By: Patrick Macher

empty times square new york This Picture of Times Square Says It All

The Bad:


“We have it totally under control. It’s one person coming in from China, and we have it under control. It’s going to be just fine,” President Donald Trump reassured the public on January 22, 2020.[1] At the time, COVID-19 seemed like an other-worldly issue, but less than fifty days later, the United States got a taste of the impact the rest of the world had already learned to fear.[2] On March 09, 2020, the largest point plunge in history for the Dow Jones Industrial Average tore through the hopes of bullish traders as the reality of the inevitable spread of coronavirus set in and dropping oil prices foreshadowed the looming recession.[3] The Dow dropped so fast that the point loss triggered a “circuit breaker,” which is a fifteen minute automatic trade halt after a 7% loss.[4] The stock market turned bearish falling over 20% from the recent highs.[5] The Dow hit its March low on the 16th as it traded for a measly $22.00, a far cry from the $48.76 it was trading for a month prior.[6] In 8 calendar days COVID-19 flipped the Dow Jones, a blue-chip market index, on its head and sent American investors straight into self-quarantine.


The Worse:


The unemployment rate is a lagging recession indicator, meaning that once it starts to drop, the economy is already amidst the recession.[7] The U.S. unemployment rate jumped to 4.4% in March as the number of unemployed went from 1.35 million to over 7 million in the span of a few weeks.[8] The rate is projected to rise in April as March’s numbers stem from a mid-March, largely pre-quarantine, survey.[9] Unemployment numbers demonstrate household economic risk, but perhaps equally important is the real economy of credit, which drives the commercial economy.[10] As the financial system faces shock, liquidity problems hamper credit investment lines, which damage capital formation and ultimately growth.[11] The ugly end result is a crippled commercial sector with a damaged household profile unable to spend companies out of the recession, ultimately paralyzing any prospect of economic growth.[12]


The Hopeful?


It would be great to say the economy is going to bounce right back to pre-quarantine highs once the fear of coronavirus subsides, but there are simply too many uncertainties and unknowns.[13] The government has feverishly fought to combat the recession with drastic rate cuts and the largest financial emergency stimulus package in history.[14] On March 15, the Federal Reserve cut lending rates to virtually zero in an attempt to mitigate the damage to the economy and encourage credit lending.[15] On March 27, President Trump signed a historic $2 trillion legislation aimed at helping American workers, small businesses, and industries grappling with the economic disruption, such as the utterly halted airline industry.[16] Dow investors seem to be optimistic to the influx of household capital and lowered credit rates as it has climbed to the $36.56 mark just less than a month after its historic $22.00 low.[17] Opportunistic investors are hawking to take advantage of a historically low market and this may be falsely stabilizing the economy.[18] Unfortunately for most investors and the U.S. economy, uncertainty and unknown run rampant in this unprecedented global pandemic.[19] The most important unknown is the most obvious: the course of the virus.[20] If the virus is successfully controlled and economic restrictions are lifted in the next month, experts predict the economy could bounce back within the first half of the year.[21] However, if the virus is not contained and the economy must endure the effects of social distancing through the course of the summer, McKinsey consultants predict that it could take up to two years for the GDP to recover.[22]

[1] See Linda Qiu et al., The President vs. the Experts: How Trump Played Down the Coronavirus, N.Y. Times (Mar. 18, 2020),


[2] See Kimberly Amadeo, How Does the 2020 Stock Market Crash Compare with Others? the balance (Mar. 17, 2020),


[3] See id.


[4] See Yun Li, Plungiung Stocks Triggered a Key Market ‘Circuit Breaker’ –Here’s What That Means, CNBC (Mar. 16, 2020, 4:06 PM),


[5] See id.


[6] See Dow Inc., Yahoo Finance (Apr. 12, 2020, 9:53 PM),


[7] See Kimberly Amadeo, Unemployment Rate, Effect, and Trends: Why Every Jobless Person is Not Counted as Unemployed, the balance (May 06, 2019)


[8] See United States Unemployment Rate, Trading Economics, (last visited Apr. 13, 2020).


[9] See id.


[10] See Carlsson-Szlezak et al., Understanding the Economic Shock of Coronavirus, Harvard Business Review (Mar. 27, 2020),


[11] See id.


[12] See id.


[13] See Annalyn Kurtz, How Quickly Can the U.S. Economy Bounce Back? That Depends on the Virus, Cnn Business (Apr. 02, 2020, 6:23 AM),


[14] See Foran et al., Trump Signs Historic $2 Trillion Stimulus After Congress Passes It Friday, Cnn Politics (Mar. 27, 2020, 7:00 PM),


[15] See James Royal, Winners and Losers From the Fed’s Emergency Rate Cut, Bankrate (Mar. 15, 2020),


[16] See Foran et al., supra note 15.


[17] See Dow Inc., supra note 7.


[18] See Klein et al., COVID-19 and Shareholder Activism–The Impact, Harvard Law School Forum on Corporate Governance (Mar. 31, 2020),


[19] See Kurtz, supra note 14.


[20] See id.


[21] See id.


[22] See id.


image source: