Why History, Not Headlines, Should Shape Our View of the Future

Research Report eCommerce

Why History, Not Headlines, Should Shape Our View of the Future

May 15, 2020 16 min read

2020 has not been good. The understatement of the year. There is an overwhelming amount of negative news, shocking data, and economic predictions that feel like we are living a bad dream. The pandemic has systematically impacted companies and their employees across industry size, sector and location. Despite the incessant negative news, we set out to identify positive data and actions (upcoming report) that can be taken to strengthen business operations during this economic recession.

Before discussing positive events, we will summarize the first four months of 2020. Since first detected in the Chinese city of Wuhan in December 2019, COVID-19 has spread to every U.S. state and the District of Columbia. All continents, except for Antarctica, have also been infected. As of April 15, 2020, there were over 650,000 confirmed COVID-19 cases in the U.S. and more than two million globally.

The strict Shelter in Place orders for the majority of the US is akin to putting a patient into a medically induced coma to aid in the patient’s recovery. The result is an unprecedented financial blow to the U.S. economy, and the consumers who serve as its lifeblood. The volatile financial markets, staggering job losses, economic slowdown and uncertain future has paralyzed much of the business world.

Stock Market Declines

The business slowdown and concerns about the economic impact of COVID-19 resulted in a stock market freefall. At the end of February, the Dow Jones Industrial Average, S&P 500 and Nasdaq composite fell into correction territory, representing their worst weekly slides since 2008.

From February 19 to March 23, 2020, the U.S. stock market suffered the quickest selloff in its history, for a loss of 33.9% on the S&P 500. Of the 21 trading days between February 27 and March 27, a total of 18 days experienced moves in the S&P 500 of more than 2%, 11 down and 7 up. Moves included the largest daily percentage gain since 1933 and, except for Black Monday in 1987, the second-highest percentage loss since 1940.

Rising Unemployment

Never could American businesses have imagined a time when they had to close their doors in such great numbers and for such an extended period. Chief among the consequences of closures is skyrocketing unemployment. Approaching unemployment levels are on par with the Great Depression, which witnessed the highest levels in recorded history and soared to 24.9% in 1933.

Since the end of March, nearly 17 million people have filed for unemployment benefits, with the foreseeable unemployment rate escalating to 20%. Many Wall Street analysts estimate that by the end of April, an additional 8 million people will file, increasing the total to 25 million.

Recession Threat

Crumbling stock-market portfolios and the swelling ranks of unemployed Americans are not the only drivers of what Goldman Sachs economists are forecasting as an historically sharp and swift recession, with second-quarter GDP sinking a stunning 24% after a 6% decline in the first quarter.

Businesses are grappling with decreased demand, lost revenue, a shrinking workforce and disrupted supply chains as shutdowns, quarantines and health concerns reduce consumer incomes and spending. The resulting downswing in economic growth is occurring against a backdrop of many businesses, households and governments straining under the weight of heavy debt.

The federal government is a case in point. The 2020 deficit is likely to surpass $4 trillion, with total debt standing at approximately $24 trillion, exclusive of $3.3 trillion at the state and local government levels.

All this negative news has been captured fully in the press including the still puzzling run on toilet paper.


As you might have noticed, the magazine covers spread across the previous two pages date back more than 10 years. With all the negative news constantly circulating, we thought it was time to remind Americans that we have been through hard times before – very hard times – and we always came through as a country stronger and better prepared for the next challenge.

How does the COVID-19 pandemic differ from past crises? The pandemic is the first crisis to occur during a time of robust and connected social media. Mainstream media, with its shrinking market share, is competing with globally connected social media for attention by selling a constant stream of bad news. We have learned that you need to find the good news on your own because major media outlets are unlikely to report it.

Optimism During Uncertainty

Let us be clear, we know people are struggling and many have suffered health problems and lost loved ones and livelihoods. No one believes times are good right now. Yet, while uncertainty exists, there are reasons to look positively toward the future.

The goal of this report is twofold:

First, to nurture a glimmer of optimism based on the encouraging progress being made that, unfortunately, is being underreported.

Second, to evaluate the current state of our country within the larger historical context of how recessions and other traumatic events unfolded and resolved, and how they will resolve once again.

History of Prevailing Over Crises

The financial turmoil from COVID-19 is not the first economic crisis Americans have faced in the last three decades. Our country has endured recessions, industry implosions, terrorist attacks, wars and crashing financial markets. However, none have been able to dim the American drive and spirit.

1990 to 1991 Recession

The 1990-1991 recession put a stop to what was, at the time, the longest peacetime economic expansion in U.S. history – 92 months. Between July and October 1990, the Dow Jones Industrial Average lost almost 20% of its value.


