Lyn explains big ideas with simple words and charts. She said the U.S. was the world’s largest creditor nation after World War I, “meaning that we owned more foreign assets than foreigners owned of our assets.” This helped us during the Great Depression, but by 1985, the U.S. was a debtor nation.
I learned from Lyn that now Japan is the world’s largest creditor nation. Over time, Japan “built up a giant stockpile” of assets and has been able “to live off of that investment for decades.”
The U.S. entered 2020 as the world’s largest debtor nation. The Federal Reserve “went into this crisis with a balance sheet of approximately $4.5 trillion, never having normalized it after the 2008 crisis.” The Fed is printing money and adding $2 trillion of debt per month. The long-term solution will be economic growth and (most likely) inflation, so the government can pay debt with dollars worth less than the dollars that were borrowed.
The Fed isn’t the first to print money during hard times. Colorful, 1914-1923 German Notgeld (“emergency money” or “necessity money”) was printed by various local governments and businesses. The 1921 75 pfennig banknote below from Papenburg, Germany depicts a tax collector demanding payment.
On Sunday afternoon I turned to some recorded TV news shows. But programs from three networks were garbled due to satellite problems.
So, I read an article by James Kostohryz, “The Next Leg Down: Another Massive Decline Is Coming.” Then a John Mauldin article, “We Are Facing a Depression, Not a Recession.” Then a Wall Street Journal article my multiple authors: “America’s Make-or-Break Week,” which was summarized by its sub-title: “The bills are now coming due for big companies and millions of laid-off workers. Decisions made in the next few days will shape how coronavirus impacts the economy.”
These articles helped me understand why Prohibition was repealed in 1933, and why this probably isn’t the week to watch Henry Fonda in the 1940 movie version of John Steinbeck’s The Grapes of Wrath. Watch Harriet instead.
The stock market’s recent volatility led me to winnow my universe to only the strongest and most likely to flourish after Hurricane Corona passes. On March 23, I recorded the lows made that day by the companies I follow. While likely not a bottom, I felt the day’s lows would be a significant marker. The market seemed to agree, because the next three days were sharply higher.
The human suffering in this global pandemic vastly overshadows the importance of the market. The Great Depression, which shaped my parents’ generation and was so aptly depicted by Steinbeck, was minor compared to the suffering Harriet Tubman and millions more endured during the 246 years of slavery in America. A larger frame of reference can help us see beyond this present crisis!
Sometimes I repeat myself. Rather than apologize, I see it as a mark of consistency. My March 6 post, “With malice toward none,” concluded with a quote from Abraham Lincoln’s Second Inaugural Address.
It seemed too familiar, so a scroll through the blog archive revealed that my November 2 post was, “With malice toward none.” I changed the November 2 title to “Rules of Engagement.”
Today’s theme was inspired by Lincoln’s “…with charity for all,” His twin concepts (no malice/much charity) continue to set a high bar for a president, a nation, for everyone.
In this tumultuous 2020, I paraphrase Lincoln to offer a prayer, a mantra, or a raison d’etre: “Clarity for all.” We always need charity (a Lincoln era word for love/grace). Today, we have a particular, urgent need for clarity.
In a pandemic, numbers can provide clarity. Coronavirus hospitalizations in New York City (March 21-27) were 1,450 on Saturday; 1,800 on Sunday; 2,213 on Monday; 2,850 on Tuesday; 3,922 on Wednesday; 4,720 on Thursday; 5,250 on Friday.
The Washington Post provides a free coronavirus newsletter with links to related articles at no cost. One Denver TV station provided a much-needed moment of charity, even as it sought to convey clarity.
Hard times bring out the best of human nature. Kious Kelly, a 48-year-old emergency room nurse at New York’s Mount Sinai West, died from the coronavirus. Today there are many healthcare heroes working valiantly under difficult and dangerous circumstances.
Hard times can make us ask, “Why?” When people lose hope in human institutions, apocalyptic religion flourishes. In an email yesterday, a friend who lives 900+ miles away wrote this about the virus: “What bothers me most is when people say this is an act of God. This is not God.” In our need to explain bizarre or tragic events, sometimes God gets a bum rap.
I believe our need to assign a cause comes from our need to feel that we (or someone or something) is in control. This pandemic reminds me that I’m not in control and it exposes as a futile illusion my need to feel in control.
In 2020, we’re making major changes in the way we live. In the next few posts, I’ll share some reflections about adjustments small and large, cancelled events, the pandemic’s stress on our economy and our political fault lines, and recent stock market gyrations.
Enjoy this unforgettable rendition of “It Is Well with My Soul,” by a group of Nashville studio singers, digitally assembled amid social distancing.
I sat down this morning to write about hubris, or “pride,” but the dictionary reveals more about hubris: “(in Greek tragedy) excessive pride toward or defiance of the gods, leading to nemesis.” This required another visit to the dictionary for nemesis: “a downfall caused by an inescapable agent.”
Regardless of how 2020 plays out, I’ll remember this coronavirus as a nemesis, an inescapable agent that has reminded us of our inherent vulnerability. We try hard avoid to vulnerability. Security is a big business, including (broadly) the sale of firearms, fighter planes, home security systems, financial services, and the production of masks, gloves and hand sanitizer.
