The corona virus pandemic is leading the
country to the brink of financial crisis.
"26 million people have become unemployed in the last five weeks."
"People are gonna end up losing their
homes.
And we don't know if we might end up being one of them."
Economists warned that this is likely to be different from
anything we've seen in the last hundred years.
Because we're looking at a financial crisis on top of a public health emergency.
"This is totally different, where we're shutting down the economy to protect our health."
"The pain is gonna be severe and real.
It's not gonna be something where the government
can wave a wand, even if it's a two trillion dollar wand,
and just say, 'We'll just move on from this.'"
But even if this challenge is new,
previous experience can still offer
important perspectives about uncertainty and risk
and the human ability to
persist,
ideas that matter in the COVID-19 era.
I'm Jessica Mendoza with the Christian Science Monitor.
And in this series, we look at how history can help us
understand the issues we face today.
In this episode: economic crises.
"1929. The financial house of cards
collapses."
We know that when a financial crisis is big enough,
it can reshape an entire society.
We've seen it before.
"People who have grandparents, great-grandparents
who lived through the Great Depression,
you know that it had an effect on their whole lives.
They knew that the economy could go down really hard and really fast.
And it was tremendously important to them to save money and to have a reserve."
We saw echoes of that shift in behavior during the Great Recession.
The generation that came of age when the housing market crashed
is still reeling from that crisis.
Especially since they also faced other cultural and economic factors
that made it hard to recover, like rising college costs.
"Those of my friends that have graduated  just say, 'Welcome to unemployment.'"
"People who graduated then are much less likely to have bought a house.
They're much less likely to have taken out a mortgage.
That fear of it going wrong is especially strong
for folks who just lived through that."
And it wasn't just behavior that shifted in the aftermath of economic collapse,
institutions saw change too.
"A whole bunch of laws about banking and risk sharing and deposit insurance and all that stuff
were created in the Great Depression.
Because people said, 'We need to do something
to fight back against these risks
and chances of things breaking down.'"
We saw a similar effort to change the way our financial system worked after 2008,
through laws like the Dodd-Frank Act.
"It's an imperfect law in many ways.
But at least it was an attempt to say,
'We're gonna try and make sure the banks are
really really really safe,
and they're not going to melt down in the future.'
And so in that sense, the banks right now, I think,
are much better prepared for something to go wrong than they were circa 2007."
There's still a lot of debate over whether or not those steps were the right ones.
But still, they show that we are capable of
extraordinary action during tough times.
Which, economists say, is what we'll need
again today.
"It's really important to treat it as wartime.
It requires out-of-the-box policies."
"You have to make a decision, best evidence available.
But you have to be able to change that decision
and to adapt."
"The bill is passed."
And so as we brace ourselves for difficult times ahead, it's worth remembering:
"We're living through something that past generations have lived through.
This is not a 21st century invention.
So you get through it.
You change some patterns, you do other
things.
And then we kind of hope that in some period of time,
we can be down the other side of the curve and things will look better."
Thanks for joining us.
If you liked this video, please hit "Thumbs Up" or "Share."
And for more of our coverage of this pandemic:
