Why the Coronavirus Could Threaten the U.S. Economy Even More Than China’s

Why the Coronavirus Could Threaten the U.S. Economy Even More Than China’s

If people stop traveling and going to the dentist, the gym or even March Madness basketball games, the impact could be enormous, an economist says.

After a string of deaths, some heart-stopping plunges in the stock market and an emergency rate cut by the Federal Reserve, there is reason to be concerned about the ultimate economic impact of the coronavirus in the United States.

The first place to look for answers is China, where the virus has spread most widely. The news has been grim with deaths, rolling quarantines and the economy’s seeming to flat line, though the number of new cases has begun to fall.

Advanced economies like the United States are hardly immune to these effects. To the contrary, a broad outbreak of the disease in them could be even worse for their economies than in China. That is because face-to-face service industries — the kind of businesses that go into a tailspin when fearful people withdraw from one another — tend to dominate economies in high-income countries more than they do in China. If people stay home from school, stop traveling and don’t go to sporting events, the gym or the dentist, the economic consequence would be worse.

In a sense, this is the economic equivalent of the virus’s varied health effects. Just as the disease poses a particular threat to older patients, it could be especially dangerous for more mature economies.

This is not to minimize the indiscriminate and widespread damage that the disease has caused by disrupting the global supply chain. With shortages of everything from auto parts to generic medicines and production delays in things like iPhones and Diet Coke, a great deal of pain is coming from the closing of Chinese factories. That proliferating damage has central banks and financial analysts talking about a global recession in the coming months.

Nor is it to discount the possibility that the United States will be spared the worst effects. Scientific and public health efforts might limit the spread of the virus or quickly find a treatment or vaccine. The warmer weather of summer might slow the spread of the coronavirus as it usually does with the seasonal flu. Many things could prevent an outbreak as large as the one in China.

But it is to say that an equivalent outbreak in the United States might easily have a worse economic impact.

As a baseline, several factors work against the United States. China’s authoritarian government can quarantine entire cities or order people off the streets in a way that would be hard to imagine in America, presumably giving China an advantage in slowing the spread of the disease. In addition, a large share of American workers lack paid sick days and millions lack health care coverage, so people may be less likely to stay home or to get proper medical care. And 41 percent of China’s population lives outside urban areas, more than twice the share in the United States. Diseases generally spread faster in urban areas.

Beyond those issues, however, is a fundamental difference in economic structure: When people pull back from interacting with others because of their fear of disease, the things they stop doing will frequently affect much bigger industries in the United States.

Consider travel. The average American takes three flights a year; the average Chinese person less than half a flight. And the epidemiological disaster of the Diamond Princess has persuaded many people to hold off on cruises. That cruise ship stigma alone potentially affects about 3.5 percent of the United States, which has about 11.5 million passengers each year, compared with only 0.17 percent of China, which has about 2.3 million passengers.

People may stop attending American sporting events. There have even been calls for the N.C.A.A. to play its March Madness college basketball tournament without an audience. But sports is a huge business in the United States. People spend upward of 10 times as much on sporting events as they do in China.

And if 60 million Americans stop spending $19 billion a year on gyms, that would be a much a bigger deal than if the 6.6 million gym members in China stopped spending the $6 billion they devote to gyms now.

That’s just a start. Who wants to go to the dentist or the hospital during an outbreak if a visit isn’t necessary? Yet health spending is 17 percent of the U.S. economymore than triple the proportion spent in China.

Of course, not every service sector is so much larger than in China. Retail and restaurants, for example, have comparable shares of gross domestic product in both countries.

But over all, the United States is substantially more reliant on services than China is. And, on the flip side, agriculture, a sector not noted for day-to-day social interaction and so potentially less harmed by social withdrawal, is a 10 times larger share of China’s economy than it is in the United States.

So for all the talk about the global “supply shock” set off by the coronavirus outbreak and its impact on supply chains, we may have more to fear from an old-fashioned “demand shock” that emerges when everyone simply stays home. A major coronavirus epidemic in the United States might be like a big snowstorm that shuts down most economic activity and social interaction only until the snow is cleared away. But the coronavirus could be a “Snowmaggedon-style storm” that hits the whole country and lasts for months.

