Crises facing Biden threaten to create vicious cycles

New US president must combine agile political manoeuvring with smart economic policy

Mohamed El-Erian 

President Joe Biden and first lady Jill Biden in Washington DC on Tuesday. The new president leads a country confronting not a single but multiple self-reinforcing crises © Michael M Santiago/Getty


When Joe Biden became vice-president 12 years ago, he joined an administration dealing with a major economic heart attack in the form of the financial crisis. 

Today, the new president leads a country confronting not a single but multiple self-reinforcing crises. 

Responding well will require supplementing smart economic policy design with agile political manoeuvring at a time when financial markets remain focused on a “pedal-to-the-metal” Federal Reserve.

The major challenge in 2009 was to stabilise dysfunctional financial markets threatening to tip the world into a depression. 

This was achieved through a combination of extraordinary monetary and, to a lesser extent, fiscal responses. 

Barack Obama’s administration avoided a major economic calamity. 

But losses in the 2010 midterm elections closed its political window for major legislation, and it was unable to provide a solid runway for high growth that was both inclusive and sustainable.

If anything, today’s financial markets are functioning too well. 

Conditions are extremely loose: interest rates remain ultra low, asset prices are surging to record highs and financing is abundant for companies that can access capital markets. 

The financial system challenge for Mr Biden is not a short-term need to address immediate dislocations but the longer-term problem of relinking bubbly markets to economic realities.

Recent data confirm that the US economy is slowing, hit by higher infection rates and deaths from the pandemic. Inequality of income, wealth and opportunity, already high in the US, has worsened. 

Trust in institutions has been undermined. And, even though we all face the common problem of a virus that is mutating, international efforts to co-ordinate policy have struggled.

These crises are feeding on each other, threatening vicious cycles. No wonder the risk of “scarring” — in which short-term economic problems become stubborn longer-term obstacles to social wellbeing — has become such a concern.

I have argued before for a four-prong approach: provide immediate financial relief to vulnerable segments of the population, improve our fight against Covid-19, counter household financial insecurity, and boost productivity and growth potential, including through a lasting green recovery.

The $1.9tn fiscal package recently announced by Mr Biden seeks to address the first three of these issues. Plans for additional fiscal stimulus, scheduled for February, would take aim at the fourth.

Undoubtedly, some will worry about the efficiency of some of these measures, as well as the longer-term implications for deficits and debt. Yet most pressing questions lie elsewhere. 

Will the Democrats’ razor-thin congressional majority allow the timely passage of stimulus? Will there be enough “early wins” to facilitate the national unity needed to overcome the health crisis in particular? And how will markets react?

Mr Biden’s two-part plan for fiscal stimulus is an attempt to cut the risk of congressional opposition. 

But finding ways to build and mobilise national unity is likely to prove hard. 

Large sections of the US population feel marginalised, undermining collective efforts to deal with common challenges — as we are seeing in attempts to slow Covid-19 infections and increase vaccine adoption.

The markets question is perhaps the most vexing of all. Fed officials have recently felt compelled to adopt an even more accommodating tone despite favourable signs for a large fiscal effort, buoyant capital markets and higher asset prices.

Reacting to a one-week 20 basis points increase in yields on longer-dated government bond debt, Fed chair Jay Powell felt the need to reiterate the central bank’s dovishness. 

If the yield rise were to continue, it would increase borrowing costs and risk shaking the two major tenets that have bolstered vibrant stock markets: that there is no alternative to buying riskier assets and stocks are cheap based on discounted cash flow models. 

But the Fed’s constant reassurance only reinforces investor confidence that there are only upsides to investing in markets that have become increasingly disconnected from economic reality.

Early signs suggest that policy design is unlikely to be the main obstacle to the Biden administration’s success. But smart economic policy is a necessary but not sufficient condition for improving both the financial and medical wellbeing of America and the global economy. 

The new team also needs a high degree of political agility and a much greater sense of national collective responsibility, both political and social.


The writer is president of Queens’ College, Cambridge university, and adviser to Allianz and Gramercy 

You’ve lost that lovin’ feeling

The pandemic made the world realise the importance of human contact

Touch is the only sense crucial to humans’ survival



It has been 11 months since anyone hugged Larry. 

The 62-year-old accountant lives alone in Chicago, which went into lockdown last March in response to covid-19. He has heart problems so he has stayed at home since then.

The only people to touch him have been latex-sheathed nurses taking his blood pressure. Larry describes himself as a “touchy-feely” person. 

Sex is nice, but more than that he longs for casual platonic contact: hugs and handshakes. He lies in bed, he says, yearning to have someone to hold or to hold him.

The pandemic has been an exercise in subtraction. There are the voids left by loved ones who have succumbed to covid-19, the gaps where jobs and school used to be, and the absence of friends and family. 

And then there are the smaller things that are missing. To stop the spread of covid-19 people have forsaken the handshakes, pats, squeezes and strokes that warm daily interactions. The loss of any one hardly seems worthy of note.

