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Dr. Conley said Monday it was possible the president would no longer be contagious before the 10-day period ends.

The president has repeatedly played down the threat of the virus, which medical experts say is very real, especially for older people and people with pre-existing health problems. After returning to the White House on Monday from Walter Reed National Military Medical Center, Mr. Trump stood on a White House balcony, removed his mask and flashed two thumbs up.

Biden said that he was glad Mr. Trump “seems to be coming along pretty well” but that he hoped the president would “communicate the right lesson to the American people: Masks matter.”

including Regeneron Pharmaceuticals Inc.’s experimental antibody drug cocktail

Mr. Trump’s physicians declined to answer several questions about the president’s case

“That’s crucial information,” he said. Without it, he said, it isn’t clear how badly the illness has affected him, particularly whether he contracted pneumonia. Mr. Trump’s early treatment with dexamethasone, which is typically given to people with more-severe breathing problems who are further along in the illness, raised questions, Dr. Chin-Hong said.

At the same time, Mr. Obama declined to really spend time and capital explaining his initiatives in an effective way. He believed that positive changes on the ground, especially from economic policies and the Affordable Care Act, would succeed, vindicating his judgment and marginalizing his opponents.

When President Obama began focusing on those “left behind” by the recovery, he called for building “ladders of opportunity.” That communicated that the president believed the country’s main challenges were unrealized opportunity for a newly ascendant, multicultural America, rather than the continuing economic struggle experienced by a majority of Americans.

Mr. Obama also offered only tepid support to the most important political actor in progressive and Democratic politics: the labor movement.

In fact, he spent the last couple of years of his presidency pursuing the Trans-Pacific Partnership Agreement, a free trade law vociferously opposed by the labor movement. Under President Obama, union membership has declined to 11.1 percent from 12.3 percent.

Models, it appears, do not substitute for the hard work of organizing and engaging voters in nonpresidential years; models that apparently drove nearly every decision made by the Clinton campaign are no substitute for listening to voters.

On the eve of the 2016 election, the president used the refrain: “We’ve seen America turn recession into recovery” and 15.5 million new jobs. Pointedly, he said, “Incomes are rising. Poverty is falling.”

The public’s reaction was stark from the beginning. People did not believe his view on the economy, and his approval ratings fell in Maine, New Hampshire, Pennsylvania, Iowa, Minnesota and Wisconsin in 2010 and in Iowa, Michigan, North Carolina, Ohio and Pennsylvania in 2014 — the states that led the working-class move away from the Democrats.

Just as important, however, was the discontent brewing with the Democrats’ own base. Combined, the approximately 40 percent of minority, unmarried female and millennial voters disapproved of how President Obama was handling his job in 2010 and 2014, and many stayed home during the off-year elections. Mitt Romney carried white millennials by 7 percentage points in 2012.

The president will leave office with a rising approval rating near the same league of Ronald Reagan, an economy nearing full employment and real wages tipping up. Yet a majority of voters in the last election said the economy was the top issue in their vote.

We think voters were sending a clear message: They want more than a recovery. They want an economy and government that works for them, and that task is unfinished.

what about the United States? Before the 1914 war, the great economic potential of the U.S. was suppressed by its ineffective political system, dysfunctional financial system, and uniquely violent racial and labor conflicts. “America was a byword for urban graft, mismanagement and greed-fuelled politics, as much as for growth, production, and profit,”

as World War I entered its third year—and the first year of Tooze’s story—the balance of power was visibly tilting from Europe to America. The belligerents could no longer sustain the costs of offensive war. Cut off from world trade, Germany hunkered into a defensive siege, concentrating its attacks on weak enemies like Romania. The Western allies, and especially Britain, outfitted their forces by placing larger and larger war orders with the United States

His Wilson is no dreamy idealist. The president’s animating idea was an American exceptionalism of a now-familiar but then-startling kind.

That staggering quantity of Allied purchases called forth something like a war mobilization in the United States. American factories switched from civilian to military production; American farmers planted food and fiber to feed and clothe the combatants of Europe

But unlike in 1940-41, the decision to commit so much to one side’s victory in a European war was not a political decision by the U.S. government. Quite the contrary: President Wilson wished to stay out of the war entirely. He famously preferred a “peace without victory.” The trouble was that by 1916, the U.S. commitment to Britain and France had grown—to borrow a phrase from the future—too big to fail.

His Republican opponents—men like Theodore Roosevelt, Henry Cabot Lodge, and Elihu Root—wished to see America take its place among the powers of the earth. They wanted a navy, an army, a central bank, and all the other instrumentalities of power possessed by Britain, France, and Germany. These political rivals are commonly derided as “isolationists” because they mistrusted the Wilson’s League of Nations project. That’s a big mistake. They doubted the League because they feared it would encroach on American sovereignty.

Grant presents this story as a laissez-faire triumph. Wartime inflation was halted. Borrowing and spending gave way to saving and investing. Recovery then occurred naturally, without any need for government stimulus. “The hero of my narrative is the price mechanism, Adam Smith’s invisible hand,

It was Wilson who wished to remain aloof from the Entente, who feared that too close an association with Britain and France would limit American options.

