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Two days later, he was entreated by some Hungarian noblemen who came there to renounce his share of government in the Kingdom of Hungary also

The dynasty’s subjects, supported by the western powers, violently renounced the unity that had been given them under the Habsburg Monarchy, and declared their national independence

Men had been predicting the collapse of the Habsburg Empire since the days of Napoleon: in an age of national states, this Empire, which included eleven peoples, seemed to defy the spirit of The Times in a particularly flagrant manner

the peoples had developed a national consciousness

This new national consciousness ran side by side with, and often counter to, the patriotism inspired by the Emperor. First the ‘historic’ peoples—Germans, Hungarians, Italians and Poles—thought of themselves as nations, rather than as Habsburg subjects, and many of them demanded to have their own states

expected to redeem the Monarchy’s prestige in a short war; he was taken aback when the Russians and French came in, and still more so when the war dragged on beyond October 1914

The Habsburg Monarchy was not fitted for a long war. The Empire was not very highly industrialized, and had to take a large part of her arms from Germany

This was the decisive moment in the collapse of Austria-Hungary

The Germans did not bully the Habsburgs as they bullied their satellites a generation later

most of the Austrian Germans and most of the Hungarians wished to fight to a victorious conclusion. Charles therefore stood by, wringing his hands as the Germans resolutely went on tearing Europe apart. He could do nothing but make ineffectual gestures. The last Habsburg had become a ‘good German’

Some of the peoples were pro-German, hoping to profit from German victory in Europe: if the Germans ruled Belgium and Poland, who would worry if their Bohemian cousins took their bit of Bohemia for themselves, and who would worry if the Hungarians went on ruling Slavs and Romanians in a high-handed manner

Clearly, if Germany defeated France, then the German language would become obligatory in Bohemian courts

In 1918, the situation inside Austria-Hungary was desperate; strikes and mutinies became commonplace

It was clear that only German victory in the west could solve the internal problems of the Monarchy

Up to the spring of 1918, few people had really wanted to see the Habsburgs expelled from Vienna, for they solved too many problems, or at least allowed these problems to be forgotten

These men answered the Allies’ problem: they offered at once an obstacle to German success, and a guarantee against the consequences of German failure

All this gave the Germans a whip-hand over the Monarchy, so that there could be no question of a separate peace. To the Emperor Charles, who succeeded Francis Joseph at the end of 1916, it looked as if he was fighting only to make the Germans masters of Europe

To the end, Hungary refused to make concessions to anyone, and pointed to Austria as a woeful example

As a result, Hungary remained remarkably solid until the end, as Austria staggered from one liberal nostrum to another.

Charles decided that he must sue for peace

By this, the Habsburg dynasty pledged itself to carry out the Fourteen Points

Thus, when the Monarchy was overthrown in Prague and other centres, there was a minimum of fuss— military commands simply handed over nominal powers to the National Councils

It was revolution by telephone

In reality, Austria-Hungary had been finished from the beginning of September, for no one would now wish to be associated with the Habsburg dynasty

In the manifesto, these professors and the Emperor sought to win recognition by associating themselves with the nationalists

the embrace of the Habsburg dynasty was by this time regarded as the kiss of death, and all the National Councils, without exception, rejected the manifesto

the last asset of the Monarchy

In the Balkans, the Austro-Hungarian front went through much the same process of dissolution

in Albania

By November nth, the new authorities were functioning everywhere. Fear of popular disturbance, however, and of Bolshevik outbreaks, prompted them to request that Charles should abdicate

persuading Charles to renounce his part in the government of his lands—there was never a formal abdication

Hungary was declared a republic on November 16th. The following spring Charles, a lonely and dignified figure, went into exile in Switzerland

Two in 10 respondents said it was a minor problem, with just 16% considering it not worrisome at all.

More than half of polled Americans said they wanted the climate crisis to be confronted right away, with smaller groups happy to wait a few more years and just 18% rejecting any need to act.

“Americans are finally beginning waking up to the existential threat that the climate emergency poses to our society,

This is huge progress for our movement – and it’s young people that have been primarily responsible for that.

However, just 44% of poll respondents said human activity was a major contributor to climate change.

There is an even starker split on the findings of climate scientists. According to the CBS poll, 52% of Americans say “scientists agree that humans are a main cause” of the climate crisis, with 48% claiming there is disagreement among experts.

“This remains a vitally important misunderstanding – if you believe global warming is just a natural cycle, you’re unlikely to support policies intended to reduce carbon pollution, like regulations and taxes,”

“These results also again confirm a long-standing problem, which is that many Americans still believe scientists themselves are uncertain whether human-caused global warming is happening.

“Our own and others’ research has repeatedly found that this is a critical misunderstanding, promoted by the fossil fuel industry for decades, in order to sow doubt, increase public uncertainty and thus keep people stuck in the status quo, in a ‘wait and see’ mode.”

While nearly seven in 10 Democratic voters understand that humans significantly influence the climate and 80% want immediate action

just 20% of Republicans think humans are a primary cause and barely a quarter want rapid action.

On the science, nearly three-quarters of Democrats said almost all experts agree that humans are driving climate change, with just 29% of Republicans saying the same.

Younger people are far more likely to consider it a personal responsibility to address the climate crisis and to believe that a transition to 100% renewable energy is viable.

Young people have been galvanized by climate science being taught in schools as well as a spreading global activist movement spearheaded by Greta Thunberg

This generational divide even cuts across party affiliation, with two-thirds of Republican voters aged under 45 considering it their duty to address the climate crisis

Just 38% of Republicans aged over 45 feel the same.

Around three-quarters of all respondents said they understand that climate change is melting the Arctic, raising sea levels and causing warmer summers

Just 19% said humans can stop rising temperatures and the associated impacts, with nearly half thinking it possible to slow but not stop the changes and 23% refusing to believe humans can do anything at all

“By saying we should merely slow and not reverse global warming, we are passively accepting the deaths of billions of people,” said Margaret Klein Salamon, of the Climate Mobilization Project.

“The only thing that can protect us is an all-out, all-hands on deck mobilization, like we did during the second world war. Avoiding the collapse of civilization and restoring a safe climate should be every government’s top priority – at the national, state, and local levels.”

The process was repeated over and over, as word of cum-ex spread like a quiet contagion. Germany was hardest hit, with an estimated $30 billion in losses, followed by France, taken for about $17 billion. Smaller sums were drained away from Spain, Italy, Belgium, Austria, Norway, Finland, Poland and others

Outrage in these countries has focused on the City of London, Britain’s answer to Wall Street. Less scrutinized has been the role played by Americans, both individual investors and branches of United States investment banks in London, including Morgan Stanley, JPMorgan Chase and Merrill Lynch Bank of America.

American bankers didn’t try cum-ex at home because they feared domestic regulators. So they moved operations to London and treated the rest of Europe as an anything-goes frontier

”There was this culture in London, and it really came from New York,” he said. “These guys were either from New York or trained in London at New York banks, and they looked at Europe as their playground. People at the highest levels were collaborating to rip off countries.”

At Merrill, Mr. Shields’s job was to identify “tax-attractive trades,” as he put it in his testimony. He had joined one of the least visible sectors of the financial world, which pokes at the seams of international finance law, looking for ways to reduce clients’ tax bills.

the presiding judge issued a preliminary ruling that, for the first time, declared cum-ex a felony, calling it a “collective grab in the treasury.”

German prosecutors say they will now pursue 400 other suspects, unearthed in 56 investigations. Banks large and small will be ordered to hand over cum-ex profits, which could have serious consequences for some. Two have already gone bust.

officials in Germany say the trade was a form of theft, one so obviously illicit that forbidding it — which was tried twice, with ineffectively worded laws — was hardly necessary.

Precisely who invented cum-ex trading, and when, are mysteries, but ground zero for this scandal may have been the London branch of Merrill Lynch.

uffice it to say, the goal was to fool the financial system so that two investors could claim refunds for dividend taxes that were paid just once.

When he pointed this out to management, the policy was tweaked.“They said, ‘You can answer a call on your mobile, but you need to immediately move off the floor,’” he recalled. “So these guys would get up from their desks, start walking toward the edge of the floor, send a text message and then walk back. It was a joke.”

The trade was pure theater and required a huge cast: stock lenders, prime brokers, custodians, accounting firms, asset managers and inter-dealer brokers. It also required vast quantities of stock, most of which was sourced from American shareholders.

A lawyer who worked at the firm Dr. Berger founded in 2010, and who under German law can’t be identified by the media, described for the Bonn court a memorable meeting at the office.

Sensitive types, Dr. Berger told his underlings that day, should find other jobs.“Whoever has a problem with the fact that because of our work there are fewer kindergartens being built,” Dr. Berger reportedly said, “here’s the door.”

