By: James Wood
Note: The opinions expressed are those of the author alone and do not reflect an institutional position of the Gardner Institute. We hope the opinions shared contribute to the marketplace of ideas and help people as they formulate their own INFORMED DECISIONS™.
The financial market turmoil and daily life disruptions caused by the COVID-19 virus seem extraordinary. Other flu pandemics, at least to my memory, did not involve empty grocery store shelves, cancellation of an NBA season, travel bans, and quarantines of cities and, in some cases, country lock-downs. That’s to name a few of the disruptions.
In no way do I mean to minimize the threat of the virus or precautions set out by the Centers for Disease Control. Social distancing seems like a wise strategy. But I question stocking-up on bottled water. It reminds me of a phrase from one of the 20th Century’s most celebrated economist, John Maynard Keynes. In his monumental work, The General Theory of Employment, Interest, and Money Keynes notes, “there is the instability (economic) due to the characteristic of human nature…a result of animal spirits”. Keynes’ use of the phrase referred to the gloom of the Great Depression, the negative feedback loop forcing lower and lower levels of economic activity. In Keynes’ view, animal spirits—greed, corruption, speculation, fear, and confidence—are the main causes of economic fluctuations. Indeed, today, fear and loss of confidence are powerful forces governing economic behavior. In a recent Washington Post Op-Ed, former