Host

Gabrielle Sierra

Podcast Host and Producer

Episode Guests

Sylvia Mathews Burwell

President, American University


Rana Foroohar

Global Business Columnist and Associate Editor, Financial Times


Tom Frieden

Senior Fellow, Council on Foreign Relations


Shannon K. O'Neil

Vice President, Deputy Director of Studies, and Nelson and David Rockefeller Senior Fellow for Latin America Studies

 

Show Notes

CFR Resources

Think Global Health 

CFR’s Topic Page on Coronavirus

What You Need to Know About the Coronavirus Outbreak,” Claire Felter and Lindsay Maizland

The World Health Organization,” CFR.org Editors

The Coronavirus, Oil, and Global Supply Chains,” Amy M. Jaffe

The Coronavirus Outbreak Could Disrupt the U.S. Drug Supply,” Yanzhong Huang 

 

Read More 

The CDC’s guidance on the coronavirus

The WHO’s guidance on the coronavirus

Coronavirus and 2020 Elections: What Happens to Voting in an Outbreak,”

New York Times

When Everyone Stays Home: Empty Public Spaces During Coronavirus,” Atlantic

Corporate margins are going to be squeezed,” Financial Times

 

Watch or Listen

Coronavirus: Fact vs Fiction,” CNN

Will Coronavirus Cause a Recession?,” The Journal

Why new diseases keep appearing in China,” Vox

 

Transcript

So at the end of our last episode, we mentioned we were taking a break ahead of our second season. But, here we are. Thanks to the Coronavirus. 

Usually, this podcast doesn’t do the news. Our whole thing is to take a step back and paint the big picture on global problems that affect us at home. But right now the news is nothing but global problems.  

The outbreak has pulled back the curtain and exposed the vulnerabilities of our interconnected world. A world in which germs, and crises, travel quickly.  

So today, we’re going to take a look at what the Coronavirus is teaching us in two parts. 

First, when the world fights a pandemic, who gets to make the decisions that count? 

And second, the economy. How has a virus led to supply shortages and historic stock market losses? 

I’m Gabrielle Sierra and this is Why It Matters. Today, learning the lessons of Coronavirus, so far.

THE WASHINGTON POST: 0:00: Fears are growing that it won’t be possible to stop the global spread of Coronavirus... Health experts have warned that the chances of containing it are diminishing, as cases appear in more countries. 

https://www.washingtonpost.com/world/2020/03/02/coronavirus-live-updates/ 

ARIRANG NEWS: 0:16: In China as of Tuesday, the new Coronavirus has killed at least 425 people, and infected over 20,400.

https://youtu.be/aKVzF-SqUdo?t=16

BBC NEWS: 0:21: Almost 60,000 people in China are now known to be infected, and the number of those killed stands at more than 1,300.

https://youtu.be/RHl8Lh67bnY?t=20

CBS EVENING NEWS: 0:14: Worldwide, cases of the Coronavirus have surpassed 100,000, and a top health official warns we are the beginning of the storm.

https://youtu.be/z9wKnkEpnCU?t=14

ABC NEWS: 0:28: Coronavirus cases are now being reported in at least 60 countries…

https://youtu.be/fF9qnNVRWHs?t=28

AL JAZEERA: 0:06: An Italian man flew into Lagos, Nigeria from Milan, earlier this week.

https://www.aljazeera.com/news/2020/02/coronavirus-outbreak-bigger-latest-updates-200228232914773.html

ABC NEWS: 0:16: At least three new States are now reporting cases, New York, Florida, Rhode Island, and a number of cases…

https://youtu.be/fF9qnNVRWHs?t=16

INDUS NEWS: 0:00: The total number of countries outside China affected by the Coronavirus, has now passed 100. 

https://youtu.be/zUqr2YMndrY

Sylvia BURWELL: Part of why we should be so concerned about it is it's new. We don't have a vaccine. We see a higher mortality rate, and we see it spreading pretty rapidly through populations, and that's very concerning. My name is Sylvia Burwell, and I am currently the President of American University. And before that, I was the Secretary of Health and Human Services for the US Government.

And so it is spreading rapidly, and we are learning what its mortality rate is. Anytime there's a virus, one of the most important things to understand is the mortality rate. How many people that get the virus are going to die. 

