2020, the historian Adam Tooze writes in Shutdown, his brilliant, bracing account of the Covid pandemic and its protracted political aftermath, was “merely a moment in a process of escalation”; a trial-run for the “systemic mega-crises” to come. The “shocks of the Anthropocene”, he warns, are not going to arrive “in neat sequence.”

Tooze is dazzled by the power of two radically different institutions: the Chinese Communist Party under Xi Jinping and the US Federal Reserve. Beijing’s hardline response to the virus meant that China had effectively contained its domestic Covid outbreak by the end of February last year–just as the chaotic liberal democracies of the West were beginning to grapple with the reality of SARS-CoV-2. At the same time, without the extraordinary borrowing and liquidity measures enacted by Fed Chair Jerome Powell, the entire global financial system could have buckled under the weight of an unprecedented economic contraction. Over three billion adults were furloughed or forced to work from home during the first half of last year, Tooze writes. 1.6 billion children had their educations disrupted. $10 trillion worth of earnings were lost. Never before have so many people simultaneously suffered “such serious interruption to their daily lives.”

Read More

In the years leading up to the 2008 financial crash, an influential section of the American political class became convinced that a major economic crisis was on its way.

Serious Washington players like Robert Rubin, who served as head of Bill Clinton’s National Economic Council from 1993 to 1995, Peter Orszag, another heavyweight Clintonite economist, and Larry Summers, Clinton’s Treasury Secretary between 1999 and 2001, all raised the alarm.

Read More