Wilson was guided by a different vision: Rather than join the struggle of imperial rivalries, the United States could use its emerging power to suppress those rivalries altogether. Wilson was the first American statesman to perceive that the United States had grown, in Tooze’s words, into “a power unlike any other. It had emerged, quite suddenly, as a novel kind of ‘super-state,’ exercising a veto over the financial and security concerns of the other major states of the world.”

Wilson hoped to deploy this emerging super-power to enforce an enduring peace. His own mistakes and those of his successors doomed the project,

What went wrong? “When all is said and done,” Tooze writes, “the answer must be sought in the failure of the United States to cooperate with the efforts of the French, British, Germans and the Japanese [leaders of the early 1920s] to stabilize a viable world economy and to establish new institutions of collective security. … Given the violence they had already experienced and the risk of even greater future devastation, France, Germany, Japan, and Britain could all see this. But what was no less obvious was that only the US could anchor such a new order.”

And that was what Americans of the 1920s and 1930s declined to do—because doing so implied too much change at home for them: “At the hub of the rapidly evolving, American-centered world system there was a polity wedded to a conservative vision of its own future.”

The Forgotten Depression is a polemic embedded within a narrative, an argument against the Obama stimulus joined to an account of the depression of 1920-21. As Grant correctly observes, that depression was one of the sharpest and most painful in American history.

Then, after 18 months of extremely hard times, the economy lurched into recovery. By 1923, the U.S. had returned to full employment.

“By the end of 1916, American investors had wagered two billion dollars on an Entente victory,” computes Tooze (relative to America’s estimated GDP of $50 billion in 1916, the equivalent of $560 billion in today’s money).

the central assumption of his version of events is the same one captured in Rothbard’s title half a century ago: that America’s economic history constitutes a story unto itself.

Americans, meanwhile, were preoccupied with the problem of German recovery. How could Germany achieve political stability if it had to pay so much to France and Belgium? The Americans pressed the French to relent when it came to Germany, but insisted that their own claims be paid in full by both France and Britain.

Germany, for its part, could only pay if it could export, and especially to the world’s biggest and richest consumer market, the United States. The depression of 1920 killed those export hopes. Most immediately, the economic crisis sliced American consumer demand precisely when Europe needed it most.

But the gravest harm done by the depression to postwar recovery lasted long past 1921. To appreciate that, you have to understand the reasons why U.S. monetary authorities plunged the country into depression in 1920.

Monetary authorities, worried that inflation would revive and accelerate, made the fateful decision to slam the credit brakes, hard. Unlike the 1918 recession, that of 1920 was deliberately engineered. There was nothing invisible about it. Nor did the depression “cure itself.” U.S. officials cut interest rates and relaxed credit, and the economy predictably recovered

But 1920-21 was an inflation-stopper with a difference. In post-World War II America, anti-inflationists have been content to stop prices from rising. In 1920-21, monetary authorities actually sought to drive prices back to their pre-war levels

James Grant hails this accomplishment. Adam Tooze forces us to reckon with its consequences for the rest of the planet.

When the U.S. opted for massive deflation, it thrust upon every country that wished to return to the gold standard (and what respectable country would not?) an agonizing dilemma. Return to gold at 1913 values, and you would have to match U.S. deflation with an even steeper deflation of your own, accepting increased unemployment along the way. Alternatively, you could re-peg your currency to gold at a diminished rate. But that amounted to an admission that your money had permanently lost value—and that your own people, who had trusted their government with loans in local money, would receive a weaker return on their bonds than American creditors who had lent in dollars.

Britain chose the former course; pretty much everybody else chose the latter.

The consequences of these choices fill much of the second half of The Deluge. For Europeans, they were uniformly grim, and worse.

But one important effect ultimately rebounded on Americans. America’s determination to restore a dollar “as good as gold” not only imposed terrible hardship on war-ravaged Europe, it also threatened to flood American markets with low-cost European imports. The flip side of the Lost Generation enjoying cheap European travel with their strong dollars was German steelmakers and shipyards underpricing their American competitors with weak marks.

American leaders of the 1920s weren’t willing to accept this outcome. In 1921 and 1923, they raised tariffs, terminating a brief experiment with freer trade undertaken after the election of 1912. The world owed the United States billions of dollars, but the world was going to have to find another way of earning that money than selling goods to the United States.

Between 1924 and 1930, world financial flows could be simplified into a daisy chain of debt. Germans borrowed from Americans, and used the proceeds to pay reparations to the Belgians and French. The French and Belgians, in turn, repaid war debts to the British and Americans. The British then used their French and Italian debt payments to repay the United States, who set the whole crazy contraption in motion again. Everybody could see the system was crazy. Only the United States could fix it. It never did.

The reckless desperation of Hitler’s war provides context for the horrific crimes of his regime. Hitler’s empire could not feed itself, so his invasion plan for the Soviet Union contemplated the death by starvation of 20 to 30 million Soviet urban dwellers after the invaders stole all foodstuffs for their own use. Germany lacked workers, so it plundered the labor of its conquered peoples. By 1944, foreigners constituted 20 percent of the German workforce and 33 percent of armaments workers

“If man accumulates enough combustible material, God will provide the spark.” So it happened in 1929. The Deluge that had inundated the rest of the developed world roared back upon the United States.