Also, how this virus spreads. Either it can spread if you are asymptomatic, which means you might not know that you have it, because you're not, you don't have a fever yet, you don't have a cough yet, but you could pass it on to someone else. You're more likely to pass it on when you have symptoms. But the virus can be passed both ways.

Tom FRIEDEN: We believe the ancestral host was a bat and that there was an intermediate animal that somehow came in contact with people and resulted in spread in Wuhan, China, in either late November or early December of 2019. We then saw explosive spread in Wuhan at the end of December and beginning of January of 2020. It has since spread all around the world.

I'm Dr. Tom Frieden, President and CEO of Resolve to Save Lives, a global nonprofit organization promoting public health. I'm also Senior Fellow for Global Health at CFR.

Tom Frieden also ran the Centers for Disease Control under Pres Obama, which means that for 8 years he managed the U.S. response to outbreaks like this one. 

FRIEDEN: The novel coronavirus spreads from person-to-person, but we're not entirely sure how it spreads. It may spread by coughing on somebody, or it's possible that it spreads sometimes through contaminated surfaces. One of the things that we need to learn more of is, how does it spread and how can w-we reduce the spread?

SIERRA: Who gets to make decisions that matter in this type of crisis?

FRIEDEN: There's coordination in global health, but every country sets its own policies. 

It’s understandable that individual countries want to be in charge of their own response. But because germs don’t obey borders, countries can only do so much on their own. That’s why public health officials see the need for serious improvements to global health coordination. 

FRIEDEN: After the 2003 SARS epidemic, the world got together and improved something called the International Health Regulations, or IHR. But what we found was that that wasn't taken very seriously by countries. In 2012, when I was running the Centers for Disease Control and Prevention, we therefore launched an initiative to strengthen that global collaboration and hold countries accountable for improving their ability to find outbreaks when they first occurred, to stop them whenever possible, as quickly as possible, and to prevent health threats.

SIERRA: But it's still sort of a voluntary system?

FRIEDEN: It's entirely a voluntary system. There are guidelines from the World Health Organization. Only 15% of countries in the world have documented that they're even basically ready for a serious health threat.

SIERRA: Wow. I mean, that's really scary because even if one single country does it right, there's no guarantee that their neighbors will too.

FRIEDEN: A weakness anywhere is a weakness everywhere. We are as vulnerable as the weakest link in the chain. We can't protect ourselves from diseases by pulling up the drawbridge around the United States. We're all connected by the air we breathe, the water we drink, the food we eat, the planes, and trains, and ships we travel on. And that's why it's in our self-interest to improve preparedness around the world. 

The Coronavirus is one of those threats, like global warming, that makes you remember, we’re all on a single planet. The oceans aren’t moats, and there is no way to wall your country off from the outside world. I mean look, this virus even spread to North Korea, the world’s most isolated state. 

It’s a shared threat, so there must be some big powerful global organization that steps in to save the day, right?

Well, yes, and no.  

SIERRA: So what power does the World Health Organization have?

FRIEDEN: There are fundamentally three things that the World Health Organization can do effectively and that we rely on them to do. The first is to issue guidelines so that countries will look at how something should be done, and that's an important function. The second is to track data so that we can all be on the same page as to what health status actually is. And the third is to provide support for individual countries, and that's done to a greater extent in some parts of the world than others. But WHO offices can be very effective at partnering with ministries of health and advising heads of state.

SIERRA: So, if you could make any changes you wanted to this global health infrastructure, what would you do?

FRIEDEN: The focus right now has to be to create a mechanism so that countries can step up their level of preparedness. Improving preparedness globally would cost about $1 per person per year. That would need to be continued for at least 10 years, so the total cost globally is going to be on the order of $30 billion. That's a lot of money, but it's a tiny fraction of the amount of money it could save or what this pandemic is going to cause us. When you think about the hundreds of billions or even trillions of dollars of costs that the COVID-19 pandemic has led to, you realize that not only is it a best buy to invest in protecting ourselves, but it's basically unconscionable not to do it. 

SIERRA: Do you feel like the coronavirus is a wake-up call?