The recession only lasted eight months, followed by a lengthy 120 months of expansion and prosperity. Today, the recession is barely remembered.

Dot-Com Bubble, September 11 Attacks and War in Afghanistan

Then came the collapse of the dot-com bubble and the September 11 attacks, one of the deadliest events in U.S. history. On the first day of trading after September 11, the stock market lost 7.1% of its value. By the end of that week, the Dow Jones had lost more than 14% of its value.

Newspaper headlines proclaimed the attack’s repercussions. Chief among them was the complete collapse of the airline industry. The U.S. invaded Afghanistan and Operation Enduring Freedom was launched in 2001, which became the longest war in U.S. history.

The ripple effect of the bursting dot-com bubble, the tragedy and magnitude of the September 11 attacks, and the war in Afghanistan dealt a devastating blow to U.S. industries, leading many experts to believe in a prolonged economic downswing. It appeared the American way of life and economic prosperity would never bounce back to the same levels.


After rebounding from the initial shock of multiple crises, businesses began rebuilding. By the fourth quarter of 2001, growth had already started to return. Although every business did not survive, industries as a whole recovered. Once again, the country, economy and stock market came out stronger on the other side, and were then better prepared to handle uncertainty.

Great Recession of 2008

The Great Recession of 2008 followed the same pattern as previous economic downturns. It was considered by many, including the International Monetary Fund (IMF), as the most severe economic and financial collapse since the Great Depression.

Headlines along the lines of More Pain: Economy Shrinks, Last Year’s Poverty Rate Was Highest in 12 Years and This Is the Worst Recession in Over 100 Years were in non-stop media circulation. The housing market’s collapse was viewed as irreversible by real estate experts and American consumers alike.

General Motors, Washington Mutual, Charter Communications, CIT Group and other industry giants filed for bankruptcy. Global and well-respected financial institutions such as Merrill Lynch, Lehman Brothers and Bear Sterns needed rescuing in quick succession. Banks were losing cash on a scale that nobody believed possible.


As always, recovery followed. The recession officially ended in the second quarter of 2009. While many businesses collapsed, most rebounded stronger and more competitive than ever. Industries as a whole, including real estate, also recovered, with home prices returning to pre-recession highs more quickly than most experts predicted.

Unbalanced Mainstream Media Coverage

Unfortunately, major media outlets rarely report on long-term recovery. It is not sexy, sellable news. For example, American International Group (AIG) required a $85 billion bailout due to the recession. The U.S. government’s assistance came in the form of share purchases. By the time the Federal Reserve and the U.S. Treasury sold back those shares, they generated $22.7 billion in total profits for the government and taxpayers. It was a good investment by almost any measure.

Yet, the sale and profit barely made the news. Why? Because mainstream media is almost exclusively focused on in-the-moment events with a tendency to prioritize negativity and sensationalism – catastrophes, plunging financial markets and widespread deaths, to name a few. To uncover positive news, you usually have to observe just how far we have actually come.

COVID-19 Pandemic

As we face another recession, now caused by a global health pandemic, ominous headlines proliferate: Analyst Anticipates “Worst” Financial Crisis Since 1929 Amid Fears of a Global Recession, The US Economy Has Wiped Out All the Job Gains Since the Great Recession and Unparalleled Global Recession Underway.

Once again, the airline industry is in chaos and analysts are drawing parallels between the impact of September 11 and COVID-19 on the travel industry. Tourism and hospitality are frozen on both domestic and international levels. Unemployment rates are skyrocketing daily. We are drowning in massive amounts of negativity.

We invite you to step back and look at the COVID-19 pandemic in terms of measures being taken to mitigate its disastrous effects and, based on historical evidence, ways these measures will lead to recovery.

Congressional, Federal Reserve and U.S. Treasury Initiatives

From an economic perspective, and with political arguments on the federal government’s performance notwithstanding, much is being done by Congress and the Federal Reserve to support struggling businesses, individuals and educational institutions.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law is providing over $2 trillion in economic relief geared toward individuals, public-health organizations, state and local governments, small businesses, large corporations and educational institutions. The CARES Act is the most comprehensive aid package in American history.

In parallel, the Federal Reserve has launched several initiatives to minimize the depth of the recession. It has committed to infusing the country’s financial system with $1.5 trillion to maintain trust in a market facing liquidity concerns. The U.S. Treasury has widened its scale of purchases beyond short-term T-bills to include bills, notes and corporate bonds.

