I thought Covid was going to be the thing that forced the correction. And then it made it worse. The current model is totally unsustainable. Not from a financial perspective but just from a “people need to afford to live” perspective.
I could not agree more. COVID should've been the correction - Instead, to save face governments went insane and put us in for a world of hurt. The world literally didn't make anything for 1-2 years (based on shutdowns/lockdowns) yet there was no recession. Nuts.
The recession we need is one where the big companies that are "too big to fail," fail and all the people that got screwed over get the real bailouts so they can create new small businesses. Increasing competition and decreasing monopoly. Along with better stabilizing the economy and reducing the most suffering long term. A decent example of this would be Iceland.
just destroy blackrock and vanguard, the long nose tribe house of cards will fall soon after as all the people harmed by them will rush to pull their roots out.
And when you get voted out of office for allowing an economic disaster to happen "on principle", the guy from the other party can come into office and be forced to clean up your mess. Those "too big to fail" companies were called that for serious economic reasons.
And when you get voted out of office for allowing an economic disaster to happen "on principle", the guy from the other party can come into office and be forced to clean up your mess. Those "too big to fail" companies were called that for serious economic reasons.
Transfer of wealth usually occur during inflation and market crash at times like this. So for me,this is time for aggressive investment. The more stocks drop, the more I buy. I'm just focused on making better investments and earning more as recession fear increases.
Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
Not to blow her trumpet, but Svetlana Sarkisian Chowdhury is exceptional in navigating tough markets. She has been planner ever since we met in London global economy conference. she's verifiable , so you could just search her and book an apointment. good luck!
The problem is that "the pain" is always inflicted to the lower classes that will lose their jobs, while the upper classes just ride the downturn with slightly suboptimal returns on their portfolios
Over half of American households pay NO Federal Income Tax. Half! It’s not the lower classes that suffer most. It’s the Middle Class that always gets hit hard. People on welfare still get to vote (for some reason); the (truly) rich have plenty of loopholes in any new laws when the welfare class screams: “Do SOMETHING!” Towards Washington.
on a fundamental level i agree the issue though is that we aren't just dealing with companies anymore but megacorporations. whenever we go into a recession only the strong survive works, until you have companies so full of capitol and assets that they can literally weather any storm. once the storm passes they buy up all the removed competition until it is literally only them, they buy out the new competition, stop innovating because there is no competition to compete against, and focus on absorbing as much money from the consumer as possible with things like planned obsolescence. they became so powerful they literally influence entire countries, and some have even more power than the countries they operate out of. the warehouses that collapsed a while back as i'm sure everyone has heard got tornado warnings but the company believed it knew better and ignored the warning and order people to keep working... and they did because the handful of companies that own everything have too much power and a recession would only let me acquire more.
I feel as though this is an extremely important issue that this video did not cover. The video talked about all the businesses in an economy as equal, implying that, in all cases, more supply = more better because more supply = more growth. I don’t think this is fair because ultimately, the happiness of the people is all that matters, not the growth of the economy. Just look at china. The most rapid growing economy of all time….for what? A straight up dictatorship? No thank you!
@@unripetomato4312 Not to mention that the happiness of the population is one of the best indicators for a country's future. Nations like Russia and France in particular experienced staggering levels of discontent and wealth inequality shortly before their revolutions, and those factors where precisely what cause the revolutions. Looking again to China, let's consider the fact that they've got one of the highest execution rates per capita on the planet. Now granted, they do have more capital offences than any sane country, but the more of your own citizens you need to kill to maintain the current system, the less stable that system is.
Yep, corporate socialism. Its the redistribution of wealth from one group, whether that be other companies or individuals, to mega-corporations. People often call this crony capitalism, but its the furthest thing from free market capitalism. Mega-corporations weild a HUGE stick and can brow beat or pay off politicians to put in policies that continue this trend. It's nothing more than plain old socialism, which as we all know, always ends in failure.
Yep, it's like trying to create competition between a heavy weight boxer and a kid and calling it survival of the fittest. For there to be competition, you need parties operating on a similar level.
I'm not kidding when I say that the market crash and high inflation have me really stressed out and worried about retirement. I've been in the red for a while now and although people say these crisis has it perks, I'm losing my mind but I get it Investing is a long-term game, so focus on the long run.
I can’t focus on the long run when I should be retiring in 3years, you see I’ve got good companies in my portfolio and a good amount invested, but my profit has been stalling, does it mean this recession/unstable market doesn’t provide any calculated risk opportunities to make profit?
The US-Stock Mrkt had been on it’s longest bull-run in history, so the mass hysteria and panic is relatable, considering we’re not accustomed to such troubled mrkts, but there are avenues lurking around if you know where to look, I’ve netted over $850k in the past 10months and it wasn't some rocket-science strat. I applied , I just knew I needed a firm and reliable technque to navigate better in these times, so I hired a portfoilo advlsor.
Big Credits to 'Ingrid Cecilia Raad'' has a web presence, so you can simply search for, there are some others but it might be difficult to get them, but Janet as been a good guide through the year.
There's also the "The Cantillon Effect", which exacerbates wealth- and income-inequality. When the money supply is expanding, rich people tend to get the new money first (before prices rise), and see less inflation, while poor people get it later and see more inflation. It's part of why trillion-dollar corporations can scoop up single-family homes but more & more average people can't.
@FreddieBob You’re acting like there’s some kind of centuries-long plan going on, but I think you’ve forgotten that the middle class shrank in the late 1800’s/early 1900’s and then grew in the 1940’s-1970’s. Why would a plan to destroy the middle class result in decades-long growth? And why would a plan to destroy the middle class take centuries to execute, especially when the middle class is actually a fairly recent invention? In fact, I think the middle class actually became a thing right around the same time this so-called “plan to destroy the middle class” supposedly popped up, which means the plan to destroy the middle class would only resulted in its invention.
@FreddieBob This kind of master planning is almost non existent in the world and people who think this way are mostly distrustful people who can't imagine that different genuinely good or neutral intentions can lead to a negative result. Regulations are generally not pursued specifically to make markets difficult, they are pursued due to bad actors taking advantage. Most systems aren't specifically created to exploit, people selfishly come later and find ways to exploit systems or, even more common, just use the systems to their own benefit without thinking about how it affects others. Kind of like how we don't wonder how that t-shirt or laptop or coffee is so cheap when we buy it. We're just thinking of ourselves, we don't think first that maybe it's cheap because someone is being exploited somewhere. We don't do it intentionally were just not thinking of others, but it does create systems of exploitation
Pleased this effect has been named. A variation of this I have been thinking about is inflation primarily caused by wealth inequality. If you had say 10% of the population control 90% of the wealth (and no investment in increasing goods), the could bid up the price of all goods to where the remaining 90% couldn't afford them. Why wealth inequality isn't included in discussions of increased money supply is highly suspect.
@@oakinwol IMHO, there is little point to differentiating between malice and apathy when it comes to the part of society that wields outsized power in that fashion.
@@rafaelmarkos4489 Society is relationships. In your relationships do people generally engender you to change by attributing all of your inaction, weaknesses, and apathy to malice? In many ways, because of the natural human condition, one could argue that the attribution of malice to people's action is a much much BIGGER problem than apathy. These ways that we judge others, usually more harshly than we judge ourselves, perpetuates these natural behaviors
I think one problem with the assessment about the benefit of an economic downturn is the foundation of many economic theories: they assume a rational human being behaving rationally. When it comes to reducing the workforce, this then comes in the form of assuming that the underperforming staff are the ones to be laid off first. Having been employed through several economic downturns and having survived the cut, I can say for certain that this is not my experience.