FRIEDEN: If the coronavirus pandemic isn't a wake-up call, nothing will be.

SIERRA: Hmm. Do you think that other pandemics are coming?

FRIEDEN: It is inevitable that there will be other health threats. Every year on average we identify one new microbe. Some of them are deadly and spread widely, some of them not so deadly. And if we don't strengthen our defenses against them, we're leaving ourselves vulnerable to both health and economic harm.

SIERRA: Hmm. Do you think because it's sort of an invisible problem people tend to shelve it until something like this happens?

FRIEDEN: I think the biggest problem isn't that it's invisible, it's that it's in the indefinite future.

SIERRA: Mm-hmm.

FRIEDEN: Therefore, it's really the characteristic of good governance to be concerned about things that might or might not hit an elected leader during his or her time in office-

SIERRA: Right.

FRIEDEN: ... but that are responsible to address. Or as a very wonderful, um, political leader I once got to know, used to be fond of saying, uh, "We are planting a tree under the shade of which we may not sit, but our children and grandchildren may enjoy." 

SIERRA: So, you know, we've been going pretty wide. Let's look in a little bit. Can you tell me a little bit about the US response?

FRIEDEN: The US is facing what is likely to be widespread transmission of coronavirus.

SIERRA: So what powers does the CDC have during an outbreak?

FRIEDEN: CDC is the nation's health protection agency. It works 24/7 to protect Americans from threats, whether those are natural or man-made, whether they come from this country or anywhere in the world, whether they are infectious or non-infectious. CDC is primarily an advisory organization, so it has the technical experts in just about every area in health. It has the best laboratories in the world. It has tremendous resources that are able to be flexed into an area. CDC also spends about 60% of its budget giving money to s-state and local areas for very specific programs and it has a tight relationship with those areas so that it can help them improve their ability to find, stop, and prevent health threats.

SIERRA: Do you think that the CDC has the resources it needs?

FRIEDEN: The CDC does not have the resources it needs. The Congress has just passed a supplemental appropriation, that's important. But the regular appropriation needs to increase.

SIERRA: Mm-hmm.

FRIEDEN: We've talked for years and succeeded at doubling the NIH budget, but nothing like that has happened with CDC. And quite frankly. When you invest in CDC, you save lives and you save money.

SIERRA: What would winning against the coronavirus look like?

FRIEDEN: We need to try to contain it. That means to end transmission in communities where it arises. China has been able to do that remarkably, despite the enormous challenges of doing so. At some point, it becomes impossible to do contact tracing because there's so many cases, and then you shift to more of a societal strategy, things that may be effective and we don't know if they are yet. Include closing schools, getting people to telework, telling people whose family members are ill that they too have to stay home to be quarantined. But there's some things that we can do no matter what. We can wash our hands more often. Cover our mouth and nose when we cough or sneeze. Don't go out if we're sick and maybe for a while we should stop shaking hands.

SIERRA: Fair enough. Go for elbows.

FRIEDEN: Elbows. The Indian, namaste, is something I've always preferred.

SIERRA: A nice wave from afar.

FRIEDEN: A wave is good.

So clearly, mitigation is important. But as we wait to see how far the Coronavirus spreads, we’re all hoping for an outright cure. 

SIERRA: So, how important is a vaccine?

BURWELL: So one of the things, um, I think vaccines and treatment are both very important. With regard to vaccines, it will take several steps to get there. And based on my previous experience in terms of trying to get vaccines very, very quickly, which we tried to both in Ebola and with Zika, um, it would take about 12 to 18 months to do that. So you have to work on the immediate short-term and long-term at the same time. Those kinds of issues are extremely important too. And we need to be able to have the funding and the support for moving those types of things quickly. And that's a combination of the science, and the regulatory approval, to make sure that anything that is going to be used is as safe as possible.

SIERRA: What have we done well so far do you think? And in the same token, what have we done poorly?

FRIEDEN: It's still really early days- in the United States to see what's going well and what's not. Clearly, there was a problem getting test kits out from the CDC. That's unusual. CDC has been able to do that very well in the H1N1 pandemic, in Zika, and at other times. I think the US is just beginning to share the kind of information it needs to share on who's been tested, the age groups of those tested, and the results. Knitting together our federal system in the US because health is a state affair in the US, and getting every jurisdiction reporting regularly, in a standard way, in a timely way to CDC so that CDC can share that information with the public is very important. It will be key that the scientists continue to be front and center in speaking with the public.