And yet touch is as necessary to human survival as food and water, says Tiffany Field, director of the Touch Research Institute at the Miller School of Medicine, part of the University of Miami. 

It is the first sense to develop and the only one necessary for survival. We can live with the loss of sight or hearing. But without touch, which enables us to detect such stimuli as pressure, temperature and texture, we would be unable to walk or feel pain. Our skin is the vehicle through which we navigate the world.

Certain groups have long been starved of touch. For centuries lepers were deemed untouchable. Dalits, the lowest caste in India, were literally known as such. Solitary confinement is used as a punishment in prisons. 

In a film made before his death in 2015 Peter Collins, a Canadian convict locked up alone, said he craved so intensely the touch of another human that he pretended the flies walking on his skin were his wife’s fingers. 

But not until the pandemic, with its widespread social distancing, have such vast swathes of the population been deprived of friendly physical contact for so long.

Humans need touch to form close relationships. To improve its chances of survival, Homo sapiens evolved to live in groups. Humans “need to interact with each other”, explains Alberto Gallace, a psychobiologist at the University of Milano-Bicocca, which may explain why, like other social animals, they have developed a neurological system designed to respond to affectionate touch. 

Stimuli applied to the skin at a certain pressure and speed—“basically a caress”, says Dr Gallace—activate a dedicated nerve fibre in the skin.

Stimulating this fibre lights up parts of the brain responsible for pleasure, releasing a cocktail of hormones, including dopamine, serotonin and oxytocin, that soothe anxiety and make us feel happier.

The importance of touch starts early. A review of scientific literature conducted in 2016 found that babies who had skin-to-skin contact with their mothers immediately after birth were 32% more likely to breastfeed successfully on their first attempt than those who did not. 

Several hours later, they also had better heart and lung function and higher blood-sugar levels. In one study in 1986 in America premature babies who were given regular massages for ten days shortly after they were born gained weight more quickly and left intensive care sooner than premature babies who were not. 

Their physical and cognitive development was also better than the control group in tests a year later.

The positive health effects continue. Touch depresses levels of cortisol, a hormone produced in response to stress. 

In addition to triggering the “flight or fight” response, cortisol smothers “natural killer cells”, a type of white blood cell that attacks viruses and bacteria. Touch can also increase the production of natural killer cells in patients with hiv and cancer, according to Dr Field. 

In 2014 researchers at Carnegie Mellon University observed that healthy adults who were hugged more frequently were less likely to get colds, perhaps because such embraces are a way of communicating affection, and people who feel cared for are less likely to fall ill.

A lack of touch, by contrast, is damaging. After controlling for factors such as poverty and quality of medical care, studies of infants show that the absence of touch leads to a broad range of developmental problems, argues David J. Linden, a professor of neuroscience at Johns Hopkins University, in a book called “Touch”. 

Children who are not cuddled tend to develop certain cognitive skills later than their peers. A lack of touch may fuel aggression. In 2002 Dr Field observed that compared with French adolescents, children in America received less affectionate physical contact and were more combative. But those who received daily massages became less aggressive after five days.

Without regular contact people can become “skin hungry”, a state in which they experience less touch than they want. The few studies that have been done into skin hunger suggest it is harmful. 

A survey of 509 adults from around the world in 2014 suggested that being deprived of touch was linked to loneliness, depression, stress, mood and anxiety disorders and secondary immune disorders.

The pandemic supercharged that. In a poll of 260 Americans who had been under lockdown for a month last April, conducted by Dr Field, 60% said that they longed for physical contact. 

The impact may be particularly acute in places where people are normally more tactile. 

In southern Italy “keeping your distance from someone is almost offensive”, says Luca Vullo, the author of a book on Italians’ non-verbal communication. 

And yet even Italians have surprised themselves with the level of their compliance with social-distancing measures. 

Most wear masks and keep their distance in queues (although when restrictions have been eased, many have found it harder to maintain, especially in restaurants, and particularly after a glass or two of wine). 

In Brazil, however, Claudia Matarazzo, an etiquette coach who wrote a guide in mid-2020 on how to limit physical contact without being rude, has given up trying to convince her compatriots to swap kisses for elbow bumps. 

Her efforts have not been helped by the president, Jair Bolsonaro, who regularly hugs and shakes hands with supporters. He failed to keep his distance even when he had covid-19.

By contrast, people from more reserved countries may hardly notice they are receiving less physical contact. Leonard Lim, a Singaporean tech worker, has not met anyone in the flesh, except for his wife, with whom he lives, and their parents, since last February. 

It did not occur to him that he had received less physical human contact over the past year until asked whether he had noticed its absence.

The sense of touch is easily overlooked. Its flashier cousins, vision and hearing, have entire art forms dedicated to them while chefs and perfumers serve our taste buds and nostrils. Scientists neglect it. 