From the start, the United States was Hitler’s ultimate target. “In seeking to explain the urgency of Hitler’s aggression, historians have underestimated his acute awareness of the threat posed to Germany, along with the rest of the European powers, by the emergence of the United States as the dominant global superpower,” Tooze writes. “The originality of National Socialism was that, rather than meekly accepting a place for Germany within a global economic order dominated by the affluent English-speaking countries, Hitler sought to mobilize the pent-up frustrations of his population to mount an epic challenge to this order.”

Germany was a weaker and poorer country in 1939 than it had been in 1914. Compared with Britain, let alone the United States, it lacked the basic elements of modernity: There were just 486,000 automobiles in Germany in 1932, and one-quarter of all Germans still worked as farmers as of 1925. Yet this backward land, with an income per capita comparable to contemporary “South Africa, Iran and Tunisia,” wagered on a second world war even more audacious than the first.

That way was found: more debt, especially more German debt. The 1923 hyper-inflation that wiped out Germany’s savers also tidied up the country’s balance sheet. Post-inflation Germany looked like a very creditworthy borrower.

On paper, the Nazi empire of 1942 represented a substantial economic bloc. But pillage and slavery are not workable bases for an industrial economy. Under German rule, the output of conquered Europe collapsed. The Hitlerian vision of a united German-led Eurasia equaling the Anglo-American bloc proved a crazed and genocidal fantasy.

The foundation of this order was America’s rise to unique economic predominance a century ago. That predominance is now coming to an end as China does what the Soviet Union and Imperial Germany never could: rise toward economic parity with the United States.

t is coming, and when it does, the fundamental basis of world-power politics over the past 100 years will have been removed. Just how big and dangerous a change that will be is the deepest theme of Adam Tooze's profound and brilliant grand narrative

The safe-have U.S. dollar continued to fall.

Markets for risk assets have been on a tear, carrying major stock market indexes to within sight of pre-pandemic, all-time highs.

The rise came as the Nasdaq Composite, S&P 500 and the Dow Jones Industrial Average continued their rise from March

The dollar index fell 0.24%

On Wednesday, the Dow rose 2.05%, the S&P 500 gained 1.36% and the Nasdaq Composite added 0.78%.

The move to riskier assets continued to take down prices for U.S. Treasuries. The yield on the benchmark 10-year reached 0.7333% on Wednesday, up from 0.667% on Tuesday.

Governments around the world have gradually started to lift tough lockdown measures imposed to contain the coronavirus which has infected nearly 6.4 million people and killed over 379,000.

On Wednesday, a report showed that U.S. private payrolls fell less than expected in May, suggesting layoffs were abating as businesses reopen.

Fear of coronavirus infection is the economy’s biggest hurdle, he said, and the recovery will be held back until Americans believe it’s safe to resume commercial activities involving person-to-person contact.

“The No. 1 thing, of course, is people believing that it’s safe to go back to work so they can go out,” said Mr. Powell. “That’s what it will take for people to regain confidence.”

“If consumers are afraid to eat out, shop or travel, a relaxation in laws requiring business closures may do little to bring back customers and thus jobs,”

Mr. Powell and other senior central bank officials have indicated they don’t think a V-shaped recovery is likely. This has fueled their concern that the government’s initial relief measures may prove insufficient to nurse the economy through a shock with no modern parallel and with interest rates already near zero.

Boston Fed President Eric Rosengren said he expected the unemployment rate to peak near 20% this year and to stay above 10% through the end of the year. “This outlook is both sobering and a call to action,” he said. “Now is the time for both monetary and fiscal policy to act boldly to minimize the economic pain from the pandemic.”

Mr. Rosengren warned that simply allowing businesses to reopen without slowing the spread of the virus risked making the economy worse.

For the third time in a week, Mr. Powell suggested additional spending by Washington could be needed to prevent long-term damage from high unemployment and waves of bankruptcies. “The scope and speed of this downturn are without modern precedent and are significantly worse than any recession since World War II,”

It is vital that the design and timing of reductions in business restrictions not result in worse outcomes and higher unemployment over a longer period of time.”

Congress has appropriated nearly $2.9 trillion so far to support households, businesses, health-care providers and state and local governments, or around 14% of national economic output.

“I do think we need to take a step back and ask over time is it enough, and we need to be prepared to act further,” Mr. Powell said Tuesday.

Animating the administration’s approach is the expectation of a V-shaped recovery, he indicated. “We believe it’s the best bet,” Mr. Kudlow said.

“They’re all assuming after Labor Day everything is fine. Hope is not a strategy,” said Stephen Myrow, a former Treasury official in the George W. Bush administration

The issue has taken on urgency because of uncertainty over how long consumers will shun commercial activities that require human contact and because of partisan differences that could hold up further federal spending.

They were offering nearly unlimited cheap debt to keep the wheels of finance turning, and when that didn’t help, the Fed began purchasing massive quantities of government debt outright.

Investors dumped whatever they could, including ostensibly “risk-free” U.S. Treasury securities. As a global dash for dollars unfolded, Treasurys were no longer serving as the market’s traditional shock absorbers, amplifying extreme turmoil on Wall Street.

By week’s end, the Dow had plunged more than 10,000 points since mid-February as investors struggled to get their arms around what a halt to global commerce would mean for businesses that would soon have no revenue.

