Ten reasons why this time it's different

One of the best-selling books in the post 2008 global financial crisis was Reinhart and Rogoff’s study of previous financial crises, This Time is Different. It’s an impressive analysis, and one which came in for much criticism over its use of data. But their point was that it never really is different — all financial crises have their roots in the same regulatory failings, foolishness, the same failure to read the sign of the times. We have experienced pandemics over the last century and long before then. Even so, here are ten reasons why this one really is different — “the worst human and economic catastrophe since at least the 1930s,” according to the OECD.

1. Because of the global scale of the resultant economic crisis — broader and deeper than the post-2008 Banking crisis which morphed into The Great Recession — the scars will be felt for generations to come.
2. Because of the way it has struck at the two lungs of the global economy — Demand and Supply and at its central nervous system: globalised and highly synchronised financial markets.
3. Because of the scale of the response by governments to the crisis and the fiscal consequences: from the war-sized government borrowing to the enormous public debt burden that will have to paid off by our children’s children. The IMF estimate the total costs to all governments will exceed $10 trillion.
4. Because of the unprecedented uncertainty about when, and how, economic recovery will become self-sustaining. Current forecasts, as we see only too clearly in the US, the UK and others, vary from “best guess” to political kite-flying. We simply don’t know. There are so many variables, in particular when an effective vaccine will become available for mass distribution. Our capacity to live with what John Kay and Mervyn King call “Radical Uncertainty” requires a wholly different approach to policy making.
5. Because the catalyst for the crisis continues to lie outside of the economic system but which, because of its effects and the policy responses, exerts pressures within the global economy and financial markets. These pressures have laid bare the weaknesses and limitations of globalisation — and how they are affecting nations and relations between nations.
6. Because of the multi-dimensional nature of the crisis. There is no domain of our lives — faith, family and our engagement with others — untouched by the virus and its effects. No country is unaffected. The transmission of the virus was facilitated by the ease of travel and openness of borders — the beating heart of globalisation.
7. Because it has struck at national health systems that were wholly unprepared and overwhelmed — although they had good reasons to be prepared for just such a pandemic.
8. Partly because it has subverted the engagement of countries with each other. The visceral dispute between the US and China, whichever way you look at it, has done grave damage to global governance and cooperation. But it does not stop there. The restriction on freedom of movement has brought home the reality that responsibility for the welfare of citizens ultimately rests — as it should rest — with national parliaments.
9. Because of the phenomenon of intergenerational “psychosocial scarring”: death and illness — the collapse of business and long-term unemployment — creating a new kind of dependency.
10. Because this pandemic has triggered the suspension of fundamental freedoms of movement and of worship that should cause grave unease. It has changed our way of “being-in-the-world”. As one commentator put it, “The comfort of being in the presence of others is replaced by a greater comfort and felt-security of their absence.”