SIERRA: So what role do you think that fear and xenophobia play in a moment like this?

BURWELL: You know, they... Sadly they do come into play, and they come into play in terms of how people treat individuals that they see, that are from the countries where there have been particular outbreaks. Whether that's China or South Korea, uh, in terms of how people react. And this is why in the beginning I mentioned the importance of communication and clarity, because when people are armed with the information versus fear, that is one of the best ways to combat what is a very real thing that is happening. I was on the Hill speaking to members about this issue this past week. And a member told me that in her district, that people are not going to Chinese restaurants. And so the impact that's occurring because of issues of xenophobia extends to individuals, but also extends to the economy as well. So I think our best approach to that is making sure people have information, um, and you pull the fear as much as possible, uh, out of people's concerns. So that they know and we can avoid those issues that are coming into play here.

FRIEDEN: We have to avoid stigma. Ironically, today as we speak, the risk of someone from anywhere outside of Wuhan, China, elsewhere in China having coronavirus is probably lower than anywhere else in the world. And yet, we still have a travel warning in place, which may or may not be reasonable. We have to recognize that we're all connected by the air we breathe, the water we drink, the food we eat, the travel we take, and we as humanity have a common enemy. That common enemy is dangerous microbes.

As Coronavirus spreads across the world, another crisis is unfolding.

ABC 15 ARIZONA: 0:07: Some hospitals across the country already saying they only have a week worth of supplies.

https://youtu.be/cqB-5uN-6dU?t=7

CNBC TELEVISION: 0:11: Companies like Adidas, Puma, Tyson Foods, and Apple, are all warning about the potential negative impact the virus could have…

https://youtu.be/EpdXnEaocXQ?t=11

WOOD TV8: 0:23: Tonight, concerns over the Coronavirus are spreading to the automotive industry.

https://youtu.be/5a67IcFLN20?t=23

CBS THIS MORNING: 0:39: Because of the outbreak, supply chains for products from cars to smartphones are disrupted, and flights and cruises are being canceled.

https://youtu.be/hwQ3KyxMSkE?t=38

PART II - how does a virus that started in an open market in Wuhan, China, lead to a global economic crisis?  

SIERRA: Alright. First question is the easiest. What is your name and what do you do? 

Rana FOROOHAR: Rana Foroohar and I am the global economics columnist and associate editor at the Financial Times. I'm also global economic analyst at CNN. 

So how did the economic problems start? 

FOROOHAR: So coronavirus started hitting, and we immediately noticed the reaction in China, which, went to a containment strategy, a quite a severe containment strategy. Um, quarantines, uh, people being kept in their homes, factories eventually being shuttered, schools being shut. But it also had a big impact on things like consumer spending...that Chinese consumer and particularly the consumer going out, traveling, spending more has been a huge factor driving the global economy. So when people are quarantined, you know, they can't go out and do that. So you immediately saw a hit to travel and tourism, um, airline stocks, luxury brands, which are driven by Chinese consumers. Then you started to see more of the fallout into the supply chain. And this starts to trickle through into, for example, the tech industry where you've got uh, companies like Apple. Apple was the first to warn that it would not hit its revenue projections in China because of supply chain disruptions and that, that would be a big factor in their growth.

The economic disruptions started small and local, and then grew as they spread across the world through... supply chains. 

So what’s a supply chain. Take your phone.  It has thousands of parts from all around the world. The path those parts take as they come together form a chain. If any link in the chain breaks down, say a screen from South Korea or a battery from Vietnam, poof, no more phone. 

FOROOHAR: You started to see that come through into the auto industry, into the pharmaceuticals industry, which you know, has then been alarming for a lot of people because you start to realize, um, as an American how dependent we are on China for very basic things.  