@@paulomendoza5606 Hardly, laying off staff because of an economic need to downsize is quite simple if you've actually done an audit and are following a plan. That's pretty iron-clad for any possible lawsuit as long you're being fair in your criteria. Under performing staff are easy to get rid of as long as you bother to track performance, try to work with the staff member to improve it and follow policy. The people who are difficult to remove are executives and managers, they rarely have actual productivity to check and can either hop away to another department or have weaseled their way into a contract where it's less costly to pay an incompetent to sit in a corner than it is to fire them.
My father worked in many American companies for 25 years now (and counting). In the 90's they were in constant growth and everything was hunky-dory, then hit the dot com crash and they had to "restructure". That was understandable, after all it was a massive bubble burst. What's wasn't logical, was that those "restructurings" started happening every 5 years, then every 3 years, every 2 and eventually pretty much annually. The company would annually lay-off workers in one region and... announce hiring shortly after. It didn't matter if sales did well or not, they constantly rotated people. It soon became clear that it was done solely to boost stock prices by employing some accounting wizardry and bullshitting investors with completely sham decisions. It made literally no sense to reorganise everything and have workers waste time readjusting that often, but you could throw it in slides and hope to hire interns to replace senior and mid level staff salaries. In short, it was irrational and it ultimately hurt the productivity of the company, but worked short term. It was a bother for everyone and a lot of stress for those that did get laid off, but it worked for the financial sharks that saw their wallets swell.
@@paulomendoza5606 Usually when there is a layoff, they fire entire teams or close a full single factory. Thus they get rid of both good and bad employees. If the company was auditing individually every employee and offering their employees to move to the other teams/factories (assuming they can move because it would compromise their husband/wife job) then they would get rid of only the bad employees. But that doesn't happen as it would cost money to go that length.
I kind of wish he included the demographic reality that the entire world doesn't have enough consumers because our population will peak at most at 10 billion due to almost nobody having babies. Worst of all, once you start not having as many babies it is extremely hard to get those people to start having babies again. So the current economic downturn is NOT a recession: it's actually worse than a depression. There's actually nothing we can do about it; more than half the world will simply see near apocalyptic levels of collapse. Oops! I guess we should've been having more kids all along. The good news is that the growing nations that see a collapse they can also reverse that to some degree by transitioning back to subsistence farming which results in a major baby boom. In maybe two hundred years those countries will have very healthy economies. By the way, as far as demographics are concerned, the US and Mexico are the only countries outside of Africa that will be able to weather the storm. Although, we Americans need to get started baby making fast or this same demographic reality will hit us too in about 30 to 40 years. This has a knock on effect which is extremely desperate: our levels of research are about to evaporate as the US will be the only country in the world even remotely capable of conducting research, but will be seeing unprecedented levels of isolationism put us back into our shell. The problem with that is that Climate Change isn't exclusively man-made; it is also being caused by other factors that require a scientific solution... And America is going to be hit HARD by Climate Change. Of course, climate change also needs a scientific solution, but I digress. At any measurement we need to find some way of conducting research when globalism doesn't exist. I don't know if any of you are aware, but virtually all of our research in the US relies extensively on other countries: that's why research speeds have gone absolutely insane and tech has been exploding in recent decades. Yeah, the Golden Age of Earth is over. Globalism is dead. Should we try to revive it? Should we just let it happen? Eh, I don't think this corpse can get moving again. The collapse of Globalism is because nobody had enough babies. There's no undoing that. All we can do is seed the eventual return of globalism by having 3 to 5 kids each. As far as Africa goes... It's not a positive outlook. They don't have the education levels to be able to jump start an industrial revolution on their own and global resource supplies actually indicates that Europe might become colonial again. As much as ideology might affect decision making for the better right now... Hunger will change their minds. I'm not really sure how that's going to turn out. It's honestly kind of depressing to think about because Europe doesn't have an out other than conquest. Who knows? Maybe they're invent a new kind of "conquest" that doesn't require human suffering? I sure hope so. Africa could genuinely use Europe's expertise in industrialization... But that just infects Africa with the same problem the rest of the world has so who knows how long that can last?
It's awkward to me that he had it and then lost it, if you have that boom and bust cycle you could literally smooth it out 50% tax on everything above that straight line, 50% stimulus for everything below it, the other half used as a measuring stick, if money runs dry, lower the slope until you get a strate-ish line and no one will run out of money to the point of starving, more workforce, more production, more better, less work for the same lifestyle, free market works only for people who know how to handle it, when you are on loan to buy food it's not so fun and everyone has a bad time not only the person in debt especially in a case of a default.
@@Ryanowning "more cheap houses more kids" quoting my self quoting someone else, If you have cheap housing and cheap food people will want to have kids, more free time more "fun" time, less kids dying in poverty, Expensive food and floorspace => more work time, more mate competition, less kids, it's that simple really, people don't want to make dead children, if the earth is going to explode in 10-20 years why have children, better live your life to the fullest up to that point... Which is kind of the reason why the earth might explode, too many hedge their bets on the earth exploding so will make everything in their power to make that a reality, people really hate loosing a bet, even when it's life at stake. Start betting on the earth living for a trillion years and you may live to see it end in a trillion years with me next to you as we watch the stars turn into blackholes.
@@Ryanowning thanks for the question i wanted it : shorthand for all the ways to mess up live as we know it(doesn't matter which one), global warming, Corporate dystopia, totalitarianism, Nuclear winter, Meeting aliens, on top of the more mundane: famine, AI singularity, people sticking to their screen and forgetting to eat, and all the many many more scenarios. Actually we probably wouldn't meet extraterrestrial aliens only the good old terrestrial ones once we put them there. Just like what happened in America and the three times it was discovered "for the very first time"
"they are also effective at getting rid of underperforming workers" Man I've been in the work force 22 year and I've never had a single job that made me felt like I mattered no matter how hard I performed, we're all just cogs in the machine, discs to put on a grinding wheel until we're ground down to nothing. Maybe people are waking up to the fact that we shouldn't have to kill ourselves for a paycheck when that paycheck doesn't even give us the ability to survive.
This, also all the companies I’ve worked for actually went through a contractor, they pre-plan on laying off their contractors ahead of time, performance is tracked but it’s just lip service lol.
Look up the news article this channel is citing: this video pretty much lied about this. They pulled out because they DIDNT want to play ball with the workers union, and were using this as an excuse. It's the same as current day retail stores pulling out of cities citing "shoplifting" despite no notable increase to reports at the scale claimed. It's all misinformation to put the blame on normal people instead of these corporations.
@@ericpowell4350 I worked for a bank. No seriously, they go through contractors and believe me, the clients are very very rich. There is no reason for them to do that. It is simply out of greed.
Well said EE. When you stop small wildfires, it weakens the forest and allows for the old, weak growth to strangle new life. Eventually, the whole biome is vulnerable to burning down. The economy is similar. Keynes was a brilliant man but his theories willfully ignored the fact that no one wants to pull back fiscal stimulus when they need to.
A 7-10 year business cycle clashes pretty strongly with a 4-8 year political cycle. Nobody wants to be the one to shut down the buffet and put the economy back on a diet.
@Evan Galea Keynes was absolutely not a brilliant man. He was short sighted and had no understanding of the fundamentals of sustainable economies. Everything he pushed for was for short term success and didn't care about economic longevity because "in the long run, we are all dead". But hey, keep printing money and infinitum and repeat the mistakes of the past, maybe it will work out differently for us.
