This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.nytimes.com/2020/04/02/upshot/powell-career-path-crisis-coronavirus.html

The article has changed 26 times. There is an RSS feed of changes available.

Version 5 Version 6
How Jerome Powell’s Unconventional Career Path Prepared Him for This Crisis How Jerome Powell’s Unconventional Career Path Prepared Him for This Crisis
(about 16 hours later)
When Jerome H. Powell was nominated to lead the Federal Reserve in late 2017, there was some tut-tutting about his seemingly unusual background for the job.When Jerome H. Powell was nominated to lead the Federal Reserve in late 2017, there was some tut-tutting about his seemingly unusual background for the job.
Some articles noted that he would be the first Fed chair without formal economic training since a notoriously inept Carter-era Fed chair, G. William Miller. Mr. Powell had a distinguished résumé, but also a winding career path that took him from corporate law to Wall Street deal making to public service. His predecessors, by contrast, were world-caliber experts in labor markets (Janet Yellen), monetary policy (Ben Bernanke) or economic forecasting (Alan Greenspan).Some articles noted that he would be the first Fed chair without formal economic training since a notoriously inept Carter-era Fed chair, G. William Miller. Mr. Powell had a distinguished résumé, but also a winding career path that took him from corporate law to Wall Street deal making to public service. His predecessors, by contrast, were world-caliber experts in labor markets (Janet Yellen), monetary policy (Ben Bernanke) or economic forecasting (Alan Greenspan).
But now, as the world’s most powerful central bank faces perhaps the gravest economic crisis of modern times, Mr. Powell’s varied experiences appear to be a strength, not a weakness, with his areas of knowledge uncannily well suited to the woes confronting the world economy.But now, as the world’s most powerful central bank faces perhaps the gravest economic crisis of modern times, Mr. Powell’s varied experiences appear to be a strength, not a weakness, with his areas of knowledge uncannily well suited to the woes confronting the world economy.
The challenge isn’t really about diagnosing the problem. There is little disagreement on what is happening: A pandemic is necessitating the shutdowns of large swaths of economic activity.The challenge isn’t really about diagnosing the problem. There is little disagreement on what is happening: A pandemic is necessitating the shutdowns of large swaths of economic activity.
The Fed is not trying to project exactly how high the unemployment rate will rise or how low the G.D.P. numbers will fall. It’s trying to act swiftly and creatively to devise programs that can pump trillions of dollars into the economy.The Fed is not trying to project exactly how high the unemployment rate will rise or how low the G.D.P. numbers will fall. It’s trying to act swiftly and creatively to devise programs that can pump trillions of dollars into the economy.
Mr. Powell and his Fed colleagues, along with their counterparts at the Treasury Department, are essentially trying to ensure that however bad things get, American business is in position to return to functioning rapidly once the public health crisis subsides. The idea is that millions of unemployed Americans will have jobs to go back to when that day comes.Mr. Powell and his Fed colleagues, along with their counterparts at the Treasury Department, are essentially trying to ensure that however bad things get, American business is in position to return to functioning rapidly once the public health crisis subsides. The idea is that millions of unemployed Americans will have jobs to go back to when that day comes.
To do that, you need someone who understands the minutiae of how the Fed works and the legal details of its authorities. You want someone who understands the problems facing business and what might solve them, and who has the deft political touch to collaborate with the Treasury Department and Congress to carry out that mission.To do that, you need someone who understands the minutiae of how the Fed works and the legal details of its authorities. You want someone who understands the problems facing business and what might solve them, and who has the deft political touch to collaborate with the Treasury Department and Congress to carry out that mission.
Mr. Powell spent six years as a governor at the Fed focused on the not-very-sexy details, and is a lawyer by training. He worked in financial markets and in overseeing corporate buyouts in the private equity industry. And he worked at the Treasury Department in the early 1990s and has carefully cultivated relationships on Capitol Hill.Mr. Powell spent six years as a governor at the Fed focused on the not-very-sexy details, and is a lawyer by training. He worked in financial markets and in overseeing corporate buyouts in the private equity industry. And he worked at the Treasury Department in the early 1990s and has carefully cultivated relationships on Capitol Hill.
The situation has unfolded so rapidly that you also need someone who can push an often cautious Fed bureaucracy to act on a speed and scale commensurate with the crisis. Former colleagues describe Mr. Powell as a crisp decision maker.The situation has unfolded so rapidly that you also need someone who can push an often cautious Fed bureaucracy to act on a speed and scale commensurate with the crisis. Former colleagues describe Mr. Powell as a crisp decision maker.
“It’s a unique situation, and Jay has the right attributes for dealing with it,” said Nellie Liang, who worked closely with Mr. Powell on financial stability issues as a Fed staffer and now is a senior fellow at the Brookings Institution. “He’s a person who can size up a situation very quickly and be decisive. I think he’s really well suited for this situation.”“It’s a unique situation, and Jay has the right attributes for dealing with it,” said Nellie Liang, who worked closely with Mr. Powell on financial stability issues as a Fed staffer and now is a senior fellow at the Brookings Institution. “He’s a person who can size up a situation very quickly and be decisive. I think he’s really well suited for this situation.”
In the space of just three weeks starting in late February, the Fed cut interest rates to zero, relaunched its program of bond buying on a mass scale, and initiated programs to support lending to all sorts of entities — sometimes more than one a day. It was as if actions that were spread out over 18 months during the 2008 financial crisis were squeezed into a single month.In the space of just three weeks starting in late February, the Fed cut interest rates to zero, relaunched its program of bond buying on a mass scale, and initiated programs to support lending to all sorts of entities — sometimes more than one a day. It was as if actions that were spread out over 18 months during the 2008 financial crisis were squeezed into a single month.