Shannon O’NEIL: We've seen that there's a shortages of masks, um, both China has shortages, but shortages around the world. If you go to Amazon, you won't be able to buy a mask because there are so few around the world. That's in part because almost all of them are made in China. My name is Shannon O'Neill, and I am a senior fellow at the Council on Foreign Relations. So that's one example that happened right at the beginning of this crisis. But as we go forward, you will see more and more shortages. And one that could possibly hit is in medicines. Yes, medicines are made all over the world, but the basic active ingredients that are behind the Tylenol you buy, or the heart medicine, or blood pressure medicines, many of them, come from China. So as China shuts its borders, or shuts down its factories to keep workers apart to do what's called social distancing, and we don't see the production there, those factories in the United States, in Europe, in India, anywhere else in the world, they may not be able to get those basic inputs, to make the things that end up on your pharmacy's shelves.

SIERRA: I mean, it's a pretty crazy thing because, you know, people are worried about getting coronavirus, and yet the worries cross into different healthcare issues because we don't even think that the virus will affect us being able to get our medication for other health issues.

O’NEIL: That's gonna be the big challenge, many people may not get coronavirus, but many of the medicines that you need in your day-to-day life, or if you get a different type of cold, you won't be able to get, or you may not be able to get.

With a crisis like the coronavirus, supply chain problems can take time to materialize. The stock market is a different story.

CHANNEL 4 NEWS: 0:01: This is a day, if not the first then of staggering proportions not seen since the height of the global financial crisis.

https://youtu.be/n6TOlFfe-zI?t=1

ABC NEWS: 0:51: Stocks falling seven percent just out of the gate this morning, on those fears about the Coronavirus…

https://youtu.be/NHH-T12Xt-c?t=51

NBC NEWS: 0:20: An emergency trigger that stopped trading, and the expectation and fear is that we will see markets in free fall this morning, here in the US as they have done in the global markets already today…

https://youtu.be/2jhfpfrV8Nw?t=20

SIERRA: So let's talk about the stock market. What problems have we seen there? 

FOROOHAR: So one thing that's important to recognize, a lot of people are saying, Oh gosh, you know, here comes coronavirus. This is the hit to the stock market that we weren't expecting. Who could have known? But this is a market, as I've been saying for some time, uh, that was ready to drop really at the first sign of- of any kind of danger. So it could have been anything, could have been a terror event, it could have been more trade tensions. Um, it could have been something bad happening in the European Union. We are now in the longest recovery cycle ever, like in 150 years in America. So we're basically due for a correction and a recession. 

O’NEIL: So part of the reason the stock market plummeted was fear. People don't know what's going to happen with this virus. They don't know if it's going to be 10,000, 100,000, or 100 million people that are infected, and whether those people will live and recover, or whether they'll die. So as fear grabs hold in any areas of our lives, it affects others, including the stock market. 

The stock market is an ever-evolving beast. In fact, since we spoke with Rana and Shannon, prices have plummeted even further, in part due to an energy price war. There’s no way to tell what will happen next. 

SIERRA: Hmm. So I don't own stocks. I know very little about stocks if at all. But I know a lot of people around me seem to be freaking out about what's going on. So how does this big market drop affect the lives of everyday people? 

FOROOHAR: Well, it's a great question. I mean it affects us all in our 401(k)s, um, over and this is, this is really part of a- a bigger turn and you could almost do a whole another podcast on this, but in the last 40 years or so, our retirement system in America shifted from being kind of a pension oriented, defined benefit system where you- you work for one company most of your life, you get a pension- set pension at the end of the, uh, that time, 40, 50 years. You know what you're gonna get to, what's called a defined contribution system that's the 401(k) that many of us, although not all of us, um, get to contribute into as part of our jobs. And most of the time the advice has been, you know, I'm, I turned 50 today. Actually I the advice my entire life. Has been put your money in an index fund stock index fund and hold it and don't look at it. You know, that's what everybody would have told you. Your mom, Warren Buffet, Fidelity, you know (laughs), and um, and that's been pretty good advice because we've come through 40 years of a really prolonged bull market. But I believe we are now at a fundamental turning point, uh, in economics, in politics, in technology. And I think that that sense that multinational stocks, American stocks are always gonna go up, that they're always gonna be safe bets. I think that's changing and that's gonna make it trickier for individuals to invest and to really feel confident that their- their retirement is safe in the markets. 

