Shutdown summary

In November 2019, a new virus began to pass from person to person in Wuhan, China. Within weeks, the sick filled the city’s hospital beds. Gasping and terrified, many suffered a death that resembled suffocation. 

The provincial leadership of the Communist Party kept the crisis quiet, suppressing reports that might reach party leadership, which was in the midst of annual meetings. But on January 6, 2020, China’s President Xi Jinping received news of the spreading illness. Xi was ready.

After almost four years of ordeal, Britain left the European Union on January 31, 2020. According to UK Prime Minister Boris Johnson, the country was set to usher in a new era of freedom and greatness, so long as it avoided irrational fears, such as “pandemic panic.” 

A week later, the US Senate acquitted Donald Trump of abuse of power and obstruction of Congress for the second time. Trump celebrated with a tour of red states, where he held rallies packed with adoring crowds. 

When people’s physical safety isn’t guaranteed, there isn’t much of an economy. So in the spring of 2020, as COVID-19 circulated from one person to the next, the global economy began to evaporate.

Air travel dropped 94 percent. Salons, gyms, dentists’ offices, stores, tourist attractions, schools, and countless other businesses that put people near one another ground to a halt. COVID-19 jeopardized the supply of goods and services, slashed demand, and imperiled the livelihoods of millions in what amounted to the steepest worldwide economic drop in history. Soon, this shockwave breached the safest collection of assets in the world: the market for US Treasuries. 

When Covid first struck Europe in February 2020, it broke out in a cluster of towns southeast of Milan. Rome ordered the region into lockdown and enforced the quarantine with a cordon of police and military personnel.

While the media rightly focused on the human toll, Covid’s economic contagion – the supply, demand, and labor shock – was also terrifying, and in fiscal terms, Italy was extremely vulnerable. It owed $1.9 trillion, nearly one and a half times its GDP. Covid then broke out in France and Spain. If Covid dragged their GDPs below their total debt, the European economy would enter a doom spiral. 

In April 2020, as the virus made its deadly way into the Global South, a coalition of European and African governments petitioned the IMF – the International Monetary Fund – to triple loans and aid to poor countries. The US, however, vetoed the deal. Word behind the scenes was that Treasury Secretary Steven Mnuchin bowed to pressure from Republican IMF-skeptics led by Texas Senator Ted Cruz.

The IMF did manage to put a moratorium on loan repayments, but in the midst of the pandemic, middle and lower-income countries didn’t need debt forgiveness. They needed cash. 

On May 25, 2020, a white police officer in Minneapolis, Minnesota knelt on the neck of a Black man named George Floyd. Floyd had allegedly attempted to pass off a counterfeit $20 bill at a corner store, and in the midst of his arrest, face down on the street, he repeatedly told the officer who knelt on his neck that he could not breathe. A bystander filmed the arrest, and soon millions would watch Floyd die under the officer’s knee. 

Covid’s devastating effects fall hardest upon the poor. In 2020, given US history and its present disparities, Black Americans were more likely than white Americans to suffer illness and job loss. They were also more likely to die.

The speed with which medical science produced a vaccine for SARS-CoV2 has no precedent in history. Before Xi Jinping even knew that Covid had hit Wuhan, professors in Shanghai had successfully sequenced the virus’s genetic code. Within the year, several vaccines against the virus were available. 

However, few outside of the rich world have gotten a vaccine. Supply bottlenecks, vanishing will on the part of rich governments, and the intellectual property concerns of pharmaceutical companies have slowed the global rollout. Meanwhile, variants are emerging.