“It was sheer, unadulterated panic, of a magnitude that was far worse than in 2008 and 2009. Far worse,”

The idea of shutting down markets was especially discouraging: “It was a profoundly un-American thing to contemplate, to just shut everything down, and almost fatalistic—that we’re not going to get out of this.”

nearly two years later, most agree that the Fed’s actions helped to save the economy from going into a pandemic-induced tailspin.

“My thought was—I remember this very clearly—‘O.K. We have a four-or-five-day chance to really get our act together and get ahead of this. We’re gonna try to get ahead of this,’” Mr. Powell recalled later. “And we were going to do that by just announcing a ton of stuff on Monday morning.”

It worked. The Fed’s pledges to backstop an array of lending, announced on Monday, March 23, would unleash a torrent of private borrowing based on the mere promise of central bank action—together with a massive assist by Congress, which authorized hundreds of billions of dollars that would cover any losses.

If the hardest-hit companies like Carnival, with its fleet of 104 ships docked indefinitely, could raise money in capital markets, who couldn’t?

on April 9, where he shed an earlier reluctance to express an opinion about government spending policies, which are set by elected officials and not the Fed. He spoke in unusually moral terms. “All of us are affected,” he said. “But the burdens are falling most heavily on those least able to carry them…. They didn’t cause this. Their business isn’t closed because of anything they did wrong. This is what the great fiscal power of the United States is for—to protect these people as best we can from the hardships they are facing.”

They were extraordinary words from a Fed chair who during earlier, hot-button policy debates said the central bank needed to “stay in its lane” and avoid providing specific advice.

To avoid a widening rift between the market haves (who had been given access to Fed backstops) and the market have-nots (who had been left out because their debt was deemed too risky), Mr. Powell had supported a decision to extend the Fed’s lending to include companies that were being downgraded to “junk” status in the days after it agreed to backstop their bonds.

Most controversially, Mr. Powell recommended that the Fed purchase investment vehicles known as exchange-traded funds, or ETFs, that invest in junk debt. He and his colleagues feared that these “high-yield” bonds might buckle, creating a wave of bankruptcies that would cause long-term scarring in the economy.

Mr. Powell decided that it was better to err on the side of doing too much than not doing enough.

, Paul Singer, who runs the hedge-fund firm Elliott Management, warned that the Fed was sowing the seeds of a bigger crisis by absolving markets of any discipline. “Sadly, when people (including those who should know better) do something stupid and reckless and are not punished,” he wrote, “it is human nature that, far from thinking that they were lucky to have gotten away with something, they are encouraged to keep doing the stupid thing.”

The breathtaking speed with which the Fed moved and with which Wall Street rallied after the Fed’s announcements infuriated Dennis Kelleher, a former corporate lawyer and high-ranking Senate aide who runs Better Markets, an advocacy group lobbying for tighter financial regulations.

This is a ridiculous discussion no matter how heartfelt Powell is about ‘we can’t pick winners and losers’—to which my answer is, ‘So instead you just make them all winners?’”

“Literally, not only has no one in finance lost money, but they’ve all made more money than they could have dreamed,” said Mr. Kelleher. “It just can’t be the case that the only thing the Fed can do is open the fire hydrants wide for everybody

Mr. Powell later defended his decision to purchase ETFs that had invested in junk debt. “We wanted to find a surgical way to get in and support that market because it’s a huge market, and it’s a lot of people’s jobs… What were we supposed to do? Just let them die and lose all those jobs?” he said. “If that’s the biggest mistake we made, stipulating it as a mistake, I’m fine with that. It wasn’t time to be making finely crafted judgments,” Mr. Powell said. He hesitated for a moment before concluding. “Do I regret it? I don’t—not really.”

“We didn’t know there was a vaccine coming. The pandemic is just raging. And we don’t have a plan,” said Mr. Powell. “Nobody in the world has a plan. And in hindsight, the worry was, ‘What if we can’t really fully open the economy for a long time because the pandemic is just out there killing people?’”

Mr. Powell never saw this as a particularly likely outcome, “but it was around the edges of the conversation, and we were very eager to do everything we could to avoid that outcome,”

The Fed’s initial response in 2020 received mostly high marks—a notable contrast with the populist ire that greeted Wall Street bailouts following the 2008 financial crisis. North Carolina Rep. Patrick McHenry, the top Republican on the House Financial Services Committee, gave Mr. Powell an “A-plus for 2020,” he said. “On a one-to-10 scale? It was an 11. He gets the highest, highest marks, and deserves them. The Fed as an institution deserves them.”

The pandemic was the most severe disruption of the U.S. economy since the Great Depression. Economists, financial-market professionals and historians are only beginning to wrestle with the implications of the aggressive response by fiscal and monetary policy makers.

Altogether, Congress approved nearly $5.9 trillion in spending in 2020 and 2021. Adjusted for inflation, that compares with approximately $1.8 trillion in 2008 and 2009.

By late 2021, it was clear that many private-sector forecasters and economists at the Fed had misjudged both the speed of the recovery and the ways in which the crisis had upset the economy’s equilibrium. Washington soon faced a different problem. Disoriented supply chains and strong demand—boosted by government stimulus—had produced inflation running above 7%.

because the pandemic shock was akin to a natural disaster, it allowed Mr. Powell and the Fed to sidestep concerns about moral hazard—that is, the possibility that their policies would encourage people to take greater risks knowing that they were protected against larger losses. If a future crisis is caused instead by greed or carelessness, the Fed would have to take such concerns more seriously.