Worried about the growing pileup of tax-withholding credits on the books, Frank Tibo, the bank’s chief tax officer, flew to London in May 2007. He spent the day grilling Mr. Mora

When Mr. Tibo tried to signal his concern to executives at UniCredit, the bank’s Italian owner, they didn’t seem to care, he said

“There were big profits coming out of HypoVereinsbank, and most of it was from the investment banking section,” Mr. Tibo said. “The Italians quickly made up their minds: ‘We want to make money.’ No one gave us any internal support, because they didn’t want us to learn anything.”

By then, Mr. Mora and Mr. Shields were long gone from the London branch. Tired of niggling questions and feeling underpaid, they had left in 2008 to open Ballance Capital, one of the first full-service, one-stop cum-ex trading shops.

Dozens of German banks participated in cum-ex deals, too, gobbling up German taxpayer money at the same time they received a rescue package worth more than $500 billion.

Last year, the lawyer who testified anonymously at the Bonn trial described the culture of the cum-ex world to Oliver Schröm and Christian Salewski, two reporters on the German television show “Panorama,” under disguising makeup. It was a realm beyond morality, he said: all male, supremely arrogant, and guided by the conviction that the German state is an enemy and German taxpayers are suckers.

“That was the normal world to which we no longer belonged,” he told the reporters. “We looked out the window from up there, and we thought, ‘We’re the cleverest of all, geniuses, and you’re all stupid.’”

a former Merrill Lynch investment banker sat in a London restaurant near the Thames and described what had turned him into a whistle-blower. In the years after the financial crisis, he said, he noticed that a handful of colleagues on the company’s trading floor were using their personal mobile phones, a breach of company policy. All communication was supposed to be tracked and recorded. These guys were sending self-deleting texts on Snapchat.“Obviously, they were circumventing controls,”

Seemingly risk-free profits poured in, and over the years a mini-industry thrived, one that a former participant labeled “the devil’s machine.”

The complaint lays out, in painstaking detail, how the trades were confected, who executed them and which questions should be asked by investigators to uncover the “sham.” It states that Merrill Lynch earned hundreds of millions of dollars over the previous seven years from cum-ex trades.

“Anyone who stood in the way of this trade was swept aside, and those who enabled it were promoted,” the whistle-blower said in a follow-up phone call. “But it was widely regarded as insanity inside the bank for it to be extracting money from sovereign treasuries, particularly after the entire sector had been supported by the public purse.

American banks conducted their cum-ex trades overseas, rather than at home, out of fear, the whistle-blower said. Specifically, he mentioned a 2008 Senate investigation into “dividend tax abuse” that found it was depriving the Treasury of $100 billion every year. The report led to a ban on dividend arbitrage tied to stock in United States corporations.

But nothing prevented American bankers from conducting such trades with foreign companies on foreign soil.

German efforts to stamp out cum-ex with legislation, in 2007 and 2009, left holes through which certain types of financial players could still crawl. This included private pension plans in the United States, a niche financial product for wealthy people who want the kind of privacy, and exotic investment options, that Fidelity doesn’t offer.

Investors will have problems of their own. Many have said they had no idea how cum-ex traders returned such dazzling profits. That defense became less plausible in 2012, after the German government spent millions of dollars to buy 11 hard drives from industry insiders. The hard drives were filled with marketing fliers, written by bankers, who sold cum-ex with an antigovernment pitch.

“We learned that it was very common for these bankers to have conversations over coffee with clients about cum-ex,” said Norbert Walter-Borjans, a former minister of finance for North Rhine-Westphalia. “They would say, ‘If you have a problem with how your hard-earned money is being spent in taxes, we’ve got an idea for you.’”

Authorities across Europe are said to be waiting for a resolution of the Bonn trial to move ahead with their own. Many are livid that Germany didn’t alert them sooner about the perils of cum-ex. The failure, say lawyers, stems from a Europe-wide hypersensitivity about privacy, which is especially acute when it comes to taxes.

In 2012, soon after Germany shut down its cum-ex problem, a London trader began a cum-ex scheme that fleeced the Danish tax authority of $2 billion, officials there say. The trader, Sanjay Shah, who now lives in Dubai, denies wrongdoing but has never been shy about the source of his wealth.When he bought a $1.3 million yacht a few years ago, he found the perfect name: Cum-Ex.

The things you do with your life are mostly chosen: your job, spouse and hobbies.

At our foundation, we were a society with strong covenantal attachments — to family, community, creed and faith. Then on top of them we built democracy and capitalism that celebrated liberty and individual rights.

The deep covenantal institutions gave people the capacity to use their freedom well. The liberal institutions gave them that freedom.

This delicate balance — liberal institutions built atop illiberal ones — is now giving way. The big social movements of the past half century were about maximizing freedom of choice. Right-wingers wanted to maximize economic choice and left-wingers lifestyle choice. Anything that smacked of restraint came to seem like a bad thing to be eliminated.

We’ll call this worldview — which is all freedom and no covenant — naked liberalism

The problem with naked liberalism is that it relies on individuals it cannot create.

Naked liberals of right and left assume that if you give people freedom they will use it to care for their neighbors, to have civil conversations, to form opinions after examining the evidence. But if you weaken family, faith, community and any sense of national obligation, where is that social, emotional and moral formation supposed to come from? How will the virtuous habits form?

Naked liberalism has made our society an unsteady tree. The branches of individual rights are sprawling, but the roots of common obligation are withering away.

Freedom without covenant becomes selfishness. And that’s what we see at the top of society, in our politics and the financial crisis

Freedom without connection becomes alienation.

And that’s what we see at the bottom of society — frayed communities, broken families, opiate addiction.

Freedom without a unifying national narrative becomes distrust, polarization and permanent political war.

covenantal attachments they become fragile. Moreover, if you rob people of their good covenantal attachments, they will grab bad ones.

First, they will identify themselves according to race. They will become the racial essentialists you see on left and right

Then they resort to tribalism. This is what Donald Trump provides. As Mark S. Weiner writes on the Niskanen Center’s blog, Trump is constantly making friend/enemy distinctions, exploiting liberalism’s thin conception of community and creating toxic communities based on in-group/out-group rivalry.

Trump offers people cultural solutions to their alienation problem. As history clearly demonstrates, people will prefer fascism to isolation, authoritarianism to moral anarchy.

If we are going to have a decent society we’re going to have to save liberalism from itself. We’re going to have to restore and re-enchant the covenantal relationships that are the foundation for the whole deal. The crucial battleground is cultural and prepolitical.

In my experience, most people under 40 get this. They sense the social and moral void at the core and that change has to come at the communal, emotional and moral level.

Many public intellectuals were trained in the social sciences and take the choosing individual as their mental starting point. They have trouble thinking about our shared social and moral formative institutions and how such institutions could be reconstituted.

Congressional Republicans think a successful tax bill will thwart populism. Mainstream Democrats think the alienation problem will go away if we redistribute the crumbs a bit more widely.

History is full of examples of nations that built new national narratives, revived family life, restored community bonds and shared moral culture: Britain in the early 19th century, Germany after World War II, America in the Progressive Era. The first step in launching our own revival is understanding that the problem is down in the roots.

The introduction of a universal basic income is, he believes, inevitable. This drastic reinvention of the welfare state would see the government pay every single citizen, irrespective of their wealth or employment status, a regular cash sum calculated to cover all their basic needs

Is he worried that the country’s economic woes are leading us towards the threat of civil unrest? “Yes – or certainly just to the rise of politicians who don’t believe in our democracy. I think that’s a genuine risk. I am genuinely fearful for the fabric of what we think of as this nation, if we don’t address these problems.” In his lifetime is this threat unprecedented? “Yes, of course it is. This is the most scary time since the second world war.”

“It is fucking mad for middle class people like us to want anything other than a decent life for our children,” he exclaims. “If you’re on shit wages, it’s completely reasonable to want your children to be better off than you are. Completely reasonable. But the notion that we,” and he gestures around his elegant townhouse kitchen, “should want more [for our children] is shocking and appalling. We shouldn’t think in those terms. We’ve actually got to think, maybe we should make some sacrifices and be a bit poorer. Because if we don’t make those sacrifices and become a bit poorer, so that those lower down the scale have better lives, we may end up facing utter chaos.”

“We will end up with it. We just have to reconcile ourselves to no growth. The natural tendency of the economy at the moment is to widen income and wealth disparities and in those circumstances, and particularly when you layer on top of that the rise of robots and artificial intelligence, it is very, very difficult to think of any alternative but guaranteeing some kind of universal basic income.” Does he assume this will become Labour party policy in the foreseeable future? “Yeah.”

“I think it’s becoming clearer that Labour will end up, as a minimum, signed up to a position where we are a bit like Norway.” In other words, a permanent member of the single market. “But it’s altogether conceivable that they end up being a party that says we have to have another vote on this. They will arrive undoubtedly at one or other of those positions.”

