/a> to try to provide economic balm with fiscal stimulus. There\u2019s nothing wrong with that in principle, but the classic remedies weren\u2019t designed for a coronavirus.<\/p>\n

A payroll tax cut, proposed by President Trump, won\u2019t set off a wave of spending if people are huddling at home. Huge amounts of spending won\u2019t help workers in Wuhan or Milan get back to their factories if they are quarantined. Nor will it aid service sector workers in the United States who lose their jobs if people stop going out to eat because they simply don\u2019t know if they have been infected with the virus. And it\u2019s not clear how vital small businesses, which are suffering enormous losses, can be adequately bolstered.<\/p>\n

During the Great Depression, President Franklin Delano Roosevelt calmed and inspired people around the world when he declared<\/a>: \u201cThe only thing we have to fear is fear itself.\u201d<\/p>\n<\/div>\n<\/div>\n

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The president of the United States addressed<\/a> the world from the Oval Office on Wednesday night and announced<\/a> a ban on most air travel from Europe as a cure for America\u2019s problems. His speech did not have a calming or inspirational effect: It was roundly denounced<\/a>, and the market reaction was pandemonium.<\/p>\n

But there is no shortage of solid suggestions. Providing paid sick leave and medical coverage to those who don\u2019t have it, strengthening unemployment insurance \u201cand generally repairing the frayed social safety net in the United States\u201d are useful options, said Alicia Munnell, a Boston College economist.<\/p>\n

Oddly, though, the most important boon to the economy might come from something simpler: a general conviction that government, businesses, nonprofits and individuals are responding effectively, and that a semblance of normal life will soon resume.<\/p>\n

But the epidemic\u2019s relentless math, and the bumbling start to the recovery effort in the United States, suggest that we won\u2019t be close to that moment for many weeks.<\/p>\n<\/div>\n<\/div>\n<\/section>\n

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Jeff Sommer writes Strategies<\/a>, a column on markets, finance and the economy. He also edits business news. Previously, he was a national editor. At Newsday, he was the foreign editor and a correspondent in Asia and Eastern Europe.<\/em><\/p>\n

The New York Times<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By Jeff Sommer, Strategies, March 12, 2020 The pandemic is a transformative global event, requiring fresh thinking and a public generosity that has not been a hallmark of recent American life, our columnist says. \u201cThis time is different.\u201d People always say that as markets spiral, but time usually proves them wrong. Boom and bust, expansion […]<\/p>\n","protected":false},"author":1001004,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[],"_links":{"self":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts\/9429"}],"collection":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/users\/1001004"}],"replies":[{"embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9429"}],"version-history":[{"count":1,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts\/9429\/revisions"}],"predecessor-version":[{"id":9430,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=\/wp\/v2\/posts\/9429\/revisions\/9430"}],"wp:attachment":[{"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9429"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9429"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/worldcampaign.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9429"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}