All right, when we started this project about five, six years ago, and we would explain to people what it was about, they'd go, "What? I don't get it. What's the global systemic risk? I don't understand where that comes from." We would make references to 2008, and they would go, "yeah, well, that's different." And then in January of 2020, we got COVID. And all of a sudden a lot of people understood what we were talking about. So you'll be able to—you know, I've given you some forewarning of how we can apply the global systemic risk approach to COVID and to other infectious diseases. Let me just focus in a little bit on that, on the coronavirus and its effect as understood through global systemic risk. So pandemics and plagues are a part of human history. This wonderful book by an ex-professor of mine, actually, Frank Snowden, Epidemics and Society, and provides this great guide to all the various epidemiological challenges that we have faced. There is a huge debate about the size of the Justinian plague, for example, and to what extent it played a role in the decline of the eastern Roman Empire. The Black Death—huge debate ongoing about, was it a positive force in that it actually increased labor prices and brought about the end of feudalism and therefore the beginning of the Renaissance? Or is it just this horrific event that 50% of the population in Europe— I don't know what the population in China or in the rest of Eurasia. But the well-known number is about 50% of the population in western Europe. You've got smallpox as a horrific culling of the population in the 16th century Americas. As the America—the Western Hemisphere population had not been exposed to it. And smallpox—between smallpox, the anxiety from conquest, the results of conquest, something like 90 to 95% of the population in the Americas, of the original, the indigenous population, disappears throughout the 16th century. You have typhus and TB as 19th century scourges. You've got plague that keeps reoccurring in one part of the world or another. You've got cholera, a major killer in the 19th and still the 20th century. You have the influenza epidemic of 1918 through 1920. During which, by the way, my great-grandparents died in Santiago—in Guantanamo, Cuba. You've got the HIV/AIDS epidemic of the last third of the 20th century. Anybody who knew folks in New York can remember just the incredible death toll of this. I had some family in New York and I was very close to one of my cousins. And I saw him and a whole generation of his friends die through HIV/AIDS. And then more in the 21st century, we've got the SARS and Ebola threats. So what's particularly important about each one of these? How can we say which one of these is going to be the greatest threat, in a sense? And we can look at three elements. One is contagion vector. That is, how is the disease transmitted? Is it transmitted by touch? Is it transmitted by some blood exchange? Is it transmitted airborne? You've got infection rate and speed. How much do you have to be infected, okay, to actually get it? Do you need an overwhelming amount of exposure, or will a small amount of exposure do it? And how fast will you get it? Here's an interesting case. Sometimes faster is better. The reason for that is, if you get the symptoms before too long, then at least there is some indication. What's really, really dangerous is an infection rate and a low speed. Which means that the disease can be dormant for quite a while. And then, of course, is the mortality level. How deadly is the disease? Well, let's take a look at COVID in that way. Why COVID is so bad? It's airborne. I mean, this is the biggest problem. This is an airborne disease. Moreover, this is the speed of travel of humans, not of COVID. Because we've increased so much our interdependence through flights, et cetera, it is very, very possible for someone to get the disease and travel and never know that they have it. And therefore, maybe, possibly infect everyone on a plane, or on a ship, or in a railroad car, plus all the people when he or she goes home. There are healthcare limitations. A major problem with COVID is that it requires large degrees of hospitalizations. Its mortality rate is relatively low, but it does require hospitalization. This has put a strain on the system. Much of the strain of COVID, over and above—as of November 19th, 250,000 lives in the United States, over a million lives throughout the world. Part of the problem is not just that horrific cost, but the fact that it puts these strains on healthcare institutions that have been designed with the very same principles we've talked about about efficiency. You look at the marginal return on an extra ICU bed. Marginal return on an extra ICU personnel. We've shrunk, in many ways, our healthcare system to account for those efficiencies, and we're running into a problem when we could use much more redundancy, in a sense, in the system. And I want to urge you to go to the Johns Hopkins COVID dashboard, where you will see lots of data about the spread, the history, and the incidents in various parts of the world. And I strongly urge you to do that, it's a very sobering virtual visit because you realize that this is a global disease, and in some places it's getting much worse. So how did it come about? And again, I think everybody agrees that it's airline travel that causes it. What we've done here, actually, these different colors— which you can't really tell because it all looks like a spider web, these different colors are various points in the infections. And if you look here, this sort of orange, okay, that's the beginning, that's the first infection where it goes from China or, of course, also within China, but goes to Southeast Asia. It goes to, by a strange set of coincidences, goes to Iran and begins to enter in Europe. It then spreads faster and it goes to the United States, but mostly through Europe. Most of the incidents for COVID in the United States actually begins in Europe, having gotten it from China. But there's also some direct China. And then, of course, it goes from the United States and from Europe to South America. Sub-Saharan Africa has so far been relatively spared. Part of that is because it is a marginal player, in a sense, in a lot of globalization, and that, in a sense, has given it some advantage. On the other hand, the major cities in Latin America that are very much players in globalization, they've been hit very, very hard. And one of the first effects that we see is the collapse of global air flights. This is percentage change from the previous year. Until March, you know, there was a travel emergency, but it wasn't so bad. March 16th, we had reduced air travel by about 10%. Notice what happens in that week. It almost collapses, to minus 70 or minus 80%. A lot of this is transoceanic or international travel. As borders are placed, but also within individual countries. For example, Italy shuts off most of the north from the south, saving the south, at least in the first wave, from a very high infection rate. So we see that flights, in a sense, are both a cause of the infection, and also one of the indicators of how bad it is, as a major form of transportation collapses. I also want you to realize that this is not just inconvenience in terms of tourists or travel, that there are industrial products, there are international products that are better off being transported by airplane. Let's say they need particular conditions or they need particular refrigeration, et cetera, they can't sit around in a ship or in a port for extended periods of time. All of a sudden, a lot of those products have had their distribution network affected. So we shouldn't just see this as, oh gee, we can't go here or we can't go there or our aunt can't visit us or whatever it might be. This is much more serious. It actually also involves a possible disruption in the supply chain. We see the same kind of collapse in ground mobility. This is mobility in and out of certain cities. And you see, again, that same week, between March 17th and March 24th. Sao Paulo, New York, Moscow, Paris, Milan, Sydney, Stockholm, and Manchester. All see this drastic decline, movement inside the city and also movement out and in of the city. It begins to recover, but even still in October, it was nowhere near normal. So again, I want you to think about not just the inconvenience, not just the tragedy of not being able to visit a sick one, let's say, or a dying member of the family, but also in terms of—to the extent to which the supply chain also depends on this public transportation system much as it does on airline traffic. And one of the most obvious consequences has been the collapse in tourist arrivals. The red line is 2020. And again, the same pattern that we've seen. This is in the world. You see this incredible decline in Europe, in Asia and the Pacific, in Africa, in the Middle East, in the Americas. It has had a particularly bad effect on those parts of the world that depended on tourism, where tourism is a major industry. So you can see that, for example, in Africa, this might not have had that much of an effect because the number of tourist arrivals per month was much lower. In Europe, you go from 40 million tourist arrivals per month to almost none in the space of one month. And again, imagine if you own a small restaurant, or a souvenir shop, or anything like that, or a hotel, or you operate a hotel, or you work at a hotel, you work at a restaurant, and what this means for your daily life in terms of a disruption. Next we're going to look at some more effects of how COVID, in a sense, snuck into our lives, how COVID used precisely that same globalization system to affect our lives.