Blank checks, taboos and bazookas: Inside the global battle to prevent another depression

Economic firefighters around the world have a problem they’ve never seen before: a lightning-fast economic collapse strapped to a virulent global pandemic and wild, whipsawing financial markets threatening to amplify the damage.

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From Washington to Brussels to Frankfurt to Berlin and beyond, officials in advanced economies are rolling out the biggest fiscal and monetary policy bazookas they’ve ever imagined. Some of the players, notably Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin, have forged a close fire-fighting partnership echoing their predecessors’ during the 2008 financial crisis. Officials who confronted the brink of economic calamity during a European debt crisis that began a decade ago — such as German Chancellor Angela Merkel and the new European Central Bank president, Christine Lagarde — are revising their playbooks and trying to avoid renewing the divides of that conflict.

Economists, traders and average citizens are all too aware that those efforts can’t stop the coronavirus, which is causing a once-in-a century human and economic catastrophe that’s still playing out with no clear end in sight. They’re starting to brace for a longer and deeper downturn than any of them imagined just a month ago when the mass shutdowns began across the global economy. And they’ve yet to grapple with the consequences of the economic damage rippling from the largest and strongest economies to the smaller and weaker ones with fewer resources.

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