Peston is critical of Corbyn’s view that “the state can solve everything”, but isn’t at all surprised by his popularity. “Younger people think, ‘Fuck it, nobody’s running this place for me. And capitalism is shit, it’s doing nothing for me because when am I ever going to get any capital?’ So, it’s not surprising in those circumstances that they then say, ‘We want a public sector, state-based solution of the sort that Jeremy Corbyn is offering’.”

What is new is the role social media (and, to a lesser extent, digital news) plays in both focusing outrage and scaring employers. And this, too, is a problem of economics, not culture. Social platforms and media publishers want to attract people to their websites or shows and make sure they come back. They do this, in part, by tuning the platforms and home pages and story choices to surface content that outrages the audience.

This is not just a problem of social media platforms. Watch Fox News for a night, and you’ll see a festival of stories elevating some random local excess to national attention and inflicting terrible pain on the people who are targeted. Fox isn’t anti-cancel culture; it just wants to be the one controlling that culture.

Cancellations are sometimes intended, and deserved. Some speech should have consequences. But many of the people who participate in the digital pile-ons that lead to cancellation don’t want to cancel anybody. They’re just joining in that day’s online conversation. They’re criticizing an offensive or even dangerous idea, mocking someone they think deserves it, hunting for retweets, demanding accountability, making a joke. They aren’t trying to get anyone fired. But collectively, they do get someone fired.

The problem is when that one awful thing someone said comes to define their online identity, and then it defines their future economic and political and personal opportunities

This isn’t an easy problem to solve, but our lifelong digital identities are too important to be left to the terms and conditions of a single company, or even a few.

Finally, it would be better to focus on cancel behavior than cancel culture. There is no one ideology that gleefully mobs or targets employers online. Plenty of anti-cancel culture warriors get their retweets directing their followers to mob others.

Unless something that is said is truly dangerous and you actually want to see that person fired from their current job and potentially unable to find a new one — a high bar, but one that is sometimes met — you shouldn’t use social media to join an ongoing pile-on against a normal person.

There have always been things we cannot say in polite society, and those things are changing, in overdue ways. The balance of demographic power is shifting, and groups that had little voice in the language and ordering of the national agenda are gaining that voice and using it.

Slowly and painfully, we are creating a society in which more people can speak and have some say over how they’re spoken of.

Indexing has gone big, very big. For nine in 10 companies on the S&P 500, their largest single shareholder is one of the Big Three. For many, the big indexers control 20 percent or more of their shares. Index funds now control 20 to 30 percent of the American equities market, if not more.

One primary concern comes from the analysts at Bernstein: “A supposedly capitalist economy where the only investment is passive is worse than either a centrally planned economy or an economy with active, market-led capital management.”

Passively managed investment options do not just outperform actively managed ones in terms of both better returns and lower fees. They eat their lunch.

Let’s imagine that a decade ago you invested $100 in an index fund charging a 0.04 percent fee and $100 in a traditional mutual fund charging a 1.5 percent fee. Let’s also imagine that the index fund tracked the S&P 500, and that the mutual fund ended up returning what the S&P 500 returned. Your passively invested $100 would have turned into $356.66 in 10 years. Your traditionally invested $100 would have turned into $313.37.

Actively managed investment options could make up for their higher fees with higher returns. And some do, some of the time. Yet scores of industry and academic studies stretching over decades show that trying to beat the market tends to result in lower returns than just buying the market. Only a quarter of actively managed mutual funds exceeded the returns of their passively managed cousins in the decade leading up to 2019,

What might be good for retail investors might not be good for the financial markets, public companies, or the American economy writ large, and the passive revolution’s scope has raised all sorts of hand-wringing and red-flagging. Analysts at Bernstein have called passive investing “worse than Marxism.” The investor Michael Burry, of The Big Short fame, has called it a “bubble,” and a co-head of Goldman Sachs’s investment-management division has warned about froth too. Shortly before his death in 2019, Bogle himself warned that index funds’ dominance might not “serve the national interest.”

The problem is that the public markets have been cornered by a group of investment managers small enough to fit at a lunch counter, dedicated to quiescence and inertia.

Active managers direct investment dollars to companies on the basis of those companies’ research-and-development prospects, human capital, regulatory outlook, and so on. They take new information and price it into a company’s stock when buying and selling shares.

Passive investors, by contrast, ignore annual reports and market rumors. They do nothing with trading-floor gossip. They make no attempt to research what to invest in and what to skip. Whether holding international or domestic assets, holding stocks or bonds, or using a mutual-fund structure or an ETF structure, they just mirror the market. Big U.S.-stock index funds buy big U.S. stocks just because they’re big U.S. stocks.

At least in a Soviet-type centrally planned economy, apparatchiks would be making some attempt to allocate resources efficiently.

Passive management is merely a giant phenomenon, not an all-encompassing one. Hundreds of actively managed mutual funds are still out there, as are legions of day traders, hedge funds, and private offices buying and selling and buying and selling. Stock prices still move around, sometimes dramatically, on the basis of new data and new ideas.

Still, passive investing may well be degrading the informational content of the markets, messing up price signals and making business decisions harder as a result.

When one of these commodities ends up on an index, the firms that use that commodity in their business see a 6 percent increase in costs and a 40 percent decrease in operating profits, relative to firms without exposure to the commodity, the academics found

the price fluctuations of a newly indexed stock “magically and quickly” change. A firm’s shares begin to move “more closely with its 499 new neighbors and less closely with the rest of the market. It is as if it has joined a new school of fish.”

More broadly, the Bernstein analysts, among others, worry that index-linked investing is increasing correlation, whereby the prices of stocks, bonds, and other assets move up or down or sideways together.

Their theory is that ETF trading shifts prices in subtle ways, making it harder for businesses to know when to buy their gold and copper. Corporate executives “are being influenced by what happens in the futures market, and what happens in the futures market is being influenced by ETF trading,”

A far bigger concern is that the rise of the indexers might be making American firms less competitive, through “common ownership,” in which the mega-asset managers control large stakes in multiple competitors in the same industry. The passive firms control big chunks of the airlines American, Delta, JetBlue, Southwest, and United, for instance

The rise of common ownership might be perverting corporate behavior in weird ways, academics argue. Think about the incentives like this: Let’s imagine that you are a major shareholder in a public widget company. We’d expect you to desire—insist, even—that the company fight for market share and profits. But now imagine that you are a major shareholder in all the important widget companies. You would no longer really care which one succeeded, particularly not if one company doing better meant another company doing worse. You’d just care about the widget sector’s corporate profits, which would go up if the widget companies quit competing with one another and started raising prices to pad their bottom line.

one major paper showed that common ownership of airline stocks had the effect of raising ticket prices by 3 to 7 percent.

A separate study showed that consumers are paying higher prices for prescription medicines because generic-drug makers have less incentive to compete with the companies making name-brand drugs.

Yet another study showed that common ownership is leading retail banks to charge higher prices.

Across firms, executive compensation seems to be more closely linked to a company’s performance when its shareholders are not invested in the company’s rivals, the study found. In other words, firms stop paying managers for performance when owned by the same people who own their rivals.

The market clout of the indexers raises other questions too. The actual owners of the stocks—not the index-fund managers but the people putting money into index funds—have little say over the companies they own. Vanguard, Fidelity, and State Street, not Mom and Dad, vote in shareholder elections

In fact, the Big Three cast roughly 25 percent of the votes in S&P 500 companies.

In an interview with The Wall Street Journal, the chief executive officer of State Street said he thought it was “almost inevitable, when you see this kind of concentration, that it probably will make sense to do something about it.”

But figuring out what the appropriate restrictions are depends on determining just what the problem with the indexers is—are they distorting price signals, raising the cost of consumer goods, posing financial systemic risk, or do they just have the market cornered? Then, what to do about it? Common ownership is not a problem the government is used to handling.

, thanks to the passive revolution, a broad variety and huge number of firms might have less incentive to compete. The effect on the real economy might look a lot like that of rising corporate concentration. And the two phenomena might be catalyzing one another, as index investing increases the number of mergers and makes them more lucrative.

In recent decades, the whole economy has gone on autopilot. Index-fund investment is hyperconcentrated. So is online retail. So are pharmaceuticals. So is broadband. Name an industry, and it is likely dominated by a handful of giant players. That has led to all sorts of deleterious downstream effects: suppressing workers’ wages, raising consumer prices, stifling innovation, stoking inequality, and suffocating business creation

The problem is not just the indexers. It is the public markets they reflect, where more chaos, more speculation, more risk, more innovation, and more competition are desperately needed.