The high inflation that followed in 2021 might have been worse if the U.S. had seen more widespread bankruptcies or permanent job losses in the early months of the pandemic.

an additional burst of stimulus spending in 2021, as vaccines hastened the reopening of the economy, raised the risk that monetary and fiscal policy together would flood the economy with money and further fuel inflation.

The surge in federal borrowing since 2020 creates other risks. It is manageable for now but could become very expensive if the Fed has to lift interest rates aggressively to cool the economy and reduce high inflation.

The Congressional Budget Office forecast in December 2020 that if rates rose by just 0.1 percentage point more than projected in each year of the decade, debt-service costs in 2030 would rise by $235 billion—more than the Pentagon had requested to spend in 2022 on the Navy.

its low-rate policies have coincided with—and critics say it has contributed to—a longer-running widening of wealth inequality.

In 2008, household wealth fell by $8 trillion. It rose by $13.5 trillion in 2020, and in the process, spotlighted the unequal distribution of wealth-building assets such as houses and stocks.

Without heavy spending from Washington, focused on the needs of the least well-off, these disparities might have attracted more negative scrutiny.

Finally, the Fed is a technocratic body that can move quickly because it operates under few political constraints. Turning to it as the first line of defense in this and future crises could compromise its institutional independence.

Step one, he said, was to get in the fight and try to win. Figuring out how to exit would be a better problem to have, because it would mean they had succeeded.

“We have a recovery that looks completely unlike other recoveries that we’ve had because we’ve put so much support behind the recovery,” Mr. Powell said last month. “Was it too much? I’m going to leave that to the historians.”

The final verdict on the 2020 crisis response may turn on whether Mr. Powell is able to bring inflation under control without a painful recession—either as sharp price increases from 2021 reverse on their own accord, as officials initially anticipated, or because the Fed cools down the economy by raising interest rates.

if you look at United States history since World War II, you find that of the 10 presidents who preceded Barack Obama, seven left office with a debt ratio lower than when they came in. Who were the three exceptions? Ronald Reagan and the two George Bushes. So debt increases that didn’t arise either from war or from extraordinary financial crisis are entirely associated with hard-line conservative governments. And there’s a reason for that association: U.S. conservatives have long followed a strategy of “starving the beast,” slashing taxes so as to deprive the government of the revenue it needs to pay for popular programs.

But that is not the entire story. The euro zone’s troubles have helped Germany’s export-oriented economy. The weak euro has made Germany’s exports more competitive against those of countries with which it competes, most notably the United States and Japan. Since the end of 2007, the euro is down about 10 percent against the dollar and about 20 percent against the yen.

The charts reflecting Germany’s unemployment rates, if they were the only evidence available on world economic trends, would seem to indicate there was a mild downturn in 2009 that soon ended, with the economy recovering the next year. The United States charts would indicate a more severe downturn, followed by a recovery that began in 2010 and may now be gathering strength. In Britain, there has been much less progress since unemployment peaked in 2011.

In the 16 other euro zone countries as a group, the chart indicates a deep recession that leveled off in 2010 and 2011 but has since gotten much worse — particularly for young workers.

The European Commission’s latest economic forecast, released last week, predicted declining unemployment in Germany this year and next, but said joblessness was likely to continue to climb in France, Italy and Spain.

This may be the singular tragedy of the Obama administration. Five years later, it is clear to all fair-minded economists that the stimulus did work, and that it did enormous good for the economy and for tens of millions of people. But because it fell short of its goals, and was roundly ridiculed by Republicans and inadequately defended by Democrats, who should have trumpeted its success, the president’s stimulus plan is now widely considered a stumble.

This enabled Republicans to champion an austerity policy that produced deep reductions in discretionary spending, undoing many of the gains begun in 2009. The result has been a post-stimulus recovery that remains weak and struggling, undermining an economic legacy that should be seen as a remarkable accomplishment.

The legacy of that policy, detailed by the White House last week in its final report on the effects of the stimulus, affects virtually every American who drives, uses mass transit, or drinks water. It improved 42,000 miles of road, fixed or replaced 2,700 bridges, and bought more than 12,000 transit vehicles. It cleaned up water supplies, created the school reforms of the Race to the Top program, and greatly expanded the use of renewable energy and broadband Internet service.

its assessment echoes the views of many independent economists and the independent Congressional Budget Office. “The Recovery Act was not a failed program,” the C.B.O.’s director, Douglas Elmendorf, told annoyed Republican lawmakers in 2012. “Our position is that it created higher output and employment than would have occurred without it.”

back in America we haven’t had an official, declared policy of fiscal austerity — but we’ve nonetheless had plenty of austerity in practice, thanks to the federal sequester and sharp cuts by state and local governments. The good news is that we, too, seem to have stopped tightening the screws: Public spending isn’t surging, but at least it has stopped falling. And the economy is doing much better as a result. We are finally starting to see the kind of growth, in employment and G.D.P., that we should have been seeing all along — and the public’s mood is rapidly improving.

You know the spiel: that the U.S. economy is ailing because Obamacare is a job-killer and the president is a redistributionist, that Mr. Obama’s anti-business speeches (he hasn’t actually made any, but never mind) have hurt entrepreneurs’ feelings, inducing them to take their marbles and go home.

