1. History Sucks
I’m not really young anymore, but I’m not quite old. And so far the three big events of my adult life have been: 9/11, the 2008 financial crisis, and now the 2020 pandemic.
So I spent a few minutes yesterday feeling sorry for myself and wishing that I could stop living through history, because it turns out not to be any fun.
The problem, as I realized pretty quickly, is that history keeps happening. Just in the last century we’ve had:
- A global pandemic
- A world war
- A global economic depression
- Another world war
- Nuclear bombs dropped on civilian populations
- A presidential assassination
- A president pushed from office for criminal conduct
- A global energy crisis resulting in energy rationing
- An attempted presidential assassination
- A massive terrorist attack on the largest American city
- A storm of the century
- A global economic recession
- Another global pandemic
Most of these are the kinds of world-historical events that you expect once a century. But here’s the thing:
There are enough once-a-century kind of events that, over the course of an actual century, you’re going to get one of them every decade or so.
So, that’s no fun.
This is why, by the way, a responsible society does not elect leaders who are unfit for office simply because they want to “blow the whole thing up.”
Being able to “blow the whole thing up” is a luxury afforded only during times of abnormally prolonged stability. And because you never actually know when the next once-a-century crisis is going to hit, people tend to go with more vanilla, basically-responsible elected leaders.
Because when you get so decadent that you start to believe that the machine will run itself and it’s fine to have leaders who are in no way capable of executing even the most basic tasks of governance, then you end up with things like this.
America’s most recent holiday from history lasted for 10 years. It’s now over.
2. New Developments
There are three very important pieces to read:
The Bailout: After spending a decade studying the 2008 financial crisis, Andrew Ross Sorkin believes that the only path forward is for the government to essentially backstop the entire U.S. economy. This is an enormous undertaking—we are talking trillions of dollars, just to prop up the economy for a few months:
The government could offer every American business, large and small, and every self-employed — and gig — worker a no-interest “bridge loan” guaranteed for the duration of the crisis to be paid back over a five-year period. The only condition of the loan to businesses would be that companies continue to employ at least 90 percent of their work force at the same wage that they did before the crisis. And it would be retroactive, so any workers who have been laid off in the past two weeks because of the crisis would be reinstated.The program would keep virtually everyone employed — and keep companies, from airlines to restaurants, in business without picking winners and losers.
It would immediately create a sense of confidence and relief during these tumultuous times that once the scourge of the coronavirus was contained, life would return to some semblance of normal. It would also help encourage people to stay home and practice social distancing without feeling that they would risk losing their job — the only way to slow this disease.
The price tag? A lot. Some back-of-the-envelope math suggests that many trillions — that’s with a “t” — of dollars would go out in loans if this crisis lasted three months, possibly as much as $10 trillion. That’s half the size of America’s gross domestic product. And assuming 20 percent of it is never repaid, it could cost taxpayers hundreds of billions if not several trillions. I get that. But with interest rates near zero, there is no better time to borrow against the fundamental strength of the U.S. economy, spend the money and prevent years of economic damage that would ultimately be far, far costlier.
This is the most important piece you’ll read today.