For every research paper on touch, there are 100 on sight. In the 19th century European intellectuals dismissed touch as “a crude and uncivilised mode of perception”, inferior to sight, according to Constance Classen, a cultural historian. In Anglophone countries, the Victorian horror of the body gave popular ballast to this bias. 

Strictures against touch persisted in those countries into the next century. In the 1960s Sidney Jourard, a psychologist at the University of Florida, observed the behaviour of couples in coffee shops around the world. 

Over the course of an hour couples in Paris and Puerto Rico touched each other 110 and 180 times respectively. Their counterparts in Florida touched each other just twice. 

Those in London avoided any contact at all.

Out of touch

People in such countries are more demonstrative today. But Dr Field argues that many Americans were suffering from skin hunger before the pandemic. 

Among those surveyed by Dr Field in April only a fifth said that they touched their children frequently. Outside the home, tactile interaction has effectively been outlawed in many places. 

Many American states have banned teachers from touching their students. A lot of schools have similar policies. 

The MeToo movement means physical contact is rare in offices. And in recent decades the number of people living alone has shot up in many rich countries. So too has the time spent online. 

Virtual spaces bring users together but these connections are forged in an immaterial dimension. Screens are portals to digital worlds that require us to leave our bodies behind. Richard Kearney, a professor of philosophy at Boston College, calls this process “excarnation” and argues that it is fuelling a “crisis of touch”.



Some were trying to mend this before the pandemic. In Japan Deguchi Noriko, the founder of the Japan Touch Counselling Association, instructs new mothers, nurses and nursery teachers in the art of what she calls “skinship”, the act of “deepening our bond and trust with others” through clasping hands, hugging and stroking. In America urbanites were congregating at “cuddle parties”, hopeful that draping themselves over strangers would banish their loneliness.

In 2015 Madelon Guinazzo and Adam Lippin founded Cuddlist, a company which trains “cuddle therapists”. They suspected that many people longed for “platonic, mutual, consensual touch that’s purely about affection”, says Ms Guinazzo. 

That need was not being met, she argues, because of the “hypersexualisation” of touch in America. Their company has put therapists in contact with 50,000 clients around the world. They tend to be people experiencing too little touch or the unwelcome kind. 

Larry, the accountant from Chicago, began seeing Ms Guinazzo three years ago. He was uncomfortable with the idea of paying for hugs but his desire for contact exceeded the brief embraces he received from friends. He was surprised to find that the shoulder rubs, hugs and hand-holding brought him comfort and “a sense of joy”.

At present Larry can only meet Ms Guinazzo online. They evoke the sensation of touch through words and their imaginations—or try to. 

Zoom cuddles are not as potent as those in the flesh, says Larry. 

But in the age of distance, the skin-hungry must make do with what they can. 

Between February 10th and 13th 2020 sales of massage chairs in China were 436% higher than in the same period in 2019, according to Suning.com, a big retailer. 

Others are turning to technology to simulate caresses. CuteCircuit weaves haptic sensors into shirts which, it claims, can transmit the sensation of a hug using Bluetooth technology to corresponding shirts. 

Between April and December, traffic to its online shop surged by 238%. 

The pandemic has made many more people aware of their craving for touch, says Ms Guinazzo. 

Her business has suffered, but once covid-19 ebbs she expects demand to surge. 

People need to touch people, not just screens.

Interview with Virologist Christian Drosten

"I Am Quite Apprehensive about What Might Otherwise Happen in Spring and Summer"

In an interview with Christian Drosten, the German virologist looks back on the mistakes he has made in the coronavirus pandemic – and ahead to the dangers that the pandemic still has in store for us.

Interview Conducted By Rafaela von Bredow und Veronika Hackenbroch

Christian Drosten on the grounds of Charité Universtiy Hospital in Berlin Foto: Julia Steinigeweg / DER SPIEGEL


DER SPIEGEL: Professor Drosten, the pandemic has entered a decisive phase. The beginning of the vaccination campaign has meant light at the end of the tunnel, but now, more contagious virus variants have appeared. How dangerous is the situation in Germany at the moment?

Drosten: I am, of course, closely monitoring the situation. Politicians are also acutely aware that we have to be careful. 

Early on, I admit that I had my doubts as to whether B.1.1.7, the new variant from Britain, was as much more contagious as people were claiming. 

But now, there is a new study from Oxford, really solid data, showing that this mutation is up to 35 percent more contagious than the wild-type virus. 

It is rather astonishing that the virus has boosted its infectiousness to that degree. 

That is, unfortunately, more dangerous than if it had become more deadly – because every new case will infect more people, and each of them will infect more people, such that the number of cases will grow exponentially.

DER SPIEGEL: On Monday evening, you were part of the group of experts advising Chancellor Angela Merkel and the governors of Germany's 16 states. What recommendations did you make?