Amazing how people would rather have hyperinflation and a stagflation risk instead of a corrective recession because they want to keep their stock portfolios up
@@bobbygunz9254 Would you rather have hyperinflation where costs of living go up 15% per year? The loss of purchasing power will also delay your retirement
@@chris-pj7rk Either they have so much in retirement that hundreds of thousands don’t matter, they made the mistake of not investing more in bonds very close to retirement, or they already had a few years till retirement and they can afford to wait.
This video really highlights how economic theory has little to do with economic reality. Corporations going broke in times of economic downturn? Not the big boys, they just print themselves more money.
Economics is mostly alchemy. And yes, most or all economic theories and videos contain multiple instances of "...and then X, Y and or Z corrects for that." Uhhh, right. Okay, but what if X, Y and Z went our for smokes 40 years ago and never came back? Asking for a friend. That part is never addressed, because it's never addressed in the real world, either.
@@geeee8933 it's mainly referring to how many big businesses get massive bailouts due to government lobbying, which makes them pretty much immune to this since, y'know, a power company going bankrupt would generally be a bad thing.
Because all those theories treat aggregate supply-demand curves as continuous assuming that there are numerous actors competing at every level of every industry. This is true in many cases, but not when you have hardcore consolidation like we do today. It's like discretizing a signal in electronics: if your steps are tiny with respect to the spectrum of values then you can approximate it like a continuous process. If they are too large to ignore then you're just doing poor modelling. If every industry is operated by a handful of companies OR if every industry has a strategic bottleneck (e.g. many farmers sell to a single suppliers that then supplies many supermarkets) then you can't just pretend that you have real competition. Markets fail more of then then not, particularly the more complex the economy becomes. What you get are those "too big to fail" behemoths that aren't subject to market forces and have incredible political power to skew the playing field in their favour.
@@meganegan5992 that’s not the same as the companies printing money. And I think folks are overestimating the number of companies that are “too big to fail.” Government is most likely to step in to support companies whose failure poses systematic risk to the economy (ie banks); there’s less incentive/reason for the government to prop up a large but still comparatively isolated company in non-financial sectors (look at PG&E, for example)
He said "things in the US are actually fairly good" 15% true inflation, food shortages, supply chain issues, intentional gas shortages, etc say otherwise
@@timothypickarski5234 yeah capatalism invented economic downturns lol. Show me the miracle system that is perpetually wealthy for all and never blew up in everyone's faces in a single generation
Never felt more helpless as an unemployed in 2008 and 2011, never felt more powerful last year, when everybody was looking for me. This economic roller coaster is mentally tough to ride.
The people who refuse to work due to government stimulus will be unemployable when the economy goes into a recession. Every business that sees that gap in the resume and they will know that employee is only worth hiring during a worker shortage. Something similar happened to people who got layed off in 2008.
@@urubissoldat5452 During the great recession, employers were discriminating against people who were unemployed for over a year even though there was a poor job market. What makes you think employers won't discriminate against workers who were unemployed when jobs were plentiful?
@@urubissoldat5452 There hasn't been a lockdown in months. No one is going to believe someone couldn't work for over a year due to covid. Even if you disagree, most HR people I know see it that way.
"Underpeforming employees" is comstantly adjusted, meaning that a stellar employee 10 years ago is now extremely slow and unproductive. As an employee, your exploitation will get worse in this economic system, which is why the number of hours worked every year creeps up and why you're burnt out. Realize this, and you realize that nothing benefits you, neither recession nor good economic conditions.
I think a majority thought a pandemic would slow everything down and people started spending instead. The pandemic spending increase bypassed a correction cycle. It will be interesting to see how this recession plays out because of that.
We have been in a recession since 2009 if we use more honest government figures calculated the way they were in the 1980's. Technology has improved our standard of living since then but based on 'the old way' of defining a recession we've been in one for over a decade. The cycle hasn't been bypassed - it has been re-defined away and ignored.
Why did the spending increase? Because of government stimulus, the money were printed out of nowhere, and it will make the recession much worse because of an increased inflation due to a higher monetary supply.
Stimulus wad added because everyone failed to realize, that with goods so easily available, we have transitioned away from saving and waiting in times of crisis. People now try to get everything they may need or want before someone else can get it.
@@donchaput8278 that is actually not the cause of the stimulus Quantitative Easing. It was the fed that injected trillions of dollars into the stock market to avoid companies to default, and at the same time turning down interest rates to 0% again.
A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time! I have been reading of investors making about $250k profit in this current crashing market, and I need ideas on how to achieve similar profits.
On the contrary, even if you’re not skilled, it is still possible to hire one. I am a project manager and my personal port-folio of approximately $750k took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my port-folio this red season. I’ve made over $150k since then.
@@instinctively_awesome8283 There's a very bad downturn in my port_folio. lost over 32 thousand this month alone. Would you link me up with your handler?
agreed. My plan is to wait for trades to get cheaper,, fix up my entry level unit in an amazing location that is unlikely to depreciate much and use the opportunity to buy a bigger place that is more suited to my lifestyle- because those properties are more likely to drop.
Painful honesty... Yes, a recession's effect can be lessened by structural designs. A worker in Sweden or Denmark is going to suffer less pain in a recession than in the US or Britain. But recession, in its entirety, cannot be avoided at some point.
An important thing to point out about the model of supply and demand is that it no longer works as a model. Both supply and demand are artificially engineered. Today companies will intentionally reduce the supply or demand of a rival business. Some are much better than others. Dumping perfectly good milk b/c the government gives farmers a check to ruin supply
Or company flat out exploiting their market gains at the consumer's expense. Think of Apple inventing a new proprietary charger port for their devices, now everyone has to buy a new charger to use these devices rather than continuing to use what they already have. It creates waste too when everyone throws out their old one that still functions perfectly well but it's now obsolete. This isn't "the most efficient distribution of goods". Many companies are incentived to be wasteful to keep demand artificially high.
@@ZachJ-0 Exactly, just like Amazon was caught dumping hundreds of thousands of unsold products every week. It's more profitable for them to destroy perfectly good products then lower their costs due to excess supply. Grocery stores do the same thing with food all the time, even locking their dumpsters so homeless people can't get at their perfectly good food. Its pretty sickening actually.
Sort of funny. I live in Wisconsin, the US Farm bill ties the price of a hundredweight of milk to the distance from Eau Claire. The furthest place in the US is California. Happy cows don't come from California, happy cow farmers do. Broke dairy farmers come from Wisconsin.
@@DrSchor in this specific "hypothetical", because it no longer is capable of serving its purpose. As soon as the phone, laptop, tablet, or whatever is replaced; all those chargers cannot work. They are incompatible with the new devices, or obsolete, despite the chargers still being capable of functioning they no longer have anything to plug into. But apple will sell you a new charger and cable for an additional $50 to the $1,200+ you just spent on your new phone! (A phone they purposefully designed to stop working after a couple years, forcing this upgrade. That's not even hypothetical, they actually did that)
Inflation begins when dollars are printed. Printed dollars are a data input to the CPI. The CPI print is the feedback loop from printed dollars. Keynesians have been trying for decades to print dollars to create inflation-used as a signal to show the stimulus is working. Then before inflation gets entrenched, deflate by destroying printed dollars. The problem here is the Fed didn’t remove the dollars it printed to stimulate. So the higher prices are here to stay for a while. The dollar strength is transitory. You will see a weak dollar once those bonds the fed has on its balance sheet become difficult to sell as higher yielding assets will be more desirable to investors.