The truth is that the private sector has done surprisingly well under Mr. Obama, adding 6.7 million jobs since he took office, compared with just 3.1 million at this point under President George W. Bush. Corporate profits have soared, as have stock prices. What held us back was unprecedented public-sector austerity: At this point in the Bush years, government employment was up by 1.2 million, but under Mr. Obama it’s down by 600,000. Sure enough, now that this de facto austerity is easing, the economy is perking up.

"The process is likely to proceed gradually," Yellen said, a hint that further hikes will be slow in coming.

New economic projections from Fed policymakers were largely unchanged from September, with unemployment anticipated to fall to 4.7 percent next year and economic growth hitting 2.4 percent.

the economic security of most Americans dwindled, and the legitimacy of the system was called into question. One consequence has been the rise of the far right; another is Donald Trump.

Germany insisted that the struggling countries had to practice austerity in order to restore the confidence of private financial markets. In a deep recession, even orthodox economists at the International Monetary Fund soon recognized that austerity was a perverse recipe for economic recovery.

Europe, because of Germany’s worries that these policies would lead to inflation, had no way to extend credit to struggling nations or to raise money through the sale of bonds, which would have allowed the ECB to provide debt relief or to invest in public services.

The political result was the same on both sides of the Atlantic—declining prospects for ordinary people, animus toward elites, and the rise of ultra-nationalism

Not so in Europe. Parties such as the German Social Democratic Party, the British Labour Party, and the French Socialists disgraced themselves as co-sponsors of the neoliberal formula that brought down the economy.

In nation after nation, the main opposition to the party of Davos is neofascism.

In his masterful narrative, the economic historian Adam Tooze achieves several things that no other single author has quite accomplished. Tooze has managed to explain a hugely complex global crisis in its multiple dimensions, and his book combines cogent analysis with a fascinating history of the political and economic particulars

when the collapse came, it was “a financial crisis triggered by the humdrum market for American real estate.”

the collapse reinforced the financial supremacy of Washington and New York. “Far from withering away,” he writes, “the Fed’s response gave an entirely new dimension to the global dollar.”

When the entire structure of borrowed money collapsed, the losses more than wiped out all the capital of the banking system—not just in the US but in Europe, because of the intimate interconnection (and contagion) of American and European banks. Had the authorities just stood by, Tooze writes, the collapse would have been far more severe than the Great Depression:

While insisting to Congress that the emergency response was mainly to shore up US finance, Bernanke turned the Fed into the world’s central bank. “Through so-called liquidity swap lines, the Fed licensed a hand-picked group of core central banks to issue dollar credits on demand,” Tooze writes. In other words, the Fed simply created enough dollars, running well into the trillions, to prevent the global economy from collapsing for lack of credit.

Bernanke instigated government action on an unimagined scale to prop up a private system that supposedly did not need the state

Using deposit guarantees, loans to banks, outright capital transfers, and purchases of nearly worthless securities, the Fed and the Treasury recapitalized the banking system. To camouflage what was at work, officials invented unlimited credit pipelines with disarmingly technical names.

The blandly named policy of quantitative easing, which drove interest rates down to almost zero, was a euphemism for Fed purchases of immense quantities of private and government securities.

The crisis, Tooze writes, “was a devastating blow to the complacent belief in the great moderation, a shocking overturning of the prevailing laissez-faire ideology.” And yet the ideology prevailed

In a reversal of New Deal priorities, most of the relief went to the biggest banks, while smaller banks and homeowners were allowed to go under

Banks were permitted to invent complex provisional loan “modifications” with opaque terms that favored lenders, rather than using their government subsidies to provide refinancing to reduce homeowner debts

How did a nominally center-left administration, elected during a financial crisis caused by right-wing economic ideology and policy, end up in this situation?

Turning to Europe, Tooze explores the fatal combination of Germany’s demands for austerity with the structural weakness of the ECB and the vulnerability of the euro.

Portugal or Greece now enjoyed interest rates that were only slightly higher than Germany’s, and markets failed to take account of the risk of default, which was more serious than that of devaluation.

instead of treating the Greek situation as a crisis to be contained and helping a genuinely reformist new government find its footing, Brussels and Berlin treated Greece as an object lesson in profligacy and an opportunity to insist on punitive terms for financial aid

A central player in this tragedy was the European Central Bank. Tooze does a fine job of explaining the delicate dance between the bank’s leaders and its real masters in Germany. Since Germany opposed continent-wide recovery spending, the bank could only pursue monetary policy. The model was the Fed. Yet while the Fed has a congressional “dual mandate” to target both price stability and high employment, the ECB’s charter allowed for price stability only

The ECB, with the consent of the Germans, came up with one of those bland-sounding names, Outright Monetary Transactions, for its direct purchases of government bonds. But the program, at the insistence of the Germans, was restricted to nations in compliance with Merkel’s rigid fiscal terms, which limited national deficits and debts. In other words, the money could not go to the very nations where it was needed most, since the hardest-hit countries had to borrow heavily to get themselves out of the recession

Reading Tooze, you realize that it’s a miracle that the EU and the euro survived at all—but they did so at terrible human cost.

the ideal of liberalized trade, and the use of trade treaties to promote deregulation or privatized regulation of finance, is a major element of the story of how neoliberal hegemony promoted the eventual collapse. But except for a passing reference, trade and globalized deregulation get little mention here.

he has almost nothing to say about Janet Yellen. Her nomination as Fed chair in 2013 to succeed Bernanke was an epochal event and an improbable defeat for the proponents of austerity, deregulation, and bank bailouts who influenced Obama’s policymaking. Yellen, a left-liberal economist specializing in labor markets, was the only left-of-center Fed chair other then FDR’s chairman Marriner Eccles. She also believed in tough regulation of banks. The extension of quantitative easing well beyond its intended end was substantially due to Yellen’s concern about wages and employment, and not just price stability, since low interest rates can also help promote recovery.