German Finance Minister Olaf Scholz and virologist Christian Drosten (in March 2020): "I'm afraid that it will be more like in Spain." Foto: Michele Tantussi/ REUTERS


Drosten: Right now, I am most concerned about the British variant, primarily because of our geographical proximity to the UK. 

According to the facts we currently have, B.1.1.7 has just started spreading in Germany. 

I think we have the singular opportunity to prevent, or at least significantly slow, the advance of this variant. With B.1.1.7, there could be a kind of threshold effect. 

If we are able to keep the new variant below a critical benchmark, we would at least have hope that it wouldn't spread as quickly here.

DER SPIEGEL: Are the measures decreed on Tuesday sufficient?

Drosten: In the negotiations, I think there was an effort made to find the gaps, the places where not enough has thus far been undertaken to stop the spread. It's clear that it was a struggle and that the results are a compromise. 

Some areas appear particularly important to me. 

Schools and daycare centers, for one, particularly the classes in secondary schools. 

England has closed such schools, with the exception of children of critical workers, and I think that is also where the most reliable data is to be found. 

For me, this is unequivocal, and Germany should use it as an orientation.

DER SPIEGEL: What about the measures pertaining to working from home?

Drosten: More could certainly have been done on that issue. It would have been good to take inspiration from the Irish experience in the autumn. 

Ireland introduced strict measures regarding working from home, and it was apparently quite effective. 

Doing so automatically reduces public transport occupancy. 

There is also a third aspect where improvements are necessary, something the British are doing: Targeted contact and support for the socially disadvantaged and groups that are difficult to reach in the pandemic. 

Here, the virus frequently spreads explosively, because many people live in close quarters and have jobs that don't allow them to work from home. 

Many perhaps don't fully understand the problem presented by confined spaces. 

I think there is still a lot to do here.

DER SPIEGEL: You've come up with an image to illustrate our current situation in the pandemic: We are in a rickety truck that is driving down a steep mountainside ...

Drosten: ... and we don't know what curves are coming up and whether the road is suddenly about to get steeper. 

We also don't know how far we still have to go, but we do know that we absolutely have to avoid missing a corner. 

In a situation like this, closing our eyes doesn't help. 

We have to keep going and do one thing in particular: Hit the brakes, even if they might be rusty.

DER SPIEGEL: What do you mean by that?

Drosten: That means, we have to lower the reproduction number R.

DER SPIEGEL: The value that tells us the average number of people an infected person passes the virus to.

Drosten: Precisely. Currently, that number is at 0.9. It is great that we have finally managed to push it back down below 1, so that the number of cases can begin to drop. 

But 0.9 isn't enough if we want to quickly loosen the brakes. 

With an R of 0.9, it takes about a month to reduce the number of infections by half. 

That is too long. 

We should try, through an intensification of the shutdown, to get the number down to 0.7. 

Then, the case numbers will drop by half in just a week, and we can get to a point where we can stop the spread of B.1.1.7 or at least give ourselves a head start.

DER SPIEGEL: Do you think that the so-called Zero-COVID strategy, the goal of sinking the number of new infections to zero, is the right way forward?

Drosten: I do think it would be possible with a significant effort. 

The virus, of course, would continue to flare up, just as we have seen in China and Australia. 

But it would absolutely be worthwhile to at least identify zero new infections as a target. 

Primarily because I am quite apprehensive about what might otherwise happen in the spring and summer.

DER SPIEGEL: What do you mean?

Drosten: Once the elderly and maybe part of the risk groups have been vaccinated, there will be immense economic, social, political and perhaps also legal pressure to end the corona measures. 

And then, huge numbers of people will become infected within just a short amount of time, more than we can even imagine at the moment. 

We won't have 20,000 or 30,000 new cases a day, but up to 100,000 in a worst-case scenario. 

It will, of course, be primarily younger people who are less likely than older people to have severe symptoms, but when a huge number of younger people get infected, then the intensive care units will fill up anyway and a lot of people will die. 

Just that it will be younger people. 

We can cushion this terrible scenario somewhat by pushing the numbers way down now.

DER SPIEGEL: Can we be confident that case numbers will begin to drop in spring as temperatures rise?

Drosten: I don't think so. The fact that we had such a relaxed summer in 2020 likely had to do with the fact that our case numbers remained below a critical threshold in the spring. 

But that's not the case any longer. 

I am afraid that it will be more like in Spain, where case numbers climbed rapidly again after the lockdown was lifted, even though it was quite hot. 

In South Africa, too, where it is currently summer, case numbers are at a high level. (Sinks into thought, saying nothing) I'm sorry, unfortunately I'm extremely tired.

DER SPIEGEL: Because you were advising politicians deep into the night?

Drosten: (laughs) No. Because I worked until 1 a.m. and then woke up this morning at 5:30.

DER SPIEGEL: How well are you able to juggle your work with family life?

Drosten: I don't really want to talk about my private life. But I do think that it's a problem many families are facing at the moment. 