I lost everything in the last recession and learned from it. I made sure to live below my means and save every possible dollar. I also invested correctly and diversely instead of buying material things, restaurant meals, and expensive vacations. I've been waiting all these years for the next recession so I can capitalize on irresponsible debt. If this video is correct, it will be a very exciting investment shopping spree for me
Consider the economy as one huge engine that produces the life styles that humans live & prosper & create a healthy financially secure future for their families . Corruption, manipulation , creation of unhealthy political policy & diplomatic environments is a recipe for engine failure. People are equally losing money in the financial market in the midst of all these.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire. Personally I hired ‘’Nicole Ann Sabin’’ a financial advisor who I copy her trades and with a good 7% in ROI monthly.
I feel as though a recession is just going to enrich those well off further.. Our terrible housing policy in Australia has favoured investors and particularly early investors (most of which have paid off their loans). As prices drop their purchasing power arguably increases. Just seems like the middle and lower class will suffer as per usual.
Mate fight those bogus politicians via camping out with yo mates in the territories spider, uh snake and emu But seriously it feels like you guys are fighting everything from nature to your political to where you are living. Learn just learn whatever you can it will help in the long term.
There is a theory going around that we should be looking at upper / mid / lower classes as "owner" and "worker" classes. "Owner" class people make most of their money from things they've already setup (passive income) even well off small buisness owners (making 200k+ per year) would be classified as "worker" if they take a active role in the buisness. Without a very foolish child wrecking what their father, grandfather (whomever) set up, the owner class is immune to economic fluctuations. Yeah, they might have to sell their mansion but as little as 4million wisely invested in stock can net you 40k per year. You won't live like royalty, but you'll never go broke.
I just hope that this recession implode the housing market, it is depressing having to spent 50% of my income to rent some shithole while watching home prices increase by ten times what I can save without starving every year.
Its extremly fucked here in canda. If you join the military pray that you dont get stationed in Vancouver or ontario. Its basically not possible to pay rent on a privates salary.
@@komerczka The recent gains we saw are unsustainable. So something will give. Already the government is forced to push forward policies to limit speculation and help first time home buyers. As it gets worse more extreme measures will be taking. More things like banning foreign speculators, empty home tax, increase taxes on those owning multiple properties, and taxing speculators more. Making real estate investment unprofitable in the short-term will go really far in reducing demand.
It will depend per country. But in most western Europe (me: Netherlands) there are simply too few houses. A small correction will probably take place (10-15%), but then the housing market will then totally lock up with far too few people sizing up anymore, locking up all price classes. Combined with increased building costs, not getting permits due to environmental issues, and a massive refugee influx. It will get way, way worse.
@@berryvanhalderen7574 In Europe there is an issue with space. Land is very much finite. I live in Canada where land is more plentiful but people crowd to a small number of cities like Toronto and Vancouver. Although supply is kept low because investors buy up majority of available real-estate. I think that is an issue every developed country is facing.
What is missing here is that big capital always finds itself winning on both the up and down cycle. The cycle is used to funnel money upwards and ruin the Gini coefficient of wealth distribution among the populace.
The problem is that during the good times businesses hoard the riches that are being made and get tax cuts by the oligarchy. While in the bad times the working people lose their job and have their salaries stagnate.
If only there's a solution.. Oh wait, labor unions, get rid of captive audience meetings! Both sides need to compete and both sides need equal bargaining power.
The liberal solution to this is to create more unions. The conservative solution to this is to kill corporate tax cuts, or more importantly kill all corporate subsidies. The problem is politicians rarely follow through on their promises on either side. I'm not a fan of public sector unions but I find some private sector unions to be beneficial as long as they're optional to join and are just a part of the industry rather than dominating the industry like the shoreline workers union for example.
@@kennethkho7165 Here is a thought... evaluate the break up value of a company. Look at Starbucks. They are so screwed. They will be forced to raise prices to absorb the cost of unions. So their already overpriced coffee is more expensive. So the question becomes, will the consumer be priced out of the Starbucks brand? Secondly, how will investors react if their Starbucks stocks aren't preforming as expected? Third, unions do very little for customer service. You can't fire the worst hire. My guess? Starbucks is considering all their options.
Workers need improved conditions too! The ball has been too much in the court of employers up until now and quality of life has deteriorated to the point where most workers can't afford the basics of home ownership and is completely out of reach for many! While inequality grows like a hockey stick we need a way to level it a bit or workers will just rebel.
I gotta wonder how much of that problem is caused by an unwillingness to move though. Not being able to afford a home in San Francisco or NYC is much different than not being able to afford a home in Southbend Indiana for example. How many people could have their quality of life triple just by moving but don't because they don't want to due to family or friends or something else?
Revolutions are part of bigger cycles too. Sometimes you need a bloodbath to remember where social classes stand. It doesn't mean that because the workers started it that it will end in their favor though.
I'm dubious of calling it a good thing when it's harder to get a job. It might be good for the GDP, but i don't believe it's good for a large majority of the people. And the economy should be in service of the people.
You're basically arguing to keep the economy well short term in exchange for increasing the risk long term. We're in a state were it eventually will happen
@@tomlxyz Our technology has vastly improved the amount of resources we can produce. If we want to maintain this new normal, then we must keep productivity up. And in a decade there will be a new new normal which requires even more productivity. But maybe, i'd argue, it'd be fine for CEOs to have to sacrifice a couple yachts in order to afford employees. That, perhaps, it wouldn't kill the shareholders to have to occasionally eat at McDonald's because the employees aren't working themselves to death for fear of being fired. That maybe, the economy would be fine if a smidge of negotiating power was given to the workers. That maybe, it would be nice, if everyone with the desire to exchange their labour for money, could do that, instead of sitting around producing nothing. But- you could be right that despite continually rising real gdp per capita (far outpacing median income), we haven't increased how many people we can afford to employ. But I'm doubtful.
@@444-w8k yeah. I was just saying that i don't believe it's a bad thing for those people that they do employ to have bargaining power. Despite the likelihood that they will use that power for things other than increasing GDP. And i was relatedly saying that i don't believe that full employment is a bad thing. There's plenty to be said about whether particular measures to reach full employment are good ideas or bad ideas. But I wasn't talking about that in my comments
In today's over financialized world, the competition means wealth and capital fall into fewer hands, not necessarily represents better services and better pay. One evidence would be the staggering salaries. Competition can't be analysed properly without measuring the context.
This video hits on something I’ve been saying for a while. The crash we are heading into now is not a new crash, it is the 2008 crash that was delayed through QE. Rather than letting the system reset itself, the Fed stepped in with QE and propped up the failed business models that led to the crash. It just reinflated the bubble. It didn’t create a new bubble. My fear is that this reinflated bubble will be worse than the original bubble.
Credit Expansion is generally the reason why bubbles form in the first place. If someone wants to "solve" the problem and not take their lumps, the solution is more credit expansion, but faster this time. The business cycle isn't really all that natural, but formed by cycles of credit expansion and contraction. Before Central Banks collapses and ressessions were usually short lived and centralized, and the source of the expansion was banks that overleveraged themselves at the expense of those who saved their money in then. Since the central bank formed, what would be a local problem limited to a single industry now encompases the entire economy, and the reason why is that the central bank is the biggest source of credit expansion in the system. All banks are interconnected, and because banks can't fail it just means that they throw our money around and when they lose it they can ask for the government to cover their losses and the central bank to loan or print them money.
It depends on who you ask if this is going to be bad. In '08 banks, despite selling junk debt, got off scot-free. They even got to keep most of the real estate while the market 'recovered'. That's why real estate prices never really went back to 1940's prices. Whatever happens now, I'm quite confident that the current players at the table have a trick up their sleeve to keep and even grow their capital through the next bust cycle. One does wonder if all the junk is not going to surprise them with a black swan event.