So go wash your hands for the full 20 seconds. And show some more sympathy for the folks quarantined in China and elsewhere. Because if it spreads rapidly in the United States, it could be a heck of a lot worse.

He Didn’t Know Kobe Bryant. But He Did.

There was nobody Shane Battier respected more than his basketball adversary. ‘So much of my career was tied to me being his foil and him being my foil,’ he says.

Kobe Bryant wrote what he knew. In the book he published before his death, he wrote about Michael Jordan and LeBron James, Jerry West and Magic Johnson, the players who helped define his two decades in the NBA and, of course, himself.

He also wrote about Shane Battier.

“I never spoke to Kobe outside the arena—ever,” Battier said this week. “I didn’t have a relationship with him. But I knew him intimately.”

Battier was the man known around the NBA as the greatest of the “Kobe Stoppers,” the select group of players who were paid to defend one of the most prolific scorers the game has ever seen. He was smart enough not to call himself a Kobe Stopper, this peculiar species that Bryant delighted in humiliating, because he understood that declaring you could stop Kobe happened to be the worst strategy for actually doing so. Nobody could stop Kobe. The best you could do was slow him down. And so it became Battier’s goal to be a human yellow light.

There are few players in NBA history whose value was so inextricably linked to someone else’s. Battier thought of himself as Captain Ahab. Bryant was his Moby Dick.

“So much of my career was tied to me being his foil and him being my foil,” he said.

Born only weeks apart, they were technically contemporaries, but it never felt that way to Battier. There was nobody he respected more than Bryant. There was also nobody who vexed him as much as Bryant.

By the time he retired in 2014, Battier had an encyclopedic understanding of almost everyone he defended—who they were, who they weren’t and how he could use that information to his advantage. But there was one he could never crack. “He was the only guy,” Battier said. “What Kobe represents is the absolute pinnacle of challenge in my profession.”

Battier, who is now an executive with the Miami Heat, felt the death of his basketball adversary in ways that he might not have expected. He’s nostalgic about their 44 games against each other—Bryant’s teams went 24-20—and wistful about beers they never shared together. He’s even thought about what he would’ve told Bryant if he ever got the chance.

“He made me feel the most alive I ever did on the basketball court,” Battier said. “I knew I had to be at my absolute best. If I wasn’t, I was in serious trouble. Even when I was, I was in serious trouble.”

Kobe Bryant and Shane Battier only spoke on the basketball court.

PHOTO: NOAH GRAHAM/NBAE/GETTY IMAGES

Bryant and Battier were maniacal competitors, but Battier knew he couldn’t compete with Bryant physically, which meant he would have to compete with the author of a book called “The Mamba Mentality” on a psychological level.

The ingenious part of his plan was how he went about pulling it off: Battier embraced Bryant’s perception of him. He wouldn’t act better than he was. He would pretend to be worse. Battier insisted he was slow and unathletic and extraordinarily lucky that a basketball legend happened to keep picking the nights they were on the court together to miss an unusual percentage of his shots. He made Eeyore sound confident.

It was a wonderful idea in theory. The problem was that NBA games are played in reality.

I saw through that tactic, understood his premeditated modesty and attacked him because of it,” Bryant wrote.

“And I knew that he knew,” Battier said.

I prided myself on playing any so-called Kobe Stopper,” Bryant wrote.

“I always prided myself as a guy who could get in the mind of another player,” Battier said.

“Safe to say,” Bryant wrote, “I had a lot of fun playing against him.”

“Nothing in my life has even come close to replicating that,” Battier said.

The professional rivalry between this one guy who believed he was the greatest and this other guy who purported to be terrible would become plain to see when it was highlighted on national television broadcasts and in a New York Times Magazine cover story—which added yet another layer of complexity to the curious game of cat and mouse they were playing while everyone around them was busy with a basketball game.

Kobe Bryant torched Shane Battier for 56 points in three quarters in Battier’s rookie season.

PHOTO: ANDREW D. BERNSTEIN/NBAE/GETTY IMAGES

The first time that Battier had the misfortune of guarding Bryant was in his rookie season of 2002. He was petrified. On the bus ride to the Lakers’ arena, however, Battier tried to inject himself with confidence. “How good can this guy really be?” he thought.

It turned out to be a rhetorical question.