This has transformed policy design: These are now negotiations among Democrats, done with the intention of finding policies popular enough that Republican voters will back them, even if Republican politicians will not

iden still talks like he believes bipartisanship is possible in Congress, but his administration has put the onus on Republicans to prove it, and to do so on the administration’s terms. That, more than any other single factor, has unleashed Democrats’ legislative ambitions.

in general, the younger generation has sharply different views on the role of government, the worth of markets and the risks worth taking seriously.

the new generation of staff members see the world very differently. “There has been a lot more work done to try to understand what the roots of economic inequality are over the course of the last decade, and openness to thinking about power and power dynamics,

“The next generation of the economics profession is rebelling against its predecessors by being all about inequality in the same way that my generation rebelled against its predecessors by being all about incentives, and this is a good thing,” said Larry Summers,

Multiple economists, both inside and outside the Biden administration, told me that this is an administration in which economists and financiers are simply far less influential than they were in past administrations.

economists are one of many voices at the table, not the dominant voices. This partly reflects Biden himself: he’s less academically minded, and more naturally skeptical of the way economists view the world and human behavior, than either Obama or Clinton. But it goes deeper than tha

The backdrop for this administration is the failures of the past generation of economic advice. Fifteen years of financial crises, yawning inequality and repeated debt panics that never showed up in interest rates have taken the shine off economic expertise

But the core of this story is climate. “Many mainstream economists, even in the 1980s, recognized that the market wouldn’t cover everyone’s needs so you’d need some modest amount of public support to correct for that moderate market failure,” Felicia Wong, the president of the Roosevelt Institute, said. “But they never envisioned the climate crisis. This is not a failure of the market at the margins. This is the market incentivizing destruction.”

the scale of the climate disaster, and the speed at which it must be addressed, simply demands a different role for the government. “If you think across the big systems in our country — the transportation system being one, the power and energy system being another — in order to actually solve climate change, we’re going to have to transform those systems,”

Biden and his team see this as fundamentally a political problem. They view the idea that a carbon tax is the essential answer to the problem of climate change as being so divorced from political reality as to be actively dangerous.

it’s not just a messaging and narrative imperative,” he told me. “It has to be that Americans see and experience that the investments in building out a more resilient power grid actually improve their lives and create job opportunities for them, or their neighbors.”

Even beyond climate, political risks weigh more heavily on the Biden administration than they did on past administrations. This is another lesson learned from the Obama years

Democrats lost the House in 2010, effectively ending Obama’s legislative agenda, and then they lost the Senate in 2014, and then Donald Trump won the White House in 2016, and then Democrats lost the Supreme Court for a generation.

Many who served under Obama, and who now serve under Biden, believe that they were so focused on economic risks that they missed the political risks — and you can’t make good economic policy if you lose political power

Biden is a politician, in the truest sense of the word. Biden sees his role, in part, as sensing what the country wants, intuiting what people will and won’t accept, and then working within those boundaries.

In America, that’s often treated as a dirty business. We like the aesthetics of conviction, we believe leaders should follow their own counsel, we use “politician” as an epithet.

But Biden’s more traditional understanding of the politician’s job has given him the flexibility to change alongside the country

Stagnating wages and a warming world and Hurricane Katrina and a pandemic virus proved that there were scarier words in the English language than “I’m from the government, and I’m here to help,” as Ronald Reagan famously put it

He’s emphasizing the irresponsibility of allowing social and economic problems to fester, as opposed to the irresponsibility of spending money on social and economic problems. His administration is defined by the fear that the government isn’t doing enough, not that it’s doing too much.

Like Biden, Harris is determined to take the oath of office outside, on the West Front of the U.S. Capitol, despite security concerns that have led to the garrison of soldiers inside the building for the first time since the Civil War.

And, like Biden, Harris is equally determined to move forward with an ambitious legislative agenda despite the fact that the early weeks of their administration will likely also see a second Senate impeachment trial of Trump.

Harris spoke to NPR on the day Biden unveiled a $1.9 trillion rescue package that would expand unemployment benefits, issue another round of direct stimulus payments, spend billions on coronavirus vaccination and testing efforts, and raise the federal minimum wage to $15, among many other provisions.

I want to start with last week with the Capitol attack. You were in Washington, D.C. What was that day like from your vantage point?It was horrific. It was a day that wherein we witnessed an assault on America's democracy, a day when we witnessed the terror that a few can wreak on so many.

"It was the same thing that went through my mind when I saw Charlottesville. I mean, it's the same thing that went through my mind when I saw a picture of Emmett Till," Harris told NPR

Ticking through some of the details — $20 billion for vaccinations, $50 billion for expanded testing, $130 billion for schools to reopen safely. If this is passed and signed into law, how quickly can Americans expect to see life to return to normal?Let me be very clear that the president-elect and I know this is not going to be easy, but we are putting everything we've got into this, and to deal with it as soon as possible, which is why we're prepared right now to, on day one, push through and get this package, so that it hits the ground and hits the streets and we get relief to the American people.

How quickly can this get passed? Democrats have the narrowest of narrow majorities in both chambers.Well, let me tell you, it's our highest priority. It is our highest priority.

But there is going to be so much else going on, including now a Senate impeachment trial. So you have not only this bill, you have to confirm the Cabinet through the Senate. There is an impeachment trial. How does that affect everything you're trying to do beyond legislation and confirmations?

We know how to multitask [laughs]. There's a reason that word exists in the English language. That's what's going to be required. We have to multitask, which means, as with anyone, we have a lot of priorities and we need to see them through.

This proposal has billions of dollars to fund vaccine distribution, but it's not just funding. There are distribution problems, information sharing problems. There are trust problems, supply problems. What can the federal government do immediately in the coming weeks to start to fix these?Well, part of it is pass our plan because we are, for example, putting $50 billion into increased testing and tracing, as you mentioned earlier. We need to increase the supply of PPE.

This is a major stimulus package coming through. Are you going to be a point person in getting it passed or in any of these areas once it starts going to effect, if he does sign it into law?Let me tell you something, on every decision that we have made as an incoming administration, we're in the room together, Joe and I, the president-elect and I. And on every, you know, I can't even tell you how many meetings we've been in together that range from this to many other topics that are priorities for us. And so all of the priorities are going to be a priority for me and for the president-elect, obviously.

Indeed, doctors are reporting similar cases across the country and around the world. A small number of Covid patients who had never experienced mental health problems are developing severe psychotic symptoms weeks after contracting the coronavirus

Beyond individual reports, a British study of neurological or psychiatric complications in 153 patients hospitalized with Covid-19 found that 10 people had “new-onset psychosis.”

Although the coronavirus was initially thought primarily to cause respiratory distress, there is now ample evidence of many other symptoms, including neurological, cognitive and psychological effects, that could emerge even in patients who didn’t develop serious lung, heart or circulatory problems.

Medical experts say they expect that such extreme psychiatric dysfunction will affect only a small proportion of patients. But the cases are considered examples of another way the Covid-19 disease process can affect mental health and brain function.

Experts increasingly believe brain-related effects may be linked to the body’s immune system response to the coronavirus and possibly to vascular problems or surges of inflammation caused by the disease process.

Also striking is that most patients have been in their 30s, 40s and 50s. “It’s very rare for you to develop this type of psychosis in this age range,”

Some post-Covid patients who developed psychosis needed weeks of hospitalization in which doctors tried different medications before finding one that helped.

Persistent immune activation is also a leading explanation for brain fog and memory problems bedeviling many Covid survivors,

How long the psychosis lasted and patients’ response to treatment has varied. The woman in Britain — whose symptoms included paranoia about the color red and terror that nurses were devils who would harm her and a family member — took about 40 days to recover, according to a case report.

ut the increase in acceptance of inequalities may work in the opposite direction, undermining efforts to help these groups and reduce inequalities

the shifts are effectively canceling out each other, leaving overall support for policies such as universal health care unchanged.

Becoming more accepting of inequality due to luck provides a logic for not sharing more of our personal resources with those who are suffering or not volunteering in other ways to help. Those Americans not heavily affected by the crisis might be finding it easier to adapt if their mindset is “After all, luck is part of life.”

The increase in solidarity may reflect that the crisis highlights the selfless behavior of others. The past weeks have put a spotlight on community engagement and, in particular, on the personal risks nurses and doctors are taking to treat their communities

As Americans have watched both neighbors and world leaders test positive for the coronavirus, the crisis has highlighted the role of luck in people’s well-being. Yet at the same time, they’ve learned they can protect themselves against the coronavirus through their own actions

Before conducting the survey, we expected that how luck plays out in this crisis might lead people to become less accepting of inequalities due to mere chance. Instead, we found that respondents who were primed to think about the crisis had less of a problem with economic inequality due to luck

Respondents who were primed to think about the coronavirus crisis were more likely to focus on society’s problems rather than personal problems

The study shows that respondents who prioritized America’s problems over their own were more likely to favor economic redistribution and universal health care. But respondents who were more accepting of luck-based inequality were less likely to favor such policies.

the movement in moral perspectives already suggests that this is a dynamic situation, and the balance of policy preferences could shift significantly as the crisis evolves.

there are indications in the data that lead us to believe that these effects are of great importance. For comparison, the change in the moral perspective of Americans due to the subtle reminder using priming equals one-fifth of the difference that we observe between Republicans and Democrats in the control group.

