Is coronavirus really a black swan event?
The global spread of the coronavirus is making America more anxious by the day. And those deepening worries are reflected in the gyrating stock market. Both the long economic expansion and 2020 presidential race seem poised on a knife's edge. Politico reports, "Trump faces 'black swan' threat to the economy and reelection." The New Yorker puts it this way: "As Coronavirus Spreads, Stocks Fall Again and the White House Frets About a Black Swan."
But the coronavirus, although dangerous and scary, isn't some unpredictable, "Gosh, who woulda thunk it?" black swan. And employing that powerful metaphor lets governments evade their responsibility to keep us safe and avoid accountability if they fail.
Recall that the phrase "black swan" gained currency a decade ago during the Great Recession and aftermath. It provided a compelling way of thinking about the simultaneous crises in banking and housing. Those economic shocks elevated investor and mathematician Nassim Nicholas Taleb to global celebrity. His best-selling 2007 book about unpredictable events, The Black Swan, seemed eerily prescient of the terrible downturn starting later that year. More than that, it gave investors and academics a conceptual framework for thinking about potential risks that were both highly destructive and low probability.
Recall that the phrase "black swan" gained currency a decade ago during the Great Recession and aftermath. It provided a compelling way of thinking about the simultaneous crises in banking and housing. Those economic shocks elevated investor and mathematician Nassim Nicholas Taleb to global celebrity. His best-selling 2007 book about unpredictable events, The Black Swan, seemed eerily prescient of the terrible downturn starting later that year. More than that, it gave investors and academics a conceptual framework for thinking about potential risks that were both highly destructive and low probability.
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