Also, the Federal Reserve announced a $700 billion quantitative easing program and cut interest rates to 0%. For the first time, the Federal Reserve’s purchases would include $500 billion of Treasuries and $200 billion of agency-backed mortgage securities. They would also include additional funds for purchases of municipal bonds. And these are only a few examples.

Government, Private Sector and Technology Response

Government support of this magnitude, and the speed of program rollouts, are nothing short of remarkable. No recession of the past 30 years has witnessed this level of concerted action. Economic recovery will be further accelerated by functioning capital markets, institutions that continue to provide debt financing and an unprecedented amount of “dry powder” in private equity – approximately $2 trillion that will be invested to help drive the growth of U.S. businesses.

We are also more technologically prepared to deal with a crisis of this level in 2020 than at any other point in history. Most of the population can successfully transition to shelter-in-place by using digital platforms to maintain communication, purchase food and other products and have them delivered to their door, and transition to online education and learning.

Infections on the Decline

Optimistic signs are also appearing on the health front. Many countries that were the early victims of COVID-19 and severely impacted are showing significant improvement.

In South Korea, the number of daily new cases dropped from their peak of 851 on March 3 to nine cases on April 21, 2020. Italy has successfully bent the curve and is seeing cautiously optimistic results. There is also impressive progress in Seattle, one of the original epicenters of the outbreak in the U.S.

Fast Tracked Clinical Trials

There is no question that we will beat this pandemic. As of April 28, 2020, according to Informa Pharma Intelligence, there are more than 1,000 clinical trials that are testing treatments and vaccines. Experimental drugs, as well as those approved for other diseases, are included in the trials.

A number of trials, including two based in the U.S., have already advanced to the clinical stage. Progress is moving at an unprecedented pace. Here are just a few examples.

Johnson & Johnson began producing its COVID-19 vaccine on a “at-risk” basis, and shortened its usual timeline for developing a vaccine by many months. Manufacturing “at risk” allows the company to produce a vaccine before its ultimate design is finalized and released to the public. Johnson & Johnson started developing the vaccine in January and is ramping up to provide one billion doses globally, with human testing of a coronavirus candidate expected in September 2020.

In May 2020, Pfizer will begin testing an experimental vaccine in the U.S. and, along with Oxford University researchers, are working toward having a vaccine for emergency use in the fall of 2020. Moderna recently announced it is preparing its vaccine for the second phase of human testing.

An experimental antiviral drug also looks promising. Data from an international clinical trial of remdesivir shows recovery time improved from 15 to 11 days. According to Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NIAID), “[Study data] shows that remdesivir has a clear-cut, significant positive effect in diminishing the time to recovery.”

Progress in the Face of Adversity

COVID-19 will become history. Similar to polio, tetanus, yellow fever, smallpox, malaria, measles, mumps, rubella, diphtheria and other diseases that once posed tremendous risks, we will protect ourselves against this virus.

To further help fill the void of positive news, we would also like to share other strides for humanity uncovered while preparing this report:

  • Ebola virus that once killed thousands of Africans and threatened to spread quickly throughout the world is now treatable. A new triple-antibody cocktail developed by U.S. scientists has reduced the mortality rate from 70% to 6%.
  • Pneumonia is a major killer of children globally. As recently as the 1990s, pneumonia killed more than 2 million children each year. That number has since dropped by almost two-thirds, thanks to better treatments as well as wider vaccinations against the pathogens that cause it.
  • Over the past 20 years, the number of people living in extreme poverty has declined by approximately 50%. This has been the fastest decline of extreme poverty in world history.
  • Over the past 40 years, the survival rate for children’s cancer has increased from approximately 10% to nearly 90% today.
  • Share of one-year-olds globally who received at least one vaccination increased from 22% in 1980 to approximately 90% today.

Resilience and Recovery

The economic recession we are experiencing today will pass as others have. While it is understandable that fear emotionally paralyzes us, we urge you to actively seek out positive news.

Restaurants will gradually reopen and start re-hiring staff. Travel restrictions will lift and the airline industry will start recouping its losses. Businesses classified as non-essential will once again open their doors.

Not all companies will continue to operate as they did before the COVID-19 pandemic. Yet, as a country, we will recover and continue to provide an environment for the creation of new businesses and new industries. Although no one can predict the new normal, we are highly confident that the U.S. economy will recover more quickly than most analysts predict. How can we be so confident? By looking at our own history.

What we know is that we will solve the problems created by this virus. We believe in human ingenuity. We believe in our ability to solve problems. We believe in the human spirit and our unity in the face of adversity. We believe in our business leaders, entrepreneurs, capital markets and the resilience of our country.