The pandemic has found a sore spot. 

In countries like Germany, where people generally aren't living together with grandma and grandpa, many families find themselves in an extremely difficult situation. 

I hope that we can learn from this and find new solutions.

DER SPIEGEL: Do you still have time for your real work, as a virologist?

Drosten: Yes, of course. We are currently taking a closer look at the British variant. We hope to have initial results in a few weeks.

DER SPIEGEL: Which of the new mutants do you believe is the most dangerous?

Christian Drosten: "I'm sorry, unfortunately I'm extremely tired." Foto: Julia Steinigeweg / DER SPIEGEL


Drosten: In a population that still isn't immune, like here in Germany, the variant from Britain will likely find success, because it is better at spreading, it is more contagious. 

The South African and Brazilian variants may be able to infect people who have already had the disease, but that likely doesn't give them an advantage in a population where immunity isn't yet widespread. 

Which means that the virus will be distributed here and there over the course of the next year, and new variants will surely appear.

DER SPIEGEL: What does that mean for the vaccines?

Drosten: One of the mutations in the Brazilian and South African variants has already demonstrated a serious immune escape ...

DER SPIEGEL: ... which helps the virus evade our immune defenses. 

Does that mean that the vaccines will be ineffective?

Drosten: Antibodies are just one component of immune protection, another is T-cell immunity. 

That protects much more strongly against a serious progression of the illness. 

If the virus mutates, it doesn't have an effect on T-cell immunity. 

As such, I don't think that we have to fear that our vaccines will be ineffective.

DER SPIEGEL: When you formulate such assessments, people across Germany are listening, and it often determines public opinion. 

How well are you able to live with that responsibility?

Drosten: It doesn't rob me of sleep. From the very beginning, I hoped that this public role would be shared among several people. And luckily, that is happening.


DER SPIEGEL: Last year, experts who have argued time and again against scientifically proven measures – e.g. Jonas Schmidt-Chanasit and Hendrik Streeck – likely did more damage than corona-truthers. 

Protecting high-risk groups must have priority, you frequently heard from their group. 

Yet it has long-since been clear that doing so is impossible when case numbers are high. 

At what point do you lose your patience?

Drosten: Are you trying to get me to criticize colleagues by name? 

I don't think much of personal attacks.

DER SPIEGEL: We are more interested in a fundamental point. Many such experts awaken the impression that only opinions are important in science, and not evidence. 

That undermines the credibility of researchers who take a more serious approach. How do you deal with that?

Drosten: Like most scientists, I try to convince people with facts. Imagine, for a moment, that a completely new dataset emerges that is so compelling that it knocks you off your feet and you think: Finally, everything is clear! 

I'll summarize it and explain it in an interview or share it via Twitter. 

By doing that, I can explain the facts or clear things up.

DER SPIEGEL: And that's how you hope to explain to us how serious science works?

Drosten: It could be that this strategy is a bit short-sighted, or perhaps naïve ...

DER SPIEGEL: ... and perhaps simply won't be understood.

Drosten: Maybe that as well. Perhaps, though, it is more your job as journalists to make it clear what makes one study more credible than another?

DER SPIEGEL: By not contradicting people who say ridiculous things publicly, you tolerate a situation whereby people believe in false prophets. 

It's particularly problematic with corona-truthers, who claim that mortality isn't much higher than it is with influenza.

Drosten: Let me be extremely clear about that: According to what I have heard, the infection mortality rate in Germany – meaning the percent of SARS-CoV-2 infections that result in death in Germany – is likely over 1.1 percent. 

That is more than 10 times higher than the flu. But I know what you mean, of course. 

Though studies that are out of date, that are no longer accurate, don't bother me so much. That's just part of science. 

What bothers me more are arguments made without evidence, without substance, with unfair analogical reasoning. All those things that are essentially akin to suppressing scientific insights. 

It results in a false balance, with people getting the impression that such arguments are also science.

A demonstration against coronavirus measures in Berlin (November 2020): "As scientists, we are defenseless." Foto: Michele Tantussi / Getty Images


DER SPIEGEL: Politicians also get sucked in by such assertions.

Drosten: Of course. How is a politician supposed to know who the real experts are? Since fall, when some of these experts sounded the all-clear, I have had the feeling that we have been subject to a false balance. 

My assessments are now almost always contrasted with opposing views that are not rooted in fact. But I simply don't have the time to fight on this front. 

I already have a fulltime job as the leader of an institution, where I carry responsibility for research, for patient care and for public health.

DER SPIEGEL: Is the battle for interpretive authority in the pandemic becoming more aggressive?

Drosten: There are certainly some attacks that on top are driven by testosterone. You simply have to ignore them.

DER SPIEGEL: Why?

Drosten: People who attack others personally are, depending on their style, like drivers who sit in the safety of their cars and scream at other drivers – something they would never do as pedestrians on the sidewalk. 

