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It’s the End of the World Economy as We Know It	It’s the End of the World Economy as We Know It
2020-04-18 15:14:18 UTC	2020-06-08 19:56:41 UTC (about 2 months later)
When big convulsive economic events happen, the implications tend to take years to play out, and spiral in unpredictable directions.	When big convulsive economic events happen, the implications tend to take years to play out, and spiral in unpredictable directions.
Who would have thought that a crisis that began with mortgage defaults in American suburbs in 2007 would lead to a fiscal crisis in Greece in 2010? Or that a stock market crash in New York in 1929 would contribute to the rise of fascists in Europe in the 1930s?	Who would have thought that a crisis that began with mortgage defaults in American suburbs in 2007 would lead to a fiscal crisis in Greece in 2010? Or that a stock market crash in New York in 1929 would contribute to the rise of fascists in Europe in the 1930s?
The world economy is an infinitely complicated web of interconnections. We each have a series of direct economic relationships we can see: the stores we buy from, the employer that pays our salary, the bank that makes us a home loan. But once you get two or three levels out, it’s really impossible to know with any confidence how those connections work.	The world economy is an infinitely complicated web of interconnections. We each have a series of direct economic relationships we can see: the stores we buy from, the employer that pays our salary, the bank that makes us a home loan. But once you get two or three levels out, it’s really impossible to know with any confidence how those connections work.
And that, in turn, shows what is unnerving about the economic calamity accompanying the spread of the novel coronavirus.	And that, in turn, shows what is unnerving about the economic calamity accompanying the spread of the novel coronavirus.
In the years ahead, we will learn what happens when that web is torn apart, when millions of those links are destroyed all at once. And it opens the possibility of a global economy completely different from the one that has prevailed in recent decades.	In the years ahead, we will learn what happens when that web is torn apart, when millions of those links are destroyed all at once. And it opens the possibility of a global economy completely different from the one that has prevailed in recent decades.
“As much as I hope we are able to get ordinary economic activity back up, that’s just the beginning of our problem,” said Adam Tooze, a historian at Columbia University and author of “Crashed,” a study of the extensive global ripple effects of the 2008 financial crisis. “This is a period of radical uncertainty, an order of magnitude greater than anything we’re used to.”	“As much as I hope we are able to get ordinary economic activity back up, that’s just the beginning of our problem,” said Adam Tooze, a historian at Columbia University and author of “Crashed,” a study of the extensive global ripple effects of the 2008 financial crisis. “This is a period of radical uncertainty, an order of magnitude greater than anything we’re used to.”
It would be foolish, amid such uncertainty, to make overly confident predictions about how the world economic order will look in five years, or even in five months.	It would be foolish, amid such uncertainty, to make overly confident predictions about how the world economic order will look in five years, or even in five months.
But one lesson of these episodes of economic tumult is that those surprising ripple effects tend to result from longstanding unaddressed frailties. Crises have a way of bringing to the fore issues that are easy to ignore in good times.	But one lesson of these episodes of economic tumult is that those surprising ripple effects tend to result from longstanding unaddressed frailties. Crises have a way of bringing to the fore issues that are easy to ignore in good times.
One obvious candidate is globalization, in which companies can move production wherever it’s most efficient, people can hop on a plane and go nearly anywhere, and money can flow to wherever it will be put to its highest use. The idea of a world economy with the United States at its center was already falling apart, between the rise of China and America’s own turn toward nationalism.	One obvious candidate is globalization, in which companies can move production wherever it’s most efficient, people can hop on a plane and go nearly anywhere, and money can flow to wherever it will be put to its highest use. The idea of a world economy with the United States at its center was already falling apart, between the rise of China and America’s own turn toward nationalism.
There are signs that the Covid-19 crisis is exaggerating, and possibly cementing, those changes.	There are signs that the Covid-19 crisis is exaggerating, and possibly cementing, those changes.
“There will be a rethink of how much any country wants to be reliant on any other country,” said Elizabeth Economy, a senior fellow at the Council on Foreign Relations. “I don’t think fundamentally this is the end of globalization. But this does accelerate the type of thinking that has been going on in the Trump administration, that there are critical technologies, critical resources, reserve manufacturing capacity that we want here in the U.S. in case of crisis.”	“There will be a rethink of how much any country wants to be reliant on any other country,” said Elizabeth Economy, a senior fellow at the Council on Foreign Relations. “I don’t think fundamentally this is the end of globalization. But this does accelerate the type of thinking that has been going on in the Trump administration, that there are critical technologies, critical resources, reserve manufacturing capacity that we want here in the U.S. in case of crisis.”
Consider just a few pieces of evidence for the weakening underpinnings of globalization.	Consider just a few pieces of evidence for the weakening underpinnings of globalization.
France’s finance minister directed French companies to re-evaluate their supply chains to become less dependent on China and other Asian nations. U.S. Customs and Border Protection has said it will seize exports of certain medical supplies. And on Friday, Senator Lindsey Graham suggested that the United States should punish China for failing to contain the virus by canceling debt the Chinese government owns — a step that would risk the role of U.S. Treasury bonds as the bedrock of the world financial system.	France’s finance minister directed French companies to re-evaluate their supply chains to become less dependent on China and other Asian nations. U.S. Customs and Border Protection has said it will seize exports of certain medical supplies. And on Friday, Senator Lindsey Graham suggested that the United States should punish China for failing to contain the virus by canceling debt the Chinese government owns — a step that would risk the role of U.S. Treasury bonds as the bedrock of the world financial system.