The study cannot say whether the effects on Americans’ moral perspectives will prove lasting. However, related research on wars, natural disasters and economic shocks has shown that people internalize moral perspectives that emerge in times of crisis

The study also captures the significant decline in the level of happiness of respondents across the board during the crisis, with the poorer respondents showing the greatest decreases in their happiness

Respondents were asked to rate their level of happiness on a scale of zero to 10, with 10 the happiest. The response overall fell 12.5 percent to a mean happiness level of 6.07 in our latest survey, compared with 6.94 in the 2019 surve

Q: Is the white-supremacist mind-set a Trump problem or a GOP problem?A: The roots of the GOP problem go back at least to the toleration and execution of the Southern Strategy to win elections. When such a tactic is deployed for half a century, no one should be surprised when white-supremacist sentiments turn out to be an animating core of group identity. I hope there can be a more honest reckoning, both for the Republican Party and for its White Christian base that has provided theological and moral cover for this strategy.

Trump is most accurately understood as the inevitable end of a road paved brick by brick through 13 presidential election cycles since 1968. By the time the RNC attempted to apologize for the Southern Strategy in 2005 or advocated for a more pragmatic and humane immigration policy in its “autopsy report” after [Mitt] Romney’s 2012 defeat, this runaway freight train simply had too much momentum behind it to be easily derailed.

I do think the clarity of the current moment is calling the moral question in this election like no other in my lifetime. There is an opportunity here, for both the GOP and for White Christians who are a part of its foundation, to rebuild a party of principle that rejects white supremacy and strategies that stoke white racial fears and grievances.

National Greatness Conservatism. We argued that the G.O.P. had become too anti-government. “How can Americans love their nation if they hate its government?” we asked. Only a return to the robust American nationalism of Alexander Hamilton, Henry Clay and Theodore Roosevelt would do: ambitious national projects, infrastructure, federal programs to increase social mobility.

George W. Bush, who made his own leap, to Compassionate Conservatism. (You know somebody has made a paradigm leap when he or she starts adding some modifying word or phrase before “Conservatism.”) This was an attempt to meld Catholic social teaching to conservatism.

am’s Club Republicans, led by Reihan Salam and my Times colleague Ross Douthat, pointed a way to link the G.O.P. to working-class concerns

Front Porch Republicans celebrated small towns and local communities.

The Reformicons tried to use government to build strong families and neighborhoods

The Niskanen Center is an entire think tank for people who have leapt from libertarianism.

Most actual Republican politicians rejected all of this. They stuck, mostly through dumb inertia, to an anti-government zombie Reaganism long after Reagan was dead and even though the nation’s problems were utterly different from what they were when he was alive

Donald Trump and Bannon took a low-rent strand of conservatism — class-based ethnic nationalism — that had always been locked away in the basement of the American right, and overturned the Reagan paradigm.

Bannon and Trump got the emotions right. They understood that Republican voters were no longer motivated by a sense of hope and opportunity; they were motivated by a sense of menace, resentment and fear. At base, many Republicans felt they were being purged from their own country — by the educated elite, by multiculturalism, by militant secularism.

During the 2016 presidential campaign, Trump and Bannon discarded the Republican orthodoxy — entitlement reform, fiscal restraint, free trade, comprehensive immigration reform. They embraced a European-style blood-and-soil conservatism. Close off immigration. Close trade. We have nothing to offer the world and should protect ourselves from its dangers.

Over the last three years, it’s been interesting to watch a series of Republican officeholders break free from old orthodoxies and begin to think afresh.

future is embodied by a small group of Republican senators in their 40s, including Marco Rubio, Josh Hawley, Tom Cotton and Ben Sasse.

they start with certain common Trumpian premises:

Everything is not OK. The free market is not working well. Wages are stagnant. Too much power is in the hands of the corporate elites. Middle America is getting screwed. Finance capitalism is unbalanced. American society is in abject decline. If Reaganism was “Let’s be free,” the new mood is “Take control.

Economic libertarianism is not the answer. Free markets alone won’t solve our problems

We need policies to shore up the conservative units of society — family, neighborhood, faith, nation. We need policies that build solidarity, not just liberty.

The working class is the heart of the Republican Party. Once, businesspeople and entrepreneurs were at the center of the Republican imagination. Now it’s clear that the party needs to stop catering to the corporate class and start focusing on the shop owners, the plumbers, the salaried workers

China changes everything. The rise of a 1.4-billion-person authoritarian superpower means that free trade no longer works because the Chinese are not playing by the same rules

The managerial class betrays America. Many of the post-Reagan positions seem like steps to the left. But these Republicans combine a greater willingness to use government with a greater hostility to the managerial class.

From these common premises the four senators go off in different directions.

Hawley is the most populist of the group. His core belief is that middle-class Americans have been betrayed by elites on every level — political elites, cultural elites, financial elites

The modern leadership class has one set of values — globalization, cosmopolitanism — and the Middle Americans have another set — family, home, rootedness, nation

Cotton has a less developed political vision but a more developed attitude: hawkishness.

Sasse is the most sociological of the crew. He is a Tocquevillian localist, who notes that most normal Americans go days without thinking of national politics. His vision is centered on the small associations — neighborhood groups, high school football teams, churches and community centers — where people find their greatest joys, satisfactions and supports.

over the long term, some version of Working-Class Republicanism will redefine the G.O.P. In the first place, that’s where Republican voters are

Behind these public figures there is a posse of policy wonks and commentators supporting a new Working-Class Republicanism,

Levin thinks the prevailing post-Trump viewpoints define the problem too much in economic terms. The crucial problem, he argues, is not economic; it’s social: alienation. Millions of Americans don’t feel part of anything they can trust. They feel no one is looking out for them.

“What’s needed,” Levin says, “is not just to expand economic conservatism beyond growth to also prioritize family, community and nation, but also to expand social conservatism beyond sexual ethics and religious liberty to prioritize family, community and nation

The Republican Party looks completely brain-dead at every spot Trump directly reaches. Off in the corners, though, there’s a lot of intellectual ferment on the right.

The Wall Street Journal editorial page stands as a vigilant guardian of the corpse, eager to rebut all dissenters. The former U.N. ambassador Nikki Haley and Senator Pat Toomey of Pennsylvania are staunch defenders of Minimal-Government Conservatism

there’s also the possibility that Republicans will abandon any positive vision and revert to being a simple anti-government party — a party of opposition to whatever Biden is doing.

Government’s job, he says, is to “create a framework of ordered liberty” so that people can make their family and neighborhood the center of their lives.

Second, the working-class emphasis is the only way out of the demographic doom loop. If the party sticks with its old white high school-educated base, it will die. They just aren’t making enough old white men.

None of this works unless Republicans can deracialize their appeal — by which I mean they must stop pandering to the racists in the party and stop presenting themselves and seeing themselves as the party of white people

Aviation is safe in large part because it learns from its disasters. Investigators from the U.S. National Transportation Safety Board go immediately to accident sites to begin assessing evidence. After months or even years of research, their detailed reports try to lay out the “accident chain” and explain what went wrong

with respect to the coronavirus pandemic, it has suffered by far the largest number of fatalities, about one-quarter of the global total, despite having less than one-20th of the world’s population.

What if the NTSB were brought in to look at the Trump administration’s handling of the pandemic? What would its investigation conclude?

This was a journey straight into a mountainside, with countless missed opportunities to turn away. A system was in place to save lives and contain disaster. The people in charge of the system could not be bothered to avoid the doomed course.

Timelines of aviation disasters typically start long before the passengers or even the flight crew knew anything was wrong, with problems in the design of the airplane, the procedures of the maintenance crew, the route, or the conditions into which the captain decided to fly. In the worst cases, those decisions doomed the flight even before it took off. My focus here is similarly on conditions and decisions that may have doomed the country even before the first COVID-19 death had been recorded on U.S. soil.

What happened once the disease began spreading in this country was a federal disaster in its own right: Katrina on a national scale, Chernobyl minus the radiation. It involved the failure to test; the failure to trace; the shortage of equipment; the dismissal of masks; the silencing or sidelining of professional scientists; the stream of conflicting, misleading, callous, and recklessly ignorant statements by those who did speak on the national government’s behalf

As late as February 26, Donald Trump notoriously said of the infection rate, “You have 15 people, and the 15 within a couple of days is going to be down close to zero.” What happened after that—when those 15 cases became 15,000, and then more than 2 million, en route to a total no one can foretell—will be a central part of the history of our times.