Or like a person who secretly lets the air out of someone's bicycle tire. 

But I don't want either of those things. I can't be like that; I don't want to behave like that.

DER SPIEGEL: Most recently, the virologist Melanie Brinkmann was attacked by the tabloid Bild because she is a proponent of the Zero-COVID strategy. 

You have also had an encounter with Bild. What advice would you give her?

Drosten: To pull back. It's the only thing you can do. 

As scientists, we are defenseless, we can't simply ignore such attacks or stand up to them. It's not just a question of thick skin or practice, but also of protective structures.

DER SPIEGEL: When you look back on this year of pandemic, what mistakes have you made?

Drosten: Certainly, when it comes to communication. For example, trying to defend myself on Twitter against attacks. 

That never works. In general, I made the mistake of spending too much time reading Twitter. 

Doing so just drives you crazy. 

And then, it was naïve of me to just announce in brief on Twitter the results of our study on viral load in children. Many people saw that as a provocation.

"It was naïve of me to just announce in brief on Twitter the results of our study on viral load in children. "

DER SPIEGEL: As a consequence of the study, you warned against reopening schools and daycare centers.

Drosten: I thought it was a piece of information that everybody needed to see: Let's redouble our efforts so we can publish as quickly as possible. 

It wasn't clear to me at the time that it could seem like a provocation – particularly in the heated atmosphere of the time.

DER SPIEGEL: The issue of school closures was the subject of hours of debate on Tuesday during the meeting between Merkel and the state governors. 

Why has it been so difficult for scientists to convince people on this issue?

Drosten: To be honest, even without our study on viral loads in children, I would not have considered it likely that children would be spared by SARS-CoV-2. 

From a purely biological perspective, the mucous membrane doesn't change all that much during puberty. 

Which means that children can also get infected – and be contagious. That so many doubts about that fact have arisen was always, and still is, confusing to me.

DER SPIEGEL: Was Germany paralyzed as a result and not prepared with clever ideas for keeping schools open throughout the winter?

Drosten: I thought, yeah, people will discuss it and then find practical solutions – like, for example, removing windowpanes and replacing them with a piece of cardboard outfitted with a fan. 

But then, the infectiousness of children was denied for so long, and nothing was done, no decisions were made for so many months through the summer. I found that very, very astonishing.

DER SPIEGEL: That’s all the mistakes you made last year?

Drosten: (laughs) I don't think I was fundamentally wrong with my scientific assessments of the pandemic.

DER SPIEGEL: You did make one bad mistake in your podcast on Tuesday.

Drosten: Uh oh. What?

DER SPIEGEL: In answering a question, you mentioned a number. 

The number, you said, was the same one as from the science fiction classic "The Hitchhiker's Guide to the Galaxy": 21. Really, 21?

Drosten: Wait a sec. I've read the book! 

The 21 in the podcast was a spontaneous joke. I knew it was half of the real number!

DER SPIEGEL: Precisely. In the book, 42 is the answer to "the ultimate question of life, the universe and everything." 

We're quite relieved. In your interview with DER SPIEGEL in May, after all, it became clear that you were familiar with neither Obi-Wan Kenobi nor Gandalf. 

SPIEGEL readers and Twitter followers offered to send you copies of "The Lord of the Rings" and "Star Wars." 

Have you since read them, or watched the movies?

Drosten: (laughs) I haven't actually found the time to read "The Lord of the Rings" this year. But I received them. They're on my shelf!

DER SPIEGEL: You can maybe plan on reading them when the pandemic is over. 

When will that be?

Drosten: I think that at some point in the middle of fall, the effects of vaccinations will begin to become apparent. 

Population-wide, not just in the sense that risk groups are protected. So that far fewer people will be getting infected. 

But for that to happen, nothing completely unforeseeable can happen.

DER SPIEGEL: Are you then going to write a book, as some of your colleagues have done?

Drosten: I did think about writing an informational book, kind of like my podcast. 

But in the course of discussions about it, I realized that there was a greater interest in me, personally. 

I then said that is something that I really don't want. 

I might write my memoirs when I retire, but not right now.

DER SPIEGEL: You have better things to do?

Drosten: Precisely.

DER SPIEGEL: Professor Drosten, we thank you for this interview. 

Technology and geopolitics

The struggle over chips enters a new phase

The age of their manufacture in China could be beginning



When microchips were invented in 1958, the first significant market for them was inside nuclear missiles. Today about a trillion chips are made a year, or 128 for every person on the planet. 

Ever more devices and machines contain ever more semiconductors: an electric car can have over 3,000 of them. New types of computation are booming, including artificial intelligence and data-crunching. 

Demand will soar further as more industrial machines are connected and fitted with sensors.

For decades a vast network of chip firms has co-operated and competed to meet this growing demand; today they crank out $450bn of annual sales. No other industry has the same mix of hard science, brutal capital intensity and complexity. Its broader impact is huge, too. 