@@jakman2179 Look into Kondratieff waves. This cycle of major booms and busts has been around through all of capitalism. The Great Depression happened in a time when the dollar was pegged to gold and the central bank had very little influence. Kondratieff waves are caused when an economy reaches its maximum growth utilization rate. The easiest way to visualize this was the railroad expansion in the 1840’s. When the railroads were being built, there was massive demand for the companies building the railroad, as well as all of the peripheral industries that supported the building of railroads. Once all of the tracks had been laid down, the demand for new railroads fell off and the entire economy collapsed. That collapse freed up capital for the next crest which was electrification. The 2008 crash was the collapse of the tech sector. There was massive tech growth as everyone was buying computers and tvs and cell phones, but once everyone had them, there was no real need to replace them. Therefore tech industries have to spend more and more on research in hopes that their newest iteration will convince enough people to replace their existing products to make a profit. It has reached it’s maximum growth utilization rate and rather than letting the collapse recirculate all of that tech capital, QE pumped a bunch of money into the stock market to make those companies appear profitable again, at least on the surface (think stock buybacks). Credit expansion therefore plays a role, as it increases the purchasing power of the economy and drives the increase in the growth utilization rate, but it is not the only factor. These collapses would happen with or without the influence of central banks.
@@TheCommonS3Nse You're actually wrong about the depression and dollar being pegged. It was unpegged for most of it and ignores the credit expansion that was occuring then. Unless a currency is near 100% backed it tends to create the credit expansion waves. Additionally, for an organization that "didn't have much influence" they seemed to do a good job of inflating the Dollar for the benefit of the Pound Sterling after WW1. It's worth pointing out that also caused a crash around 25, but a much amaller and shorter one because it was ridden to the bottom. I'm not convinced by the Kondratieff Wave theory, but will keep my opinion on it at that as I need more research into it.
A bit of research and I'm not having glowing hopes for it. Every single Downturn it claims is also attached to a period of credit expansion preceding it. There may be a coinciding effect of the 'peak' of a technology, but calling them the source of them seems faulty. 1837, The Second Bank of America was disbanded shortly before it occured. 1870s, shortly after the civil war when Greenbacks were used to pay for the war, and the Bank of England was overleveraged. 1930s, Central Banks of multiple countries were printing money because of war debts. The Central Bank in US helped keep the show going until it couldn't and collapsed, the recession that followed was exacerbated into a depression by policies that attempted to stop the correction. 1970s, stagflation from super low interest rates and an overregulated economy topped by the oil crises.
Interesting that among all of the conversation about the need for competition, there was not mention of the role of monopolies in our global and national economies.
Okay, so if deflation causes wage stagnation, why did we have wage stagnation with inflation? Sure it'll be answered later in video, just something that stood out so far
@@conor2683 I'm taking about for most of the last few decades. Obviously now some wages are going "up", though it's not actually compensating for all the inflation that has happened.
I'm from Argentina. Inflation always makes our real salaries (measured in USD) go down with time, it makes us poorer. If I was asked what do I want, instead monetary policies being forced down my throat by the government and the Central Bank, I'd choose an inflation rate of 0,0% ± 1%.
We have the opposite of wage stagnation right now we have a death spiral of wage increases actually. Workers demand higher wages > Workers receive higher wages > businesses offset higher wages by increasing prices > prices of everything goes up > Workers demand higher wages...
If a recession is needed, what about the possibility of large unqualified companies withstanding a recession thanks to government support while small and medium companies meet their end.
This was addressed when he said that if governments providing support undermines the requirement of investers to make sure they are investiing in strong companies. In fact the negative effects of government support for failing business was a key point in the video.
@@rcmwalker1987 it was not specified for large corporations and the inherent advantages they have though. I wanted a more detailed explanation in general.
@@metalknight599 large business ≠ economically nonsensical. Large business are more likely to be "strong" compared to small or medium ones, since more effective business tends to expand
Major issue is housing, cost of housing spikes, store owners need more to survive, too many people own more then 5 houses, this is extortion as it lock too many people into renting driving the cost of housing/rentals threw the roof, thus increasing the cost of everything, including materials to fix houses, heating/electricity production/gas Also ruins the market for industry because no one can get into it without lots of money
I love how people pretend those $1400 checks did anything for the economy. That amount of money isn't even enough to pay rent in most places for a month. But it was a great cover to give 5 trillion dollars to oligarchs.
It may seem inconsistent that we have a very low unemployment rate and are heading towards recession. But this is because we have changed the way we measure employment. A large proportion of the employed are under-employed part time and casual workers who are struggling to make ends meet. It is these very same people that will be laid off first, and they will need to be laid off in droves with the coming recession. If this is true, then the unemployment rate is going to skyrocket overnight.
We currently have roughly a 40% unemployment rate in the USA (only about 60% of the population is employed); this is before you take into account the number of those employed who are only part-time or otherwise 'casual workers'. Situation is a fair bit more severe & grim now than the numbers in the fed's cooked books would imply.
The reason so many can’t find full time work though is because companies do t want to higher full time workers cause full time workers get benefits like healthcare while part time workers don’t so it’s cheaper for a company to have 3 part time workers that work for less $ and no benefits than 1 full time worker who’s pay will slowly increase and does receive benefits. Could it be argued that the highest paid full time workers would be the first to go?
@@kayleehog That sounds right, based on the fact that we live in a capitalistic economy and how the world/businesses priotitise profit over the needs of people working for them. Which is why I believe we should become socailists.
Now do a video on economic inefficiencies caused by market makers having the ability to manipulate buy/sell pressure of securities by sending whatever buy/sell order they want off exchange into a dark pool instead of letting them go to the exchange for true price discovery.
I totally agree it is a good time to capitalize on the market for long-term gains, but it wouldn't hurt to know means of actualizing short term profit, I been reading off investors making over $600k in profits currently, and I need ideas on how to achieve similar profits.
You’re right! The current market might give opportunities to maximize profit, but in order to execute such effective transactions, you must be a skilled practitioner.
This recommendation literally came at the right time, I’m down by $22,000 in stocks .. its crazy! I just looked up Diana online and researched her accreditation. She seem very proficient, I wrote her detailing my Fin-market goals and scheduled a call.
I literally felt like an addict missing his biweekly dose of economics explained last few weeks. Just yesterday I was thinking "where has he gone when we most need him."
This is an excellent summery of economics. I'm sharing this with several friends who have told me they never received a good understanding of economics and how it effects the world. Thank you.
Absolutely nailed it. We need the ‘pain’ portion of the cycle. The governments stupidly avoided it with the 2008 crash - the world truely needed to rid itself of some of those corrupt and inefficient financial institutions, but the governments bailed them out - avoiding the short term ‘pain’ and allowing them to continue to operate. Eventually it will be unavoidable, but there will be much more pain involved because they’ve let it go so long.
Tax the rich. They have too much money we just need to scrape it back. The longer they have it the longer they will bid up asset prices and buy up all the commodities and real estate
@@oakinwol The people who would make the decision to “tax the rich” are filthy rich themselves. People like nancy pelosi and mitch mcconell would never shoot themselves in the foot like that. I’m all for taxing the rich, but only if they stop taxing the poor. Middle and lower class people shouldn’t be paying federal income taxes
@@oakinwol they can evade taxes. In addition to off shore tax havens they do stuff take out loans with their assets as collateral at a 0% interest rate. The banks allow this because it curries them favor in business. Now the rich file their taxes and had no income because the loan is counted as debt, they get to spend that money tax free. They have many more exploitations of the tax code like this. We need politicians who are willing to close these loop holes and fund the IRS after they're closed to go after these robber barons. In summation, tax the rich isn't nearly enough to counteract the entrenched power structure they've built for themselves.