1. The Flight Plan

the most important event was the H5N1 “bird flu” outbreak, in 2005. It originated in Asia and was mainly confined there, as the SARS outbreak had been two years earlier. Bush-administration officials viewed H5N1 as an extremely close call. “

Shortly before Barack Obama left office, his administration’s Pandemic Prediction and Forecasting Science and Technology Working Group—yes, that was a thing—released a report reflecting the progress that had been made in applying remote-sensing and AI tools since the early days of Global Argus. The report is freely available online and notes pointedly that recent technological advances “provide opportunities to mitigate large-scale outbreaks by predicting more accurately when and where outbreaks are likely to occur, and how they will progress.”

“Absolutely nothing that has happened has been a surprise. We saw it coming. Not only did we see it, we ran the models and the gaming exercises. We had every bit of the structure in place. We’ve been talking about a biohazard risk like this for years. Anyone who says we did not see this coming has their head in the sand, or is lying through their teeth.”

The system the government set up was designed to warn not about improbable “black swan” events but rather about what are sometimes called “gray rhinos.” These are the large, obvious dangers that will sooner or later emerge but whose exact timing is unknown.

other U.S. leaders had dealt with foreign cover-ups, including by China in the early stages of the SARS outbreak in 2002. Washington knew enough, soon enough, in this case to act while there still was time.

During the Obama administration, the U.S. had negotiated to have its observers stationed in many cities across China, through a program called Predict. But the Trump administration did not fill those positions, including in Wuhan. This meant that no one was on site to learn about, for instance, the unexplained closure on January 1 of the city’s main downtown Huanan Seafood Wholesale Market, a so-called wet market

“It was in the briefings by the beginning of January,” a person involved in preparing the president’s briefing book told me. “On that there is no dispute.” This person went on: “But knowing it is in the briefing book is different from knowing whether the president saw it.” He didn’t need to spell out his point, which was: Of course this president did not.

To sum up: The weather forecast showed a dangerous storm ahead, and the warning came in plenty of time. At the start of January, the total number of people infected with the virus was probably less than 1,000. All or nearly all of them were in China. Not a single case or fatality had been reported in the United States.

2. The Air Traffic Controllers

In cases of disease outbreak, U.S. leadership and coordination of the international response was as well established and taken for granted as the role of air traffic controllers in directing flights through their sectors

in normal circumstances, its location in China would have been a plus. Whatever the ups and downs of political relations over the past two decades, Chinese and American scientists and public-health officials have worked together frequently, and positively, on health crises ranging from SARS during George W. Bush’s administration to the H1N1 and Ebola outbreaks during Barack Obama’s.

One U.S. official recalled the Predict program: “Getting Chinese agreement to American monitors throughout their territory—that was something.” But then the Trump administration zeroed out that program.

“We had cooperated with China on every public-health threat until now,” Susan Shirk, a former State Department official and longtime scholar of Chinese affairs at UC San Diego, told me. “SARS, AIDS, Ebola in Africa, H1N1—no matter what other disputes were going on in the relationship, we managed to carve out health, and work together quite professionally. So this case is just so anomalous and so tragic.” A significant comparison, she said, is the way the United States and the Soviet Union had worked together to eliminate smallpox around the world, despite their Cold War tensions. But now, she said, “people have definitely died because the U.S. and China have been unable to cooperate.”

What did the breakdown in U.S.-Chinese cooperation mean in practice? That the U.S. knew less than it would have otherwise, and knew it later; that its actions brought out the worst (rather than the merely bad) in China’s own approach to the disease, which was essentially to cover it up internally and stall in allowing international access to emerging data; that the Trump administration lost what leverage it might have had over Chinese President Xi Jinping and his officials; and that the chance to keep the disease within the confines of a single country was forever lost.

In addition to America’s destruction of its own advance-warning system, by removing CDC and Predict observers, the Trump administration’s bellicose tone toward China had an effect. Many U.S. officials stressed that a vicious cycle of blame and recrimination made public health an additional source of friction between the countries, rather than a sustained point of cooperation, as it had been for so many years.

“The state of the relationship meant that every U.S. request was met with distrust on the Chinese side, and every Chinese response was seen on the American side as one more attempt to cover up,”

Several officials who had experience with China suggested that other presidents might have called Xi Jinping with a quiet but tough message that would amount to: We both know you have a problem. Why don’t we work on it together, which will let you be the hero? Otherwise it will break out and become a problem for China and the whole world.

“It would have taken diplomatic pressure on the Chinese government to allow us to insert our people” into Wuhan and other disease centers, Klain said. “The question isn’t what leverage we had. The point is that we gave up leverage with China to get the trade deal done. That meant that we didn’t put leverage on China’s government. We took their explanations at face value.”

The president’s advance notice of the partial European ban almost certainly played an important part in bringing the infection to greater New York City. Because of the two-day “warning” Trump gave in his speech, every seat on every airplane from Europe to the U.S. over the next two days was filled. Airport and customs offices at the arrival airports in the U.S. were unprepared and overwhelmed. News footage showed travelers queued for hours, shoulder to shoulder, waiting to be admitted to the U.S. Some of those travelers already were suffering from the disease; they spread it to others. On March 11, New York had slightly more than 220 diagnosed cases. Two weeks later, it had more than 25,000. Genetic testing showed that most of the infection in New York was from the coronavirus variant that had come through Europe to the United States, rather than directly from China (where most of the early cases in Washington State originated).

3. The Emergency Checklist

Aviation is safe because, even after all the advances in forecasting and technology, its culture still imagines emergencies and rehearses steps for dealing with them.

Especially in the post-9/11 era of intensified concern about threats of all sorts, American public-health officials have also imagined a full range of crises, and have prepared ways to limit their worst effects. The resulting official “playbooks” are the equivalent of cockpit emergency checklists

the White House spokesperson, Kayleigh McEnany, then claimed that whatever “thin packet of paper” Obama had left was inferior to a replacement that the Trump administration had supposedly cooked up, but which has never been made public. The 69-page, single-spaced Obama-administration document is officially called “Playbook for Early Response to High-Consequence Infectious Disease Threats and Biological Incidents” and is freely available online. It describes exactly what the Trump team was determined not to do.

What I found remarkable was how closely the Obama administration’s recommendations tracked with those set out 10 years earlier by the George W. Bush administration, in response to its chastening experience with bird flu. The Bush-era work, called “National Strategy for Pandemic Influenza” and publicly available here, differs from the Obama-era playbook mainly in the simpler forms of technology on which it could draw

consider the one below, and see how, sentence by sentence, these warnings from 2005 match the headlines of 2020. The topic was the need to divide responsibility among global, national, state, and community jurisdictions in dealing with the next pandemic. The fundamental premise—so widely shared that it barely needed to be spelled out—was that the U.S. federal government would act as the indispensable flywheel, as it had during health emergencies of the past. As noted, it would work with international agencies and with governments in all affected areas to coordinate a global response. Within its own borders it would work with state agencies to detect the potential for the disease’s spread and to contain cases that did arise:

Referring to the detailed pandemic playbooks from the Bush and Obama administrations, John R. Allen told me: “The moment you get confirmation of a problem, you would move right to the timeline. Decisions by the president, actions by the secretary of defense and the CDC, right down the list. You’d start executing.”Or, in the case of the current administration, you would not. Reading these documents now is like discovering a cockpit checklist in the smoking wreckage.

4. The Pilot

a virtue of Sully is the reminder that when everything else fails—the forecasts, the checklists, the triply redundant aircraft systems—the skill, focus, and competence of the person at the controls can make the difference between life and death.

So too in the public response to a public-health crisis. The system was primed to act, but the person at the top of the system had to say, “Go.” And that person was Donald Trump.

n a resigned way, the people I spoke with summed up the situation this way: You have a head of government who doesn’t know anything, and doesn’t read anything, and is at the mercy of what he sees on TV. “And all around him, you have this carnival,”

“There would be some ballast in the relationship,” this person said. “Now all you’ve got is the trade friction”—plus the personal business deals that the president’s elder daughter, Ivanka, has made in China,

5. The Control Systems

The deadliest airline crash in U.S. history occurred in 1979. An American Airlines DC-10 took off from O’Hare Airport, in Chicago—and just as it was leaving the ground, an incorrectly mounted engine ripped away from one of the wings. When the engine’s pylon was pulled off, it cut the hydraulic lines that led from the cockpit to the control surfaces on the wings and tail. From that point on, the most skillful flight crew in the world could not have saved the flight.

The United States still possesses the strongest economy in the world, its military is by far the most powerful, its culture is diverse, and, confronted with the vicissitudes of history, the country has proved resilient. But a veteran of the intelligence world emphasized that the coronavirus era revealed a sobering reality. “Our system has a single point-of-failure: an irrational president.” At least in an airplane cockpit, the first officer can grab the controls from a captain who is steering the aircraft toward doom.

