The New York Times explained Thursday that economic fears are surfacing as coronavirus is keeping people away from movie theaters, travel and other community activities. Their story specifically focused on the way that barbershops can forecast market instability. But it's more than that. The Times is leaving out a lot of other economic instability that people aren't taking into consideration.
"The outbreak has already caused factories to be closed, flights grounded and events canceled. Entire cities in Asia and Europe are nearly shut down. Apple, Mastercard, United Airlines and dozens of other companies have warned that the virus will hurt profits," the Times reported.
A Change.org petition appeared demanding that the University of Washington shut down its campus because of the coronavirus taking hold in the state. For those eager to get out a few weeks longer for Spring Break, shutting down the campus sounds like fun, but the reality is that the university is the fifth largest employer in the state. Shutting down means thousands won't have any income. Late Friday, the university announced that one person from the 70,000-student campus tested positive. As a result, they have canceled all in-person classes.
It raises the question, who pays when a huge employer must shut down due to something like this? Is there a government bailout the way that they did when the banks failed? The country has never faced the problem before.
The hospitality industry is huge in the country and many large businesses have loans from banks for their businesses. If people aren't staying in hotels, traveling to Disney World or any other activities, those companies will default on their loans. That could then cause banks with a large volume of hospitality loans to go under, which would send a shockwave across the country.
Already the cruise industry is taking a hot and airlines are cutting down the number of flights they're offering.
According to the Times, the Organization for Economic Cooperation and Development predicted this week that global growth could be cut in half, to 1.5 percent in 2020, if the virus continues to be a problem.
Already the Italian economy is taking a huge hit because 15 percent of the economy depends on the tourism industry.
Watch an MSNBC report on the economic impact below: