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| This Time Really Is Different | This Time Really Is Different |
| (about 16 hours later) | |
| “This time is different.” People always say that as markets spiral, but time usually proves them wrong. Boom and bust, expansion and debt, exuberance and collapse — perspective shows that these are common patterns, as constant as human nature. | “This time is different.” People always say that as markets spiral, but time usually proves them wrong. Boom and bust, expansion and debt, exuberance and collapse — perspective shows that these are common patterns, as constant as human nature. |
| “We’ve seen it over the centuries,” said Kenneth Rogoff, a Harvard economist who actually wrote the book on this — he’s a co-author of “This Time Is Different: Eight Centuries of Financial Folly.” And yet Professor Rogoff told me this week that, in some ways, the crisis of 2020 might really be unique. | “We’ve seen it over the centuries,” said Kenneth Rogoff, a Harvard economist who actually wrote the book on this — he’s a co-author of “This Time Is Different: Eight Centuries of Financial Folly.” And yet Professor Rogoff told me this week that, in some ways, the crisis of 2020 might really be unique. |
| “I’m not a virologist,” he said. “This is something different, and you need scientific expertise that I don’t have to really assess what’s going on.” | “I’m not a virologist,” he said. “This is something different, and you need scientific expertise that I don’t have to really assess what’s going on.” |
| 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 — one that still appears to be gathering force. | 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 — one that still appears to be gathering force. |
| Consider the storm’s scope. | Consider the storm’s scope. |
| 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 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 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. | 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 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 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. |
| 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. | 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. |
| It is impossible, at this early stage, to adequately quantify the economic effects of so much illness — and of the mass quarantines, lockdowns and voluntary “social distancing” in so many communities, companies and countries. Whether this event really turns out to be a storm from which the economy rebounds, or a cataclysm that wreaks far more consequential changes, cannot be easily answered. | It is impossible, at this early stage, to adequately quantify the economic effects of so much illness — and of the mass quarantines, lockdowns and voluntary “social distancing” in so many communities, companies and countries. Whether this event really turns out to be a storm from which the economy rebounds, or a cataclysm that wreaks far more consequential changes, cannot be easily answered. |
| The epidemic’s 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. | The epidemic’s 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. |
| Add those to the tally of important but unknowable factors. | Add those to the tally of important but unknowable factors. |
| But a few things can be said with a high degree of probability. | But a few things can be said with a high degree of probability. |
| Professor Rogoff estimates that a global recession is “at least 80 percent likely,” with China bearing much of the brunt and other emerging-market countries likely to be severely pounded. | Professor Rogoff estimates that a global recession is “at least 80 percent likely,” with China bearing much of the brunt and other emerging-market countries likely to be severely pounded. |
| 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, “the financial power of the United States has grown in stature since the 2007-2009 financial crisis.” | 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, “the financial power of the United States has grown in stature since the 2007-2009 financial crisis.” |
| 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. | 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. |
| “I wouldn’t 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,” he said. | “I wouldn’t 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,” he said. |
| Central banks 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’s 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 or even issuing digital money that would pay variable interest rates, targeted to the borrower. | Central banks 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’s 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 or even issuing digital money that would pay variable interest rates, targeted to the borrower. |
| Governments are beginning to try to provide economic balm with fiscal stimulus. There’s nothing wrong with that in principle, but the classic remedies weren’t designed for a coronavirus. | Governments are beginning to try to provide economic balm with fiscal stimulus. There’s nothing wrong with that in principle, but the classic remedies weren’t designed for a coronavirus. |
| A payroll tax cut, proposed by President Trump, won’t set off a wave of spending if people are huddling at home. Huge amounts of spending won’t 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’t know if they have been infected with the virus. And it’s not clear how vital small businesses, which are suffering enormous losses, can be adequately bolstered. | A payroll tax cut, proposed by President Trump, won’t set off a wave of spending if people are huddling at home. Huge amounts of spending won’t 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’t know if they have been infected with the virus. And it’s not clear how vital small businesses, which are suffering enormous losses, can be adequately bolstered. |
| During the Great Depression, President Franklin Delano Roosevelt calmed and inspired people around the world when he declared: “The only thing we have to fear is fear itself.” | During the Great Depression, President Franklin Delano Roosevelt calmed and inspired people around the world when he declared: “The only thing we have to fear is fear itself.” |
| Updated June 16, 2020 | |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| The president of the United States addressed the world from the Oval Office on Wednesday night and announced a ban on most air travel from Europe as a cure for America’s problems. His speech did not have a calming or inspirational effect: It was roundly denounced, and the market reaction was pandemonium. | The president of the United States addressed the world from the Oval Office on Wednesday night and announced a ban on most air travel from Europe as a cure for America’s problems. His speech did not have a calming or inspirational effect: It was roundly denounced, and the market reaction was pandemonium. |
| The market responded buoyantly on Friday after he declared a national emergency but prospects for targeted relief for the afflicted remained unclear. | The market responded buoyantly on Friday after he declared a national emergency but prospects for targeted relief for the afflicted remained unclear. |
| There is no shortage of solid suggestions. Providing paid sick leave and medical coverage to those who don’t have it, strengthening unemployment insurance “and generally repairing the frayed social safety net in the United States” are useful options, said Alicia Munnell, a Boston College economist. | There is no shortage of solid suggestions. Providing paid sick leave and medical coverage to those who don’t have it, strengthening unemployment insurance “and generally repairing the frayed social safety net in the United States” are useful options, said Alicia Munnell, a Boston College economist. |
| 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. | 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. |
| But the epidemic’s relentless math, and the bumbling start to the recovery effort in the United States, suggest that we won’t be close to that moment for many weeks. | But the epidemic’s relentless math, and the bumbling start to the recovery effort in the United States, suggest that we won’t be close to that moment for many weeks. |