Even before the coronavirus hit, the limits of globalization were becoming clearer.	Even before the coronavirus hit, the limits of globalization were becoming clearer.
Trade as a share of global G.D.P. peaked in 2008 and has trended lower ever since. The election of President Trump and the onset of a trade war with China had already made multinational companies start to rethink their operations.	Trade as a share of global G.D.P. peaked in 2008 and has trended lower ever since. The election of President Trump and the onset of a trade war with China had already made multinational companies start to rethink their operations.
“I think companies are actively talking about resilience,” said Susan Lund, a partner at McKinsey who studies global interconnectedness. “To what extent would companies be willing to sacrifice quarter-to-quarter efficiency for resilience over the long term, whether that’s natural disasters, the climate crisis, pandemics or other shocks?”	“I think companies are actively talking about resilience,” said Susan Lund, a partner at McKinsey who studies global interconnectedness. “To what extent would companies be willing to sacrifice quarter-to-quarter efficiency for resilience over the long term, whether that’s natural disasters, the climate crisis, pandemics or other shocks?”
She envisions not so much a full-scale retreat from global trade as a shift toward regional trade blocs and greater emphasis on having companies build redundancy into their supply networks. Governments will probably insist that certain goods, like pharmaceuticals and medical equipment, rely more on domestic production given the current global scramble for those items.	She envisions not so much a full-scale retreat from global trade as a shift toward regional trade blocs and greater emphasis on having companies build redundancy into their supply networks. Governments will probably insist that certain goods, like pharmaceuticals and medical equipment, rely more on domestic production given the current global scramble for those items.
China has reoriented its economic strategy, aiming to be not a low-cost manufacturing hub for the world but the maker of technologically advanced products like aircraft and telecommunications equipment. That has made Americans, Europeans and the Japanese all the more reluctant to have major operations in China, for fear of intellectual property theft.	China has reoriented its economic strategy, aiming to be not a low-cost manufacturing hub for the world but the maker of technologically advanced products like aircraft and telecommunications equipment. That has made Americans, Europeans and the Japanese all the more reluctant to have major operations in China, for fear of intellectual property theft.
Under the Trump administration, the United States has experienced strain with even traditional allies in Western Europe. Put it all together, and a more every-nation-for-itself mentality was already becoming ingrained before Covid-19, in ways the pandemic seems to be reinforcing.	Under the Trump administration, the United States has experienced strain with even traditional allies in Western Europe. Put it all together, and a more every-nation-for-itself mentality was already becoming ingrained before Covid-19, in ways the pandemic seems to be reinforcing.
“What typically happens after you get a crisis like this is people talk about new eras and how the post-pandemic world will be different,” said Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management. “This time I think the trends that were already in motion before this pandemic will be accelerated.”	“What typically happens after you get a crisis like this is people talk about new eras and how the post-pandemic world will be different,” said Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management. “This time I think the trends that were already in motion before this pandemic will be accelerated.”
In a past episode of de-globalization — the unwinding of global commerce that took place amid World War I and the 1918 flu epidemic — there was also a remaking of the global financial system, with the British pound losing its pre-eminence.	In a past episode of de-globalization — the unwinding of global commerce that took place amid World War I and the 1918 flu epidemic — there was also a remaking of the global financial system, with the British pound losing its pre-eminence.
	Updated June 5, 2020
	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.
	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.
	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.
	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.)
	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.
	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.
That kind of thing could plausibly happen this time too, but initial signs point the other way: toward the dollar’s becoming even more entrenched at the center of the global financial system.	That kind of thing could plausibly happen this time too, but initial signs point the other way: toward the dollar’s becoming even more entrenched at the center of the global financial system.
The U.S. Federal Reserve has opened swap lines with 14 overseas central banks — which enables them to pump dollars into their domestic banking systems — and started a novel program that lets other countries obtain dollars by pledging Treasury bonds as collateral. Those moves are helping ensure that a global dollar shortage doesn’t paralyze the world economy.	The U.S. Federal Reserve has opened swap lines with 14 overseas central banks — which enables them to pump dollars into their domestic banking systems — and started a novel program that lets other countries obtain dollars by pledging Treasury bonds as collateral. Those moves are helping ensure that a global dollar shortage doesn’t paralyze the world economy.
European officials have been reluctant to take steps that would make the euro more central to the world currency system, such as issuing bonds that are jointly guaranteed by the countries of the eurozone. And China has, if anything, been reluctant to remake its financial system in ways that could enable the renminbi to become more crucial to world commerce, such as allowing free capital flows in and out of the currency.	European officials have been reluctant to take steps that would make the euro more central to the world currency system, such as issuing bonds that are jointly guaranteed by the countries of the eurozone. And China has, if anything, been reluctant to remake its financial system in ways that could enable the renminbi to become more crucial to world commerce, such as allowing free capital flows in and out of the currency.
Mark Carney, the former governor of the Bank of England, delivered an influential speech to fellow central bankers last August arguing that the current international monetary and financial system, with its deep dollar dependence, was unsustainable. But the pandemic may be entrenching that flawed system.	Mark Carney, the former governor of the Bank of England, delivered an influential speech to fellow central bankers last August arguing that the current international monetary and financial system, with its deep dollar dependence, was unsustainable. But the pandemic may be entrenching that flawed system.