@@ZachJ-0 I hear what you're saying, but honestly it's just more excuses. Black people in America had every reason to think they couldn't change this country. The power was much more intrenched and it was literal animosity they were dealing with not simply rich people apathy and selfishness. But leaders like MLK fought, and they fought hard, and they fought peacefully, and they didn't stop, and they gave up their lives for it. People who want to sit at home comfortable or walk in protest once a year and expect change are just virtue signaling. No one was ever given anything in any country. People fought. And the peaceful fights are the ones that bring about the most lasting change most consistently. Black people walked instead of riding the bus. It was frigging hard, but they did it. And the busses changed. What are we willing to do is the question. Are we all willing to go through some hardship and support each other to fix the system? And if we cant even support each other through hardship why should rich people care enough to come out their current pockets to do it?
Competition is a very healthy part of the economy, as long as the competition is between the workers competing for jobs. Companies having to compete for workers is bad economics apparently. Wouldn’t want employees to have too much bargaining power, then companies might have to cut back on stock buybacks and dividends to afford paying employees more
"For the system to continue to give a few of us a good life and not completely collapse, a bunch of people need to take a loss and lose their jobs, homes, life savings, etc." Great system we have here.
I understand the cold hard facts presented in this video. But in reality, the only ones who genuinely suffer from these 'necessary pains' are the ones who are doing all of the work. Real humans suffer during these recessions; people get mentally unwell, physically unwell, lose their homes, jobs, friends, family. Since the economy is not a real living thing, it doesn't have to deal with the fallout of going through these so-called necessary evils. Who cares if the economy comes back stronger if you now have PTSD from being evicted, anxiety from years of financial struggles or health problems from routinely skipping meals or eating poor quality food whilst the economy was bad? All the while the Owning class mostly breeze through recessions having masses of resources to keep them comfortable. A recession would be a little easier to bare if we had faith that we too could bounce back afterwards, obtaining the things we were working so hard to achieve before we had it ripped away... but for Millennials and Gen Z it would seem that life just gets harder and harder between each recession. Prices go up, don't come back down and our jobs don't increase salaries to match it. So we just earn less and less each year, all the while being told such price hikes are 'necessary' by people who have likely never had to skip a meal in their lives. I think we as a society need to take a really deep look at what is truly important, because if we continue sacrificing the less fortunate just to please The Economy, we are no better than our ancestors who sacrificed one another on an alter to a made up God just to ensure a harvest.
@@rafaelmarkos4489 I honestly don't judge those more fortunate than myself for not understanding a situation they've never been in. Unfortunately, I think some modern societies lack the ability to feel and show empathy. You needn't have given birth to appreciate that a person who just birthed a whole new human will likely need time to recuperate and relax etc. In the same way, I like to think that a little empathy might go a long way in helping to fix this strange mindset that 'The Economy' is somehow more important than actual living human beings...
@@who41683 Mostly because by the time Christianity rolled around, we had other means of ensuring harvests... there was a time before that in 'the west' as you describe it.
@@who41683 First, that's definitely not true, you do not want to know what your enlightened European ancestors used to get up to before the Christians got around to existing (and even quite a bit after depending on where they were from), and second, even if it was, what has it got to do with her point?
I agree Ideally, the purpose of the democratic state in a market economy should be to balance the accumulative tendencies of the market with redistribution. The Financial crisis should have led to more money being redistributed to the lower classes through increased taxation of those who've benefited most and consequently investment into the rest of the population.
I think their may be corrections, maybe even severe corrections, but it's a pretty safe bet that houses will be worth a lot more in real terms 40 years from now, even compared with how unafordable they are today. I could see 100 year intergenerational mortgages happening.
On thing that I believe was missed is the growing gap between executive salaries and front workers. It seems to be easier for corporations to lay off workers and over exploit the ones that stay than to reduce the bonuses and salaries of those on top
I've spent the last 3ish years waiting for the massive correction that was due anyway before COVID. And like others have mentioned, we're in some messed up timeline where everyone found themselves richer, more stably employed, and less fiscally responsible. Absolutely nuts.
More and more people think a recession, even a depression should happen, will happen in the future, and the more we keep putting it off, the worse it will be. I agree with this for sure.
Shame that all that theory rarely translates cleanly into reality. Companies with disproportionate market power survive too. Some companies also gain disproportionate market power as a result. The housing market is inflated to obscene levels, but investors will do their level best to keep them inflated despite the downward pressure they put on consumer demand. Among other issues
You make a great point. I think EE's thesis falls apart once you realize that businesses are not a meritocracy (what is). Businesses survive because they are well connected, "too big too fail", and/or very lucky. During a downturn, investors will try to make safer investments but does that necessarily translate to better? I am not convinced.
I've been doing my own value investing for around ten years now - completely agree with this video. The distortions of the current government approaches are deeply worrying (The percentage of zombie companies in the S&P is very high, possibly the highest it's ever been, some of the highest long term valuation measures of all time matched only by 1929 and 1999, etc), to say nothing of how straight up everything is a bubble (Equities, housing, you name it). I think when this all finally goes sideways, it's going to be a big one; but, I do think - and hope - that things will eventually be better in the aftermath, as well.
@John Dew Bruh how're you too young? I was born in 2000 and remember being poor. Not being able to buy anything, having to give up my savings so that my brothers and sisters could eat.
@John Dew . 2008 was the closest thing we had to the crash in 1929 which set the country back a couple decades until WWII got us back on track. Millions of people lost their home and even more were left unemployed in 2008. For those affected it was pretty bad. For anyone who had a portfolio with stocks it was also pretty bad as the market got cut in half. Who knows how many millions of Americans had to postpone retirement for many years as a result of the 2008 crash.
@@morfreeda Well, I wouldn’t say they got better after the housing bubble burst, mostly cuz all the same problems have been perpetuated through to this day. But, if this bubble bursts and housing actually gets attainable for the average person again, that would certainly be a positive outcome.
@@Midas526 do you think housing is the solution? Though I agree owning a house has its perks many people brush off the pros of apartments. Affordable housing. Efficient land development, prosperous communities due to dense living. Then again owning a home is nice.
I recently lost all of my reserves due to changing life circumstances, thankfully they mostly went to improving my life long term. This has put me in a unique position where I now have a good amount of stability and a decent room to start saving and investing long term over the coming years as many others struggle. This comes after having a had a very rough life before some shorter upsides so while I sympathize with everyone else right now I am hellbent on enjoying this opportunity.
So long as you don't use it to look down on other people like these wannabe entrepreneurs on Facebook saying "its the market" as an excuse to keep prices the same
Woah, I've always thought that the Australian automotive industry went under largely because of structural problems like too many manufacturers in a small market unable to achieve economy of scale, and a lack of vision that kept the industry pumping out fuel-guzzling large sedans when there is no longer a market for them. Now it turns out that it was just workers taking too many sickies. I have been enlightened.
You've pretty much summarised my thoughts on that subject. I wouldn't think that a few workers taking sickies to extend long weekends is a peculiarity of the motor industry or of Australia in general but other industries survive it nonetheless. Indeed, Australian car manufacturers were by & large held up as models of efficiency for low volume output by their foreign overlords. Other Australian industries that largely didn't survive include whitegoods and other household appliances, textiles & footwear and other mass produced consumer goods I can't think of at present, and all for the same reasons that the motor industry disappeared (apart from the bit that you point out where the latter persisted with products that people no longer wanted to buy).
The entire boom and bust model is pretty bad for the future. It inherently requires that we go through a period of suffering every few years, just to increase efficiency. I say there are ways to do that which don’t also trigger unemployment spikes and drops in standard of living.
Boom and bust isn't efficient for people and capital, it's efficient for corporate wealth. We must move beyond our current neoliberal economic system to escape the boom and bust cycles.
I don't think there are. The more governments intervene to prop up businesses and markets the bigger the problem they are building up for us all when the inevitable does happen.
@@Dedjkeorrn42 a point made in the video is that the fundamental cause of the boom and bust cycle is human nature. An even bigger point is that recessions are quite literally needed and excessive policies to assuage them come with often worse consequences. I mean, we've *had* countries shunned the so called neo liberal economic system and implemented extensive controls on the economy. Turns out if you don't let the market work as it should, there's a big crash at the end. I really wish people understand that you quite literally cannot escape the market (or neo liberal economics as you put it). It can't be legislated away. Policy that tries to obstruct it will incur penalties elsewhere. As for efficiency, that's quite literally progress. Progress is simply finding more efficient ways to do things, more efficient systems etc. It benefits every one.
Can you imagine how un-Australian you have to be to sit there and say with a straight face "taking a sick day for a slightly longer weekend is a bad thing" I'm a Blue-Collar worker mate and I can tell you we've earned those extra days off. When you're working in a factory in winter, sweating in your hi-vis all so your boss can say "this line went up", you take advantage of everything you can get. It's not "laziness in the workforce". It's a genuine need to rest the body and mind.
Economics Explained: (well done). I'm sure you know how we all appreciate your work, and how well respected you've become. But this 'how to fix it' category of videos is even more valuable than 'how it works'. Thank you for your work.
Could you please make videos on the history of how recessions make a better economy through real examples? I think it would be better if you could use examples that are not that famous so that we can have new insights.
Most relevant question out there. This is where reality diverges from theory, and unfortunately with EE he all too often remains stubbornly glued to his theory.
@@ShubhamMishrabro it's kinda weird that socialism has been gone for 30 years yet Eastern Europeans seem to still blame it for all their problems. At what point do they say wow we've had capitalism for decades and we're still vastly behind Western Europe.
seemingly always left out of economic theories: finite planetary resources, degradation of the environment, cost of waste, increasing wealth inequality
The problem with economics as theorized by most economists is that they accept extremely exploitative preconditions that become self-enforcing. And let's not forget that despite the fact living standards have improved globally under the global capitalist framework that the price of this may very well include rendering large swaths of our planet uninhabitable.
Capitalism per se has nothing to do with environmental damage. Humans have been doing damage to environments long before the term capitalism was uttered. The Soviet Union gave zero fucks about the environment. Did Mao care as he had sparrows killed by peasants? No. The only reason capitalism is brought up in this conversation is because of its relative success. The reality is humanities effect on the environment is the normal state of things, whereas the ecological thinking of the last few decades (primarily from capitalist countries) is actually an aberration. It's good we are getting to grips with it, but this idea that capitalism caused the issued is silly.
Love your content, but this piece was much more partial in that it seems to almost admire the ability of large corporations like Amazon to squash out competition, and applaud the "need" to flush out workers. Also attributing the closure of the Australian automotive industry to some sick days around public holidays is a pretty weak argument at best (you usually provide some good lines of evidence for your arguments, but to make this argument I think you need a few more points of substance). Competition in the market is important, but it doesn't mean that competition needs to be a zero sum game. Massive corporations don't need to completely squash out small operators to have a functioning market. When I moved to WA from the east coast I was shocked to see Woolworths and Coles couldn't operate after 5 pm on the weekends, but then found out this gives an opportunity for independent groceries to compete with the big two players in this space.
As an engineering student (Far far from an economist) I really do enjoy these videos that give me a glimpse into how economics works. The basic understanding these provide is something that I feel is what everyone should have! :) More interesting than engineering explained 🤣🤣
I'm a government accountant, can practically feel the recession coming on. It's like how some people can stand outside and can tell you it's going to rain soon while it's still clear out. All I can do at this point is brace for impact and hope my 401k doesn't tank in the process
It doesn’t matter if it tanks. Just ride it out and wait for it to eventually go up again. The economy recovered after the crash of 1929 and it recovered after 2008. Those who held on to their 401ks in 2008 were fine, it was only those who cashed out who suffered and lost money. Unless you’re close to retiring, that is.
@@praetorian389 Question is whether the vehicle will be just scratched and everything will be fine after tires are replaced, or whether we will have to get a new one. And I think that the west will have to replace significant portions of our economic vehicle as it is squeaky and there are huge holes in the gas tanks. You know, we are losing money to various strange countries for oil and natural gas.
Without mechanisms to break up financial enterprises of a relatively large scale, "burning the brush to reduce the impact of major forest fires" ends up feeding the poor to the rich. The fix is not to rob the poor through inflation, taxation, or recession; rather to eliminate holding companies and subsidiaries, as well as promote single-industry-only businesses.
@@padraigmarley2844 The promoted capitalism that followed reshaped telecommunications as Americans know it. Imagine how much more fertile the business landscape would be if, for example, Amazon were limited to consolidating the product listings of other stores(arguably their primary industry), and had to rely on external companies for manufacturing, logistics, and web hosting. Internalizing a private economy within a company potentially undermines public economy and the effectiveness of regulation, leading to overcompensation and overcomplication.
These cycles only hit the common worker who depends on wages. To be on the safe side, just have an appreciating asset, stable portfolio or a business that produces things that people need.
I hope you all understand that when the federal reserve lowers interest rates, commodities, stocks, and real estate increase in price. The ones who benefit are the holders of those things. Thank the federal reserve for increasing income inequality and creating this bubble.
😂. Yeah that's all definitely true. I remember as I went from a very lean economy where I had to battle to get any sort of job and that work ethic was rewarded and then went into different labor markets where working to hard made others look bad or other types of toxic labor markets where production was often not the goal. Often they actually lock out productivity and can even creep up to a business level where completing or providing quality work was undesired.
Love this economics channel, I just get the feeling we are going to be in need of some further new economics theory now that we are faced with some incredible modern challenges. The rise of AI and robotics on the supply of workers for one. The destruction of the natural environment and the lack of recycling for another. Then there is the lack affordability of housing. It seems to me that if you apply only the survival of the fittest, supply and demand, and other Keynes rules to these modern problems we are all going to be either at war or living in some ghastly society that nobody wants. If we are smart enough to invent incredible new technology, we had better get smart enough to add some new economics principles too.
technology has been steadily improving for the last 2.5 million years after people started using stone tools. invention of new technology is nothing new.
@@DrSchor technology hasn't been improving linearly it's been improving at an accelerating rate and will continue to do so. People have a built-in biological limit how quickly they can adapt to change and does that change happens more quickly it overwhelms the innate biological capacity of humans.
@@hidesbehindpseudonym1920 hello hides. I did not know that people have a built in biological limit. fascinating stuff. what is an example of the overwhelmed human capacity? thanks for teaching.
Very true, for every 10 jobs destroyed by automation/AI only 2-3 jobs are being created. We're eventually going to get to a point where there are not enough jobs for everyone and, as a society, we need to start planning for that eventuality.
Great content! Would be interested to see how you think the scales for and against an economic recession would tip when you layer on growing market concentration, how larger firms weather a downturn differently from smaller independent businesses, and how that might affect the cycle.
It is only necessary because we care about corporations more than people. If we had sane priorities the only people in pain would be the people who caused this mess by demanding higher and higher profits without justification.