The more complex the organization, the more its success or failure turns on the skill of people in its middle layers—the ones who translate a leader’s decision to the rest of the team in order to get results. Doctors depend on nurses; architects depend on contractors and craftsmen; generals depend on lieutenants and sergeants

Because Donald Trump himself had no grasp of this point, and because he and those around him preferred political loyalists and family retainers rather than holdovers from the “deep state,” the whole federal government became like a restaurant with no cooks, or a TV station with stars but no one to turn the cameras on.

“There is still resilience and competence in the working-level bureaucracy,” an intelligence-agency official told me. “But the layers above them have been removed.”

Traditionally, the National Security Council staff has comprised a concentration of highly knowledgeable, talented, and often ambitious younger figures, mainly on their way to diplomatic or academic careers.

“There is nobody now who can play the role of ‘senior China person,’” a former intelligence official told me. “In a normal administration, you’d have a lot of people who had spent time in Asia, spent time in China, knew the goods and bads.” Also in a normal administration, he and others pointed out, China and the United States would have numerous connective strands

By the time the pandemic emerged, it may have already been too late. The hydraulic lines may already have been too damaged to transmit the signals. It was Trump himself who cut them.

Every president is “surprised” by how hard it is to convert his own wishes into government actions

Presidents cope with this discovery in varying ways. The people I spoke with had served in past administrations as early as the first George Bush’s. George H. W. Bush came to office with broad experience in the federal government—as much as any other president. He had been vice president for eight years, a CIA director, twice an ambassador, and a member of Congress. He served only four years in the Oval Office but began with a running start. Before he became president, Bill Clinton had been a governor for 12 years and had spent decades learning and talking about government policies. A CIA official told me that Clinton would not read his President’s Daily Briefs in the morning, when they arrived, but would pore over them late at night and return them with copious notes. George W. Bush’s evolution from dependence on the well-traveled Dick Cheney, in his first term, to more confident control, in his second, has been well chronicled. As for Obama, Paul Triolo told me: “By the end of his eight years, Obama really understood how to get the bureaucracy to do what he wanted done, and how to get the information he needed to make decisions.” The job is far harder than it seems. Donald Trump has been uninterested in learning the first thing about it.

In a situation like this, some of those in the “regular” government decide to struggle on. Others quit—literally, or in the giving-up sense

The ‘process’ is just so chaotic that it’s not a process at all. There’s no one at the desk. There’s no one to read the memos. No one is there.”

“If this could happen to Fauci, it makes people think that if they push too hard in the wrong direction, they’ll get their heads chopped off. There is no reason in the world something called #FireFauci should even exist. The nation’s leaders should maintain high regard for scientific empiricism, insight, and advice, and must not be professionally or personally risk averse when it comes to understanding and communicating messages about public safety and health.”

Over nearly two decades, the U.S. government had assembled the people, the plans, the connections, and the know-how to spare this nation the worst effects of the next viral mutation that would, someday, arise. That someday came, and every bit of the planning was for naught. The deaths, the devastation, the unforeseeable path ahead—they did not have to occur.

The language of an NTSB report is famously dry and clinical—just the facts. In the case of the pandemic, what it would note is the following: “There was a flight plan. There was accurate information about what lay ahead. The controllers were ready. The checklists were complete. The aircraft was sound. But the person at the controls was tweeting. Even if the person at the controls had been able to give effective orders, he had laid off people that would carry them out. This was a preventable catastrophe.”

In the past two decades, the list of British calamities, policy misjudgments, and forecasting failures has been eye-watering: the disaster of Iraq, the botched Libyan intervention in 2011, the near miss of Scottish independence in 2014, the woeful handling of Britain’s divorce from the European Union from 2016 onward

What emerges is a picture of a country whose systemic weaknesses were exposed with appalling brutality, a country that believed it was stronger than it was, and that paid the price for failures that have built up for years

The most difficult question about all this is also the simplest: Why?

Like much of the Western world, Britain had prepared for an influenza pandemic, whereas places that were hit early—Hong Kong, South Korea, Singapore, Taiwan—had readied themselves for the type of respiratory illness that COVID-19 proved to be.

Britain’s pandemic story is not all bad. The NHS is almost universally seen as having risen to the challenge; the University of Oxford is leading the race to develop the first coronavirus vaccine for international distribution, backed with timely and significant government cash; new hospitals were built and treatments discovered with extraordinary speed; the welfare system did not collapse, despite the enormous pressure it suddenly faced; and a national economic safety net was rolled out quickly.

One influential U.K. government official told me that although individual mistakes always happen in a fast-moving crisis, and had clearly taken place in Britain’s response to COVID-19, it was impossible to escape the conclusion that Britain was simply not ready. As Ian Boyd, a professor and member of SAGE, put it: “The reality is, there has been a major systemic failure.”

“It’s obvious that the British state was not prepared for” the pandemic, this official told me. “But, even worse, many parts of the state thought they were prepared, which is significantly more dangerous.”

When the crisis came, too much of Britain’s core infrastructure simply failed, according to senior officials and experts involved in the pandemic response

The human immune system actually has two parts. There is, as Cummings correctly identifies, the adaptive part. But there is also an innate part, preprogrammed as the first line of defense against infectious disease. Humans need both. The same is true of a state and its government, said those I spoke with—many of whom were sympathetic to Cummings’s diagnosis. Without a functioning structure, the responsive antibodies of the government and its agencies cannot learn on the job. When the pandemic hit, both parts of Britain’s immune system were found wanting.

The consequences may be serious and long term, but the most immediately tragic effect was that creating space in hospitals appears to have been prioritized over shielding Britain’s elderly, many of whom were moved to care homes, part of what Britain calls the social-care sector, where the disease then spread. Some 25,000 patients were discharged into these care homes between March 17 and April 16, many without a requirement that they secure a negative coronavirus test beforehand.

There was a bit too much exceptionalism about how brilliant British science was at the start of this outbreak, which ended up with a blind spot about what was happening in Korea, Taiwan, Singapore, where we just weren’t looking closely enough, and they turned out to be the best in the world at tackling the coronavirus,” a former British cabinet minister told me.

The focus on influenza pandemics and the lack of a tracing system were compounded by a shortfall in testing capacity.

Johnson’s strategy throughout was one that his hero Winston Churchill raged against during the First World War, when he concluded that generals had been given too much power by politicians. In the Second World War, Churchill, by then prime minister and defense secretary, argued that “at the summit, true politics and strategy are one.” Johnson did not take this approach, succumbing—as his detractors would have it—to fatalistic management rather than bold leadership, empowering the generals rather than taking responsibility himself

“It was a mixture of poor advice and fatalism on behalf of the experts,” one former colleague of Johnson’s told me, “and complacency and boosterism on behalf of the PM.”

What it all adds up to, then, is a sobering reality: Institutional weaknesses of state capacity and advice were not corrected by political judgment, and political weaknesses were not corrected by institutional strength. The system was hardwired for a crisis that did not come, and could not adapt quickly enough to the one that did.

Britain’s NHS has come to represent the country itself, its sense of identity and what it stands for. Set up in 1948, it became known as the first universal health-care system of any major country in the world (although in reality New Zealand got there first). Its creation, three years after victory in the Second World War, was a high-water mark in the country’s power and prestige—a time when it was a global leader, an exception.

Every developed country in the world, apart from the United States, has a universal health-care system, many of which produce better results than the NHS.

When the pandemic hit, then, Britain was not the strong, successful, resilient country it imagined, but a poorly governed and fragile one. The truth is, Britain was sick before it caught the coronavirus.

In asking the country to rally to the NHS’s defense, Johnson was triggering its sense of self, its sense of pride and national unity—its sense of exceptionalism.

Before the coronavirus, the NHS was already under considerable financial pressure. Waiting times for appointments were rising, and the country had one of the lowest levels of spare intensive-care capacity in Europe. In 2017, Simon Stevens, the NHS’s chief executive, compared the situation to the time of the health sevice’s founding decades prior: an “economy in disarray, the end of empire, a nation negotiating its place in the world.”

Yet from its beginnings, the NHS has occupied a unique hold on British life. It is routinely among the most trusted institutions in the country. Its key tenet—that all Britons will have access to health care, free at the point of service—symbolizes an aspirational egalitarianism that, even as inequality has risen since the Margaret Thatcher era, remains at the core of British identity.

In effect, Britain was rigorously building capacity to help the NHS cope, but releasing potentially infected elderly, and vulnerable, patients in the process. By late June, more than 19,000 people had died in care homes from COVID-19. Separate excess-death data suggest that the figure may be considerably higher

Britain failed to foresee the dangers of such an extraordinary rush to create hospital capacity, a shift that was necessary only because of years of underfunding and decades of missed opportunities to bridge the divide between the NHS and retirement homes, which other countries, such as Germany, had found the political will to do.