What this boils down to is that stock market downturns don’t just hurt banks and wall street investors. They can take big chunks out of the retirement savings of everyday people. Because those savings are tied up in stocks, and because the market is so sensitive to shocks like the Coronavirus, an illness that originated 5000 miles away, can put you years further from your retirement goals...overnight.  

But how DID companies become so exposed to problems a world away? 

O’NEIL: But one of the reason that companies were hit so hard by this is because of the ties they have to places that have infections, ties to China, to Japan, to South Korea, to Italy, and to others that are appearing along the way. And that has a lot to do with the changes in the way things are being made that's occurred over the last 40 to 50 years. 

Those changes have a name: globalization. 

O’NEIL: Globalization has been going on for centuries. We've seen trade as a big part of the way different societies discovered each other and tied to each other. We've seen globalization continue through world wars, through famines, through other natural disasters. But there is something very different today than, say, a century ago. And that is that the globalization of the last few decades the trade that has increased is not as much finished goods. The majority of what's going back and forth, are parts, they're components, they're pieces that will come together into a final good. And so what's very different than the past is that things are no longer made in just one place or even in one country. Things are made across countries, and that has allowed us to be more efficient, uh, to have better things that are cheaper, but it's also opened up countries, and companies particularly, to vulnerabilities. Vulnerabilities like the coronavirus.

SIERRA: So, but that seems like a really fragile system, why would we think that was a good idea in the first place?

O’NEIL: So in some ways, what we've seen with this globalization, and the reason companies have gone out and searched out factories and makers in lots of different places, is you can make things better, faster, and cheaper than you ever could before. And that has benefited the world. It's benefited consumers, uh, in the United States, we don't think too much about it, but many estimates say that we pay at least a few thousand dollars less for the kinds of things that we buy day in and day out. But it is vulnerable to these shortages if one of those places gets shut off, all of a sudden there's a cascading effect that affects places far, far away. So if- something that happens in Hubei, China, can affect Tulsa, Oklahoma.

FOROOHAR: It looked great on paper. “Hey, let's put the, you know, our labor force in China looks awesome.” Or Bangladesh or wherever. But you know, bad stuff can happen in countries where there is more political risk and where things are less regulated and where there aren't proper environmental and labor standards. And so I think all of that is really coming home now to the c-suite. And, it's part of this bigger conversation that's going on about, you know, who corporations should be run for, stakeholders or shareholders. Big- big- big stuff here. 

SIERRA: So coronavirus is really just the latest alarm bell. 

FOROOHAR: It's as though it's pulled back a veil on all of these vulnerabilities and risk factors and downsides that have existed in a system, you know, that we've seen really up until 2008 and we saw mainly the upside of. 

SIERRA: So I have maybe a- a silly basic question, but why don't countries have more backup supplies? 

FOROOHAR: I think you're gonna see them doing that in the future. You know, you'd like to see the labor force in America not be so decimated by globalization, but also on the defense hawk side for reasons of national security. I mean, do you want all your ibuprofen and- and your- your Coronavirus masks made in China when you potentially, according to our official military strategy in a long term strategic conflict with China, I think a lot of people are questioning that. 

SIERRA: And what about companies themselves? Shouldn't they have their own backup supplies? 

FOROOHAR: Well, they should, but you know, um, have for the last 40 years been optimized to be as lean and mean and profitable as possible. And that tends to preclude things like redundancy in your supply chain because that's costly and it's less efficient. But we're now seeing that, Hey, what are the costs of not having that? And so, I think you're gonna see companies saying maybe we need to trade a little bit of efficiency in order to decrease fragility. 

Efficiency versus Fragility. It’s a tradeoff that every company faces. Stockpiles, backup plans, and redundancies can help protect a company during a crisis like the Coronavirus. But under everyday circumstances, it can seem like an unnecessary safety net. And that cuts into profits.  

O’NEIL: As companies have tried to become more efficient, and to become more profitable, one of the things that they've worked to do is reduce the inventories that they keep around, reduce the things that are sitting in the warehouses. We've seen a whole school of management, and you go to any business school, and you'll read textbook after textbook about what's called just-in-time delivery or lean management. And what just-in-time delivery means is you don't have a warehouse full of parts waiting for weeks or months to be put into a car, or put into an iPhone, or some other type of machine, or sewed together into a suit. Instead, you have things delivered just in time, just when you need it, so it might be a few days before, even perhaps a few hours before, that the parts show up. And that's good for a company's balance sheets, they're not paying for inventory that's sitting and waiting for a long amount of time. But when something like this happens, and you can't get things delivered every day very quickly, or next-day delivery, all of a sudden, you can't keep making the things that you're used to making day in and day out. 