Last night, the lights were on in medical laboratories around the world as some of our best and brightest search diligently to find a remedy for, and a vaccine against, COVID-19. Meanwhile, we adjust to a “new normal” of no handshakes and limited exposure to our fellow humans.
At one time, our nemesis was the poliovirus. I remember my mother’s fear that swimming might bring me into contact with that inescapable agent. Thank you, Jonas Salk (1914-1995).
South Africa is in a 21-day nationwide lockdown. India’s Prime Minister said, “I appeal with folded hands, don’t come out of your homes.” The potential numbers are staggering, including 587 million Africans in urban slums and an estimated 70 million worldwide in refugee camps.
“Much of the Congolese population has refused to heed government warnings, crowding bars and markets. Defying a state ban on large public gatherings, church services still welcome thousands, some turning off loudspeakers to avoid alerting authorities.”
In the stillness of each morning, in my comfortable chair with a cup of coffee, I try to hold in my consciousness a tiny sliver of the world’s suffering. The WSJ article opened a new window of solidarity and a clearer context for my small inconveniences and for whatever action I muster.
The Old Testament book of Proverbs is a collection of Jewish wisdom sayings. Every culture stores wisdom that is passed on from the old to the young. It works well with grandparents and grandchildren. “An apple a day….” is from Wales in the 1860s: “Eat an apple on going to bed, and you’ll keep the doctor from earning his bread.”
We would be wise to let the conversation about how long to isolate be shaped by an American folk saying: “An ounce of prevention is worth a pound of cure.” It is attributed to Benjamin Franklin (1706-1790) in the context of Philadelphia fire prevention.
From medium.com comes “Coronavirus: The Hammer and the Dance,” by Tomas Pueyo. The sub-title is instructive: “What the Next 18 Months Can Look Like, if Leaders Buy Us Time.” Pueyo’s article motivates me to act like I am contagious and to treat everyone else as if they are contagious. Think of it as a codicil to the Golden Rule, or something Ben Franklin might say today.
Trusting the wisdom of a picture is worth a thousand words, let this graph inspire us to wash hands often and give others their space:
We need a more serious “buy-in” for the steps to keep us from replicating Italy’s devastation. We can beat this coronavirus. The past two days have seen a drop in Italian deaths, Yesterday, 601 coronavirus deaths were reported in Italy. It’s a sign of hope in Italy’s exhausting struggle.
Reddit has provided a visual, moving graph by Johns Hopkins and the BBC that shows the rise and (in some nations) the decline of the coronavirus. It demonstrates the difference concerted action can make.
McNeil reports that what works is “intelligent, rapidly adaptive work by health officials, and near-total cooperation from the populace. Containment becomes realistic only when Americans realize that working together is the only way to protect themselves and their loved ones.”
“What am I learning through this crisis?” Jot down your list. I’ll start:
A crisis should last at most 72 hours. To take longer is un-American.
Panel discussions, where participants loudly talk over each other, are being replaced with serial one-on-one conversations between the host and the dispersed panelists. This is social distancing at its finest.
If the virus had struck a year or two earlier, Andrew Yang would be the Democratic Party’s presidential nominee, by acclamation.
On Thursday, Scott Minerd, Chief Investment Officer for Guggenheim Global, said about corporate bailouts: “It’s probably an essential evil in order to maintain our economic system as it exists today, but I think it should be very carefully crafted to not reward people who took on risk and then expected the taxpayer to bail them out. And that’s why I think saying to a large company, ‘Yes, we’ll help you but we want 20% or 30% of your company in exchange for that,’ is a way to justify that we’re doing what’s in the best interest of taxpayers.”
When asked about sending government checks to people who have been impacted, Minerd said, “I think it would be more powerful to increase unemployment benefits and extend them for people that are unemployed. For people who are not unemployed to be getting an extra check in the mail every month seems to be an inefficient mechanism to use to allocate taxpayer money. I think the money should be directed to the people who need it. …My biggest complaint of how the (2008) financial crisis was handled is it didn’t address the issues of the common person and Main Street, and we need to make sure this time that we’re addressing the issues of people who need help, and not come out of a program where we make income inequality and wealth inequality worse.”
Thursday’s post suggested “The Great Disruption” as a way this economic crisis may be remembered. Mindful of election year “optics,” Treasury Secretary Steven Mnuchin is challenging the traditional definition of recession as two consecutive quarters of economic contraction. To paraphrase Jimmy Buffett’s Fins: “spin from the left, spin from the right, it’s the only game in town.”
The severity of this economic disruption will depend on (1) how fast we test the population for the virus, (2) how fast effective treatments can be available, and (3) how well we isolate the contagion.
Isolation is the most difficult because it depends on millions of people intentionally avoiding close contact. Dramatic changes to daily life can cause psychological disorientation.
During a week of virtual isolation, my aunt and I experienced various moments of disorientation. No Italian restaurant. I should grocery shop alone since I’m a mere 69.
During the five hour return trip home yesterday, I stopped twice at fast-food windows and once at a state rest area. I couldn’t listen to the news. My brain was marinated in this pandemic.