None of these admonitions stops me from obsessively logging on for the daily portfolio breathing check. Two weeks ago, I took big losses when the market incorporated worries about the coronavirus outbreak. It’s been a roller-coaster since — with plunges followed by partial rebounds. Monday’s 2,014-point drop in the Dow stands as my largest one-day loss ever.
The ride is stomach-churning. But it’s also a good thing — or at least a necessary one. Markets have plunged because America’s and the world’s responses to covid-19 are visibly inadequate. Investors are holding politicians and public health officials accountable for both the poor epidemic response and the accompanying economic losses. The smart money believes, despite President Trump’s blithe assurances to the contrary, things are getting worse and the virus’s spread will inspire a widespread economic slowdown. (Trump’s tweets and public statements about the virus remain reckless and uninformed, although he belatedly has discussed measures, including a payroll-tax cut, that could stimulate the economy if it appears headed to recession.) Influential people who might ignore a public-health crisis unaccompanied by blows to the macroeconomy may now step forward and act: That is the silver lining of this market “correction.”
Absent social solidarity, a hard elbow to the wallet provides a useful call to action. The economy is not the same as society. Nor is the stock market itself synonymous with the economy. Even so, given where we stand, we should embrace a common sense of purpose wherever we can find it.
I’ve been a public health researcher for 30 years. As long as I’ve been at it, America and the world have underinvested in measures to address local and global public health needs. One shameful factor has been the culture of immunity and impunity among those who have the resources to help. If you are in the investor class, even if you’re “only” upper-middle class, it’s easy to feel financially and physically immune from biological and social misfortunes we quietly presume befall others. That mind-set was widespread during the HIV and crack cocaine epidemics, two public health afflictions I have studied.
It’s even easier to assume such immunity if you are in the top 1 percent of wealthy Americans — a group that owns roughly 56 percent of stock-market wealth. (Overall, about 52 percent of Americans own stock, mostly in modest retirement accounts.)
Both the HIV and crack epidemics sliced through inner-city black and brown communities, through populations who use drugs, through sexual and gender minority communities — networks many Americans presumed (often incorrectly) did not include themselves or the people they love.
Too many people who had the power to deploy resources to prevent tragedy went to bed each night feeling complacent — an attitude not only morally indefensible but also myopic.
It’s important economic pain reaches all the way to the top. Don’t get me wrong. I feel horrible for retirees on fixed incomes and parents sending kids to college and unable to take a stock market hit. I feel horrible for cabdrivers and convention workers enduring the equivalent of a mini-depression in the “real” economy. For many of the rest of us in the investor class, the 15 percent drop in the Dow this month was hardly life-changing, even if it stings.
If the stock-market dive leads people of means to grasp that a healthy and prosperous global economy requires hundreds of billions of dollars in public investments to fight poverty, combat ill-health and develop new vaccines and disease treatments, then the drop will have not been a purely bad thing.
There is nothing inevitable about a link between economic pain and effective public spending. President Trump and parts of the conservative media blame Democrats, and foreigners, for this crisis — and they persist in describing sensible discussions and precautions as fearmongering. Tesla founder Elon Musk, a hero to many investors, has echoed such talk: “The coronavirus panic is dumb,” Musk tweeted — and was retweeted 1.6 million times.
Denying reality is becoming harder and harder. Millions of our fellow citizens — billions of others around the world, our children and our grandchildren — need us to get busy. Covid-19 is less disruptive than the floods or the droughts or the epidemics we’ll see as our increasingly interconnected world warms in the coming decades. We need more people of privilege to fear the consequences of that crisis as well.
Most of us will stay the course through this down market. What else is there to do? This doesn’t mean we’ll forget this experience. Many of us will ask hard questions about whether a better public-health response could have prevented $6 trillion in global stock market losses.
The Dow rebounded 1,100 points Tuesday. But it’s still down significantly from its mid-February peak. That’s nothing to celebrate, but maybe it’s what we need. Maybe a serious market plunge can save us from ourselves. Nothing else seems to work.