My perspective on the current coronavirus crisis, and how it differs from the stock market crashes in 1987, 2000, and 2008.
I was asked by Cornell media production people to appear in a video discussing the current coronavirus crisis.
Now that was a shock. I’m not used to being promoted by Cornell. So I behaved myself, I didn’t want them to regret it.
Here’s the story from the Cornell Chronicle, the university news newsletter:
William A. Jacobson, an expert in securities arbitration, says it’s tough to compare the current economic downturn to earlier ones, due to its health-related roots and wide-ranging scope. Unlike other stock market downturns, such as those related to 9/11 or the financial crisis of 2008, this one will require a longer-term perspective. “We need to remember that this is a marathon, not a sprint,” he says.
Jacobson is clinical professor of law and director of the Securities Law Clinic at Cornell Law School. His areas of expertise include civil litigation and arbitration, concentrating on investment, employment and business disputes in the securities industry.
For more COVID-19 impact videos, see the playlist on YouTube.
The trip to Los Angeles I refer to was my California Dreaming trip that included the Legal Insurrection reader reception.
It’s hard to compare this to any specific earlier event. Certainly a lot of comparisons are being made to 9/11. 9/11 was a shock to the system and in terms of the terrorist event of 9/11 it was over in a day. Of course the repercussions lasted for awhile, but this I think is much more systemic.
It really goes to things such as our food supply, our supply of other things, our ability to travel. I went to a conference where I spoke a few months ago in Los Angeles and one of the things that I thought about a lot is almost every single person I met on that trip from the Uber driver to get to the airport, all the people who worked in the airport, the people who ran the airline, the people at the car rental on the other end, the hotel on the other end, essentially every single person I met along that trip is now unemployed and that’s really shocking. The travel and the entertainment and the hotel industry has been completely collapsed and devastated.
I’ve been through a lot of market ups and downs. I started after graduating law school. My first big foray into the legal world in the stock market was the 1987 crash, and that is something which it wasn’t as precipitous say is 9/11 but it did take everybody by surprise.
That was in October, 1987, by the end of the year, the market was back to where it started. Things were over. Then there was the tech wreck crash in the late nineties into the early two thousands, and then there was the financial credit crisis in 2008, so the market goes through cycles.
I do believe that two, three, six years from now we’re going to look back upon this and we will have gone through it and gotten through it quite well. That doesn’t make it easier now because this is not going to be a one day or one week hit. It’s going to be an ongoing process. My perspective on it is having gone through many of these crashes in the stock market, these economic crises, is that we just need to keep that longer term perspective. Need to remember that this is a marathon, not a sprint.
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