This was the night he would make his maiden voyage to a place he called Kobe Island. He soon found himself marooned. The only person who would stop Kobe that night was Kobe himself. Bryant scored 56 points in three quarters and was too good to keep playing.

“Everyone remembers his 81-point game,” Battier said. “There’s no question he would’ve scored 80 points if he’d played the fourth quarter.

The next formative Bryant experience in Battier’s life would come seven years later. By then he was on a Rockets team riding a magical 21-game winning streak with the Lakers coming to Houston one night in 2008.

It was on Bryant to stop them. It was on Battier to stop Bryant.

Shane Battier turned his hand into a blindfold when he guarded Kobe Bryant.

PHOTO: BILL BAPTIST/NBAE/GETTY IMAGES

Battier had never known so much about this player he didn’t really know. He immersed himself in data. He internalized scouting reports that were finally worth reading. He even hydrated properly. “Instead of having a second glass of wine, I usually stopped at one,” Battier said. He would never feel good about guarding Bryant. But at least he could feel less bad.

All that information suggested the worst shot for Bryant was a long 2-pointer off the dribble while moving left, and Battier attempted to bait him into settling for exactly that shot. He was willing to try anything to make this happen. He even turned his own hand into a blindfold. Instead of trying to block Bryant’s shots, Battier tried to block his vision.

But that wasn’t the only reason he made a habit of sticking his hand over another man’s eyes.

“This is one of the things I’ll lament that I’ll never be able to tell him over a beer,” Battier said. “When I put my hand in people’s faces, I didn’t care if they made it or not. I really, really didn’t. For a guy like Kobe, I knew he would take that as a personal affront—that that was the only way I could guard him. In truth, it probably was. I was completely fine with him trying to prove that it didn’t work. That was my best-case scenario.”

Bryant played 47 minutes and 4 seconds that night. Battier was on the court for all but 40 seconds of them. Bryant went 11-for-33 and the Rockets won again. Battier considers it the single greatest defensive game of his career.

He would never have the opportunity to discuss it with Bryant.

“The physical battles were what they were, but there are very few people who could understand the psychological battles,” Battier said. “I don’t think I could have that conversation with anybody else in the world.”

The Magical Plays That Made Patrick Mahomes

The Kansas City Chiefs quarterback is reinventing his position before our eyes. Watch these plays to understand how.

MIAMI—For almost the entire history of football, the sport’s most important position was played more or less the same way. And then Patrick Mahomes came along and made everyone in football wonder how they could have been so wrong for such a long time.

If the Super Bowl is the first time you’re watching Mahomes play, you’re about to see football like never before. He throws off-balance, without looking and even left-handed. He’s the league’s reigning most valuable player. And he is one Kansas City Chiefs win from his first championship because he breaks every convention of how to play quarterback.

“People have said for years: ‘You can’t get away with doing that,’” said Arizona Cardinals coach Kliff Kingsbury, who coached Mahomes at Texas Tech. “But if you’re that good, it doesn’t matter.”

This isn’t just the stuff of legend. One of the cool things about Mahomes being 24 years old is that his entire life in football (and other sports) has been chronicled by both iPhones and the most sophisticated camera technology that a billion-dollar television deal can buy. These are the plays that reveal the ways in which he experimented with crazy ideas about the most effective way to throw a football.

The Escape
Patrick Mahomes escapes a tackle and throws a touchdown pass in high school. PHOTO: DFW INSIDE HIGH SCHOOL SPORTS

The final high-school football game of his senior year would turn out to be a preview of Mahomes’s time at Texas Tech and now with the Chiefs. Football was beginning to change dramatically in favor of the offense, and it was becoming clear that winning meant scoring more points than anyone ever imagined. This game offered a peek at how teams with Mahomes would keep scoreboard operators busy for many years to come.

Almost every teenage quarterback in Texas would have been sacked if he found himself in the arms of a linebacker named Malik Jefferson, who would one day play in the NFL himself. But not Mahomes. He escaped, scrambled and flung a touchdown pass off his back foot into the arms of Jake Parker. Few plays to this day better exemplify the ability to bring his imagination to life.

“You’re thinking during the play: How in the world does he keep doing that?” says Adam Cook, his coach at Whitehouse High School. “Those are things he did in high school and he’s continuing to do them now.”