Supply chain problems and shortages could be resolved relatively quickly if the Coronavirus subsides. But if the virus endures, they could pile up into something more serious. 

FOROOHAR: I think that we're not really gonna know where we are with corona until the summer. I think that by summer we should have a better sense of, first of all, how broadly is this virus gonna spread throughout Europe and the U.S. and how well are the authorities gonna handle it? And those two things are gonna affect the fallout economically. I mean, we've already seen Goldman Sachs telling us that even now, they don't think that we're gonna see any corporate profit growth this year.

SIERRA: Does that mean that corporations aren't going to make money this year? 

FOROOHAR: It means that there will be no profit growth. They will not make more money than they did last year. So it's not like they're gonna go bankrupt per se, but what it means is there's not gonna be, i- it's hard to imagine that there'll be any stock price growth. And once that goes away, what does that do to the underlying economy? I mean, we live in such a financialized world. We've become so dependent on what's good for the stock market is good for me, but I don't actually think that that's gonna be the case necessarily going forward. And that's gonna be a big adjustment for us as an economy and as a society. 

SIERRA: So, is the answer then to just stop importing goods, and just try to make everything ourselves here at home, American made, and just close the ports and keep it here?  

O’NEIL: Well, there's a big problem with that, just because you don't trade, just because you're isolated from the world, doesn't protect you from germs. And we see that today in the case of North Korea. This is one of the most isolated countries in the world, but it seems that it has many cases of coronavirus, so just shutting our borders to goods coming from the outside won't protect us from germs like this. It will also change the way Americans live their life, and we have become so dependent on these supply chains, this making of things around the world, and it's allowed us to live the lives that we like to live. 

SIERRA: So, isolating ourselves from the world won't work, and letting global supply chains do whatever they want is also kinda dangerous, so do you think that coronavirus is an opportunity to take stock of these vulnerabilities and, you know, make some better plans?

O’NEIL: This is a time, definitely, to take stock, and you're starting to see companies do that already. And in the face of the trade war of the last couple of years, you saw companies start to think about moving production around, some bringing it back closer to home, or finding double, triple other places where they could buy things that they might need. So you've already seen companies and factories begin to look for alternatives, and this coronavirus, it's happening even more quickly. It's accelerating this process of having a back-up plan. So perhaps if globalization and this lengthening of supply chains went a little too far, and we see the vulnerabilities when something like a virus hits, we'll see some pullback. But the lesson that I hope is not learned is that we pull back and isolate, because that will not be good for American health, but it won't be good for the American economy either. 

No one knows how this is all gonna shake out. There’s no pandemic crystal ball. But the Coronavirus is showing us the flaws in our global systems - whether from a health perspective, or an economic one. The silver lining of dark events like this is that they give us a chance to learn and correct course. We just have to pay attention, keep calm and...wash our hands. 

There’s a lot more to learn about pandemics and about the Coronavirus. We have a bunch of it linked on the show notes page for this episode at CFR.org/Whyitmatters. CFR also has a great new initiative called Think Global Health that features a lot of expert analysis of the coronavirus and other threats to global health. 

Got something you want to say? Send us an email at whyitmatters@cfr.org

Be sure to subscribe to the show on Apple Podcasts, Spotify, Stitcher, or wherever you listen to podcasts. And while you are there, if you have some spare time, leave us a review! Why It Matters is a production of the Council on Foreign Relations. The show is created and produced by Jeremy Sherlick, Asher Ross, and me, Gabrielle Sierra. Our sound designer is Markus Zakaria. Robert McMahon is our Managing Editor, and Doug Halsey is our Chief Digital Officer. Original music is composed by Ceiri Torjussen. Special thanks go to Richard Haass and Jeff Reinke. For Why It Matters, this is Gabrielle Sierra, signing off. See you soon!