Tooze ends the book with a short chapter called “The Shape of Things to Come,” mainly on the ascent of China, the one nation that avoided all the shibboleths of economic and political liberalism, though it also, of course, does not have a political democracy.

with the son of Charles VII, the monarchy was to be tested yet again

The fiscal reorganization facilitated equally significant military reforms. The Peace of Arras, rather than pacifying France

the monarchy recovered much of the authority it had lost during the early stages of the Hundred Years’ War. Although its influence in Burgundy and Flanders (now united in a formidable dynastic association) had declined, its definitive recovery of Aquitaine consolidated a direct domain, again extensive enough to free the Valois royalty from anxiety about landed resources.

Louis XI (reigned 1461–83) was shamelessly impatient for his father’s death.

No French king had ever imposed himself so totally and so tyrannically as did Louis XI.

The result was an aggressive monetary expansion that effectively ended deflation.

The economy responded strongly. From 1933 to 1937, real gross domestic product grew at an annual rate of almost 10 percent, and unemployment fell from 25 percent to 14. To put that in perspective, G.D.P. growth has averaged just 2.5 percent in the current recovery, and unemployment has barely budged.

The lesson here is that fiscal stimulus can help a depressed economy recover — an idea supported by new studies of the 2009 stimulus package. Additional short-run tax cuts or increases in government investment would help deal with our unemployment crisis.

What of the idea that monetary and fiscal policy can do little if unemployment is caused by structural factors, like a mismatch between workers’ skills and available jobs

businesses and workers found a way to get the job done. Factories simplified production methods and housewives learned to rivet.

Here the lesson is that demand is crucial — and that jobs don’t go unfilled for long. If jobs were widely available today, unemployed workers would quickly find a way to acquire needed skills or move to where the jobs were located.

at the end of World War II, that ratio hit 109 percent — one and a half times as high as it is now. Yet this had no obvious adverse consequences for growth or our ability to borrow.

what about the national debt? Given the recent debt downgrade, it might seem impossible for the United States to embark on fiscal stimulus that would increase its ratio of debt to G.D.P.

Everyone understood then why the nation was racking up so much debt: we were fighting for survival, and for the survival of our allies. No one doubted that we would repay our debts. We had done it after every other war, and raising taxes even before the attack on Pearl Harbor showed our leaders’ fiscal resolve.

someone needs to explain to the nation and to world markets just why we must increase the debt in the short run. Unemployment of roughly 9 percent for 28 months and counting is a national emergency. We must fight it with the same passion and commitment we have brought to military emergencies in our past.

Deaton and the economist Anne Case, who is also his wife, coined the term “deaths of despair” to describe the surge of mortality from alcohol, drugs and suicide.

“The meaningfulness of the working-class life seems to have evaporated,” Angus Deaton, the Nobel Prize-winning economist, told us. “The economy just seems to have stopped delivering for these people.”

Only in America has life expectancy now fallen three years in a row, for the first time in a century, because of “deaths of despair.”

Even in this presidential campaign, the unraveling of working-class communities receives little attention. There is talk about the middle class, but very little about the working class

The suffering was invisible to affluent Americans, but the consequences are now evident to all: The survivors mostly voted for Trump, some in hopes that he would rescue them

The stock market is near record highs, but working-class Americans (often defined as those without college degrees) continue to struggle. If you’re only a high school graduate, or worse, a dropout, work no longer pays.

If the federal minimum wage in 1968 had kept up with inflation and productivity, it would now be $22 an hour. Instead, it’s $7.25.

we would return to the Kristof family farm in Yamhill and see a humanitarian crisis unfolding in a community we loved — and a similar unraveling was happening in towns across the country. This was not one town’s problem, but a crisis in the American system.

“I’m a capitalist, and even I think capitalism is broken,” says Ray Dalio, the founder of Bridgewater, the world’s largest hedge fund.

One consequence is that the bottom end of America’s labor force is not very productive, in ways that reduce our country’s competitiveness

we discuss college access but not the one in seven children who don’t graduate from high school.

“We have to stop being obsessed over impeachment and start actually digging in and solving the problems that got Donald Trump elected in the first place,”

We have to treat America’s cancer.

the situation is worsening, because families have imploded under the pressure of drug and alcohol abuse, and children are growing up in desperate circumstances

In the 1970s and ’80s it was common to hear derogatory suggestions that the forces ripping apart African-American communities were rooted in “black culture.” The idea was that “deadbeat dads,” self-destructive drug abuse and family breakdown were the fundamental causes, and that all people needed to do was show “personal responsibility.

A Harvard sociologist, William Julius Wilson, countered that the true underlying problem was lost jobs, and he turned out to be right. When good jobs left white towns like Yamhill a couple of decades later because of globalization and automation, the same pathologies unfolded there.

