Shutdown: How Kovid has shaken the world economy
By Adam Tuz (Viking, 2021)
Destroyed, The original history of the 2018 global financial crisis and its aftermath, ending with a prediction by Adam Tose. “Can we achieve lasting stability and peace?” Asked Tooze, a historian at Columbia University. “Or should we rely on the balance of terrorism and the judgment of technocrats and generals?” A year after the book was published, a strange new respiratory virus began to appear in Wuhan, China. The epidemic has probably killed more than 4.5 million people so far and has undoubtedly put the world’s political and economic institutions to the toughest test. And although COVID-19 has not yet wiped out its defeat, Tooze has already made it Shutdown: How Kovid has shaken the world economyAn instant history that is essential for those trying to understand the past two years.
There is a definite danger in writing a history of the ongoing crisis. Time provides perspective and a broader awareness that developments really change the course of events. Tooze takes it and moves on, thinking it is worth sketching a narrative, identifying its main themes and highlighting the big questions raised by the world’s initial response to COVID-19. Gambling stops because the relentless crash of the news cycle has given us little time to process what we have done. ShutdownThe best business book of the year on the economy, provides us with a recap of what we desperately need.
Tuz’s narrative is skillfully woven; It draws money from the major episodes of the crisis and even provides the reader with rich details, ranging from the ins and outs of political summits to the ups and downs of financial markets. Shutdown It reminds us that not everything was as it should have been. In 2019, global growth slowed sharply. Instability has spread to various parts of the emerging world, while relations between China and the United States have been strained. The initial outbreak of what was then called the Wuhan virus in China was a cause for global concern, largely due to the size and importance of the country’s economy, which appeared to be rapidly weakening as the country locked down. Once it became clear that the disease itself would become a serious global threat, the crisis overwhelmed markets, including the deep and liquid market for the safest assets: US Treasury bonds.
The central banks, slowing down the blocks in the face of market panic, finally found determination to act boldly and collaboratively. Policymakers have dusted off playbooks written during global financial crises and left large portions of financial markets behind, working to buy huge amounts of assets and pump up the global economy full of cash. Tooze insists on this financial effort because it was both radical and effective, but because it contrasts sharply with other aspects of the global response. The world’s central bankers have shared an understanding of what needs to be done to stem the recession, and policy measures led by the strong leadership of the US Federal Reserve that equally benefit rich and poor countries. Efforts to shore up the real economy, to protect the world’s vulnerable against economic hardship, and to tackle a massive public health crisis have not gone unnoticed.
There were hints, from time to time, of what might happen. The spring of 2020 was a catastrophe for Europe, with horrific scenes of death and misery in Italy and renewed fears that a financial-market catastrophe could disintegrate the eurozone. However, after looking into the abyss, German Chancellor Angela Merkel agreed to the request of the French, Italian and Spanish governments and, for the first time, agreed to use a program to finance a general Euro-area loan. Stimulation and Reconstruction. If the Germans were willing to agree to such things, perhaps other miracles would be possible. The drive for a vaccine provides a similar perspective to a developed world. The Trump administration has poured billions of dollars into a crash vaccine-development program called Operation Warp Speed. Researchers around the world have collaborated to create the world’s first vaccine for a coronavirus in such a short time.
And yet to the end, Tuz notes, government policy was hampered by austerity. The International Monetary Fund, which has increased its resources in the years following the global financial crisis, has done what it can to help emerging economies. But the bold action plan prevented the US government from giving financial aid to other countries. As vaccines moved closer to approval, G20 leaders met to discuss how to dose the emerging world. An IMF analysis puts the cost of vaccine distribution at US $ 50 billion – which most G20 members could easily afford at their own expense – creating an estimated $ 9 trillion in economic benefits. But when it came time to pick up the pony, Merkel started bidding with an offer of € 500 million (US $ 587 million), a sadly low contribution. Other nations were similarly stingy; It looks like the second year of the epidemic will end when most of the population in the emerging world is still unvaccinated.
The question of the evolution of the balance of geopolitical power hangs over the narrative. Although the epidemic began in China, by the end of 2020 it looks like a point where the United States has officially lost its role as a stable world power. China has quickly brought its epidemic under control, restored strong economic growth (in fact, it was the only major economy to expand in 2020), and the West has provided vaccines to poor countries when it will not. The United States, on the other hand, seemed incapable of limiting the spread of the disease or managing its internal conflicts. In the summer of 2020, deep ethnic fault lines were exposed again In the first week of the new year, in the legacy of a rival president, a mob besieged the US Capitol, killing more than 4,000 Americans every day in COVID-19.
In 2021, thanks to a strong economic recovery in the United States, the balance seems to have shifted so slightly. Yet the relative strength of the two forces may be less important than the reality of increasing tension between them. In 2020, Tooze reminds us, the United States tried to stop the use of Chinese technology in its critical infrastructure and refuse to sell the necessary technology to China. Importantly, the change in US leadership was not the result of de-escalation. The epidemic on the one hand, the world seems to be entering a dangerous new era.
And that, above all, the message Shutdown Wants to understand. In order to survive in this new age, where old orthodoxy has been set aside and new rules have been applied, we need to find a vision and wisdom that we have avoided in the last two years. It will not be easy. Tuz closes his book, again, in vicious fashion, with the line, “We haven’t seen anything yet.”
Mission Economy: A Munshot Guide to Changing Capitalism
By Mariana Majukato (HarperCollins, 2021)
Mariana Majukato has long argued that the great technological leaps of the past are due to government encouragement, such as entrepreneurship. In a new book, Mission Economy, He said that the government can play an important role in tackling the current challenges, if we can think realistically instead of orthodoxy. The strategy is to set clear and ambitious goals for the government, as the United States did when it announced its intention to land a man on the moon. While the book may not satisfy strong free-marketers, its approach seems to be gaining traction in Washington.
Bettering Humanics: A New, and Older, Approach to Economic Science
Deirdre by Nansen McCloskey (University of Chicago Press, 2021)
Advanced Anthropology A short book that should really be a little shorter, but still a reward for those interested in economics. The author, Deirdre Nansen McCloskey, is a classical and economic historian who has made a compelling case that many economists are doing bad science. Assume that people are self-interested automatons, dull Homogeneous economic, Lets economists engage in all sorts of fancy mathematical modeling that creates some real insights into how the world works. But, he writes, only acknowledging that humans are complex creatures with rich internal life, and involved in humanity and “soft” social sciences (panting), can economists make real progress in understanding the big questions, such as why some societies are rich? And other poor.