As America battles the invisible enemy of the novel coronavirus (COVID-19), an exponentially growing silent killer, we find ourselves in a situation that is unprecedented in scale, a danger to our fellow citizens, and in the economic destruction and financial shock it is already causing.
To battle this invisible enemy we need to understand that we are facing three distinct threats. All three require different policy tools and coordinated actions, and those actions must be taken at “wartime scale.” Each of the three require an unparalleled, full-scale American war effort, and without that effort, we will not win, and will not emerge as the world’s superpower that we are today.
I believe that America is equal to the task, and that this can prove to be our finest hour, but we must change now, and do more, faster.
The three different threats — the three-headed monster we are battling — are intertwined and entangled, much as our modern world is.
First, and most dire, is the public health crisis, which will infect and kill increasing numbers of Americans and overwhelm our hospital systems and medical care professionals, our heroes on the front lines of this battle. It will be particularly deadly for our older and already ill friends, neighbors, and family. We have data from China (though questionable), South Korea, Italy, Iran, Europe, and now the U.S. that gives a clear sense of what we are facing, and it can’t be ignored. In this war, our doctors, nurses and health care clinicians should be thought of as our soldiers marching to the front. We must do all that we can to arm them and protect them.
The second is an economic crisis, the severity and speed of which we have never seen, not even in the Great Depression during the 1930s. Goldman Sachs estimated that more than 2 million Americans would file for unemployment benefits last week. During the Great Financial Crisis of 2008, the highest weekly level was less than a quarter of that figure. Prior recessions have been slowdowns in economic activity relatively speaking. This is not that — it is a sudden halt. And it must be offset by an equal and opposite force.
The third emergency is a financial crisis that has permeated the financial system as markets respond to the disruptions caused by the first two, with asset values declining rapidly, and liquidity becoming discontinuous and disjointed in key arteries that allow for modern commerce. The financial crisis must be stemmed so we have the circulatory system to fight the first two.
Much as America failed to win the first battle of this war — through its inability to properly test for the virus at scale in the way that South Korea did — we are now running the risk of compounding our errors through the inability to diagnose the magnitude of each issue.
Because of the unique features of this economic crisis, we must respond with unique tools. We cannot use the same tools we have used in the past, and we cannot underestimate the size of the looming disaster.
What is important is that we understand the severity of the situation, the intertwined nature of all three problems, and emphasize speed, size, and a “bias towards action” to stem the crises before us.
While America was slow to respond to the crisis, we are now at risk of compounding that error, and the situation in each instance will get worse before it gets better, even if we do act as fast as we can.
But American ingenuity and strength can and must rise to the occasion. During World War II, life changed dramatically and in many ways as Americans at home supported the “war effort” while leaning into a national spirit of agreement, pride, and will-to-win.
America still retains that winning spirit, and must channel it now to defeat this enemy. Instead of wallowing in defeat from loss in the first battle, or fear that we may not emerge, we must make this our finest hour. As Roosevelt said in his inaugural address in 1933, “This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”
Teddy Fusaro, a 2003 Westerly High School graduate, is the chief operating officer at Bitwise Asset Management, an investment firm located in San Francisco. He has held management positions at several alternative asset management companies, and began his career at Goldman Sachs.