Men in particular felt the loss not only of income but also of dignity that accompanied a good job. Lonely and troubled, they self-medicated with alcohol or drugs, and they accumulated criminal records that left them less employable and less marriageable.

Family structure collapsed.

The problems are also rooted in disastrous policy choices over 50 years

The kids on the No. 6 bus rode into a cataclysm as working-class communities disintegrated across America because of lost jobs, broken families, gloom — and failed policies.

The United States wrested power from labor and gave it to business, and it suppressed wages and cut taxes rather than invest in human capital, as our peer countries did.

Americans also bought into a misconceived “personal responsibility” narrative that blamed people for being poor.

It’s true, of course, that personal responsibility matters: People we spoke to often acknowledged engaging in self-destructive behaviors.

But when you can predict wretched outcomes based on the ZIP code where a child is born, the problem is not bad choices the infant is making.

If we’re going to obsess about personal responsibility, let’s also have a conversation about social responsibility.

Why did deaths of despair claim Farlan, Zealan, Nathan, Rogena and so many others?

First, well-paying jobs disappeared

Second, there was an explosion of drugs

Third, the war on drugs sent fathers and mothers to jail, shattering families.

Both political parties embraced mass incarceration and the war on drugs, which was particularly devastating for black Americans, and ignored an education system that often consigned the poor — especially children of color — to failing schools

Since 1988, American schools have become increasingly segregated by race, and kids in poor districts perform on average four grade levels behind those in rich districts.

Women in Recovery has a recidivism rate after three years of only 4 percent, and consequently has saved Oklahoma $70 million in prison spending,

ob training and retraining give people dignity as well as an economic lifeline. Such jobs programs are common in other countries.

For instance, autoworkers were laid off during the 2008-9 economic crisis both in Detroit and across the Canadian border in nearby Windsor, Ontario. As the scholar Victor Tan Chen has showed, the two countries responded differently

The United States focused on money, providing extended unemployment benefits. Canada emphasized job retraining, rapidly steering workers into new jobs in fields like health care, and Canadian workers also did not have to worry about losing health insurance.

The focus on job placement meant that Canadian workers were ushered more quickly back into workaday society and thus today seem less entangled in drugs and family breakdown.

Another successful strategy is investing not just in prisons but also in human capital to keep people out of prisons.

We attended a thrilling graduation in Tulsa, Okla., for 17 women completing an impressive local drug treatment program called Women in Recovery.

The graduates had an average of 15 years of addiction each, and all were on probation after committing crimes. Yet they had quit drugs and started jobs

Yet it’s not hopeless. America is polarized with ferocious arguments about social issues, but we should be able to agree on what doesn’t work: neglect and underinvestment in children. Here’s what does work.

Bravo for philanthropy, but the United States would never build interstate highways through volunteers and donations, and we can’t build a national preschool program or a national drug recovery program with private money.

For individuals trying to break an addiction, a first step is to face up to the problem — and that’s what America should do as well

Officials have differing opinions about how much change Times Square may be in for over the next few years — as new businesses inevitably replace old ones — and how long its full recovery will take. Real estate and tourism officials say estimates range between one and four years.

"2021 is certainly going to feel more upbeat than 2020 did, but I think there will also be some disappointment,"

Douglas Hercher, managing director at RobertDouglas, a private real estate investment bank. "If people are thinking Times Square, by the summer, is going to look like the Times Square we all know and love, that's probably not going to be the case."

A Times Square Alliance study found foot traffic in the neighborhood's busiest block on 42nd Street between Seventh and Eighth avenues was down 70% from the previous year.

Tompkins says about 43% of Times Square's street-level businesses are currently closed, down from 87% in the spring. Hercher estimates 25%-30% of retail rental spaces in Midtown have "gone dark" due to tenants shuttering indefinitely.

"You're going to see those retailers reducing their footprint to bring their costs in line with their sales. ... I think rental rates are going to have to come down tremendously to attract tenancy to those spaces."

Krispy Kreme, for example, opened its new flagship Times Square location in September, a few months after Covid-19 lockdowns caused a 78% drop in Manhattan retail sales activity, according to the Metro Manhattan Office Space blog.

Tompkins says the pandemic hasn't changed Times Square's appeal to retailers looking to create more-engaging shopping experiences for their customers. Luxury real estate developer L&L Holding Company has continued construction of its TSX Broadway experiential retail complex throughout the pandemic.

L&L managing director David Orowitz says the pandemic hasn't shaken the developer's faith in the $2.5 billion project, which is still set to open at the end of 2022.

"We've been really fortunate in that we raised the original capital for the project prior to Covid," Orowitz said. "At the end of the day, from the perspective of an entertainment and tourism Mecca, I think Times Square continues to evolve and will continue to be what it always was."

the normalizing of remote work options across business sectors this year has already led many companies to scale back on office space, which some analysts have predicted will be a permanent shift in the commercial real estate market.

"We've definitely seen in the residential market, rents have dropped 10-15% this year in Manhattan," he said. "That's probably a little bit of the canary in the coal mine."

Only 8% of Manhattan's estimated 1 million office employees returned to their offices for work by mid-August, according to a survey conducted by the Partnership for New York City.

"There's talk about whether it makes sense to make those into residential usage," he said. "The name of the game here in the Covid era is flexibility."