But that wasn’t the only lesson NFL teams would have learned if they’d studied tape of this particular high-school game. Cook said it was representative of one of his most useful attributes as a modern quarterback.

“His ability to extend plays with his feet,” he said. “The difference is whenever he does buy time, he’s not doing it to run the ball. He’s doing it to throw the ball down the field.”

The Basketball Pass
Patrick Mahomes shows off his football skills—on the basketball court. PHOTO: COURTESY OF BRENT KELLEY

Mahomes played his last football game on a Friday, joined the basketball team for practice the following Monday and played his first game of his senior year on Tuesday. This was not unusual—Mahomes is a case study for the virtues of playing multiple sports at a time when kids are pressured to specialize at earlier ages—but what happened next was.

A headband-wearing Mahomes secured a rebound underneath his own basket with two defenders swarming him as he was falling out of bounds. There was nowhere for him to go and nothing for him to do. Or at least that’s how it looked to everyone in the gym.

But with his body horizontal and his momentum dragging him in the opposite direction, Mahomes whipped a sidearm pass across half the court, over the entire defense and into the hands of Jake Parker for a layup—the very same Jake Parker who caught his touchdown pass a few days earlier.

It showed his awareness, his vision, his arm strength and finesse, his audacity to believe that he could make this pass and his deftness to actually pull it off. This was Mahomes, the football player, in one magnificent basketball play.

“It was one of those plays that you’ll never forget,” said Brent Kelley, his basketball coach.

The Improv Act

Kingsbury recruited Mahomes and Mahomes chose Texas Tech because they shared a vision. Kingsbury’s “Air Raid” offense gave Mahomes the structure to play an unstructured, almost improvisational form of football.

The play that illustrates this came in the first game of his first season as a full-time starter. He took the snap. He ran to his right. He ran backwards. He ran to his left. And then he threw a touchdown pass across his body.

He still just plays this free style of game,” Kingsbury said. “When it’s off schedule, that’s when the magic happens.”

The Lefty Pass

Mahomes throws with his right hand. Except for the time he threw with his left hand.

Early in the 2018 season, the Chiefs trailed 23-20 to the Broncos late in the fourth quarter, and Mahomes saw the unwelcome sight of Von Miller. He darted to his left, approaching the sideline with one of the NFL’s best pass rushers chasing his ankles, and soon Mahomes was out of space. There was only one way to get the pass from one point to another: He switched the ball from his right hand to his left.

“Whoa,” Chiefs coach Andy Reid said.

Tyreek Hill caught the lefty pass for a first down on a drive that resulted in a touchdown—and a Kansas City win.

The No-Look
Mahomes pulled off one of his most absurd feats when he turned a basketball move into a football one: He threw a no-look pass. Quarterbacks routinely look one way and then pass the other to throw off defenders. Mahomes did it at the same time.

After scrambling away from the Baltimore Ravens last year, Mahomes stepped forward in the pocket and kept his eyes trained on the center of the field. But when the ball left his hand, it went nowhere near the center of the field. It looked so unusual that the only reasonable explanation was that the ball was severely misthrown. His teammates knew better. They had seen him attempt these every day in practice.

“We knew it was going to happen at some point,” said Chiefs quarterback coach Mike Kafka. “We didn’t know when.”

The pass hit wide receiver Demarcus Robinson in the chest for a 17-yard gain. Mahomes needed the safety to move over, he said afterward, and he trusted Robinson would be in the right place. Robinson didn’t even know it was a no-look pass until he saw it on film afterward. “Everyone was talking about it like, ‘Bro, did you see that? How did he do that?’” Robinson says. “I was like, ‘Do what?’”

The Run
NFL defenders began to learn that Mahomes running and throwing usually results in them being embarrassed. Now they’re realizing that Mahomes can run—and keep running.

The Tennessee Titans became aware of this in the AFC Championship. Kansas City trailed Tennessee, 17-14, in the second quarter when Mahomes found himself in trouble. Then he pulled off a disappearing act: outrunning defenders in the backfield, juking another with a subtle cock of his head and dragging a few more into the end zone for the longest touchdown run of his career. It wasn’t just another play for high-school and college players to tell their friends about. It was a play that would catapult the Chiefs to the Super Bowl.

So how does he do all of it?

“A magician never reveals his tricks,” Mahomes once said.