When the supply chain misfires, economic activity can grind to a halt. This month a temporary shortage of chips has stopped car production-lines around the world.

And no other industry is as explosive. For several years America has enforced an intensifying embargo on China, which imports over $300bn-worth of chips a year because it lacks the manufacturing capability to meet its own needs. Fresh strains in the chip industry are forcing the geopolitical fault-lines further apart. 

America is falling behind in manufacturing, production is being concentrated in East Asia, and China is seeking self-sufficiency. In the 20th century the world’s biggest economic choke-point involved oil being shipped through the Strait of Hormuz. 

Soon it will be silicon etched in a few technology parks in South Korea and Taiwan.

Start with the shifts in the industry. A surge in demand and those novel kinds of computation have led to a golden age in chip design. 

Nvidia, which creates chips for gaming and artificial intelligence, is now America’s most valuable chip firm, worth over $320bn. 

The quest to create bespoke chips in order to eke out more performance—think less heat, or more speed or battery life—is also drawing outsiders into the design game. In November Apple unveiled Mac computers powered by its own chip (it already uses its own in the iPhone), and Amazon is developing chips for its data centres. The design boom has also fired up dealmaking. 

Nvidia, for instance, is bidding $40bn for Arm, which makes design blueprints. In the future a new open-source approach to designing chips, called risc-v, could lead to more innovation.

Contrast this effervescence with the consolidation in chipmaking. A gruelling 60-year struggle for supremacy is nearing its end. Moore’s law, which holds that the cost of computer power will fall by half every 18 months to two years, is beginning to fail. Each generation of chips is technically harder to make than the last and, owing to the surging cost of building factories, the stakes have got bigger. 

The number of manufacturers at the industry’s cutting-edge has fallen from over 25 in 2000 to three.

The most famous of that trio, Intel, is in trouble. It has fired its boss, an admission that it has fallen behind. It may retreat from making the most advanced chips, known as the three-nanometre generation, and outsource more production, like almost everyone else. 

That would leave two firms with the stomach for it: Samsung in South Korea and tsmc in Taiwan. tsmc has just announced one of the largest investment budgets of any private firm on the planet. An array of corporate A-listers from Apple and Amazon to Toyota and Tesla rely on this duo of chipmakers.

The other big industry rupture is taking place in China. As America has lost ground in making chips, it has sought to ensure that China lags behind, too. 

The American tech embargo began as a narrow effort against Huawei over national security, but bans and restrictions now affect at least 60 firms, including many involved in chips. 

SMIC, China’s chip champion, has just been put on a blacklist, as has Xiaomi, a smartphone firm. The cumulative effect of these measures is starting to bite. In the last quarter of 2020 tsmc’s sales to Chinese clients dropped by 72%.

In response, China is shifting its state-capitalist machine into its highest gear in order to become self-sufficient in chips faster. Although chips have featured in government plans since the 1950s it is still five to ten years behind. 

A $100bn-plus subsidy kitty is being spent freely: last year over 50,000 firms registered that their business was related to chips—and thus eligible. 

Top universities have beefed up their chip programmes. If the era of advanced chips being made in America may be drawing to a close, the age of their manufacture in China could be beginning.

How worried should you be? It is hard to ignore the dangers. 

If America withdraws from cutting-edge manufacturing and China continues to hurl resources at it, the White House will be tempted to tighten the embargo further in order to stymie China’s development. 

That could have explosive consequences. And the inexorable logic of scale is set to lead to an alarming concentration of production. The manufacturing duopoly could start to use their pricing power. 

Already a fifth of all chip manufacturing, and perhaps half of cutting-edge capacity, is in Taiwan, which China claims as its own territory and threatens to invade. 

The chip industry is poised for mutually assured disruption, in which America and China each have the ability to short-circuit the other’s economy.

Chips and old blocs

Some hawks in America and Europe want to respond with a subsidy bonanza of their own: socialism for semiconductors. 

But that would dampen the free-market renaissance in chip design and is, anyway, likely to fail. Instead, chip-users such as Apple should press tsmc and Samsung to diversify where factories are. 

America must urge Taiwan and South Korea to cut their soft subsidies for chip plants, so their firms have more incentive to build factories around the world. 

Last, President Joe Biden needs to create a predictable framework for trade with China in sensitive sectors, including chips, that allows it to participate in global supply chains while safeguarding Western interests. 

His predecessor oversaw a chaotic array of controls aimed at impeding China’s development, in chips as well as finance. 

These gave it an incentive to develop its own alternatives faster. 

The first chips may have been used in missiles, but it would be wise to avoid them becoming a flashpoint in a 21st-century cold war. 

The Internet Versus Democracy

In an era of mounting social and political instability in the United States, internet-enabled connectivity is powerfully amplifying an increasingly polarized national discourse. The resulting vulnerability was brought into painfully sharp focus on January 6.