Ultimately, the scandal is a consequence of a political culture that has proved unable to confront and address long-term problems, even when they are well known.

other health systems, such as Germany’s, which is better funded and decentralized, performed better than Britain’s. Those I spoke with who either are in Germany or know about Germany’s success told me there was an element of luck about the disparity with Britain. Germany had a greater industrial base to produce medical testing and personal protective equipment, and those who returned to Germany with the virus from abroad were often younger and healthier, meaning the initial strain on its health system was less.

However, this overlooks core structural issues—resulting from political choices in each country—that meant that Germany proved more resilient when the crisis came, whether because of the funding formula for its health system, which allows individuals more latitude to top up their coverage with private contributions, or its decentralized nature, which meant that separate regions and hospitals were better able to respond to local outbreaks and build their own testing network.

Also unlike Britain, which has ducked the problem of reforming elderly care, Germany created a system in 1995 that everyone pays into, avoids catastrophic costs, and has cross-party support.

A second, related revelation of the crisis—which also exposed the failure of the British state—is that underneath the apparent simplicity of the NHS’s single national model lies an engine of bewildering complexity, whose lines of responsibility, control, and accountability are unintelligible to voters and even to most politicians.

Britain, I was told, has found a way to be simultaneously overcentralized and weak at its center. The pandemic revealed the British state’s inability to manage the nation’s health:

Since at least the 1970s, growing inequality between comparatively rich southeast England (including London) and the rest of the country has spurred all parties to pledge to “rebalance the economy” and make it less reliant on the capital. Yet large parts remain poorer than the European average. According to official EU figures, Britain has five regions with a per capita gross domestic product of less than $25,000. France, Germany, Ireland, Austria, the Netherlands, Denmark, and Sweden have none

If Britain were part of the United States, it would be anywhere from the third- to the eighth-poorest state, depending on the measure.

Britain’s performance in this crisis has been so bad, it is damaging the country’s reputation, both at home and abroad.

Inside Downing Street, officials believe that the lessons of the pandemic apply far beyond the immediate confines of elderly care and coronavirus testing, taking in Britain’s long-term economic failures and general governance, as well as what they regard as its ineffective foreign policy and diplomacy.

the scale of the task itself is enormous. “We need a complete revamp of our government structure because it’s not fit for purpose anymore,” Boyd told me. “I just don’t know if we really understand our weakness.”

In practice, does Johnson have the confidence to match his diagnosis of Britain’s ills, given the timidity of his approach during the pandemic? The nagging worry among even Johnson’s supporters in Parliament is that although he may campaign as a Ronald Reagan, he might govern as a Silvio Berlusconi, failing to solve the structural problems he has identified.

This is not a story of pessimistic fatalism, of inevitable decline. Britain was able to partially reverse a previous slump in the 1980s, and Germany, seen as a European laggard in the ‘90s, is now the West’s obvious success story. One of the strengths of the Westminster parliamentary system is that it occasionally produces governments—like Johnson’s—with real power to effect change, should they try to enact it.

It has been overtaken by many of its rivals, whether in terms of health provision or economic resilience, but does not seem to realize it. And once the pandemic passes, the problems Britain faces will remain: how to sustain institutions so that they bind the country together, not pull it apart; how to remain prosperous in the 21st century’s globalized economy; how to promote its interests and values; how to pay for the ever-increasing costs of an aging population.

“The really important question,” Boyd said, “is whether the state, in its current form, is structurally capable of delivering on the big-picture items that are coming, whether pandemics or climate change or anything else.”

in the end, Facebook’s interest was fleeting. Mr. Zuckerberg and other senior executives largely shelved the basic research, according to previously unreported internal documents and people familiar with the effort, and weakened or blocked efforts to apply its conclusions to Facebook products.

At Facebook, “There was this soul-searching period after 2016 that seemed to me this period of really sincere, ‘Oh man, what if we really did mess up the world?’

Another concern, they and others said, was that some proposed changes would have disproportionately affected conservative users and publishers, at a time when the company faced accusations from the right of political bias.

Americans were drifting apart on fundamental societal issues well before the creation of social media, decades of Pew Research Center surveys have shown. But 60% of Americans think the country’s biggest tech companies are helping further divide the country, while only 11% believe they are uniting it, according to a Gallup-Knight survey in March.

Facebook policy chief Joel Kaplan, who played a central role in vetting proposed changes, argued at the time that efforts to make conversations on the platform more civil were “paternalistic,” said people familiar with his comments.

The high number of extremist groups was concerning, the presentation says. Worse was Facebook’s realization that its algorithms were responsible for their growth. The 2016 presentation states that “64% of all extremist group joins are due to our recommendation tools” and that most of the activity came from the platform’s “Groups You Should Join” and “Discover” algorithms: “Our recommendation systems grow the problem.”

In a sign of how far the company has moved, Mr. Zuckerberg in January said he would stand up “against those who say that new types of communities forming on social media are dividing us.” People who have heard him speak privately said he argues social media bears little responsibility for polarization.

Fixing the polarization problem would be difficult, requiring Facebook to rethink some of its core products. Most notably, the project forced Facebook to consider how it prioritized “user engagement”—a metric involving time spent, likes, shares and comments that for years had been the lodestar of its system.

Even before the teams’ 2017 creation, Facebook researchers had found signs of trouble. A 2016 presentation that names as author a Facebook researcher and sociologist, Monica Lee, found extremist content thriving in more than one-third of large German political groups on the platform.

Swamped with racist, conspiracy-minded and pro-Russian content, the groups were disproportionately influenced by a subset of hyperactive users, the presentation notes. Most of them were private or secret.

One proposal Mr. Uribe’s team championed, called “Sparing Sharing,” would have reduced the spread of content disproportionately favored by hyperactive users, according to people familiar with it. Its effects would be heaviest on content favored by users on the far right and left. Middle-of-the-road users would gain influence.

The Common Ground team sought to tackle the polarization problem directly, said people familiar with the team. Data scientists involved with the effort found some interest groups—often hobby-based groups with no explicit ideological alignment—brought people from different backgrounds together constructively. Other groups appeared to incubate impulses to fight, spread falsehoods or demonize a population of outsiders.

Mr. Pariser said that started to change after March 2018, when Facebook got in hot water after disclosing that Cambridge Analytica, the political-analytics startup, improperly obtained Facebook data about tens of millions of people. The shift has gained momentum since, he said: “The internal pendulum swung really hard to ‘the media hates us no matter what we do, so let’s just batten down the hatches.’ ”

Building these features and combating polarization might come at a cost of lower engagement, the Common Ground team warned in a mid-2018 document, describing some of its own proposals as “antigrowth” and requiring Facebook to “take a moral stance.”

Taking action would require Facebook to form partnerships with academics and nonprofits to give credibility to changes affecting public conversation, the document says. This was becoming difficult as the company slogged through controversies after the 2016 presidential election.

Asked to combat fake news, spam, clickbait and inauthentic users, the employees looked for ways to diminish the reach of such ills. One early discovery: Bad behavior came disproportionately from a small pool of hyperpartisan users.

A second finding in the U.S. saw a larger infrastructure of accounts and publishers on the far right than on the far left. Outside observers were documenting the same phenomenon. The gap meant even seemingly apolitical actions such as reducing the spread of clickbait headlines—along the lines of “You Won’t Believe What Happened Next”—affected conservative speech more than liberal content in aggregate.

Every significant new integrity-ranking initiative had to seek the approval of not just engineering managers but also representatives of the public policy, legal, marketing and public-relations departments.

“Engineers that were used to having autonomy maybe over-rotated a bit” after the 2016 election to address Facebook’s perceived flaws, she said. The meetings helped keep that in check. “At the end of the day, if we didn’t reach consensus, we’d frame up the different points of view, and then they’d be raised up to Mark.”

Disapproval from Mr. Kaplan’s team or Facebook’s communications department could scuttle a project, said people familiar with the effort. Negative policy-team reviews killed efforts to build a classification system for hyperpolarized content. Likewise, the Eat Your Veggies process shut down efforts to suppress clickbait about politics more than on other topics.

Under Facebook’s engagement-based metrics, a user who likes, shares or comments on 1,500 pieces of content has more influence on the platform and its algorithms than one who interacts with just 15 posts, allowing “super-sharers” to drown out less-active users

Accounts with hyperactive engagement were far more partisan on average than normal Facebook users, and they were more likely to behave suspiciously, sometimes appearing on the platform as much as 20 hours a day and engaging in spam-like behavior. The behavior suggested some were either people working in shifts or bots.

“We’re explicitly not going to build products that attempt to change people’s beliefs,” one 2018 document states. “We’re focused on products that increase empathy, understanding, and humanization of the ‘other side.’ ”