67 sats \ 34 replies \ @Undisciplined 2 Aug \ parent \ on: U.S. Job Market Signals Looming Recession news
Economic cycles are about clearing out the misallocations that have accumulated over time. Obama was largely president during a correction, which doesn't mean there were no misallocations, but most of the misallocations we're dealing with were caused by Trump and Biden era policies.
I wouldn't say it was bound to happen, because if they hadn't been such economic interventionists there wouldn't be much to correct.
I wonder if the next president will have to deal with a worse economic cycle?
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They're going to deal with a major correction. How bad the next cycle is is still TBD.
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Major correction or a major depression?
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"Depression" is a more colloquial term, which to me implies a prolonged period of reduced economic activity. Corrections/recessions can be over fairly quickly, no matter how large they are, if the government doesn't prolong them with stupid policies.
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Yes, but when has a government acted in a way that doesnt prolong it?
They love creating those worthless policies that seem to make it worse.
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It pretty much only happened in 1921: https://manhattan.institute/event/the-forgotten-depression-1921-the-crash-that-cured-itself.
We have observed different levels of prolonging, though. The Great Depression and Great Recession were subjected to much more government intervention than the others and they lasted much longer.
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I think that one is just a misnomer. The end of the 19th century was a period of rapid economic growth and expansion. I don't think "the long depression" is anything more than modern Keynesian economists misinterpreting economic history.
I'm not any sort of expert on this period, though, so I'd be interested to see evidence that the standard of living was actually depressed in this period.
Yes.
Maybe that will happen again with all the government intervention.
Let us hope they dont think of something cleverly stupid.
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The best hope is an administration that's too bumbling and incompetent to respond in a timely manner. Supposedly, that's what happened in 1921. By the time they got around to addressing the downturn, it was over.
Trump's policies prior to COIVD I dont think would have resulted in the huge issue we have had to deal with. The COVID response was going to be expensive but the biggest issue to me is that the Biden Admin has not allowed for billions in unspent COVID spending to be clawed back. Not to mention the PPP loan program was filled with fraud and while Trump signed the initial part into law in April 2020 Biden has been in charge and taken a lot of credit for the program "success" even as it failed realistically.
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The Covid stimulus was the larger part, but his restrictionist trade policies were also causing misallocations and made the supply chain less able to respond to Covid. To his credit, allowing more energy development was helping unwind some prior misallocations.
Maybe it was a wash, pre-Covid, but certainly not after.
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Oh yeah once COVID hit everything went out the window. Without COVID I think the US and China would have been able to really get into the trade stuff and "fix it" but COVID ended up driving that off the road because we needed things that only China had/made. I think long term we will be happier with those trade moves though because it really kick-started bringing back pretty fundamental things to the US or allied nations.
During COVID not a single person knew what was going on or how to react and it was a lose-lose situation for whoever was in office. I think some of the stuff being delayed from China though ended up saving lives as well. For instance, ventilators were thought to be good to help people recover only to kill a bunch of them.
Overall it was just crap timing with COVID hitting. Without that I think it all would have worked out and the issued we had with China in particular, would have been a whole lot smoother.
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Good point about the ventilators. That was pure serendipity.
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