Stephen S. Roach


NEW HAVEN – Plenty has been said, and rightfully so, about the violent insurrection at the US Capitol on January 6. Politicians are grappling with issues of legal and moral accountability. But the horrific events also touch on a critical contradiction of modern societies: the internet’s role as an instrument of democracy’s destruction.

It was not supposed to be this way. The internet’s open architecture has long been extolled by cyber-libertarian futurists as a powerful new democratizing force. Information is free and available instantaneously – and anyone can now vote with a mere click.

The rapid expansion of the public square is offered as exhibit A. Internet penetration went from 1% to 87% of the US population from 1990 to 2018, far outstripping the surge in the world as a whole from zero to 51% over the same period. The United States, the world’s oldest democracy, led the charge in embracing new technologies of empowerment.

The problem, of course, lies in internet governance – namely, the absence of rules. Even as we extol the virtues of the digital world, to say nothing of the acceleration of digitization during the COVID-19 pandemic, the dark side has become impossible to ignore. 

The Western model of open-ended connectivity has given rise to platforms for trade in illicit drugs, pornography, and pedophilia. It has also fueled political extremism, social polarization, and now attempted insurrection. The virtues of cyber-libertarianism have become inseparable from its vices.1

The Chinese model provides a stark contrast. Its censorship-intensive approach to internet governance is anathema to free societies. The state (or the Communist Party) not only restricts public discourse but favors surveillance over privacy. 

For China, governance is all about social, economic, and, ultimately, political stability. As a self-proclaimed bastion of democracy, America obviously doesn’t see it that way. Censorship of any sort is viewed with abject scorn.

Yet scorn is a good way – to put it mildly – to describe most Americans’ reaction to the deadly assault on the US Capitol. Internet-enabled social and political mobilization – first evident in Iran’s 2009 Green Movement and then in the Arab Spring of 2011 – has now struck at the heart of America.

Obviously, there is a major difference: Protesting citizens in authoritarian Iran and Arab countries were on the outside looking in, yearning for democracy. In the US, the attack on the citadel of democracy came from within, sparked by the president himself. 

This raises important questions about America’s own stability imperatives – and the failures of internet governance in revealing them.

US digital platforms – from Twitter and Facebook to Apple and Google – have taken matters into their own hands. Breaching a once sacrosanct line, they have closed down the insurrectionist-in-chief, Donald Trump. 

Yet this one-off reaction is hardly a substitute for governance. Understandably, there are great misgivings about entrusting corporate leaders with the fundamental task of protecting democracy.

But that is not the only line that has been crossed in the US. As Shoshanna Zuboff shows in The Age of Surveillance Capitalism, the business models of Google, Amazon, and Facebook are based on the use of digital technology to gather and monetize personal data. 

This blurs the distinction between cyber-libertarianism and Chinese-style surveillance, and it highlights the essence of the privacy issue – proprietary ownership of personal data.

The COVID-19 crisis offers yet another perspective on surveillance and privacy. Here, too, China and the US bookend the debate. China’s response to the first sign of outbreaks – including the current one in Hebei province – stresses aggressive lockdowns, mandatory testing and masking, and QR-code app-based contact tracing. 

In the US, these are all matters of contentious political debate, viewed by many as unacceptable transgressions in a free and open society.

At one level, China’s results speak for themselves. There have been only minor outbreaks following the initial surge in Wuhan. Unfortunately, America’s second wave – far worse than the initial carnage in the spring of 2020 – also speaks for itself.

Yet, as a recent Pew Research survey indicates, fully 40-50% of the American public still resist the discipline of science-based practices such as mobile contact tracing and engagement with public health officials. 

Couple that with significant opposition to vaccines and there is reason to believe that core tenets of democratic freedom are being twisted into an excuse to ignore the perils of COVID-19.

Whether or not we want to admit it, the aspirations and values of the so-called originalist interpretation of American democracy are being challenged as never before. 

The insurrection of January 6 and the pandemic share one critical implication: the potential breakdown of order in a free society. It’s not that China has it right. 

It’s that we may have it wrong. Unfortunately, today’s hyper-polarization makes it exceedingly difficult to find a middle ground.

Barack Obama cautioned in his final speech as president that, “Our democracy is threatened whenever we take it for granted.” Yet isn’t that exactly what America has been doing? 

In a decade punctuated by the global financial crisis, the COVID-19 crisis, a racial-justice crisis, an inequality crisis, and now a political crisis, we have only paid lip service to lofty democratic ideals.

Sadly, this complacency has come at a time of growing fragility for the American experiment. 

Internet-enabled connectivity is dangerously amplifying an increasingly polarized national discourse in an era of mounting social and political instability. 

The resulting vulnerability was brought into painfully sharp focus on January 6. The stewardship of democracy is at grave risk.


Stephen S. Roach, a faculty member at Yale University and former chairman of Morgan Stanley Asia, is the author of Unbalanced: The Codependency of America and China.