“It’s clear that he saw that this was a serious risk early, and scrambled the staff to start doing some serious work, because they’ve been able to roll out a lot of stuff very quickly,” said William English, a former senior Fed staff member now at the Yale School of Management. “I credit that to Jay. I think his understanding of markets helped him to realize that this needed very serious attention early.”“It’s clear that he saw that this was a serious risk early, and scrambled the staff to start doing some serious work, because they’ve been able to roll out a lot of stuff very quickly,” said William English, a former senior Fed staff member now at the Yale School of Management. “I credit that to Jay. I think his understanding of markets helped him to realize that this needed very serious attention early.”
The Fed’s era of mass-scale support for lending across all corners of the economy is only beginning. Mr. Powell essentially promised Congress and the Treasury Department that they could count on the Fed to help finance a gigantic lending program. The $2 trillion rescue legislation Congress passed last week includes $454 billion that can be paired with 10 times as much money from the Fed to support trillions in lending.The Fed’s era of mass-scale support for lending across all corners of the economy is only beginning. Mr. Powell essentially promised Congress and the Treasury Department that they could count on the Fed to help finance a gigantic lending program. The $2 trillion rescue legislation Congress passed last week includes $454 billion that can be paired with 10 times as much money from the Fed to support trillions in lending.
“He told me, ‘Think big,’ because the interest rates are low,’” House Speaker Nancy Pelosi said of Mr. Powell in an interview with PBS NewsHour last week.“He told me, ‘Think big,’ because the interest rates are low,’” House Speaker Nancy Pelosi said of Mr. Powell in an interview with PBS NewsHour last week.
None of this assures success. The economic crisis the United States faces has no modern precedent. The central bank is already facing tough questions about why it hasn’t done more to support lending to state and local governments, which are facing a fiscal crisis. And while it announced a “Main Street Business Lending Program” on March 23, aimed at small and midsize businesses, it is not yet up and running, and there are big open questions about how it might work.None of this assures success. The economic crisis the United States faces has no modern precedent. The central bank is already facing tough questions about why it hasn’t done more to support lending to state and local governments, which are facing a fiscal crisis. And while it announced a “Main Street Business Lending Program” on March 23, aimed at small and midsize businesses, it is not yet up and running, and there are big open questions about how it might work.
In its rush, the Fed will face tough questions of where to draw the lines. For example, the emergency lending authority invoked for many of the new programs requires that lending must be “secured to the satisfaction” of the Fed, meaning expectations for repayment.In its rush, the Fed will face tough questions of where to draw the lines. For example, the emergency lending authority invoked for many of the new programs requires that lending must be “secured to the satisfaction” of the Fed, meaning expectations for repayment.
Depending on how risky the loans turn out to be and how prolonged the economic damage, the Fed could err either by making the programs too restrictive to sufficiently support growth, or so lax that the Fed violates the law.Depending on how risky the loans turn out to be and how prolonged the economic damage, the Fed could err either by making the programs too restrictive to sufficiently support growth, or so lax that the Fed violates the law.
Updated June 5, 2020Updated June 5, 2020
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.
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.
Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.
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.
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.
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.
And with trillions of dollars sloshing around, the central bank will face remarkable pressures from every would-be borrower to get its share. Mr. Powell will need to handle the delicate politics of those decisions and also create fair, transparent processes to decide exactly what types of lending the Fed will and won’t do.And with trillions of dollars sloshing around, the central bank will face remarkable pressures from every would-be borrower to get its share. Mr. Powell will need to handle the delicate politics of those decisions and also create fair, transparent processes to decide exactly what types of lending the Fed will and won’t do.
“The best the Fed can do is set very clear parameters,” Mr. English said. “You have a program, it covers this set of entities, with this level of risk tolerance.”“The best the Fed can do is set very clear parameters,” Mr. English said. “You have a program, it covers this set of entities, with this level of risk tolerance.”
All of those types of decisions are hard, and require judgment from someone who understands the intersection of the legalities, the politics, the financial markets and the corporate world.All of those types of decisions are hard, and require judgment from someone who understands the intersection of the legalities, the politics, the financial markets and the corporate world.
Mr. Bernanke, the Fed chair when the global financial crisis erupted in 2008, was a scholar of economic history who had studied how financial panics could create economic catastrophe.Mr. Bernanke, the Fed chair when the global financial crisis erupted in 2008, was a scholar of economic history who had studied how financial panics could create economic catastrophe.
That background wasn’t the reason he was appointed to the job. But it allowed him to understand the peril that faced the world economy more quickly than most, and to persuade his colleagues to take extraordinary actions that prevented a slide to an even worse global depression.That background wasn’t the reason he was appointed to the job. But it allowed him to understand the peril that faced the world economy more quickly than most, and to persuade his colleagues to take extraordinary actions that prevented a slide to an even worse global depression.
Now, the biggest decisions are not so much about assessing the economic problem but about executing potential solutions. And for the second time in a dozen years, the United States central bank has a leader whose background, by sheer luck, seems a match for the moment.Now, the biggest decisions are not so much about assessing the economic problem but about executing potential solutions. And for the second time in a dozen years, the United States central bank has a leader whose background, by sheer luck, seems a match for the moment.
For better or worse, Mr. Powell will probably be one of the most consequential central bankers in American history, as he deploys trillions of dollars in unprecedented ways. The question for the economy is whether his long and winding career path will enable him to get it right.For better or worse, Mr. Powell will probably be one of the most consequential central bankers in American history, as he deploys trillions of dollars in unprecedented ways. The question for the economy is whether his long and winding career path will enable him to get it right.