Good point, but how do we get rid of the ones who hire and fire? Besides, the point of this video is that there are cyclic patterns in economy, and if you try to stop a cycle, it may destabilise the whole economy. Your words are nice, but you fail to back them up with feasability
@@ZetaFuzzMachine in my opinion the government needs to take a more active role in moderating the profit motive, in general. I don't think we should "get rid of" anyone btw. I am definitely not qualified to solve the problem of cyclical crises in the neoliberal economy but I think regular people definitely shouldn't take the brunt of the austerity measures. I think redistributive measures need to be taken after periods where the profit motive was out of control for too long.
@@franklyqueso the point is, people are moved by the profit motive as well. You go to work because they pay you, and the more they pay the more willing you are to do a job. It's just plain wrong believing corporations are any different. You can't really moderate the corporation profit motive without telling people they should abandon or lower their salary exectations. At the end, it's two sides of the same coin, companies are not evil behemot, they're just people that produce stuff for other people to consume. Consumers are the one that ultimately will always pay austerity measures, which is the reason why they are so unpopular.
@@lagoduria6415 I think the set up you just described is unethical but I agree it is the way we have chosen to do things lol. It is more profitable to always pass costs down to consumers and to always do the bare minimum while spending the least. It doesn't really work for the vast majority of people.
Yes reminder of the difficult times of the 90s in Australia thanks to the Keating govt of the time. The US went through very high inflation in the 70s and Paul Volkers made tough decisions.
Those "difficult times" seems like heaven compared to what is presently being experienced and what lies ahead. It's amazing how people won't stop moaning about high interest rates when the alternative is so much worse.
FED GOVERNMENT... the recession we need to have.... The Fed Gov needs to be restructured too, like businesses/economies, long overdue. Could be an interesting topic for this Channel. Gov bloat slows the economy immensely.
Ideally we try to increase productivity while also giving a decent floor to everyone so during these poor times people don't go hungry and still have a place to live. We should have the government try its best to redirect productivity into basic necessities like hosuing and health care, right now a lot of it just goes into generic business which doesn't help the everyday consumer.
@@rangvald4036 no, the market optimizes for profit and that doesn't necessarily align with the what society needs. The people of a country are it's government when the government is set up correctly. They can make decisions as a collective.
@@jasonlaboy standing in a political standpoint you’re not wrong - but viewing economics with politics in mind means that you’re entering the real world - compromises, voters, enterprises - my point is, economy on its own should be a natural selection: people who lack understanding or action have to go, good or bad; it’s a matter of removing a member of the society that contributes negatively in terms of economy with only two tools: time and money. The reality is this process is never “natural” cuz human intervention is almost always biased. Counting on politicians while not being one is simply a pov of pushing that responsibility of naturally eliminating the problem to the government completely -> do you see the problem on both sides now?
"In the same way that recession get's rid of underperforming businesses, they are also effective at getting rid of underperforming workers." I'm not sure if 'effective' is the right word. The people who get fired first when a company is in stormy waters are rarely if ever the people who's underperformance caused the companies predicament. Layoffs are selected on social standing and hierarchical power. Work performance is but a small part of social standing. Company politics is social studies, not economics.
As always, profits have a tendency to decline so the private sector uses their connection to government to keep their speculative value afloat. Which in turn creates a bubble that can only be resolved through austerity. The owners cash out and the working class get to carry the burden of an economic model completely comfortable with their immeseration.
This is a pretty good explanation of basic economic theory and the role that recessions play. We only run into problems when it comes to how countries handle recessions that invertedly make recessions worse, the most notable example I can name is the theory of trickle-down economics which end up creating massive wealth inequality.
I'm not really in phase with the statment "try to find something in your environment that is built by the governement and not by the private sector, it would be challenging". It is absolutely not, atleast in Europe. Streets, hospitals, roads, firestations and so much more are constructed by the gov
Unfortunately instead of countercyclical policy we've seen procyclical policy. Large tax cuts in 2017 when the US had a solid economic boom going on were particularly poorly timed. Also during and after the pandemic it can be said that the government splurging out money in the way it did was too aggressive. Similar pro-cyclical policies have been seen in several other countries as well. The next downturn will be exacerbated by lazy and unprincipled policymaking.
Problem was that Trump enacted policy for approval/electability. It didn’t have much to do with economic planning. The largest QE jump was at the start of CoVID, at the end of Trump
I really liked to see a video talking about the good and important side of recessions, and it was really interesting the filter on employee quality. really good video
"Global economic activity tends to increase over time despite temporary setbacks." Yes. And those setbacks kill people, let alone poverty and evictions.
People will die in recessions no matter what. Now, which would you prefer? A 2008 style recession where houses are hard to afford? Or a 1930’s style inflation where you can’t buy food?
Unfortunately, too many are using outdated standards to judge current economic trends. We are a new economy that moves entirely too fast to really see a trend( 5, 10 year cycles). Trends are now weekly
On a platform riddled with fluff, hidden among cat videos, reactors and overbearing shouty youths, lie little gems like this. Important, informative, balanced and real. Thank you for making economics accessible.
Nice! I wonder what happened then with the financial sector in 2008 where huge salaries and uncontrolled greed drove us to recession? Did CEOs salaries decrease then? Are they low now? Are these rules only for workers?
What about companies that only reinvest 10-20% of their profits into themselves, and the rest is given to shareholders or owners in case of private company. What effects would it have if they actually reinvest more, increasing the salaries of employes, expanding more and speeding up technological development cycles? Left out that companies this way can employ sometimes tens of thousands of people on what is minimal expenses for them. And if the goverments don’t let them have their way, it is enough for them to mention layoffs.
I would like to know the numbers on how that money that currently goes to shareholders/owners is distributed. Then the question becomes does the rich holding money out of circulation by leaving it in investments or tied up in real estate or in big ticket items like yachts etc help or hurt the economy.
@@patrickhenry1249 They will start giving their investors empty jobs title and wages to replace their dividends. Forcing companies reinvest a certain amount of profits never works, too many loopholes.
There are definitely times when it makes sense for a successful company to share some of its profits with shareholders, so long as it's in the form of a tangible and taxable dividend. But stock buybacks are basically a reagonomic tax loophole for shareholders. Buybacks also intuitively feel less "stable" than dividends IMO. It's much more sensible to value stock price based on an underlying dividend than to rely on a vague hypothetical notion that the company *might* perform a large buyback at some point in the near future.
Very cool system we have where poor people have to suffer every few years so that rich people can make a lot of money during good times that poor people have no real benefit from.
@@ashvio yes 100% it's inherently unstable and with every crash the billionaire oligarchs rob the working class more and more. Downturns and imperialism (another dynamic of capitalism) lead to both world wars. I wonder if it'll be different this time my bets on no it won't!
I happened to search Economics stuff for my son. Finally landed up with impressive think tank of Economics. No words to appreciate impressive stuff on Economics.
I've been feeling this for a while. The COVID-19 recession was so dramatic and so quick, the response so swift, that the cool down and restructuring that comes with a typical recession seemed to be lost.
I thought Covid was going to be the thing that forced the correction. And then it made it worse. The current model is totally unsustainable. Not from a financial perspective but just from a “people need to afford to live” perspective.
I could not agree more. COVID should've been the correction - Instead, to save face governments went insane and put us in for a world of hurt. The world literally didn't make anything for 1-2 years (based on shutdowns/lockdowns) yet there was no recession. Nuts.
correction at cost human life
Covid is not done yet
But the economy doesn't care whether you can afford things, as long as *someone* can afford it, it won't go down.
@@dogdick348 if not now then later, at even greater cost
The recession we need is one where the big companies that are "too big to fail," fail and all the people that got screwed over get the real bailouts so they can create new small businesses. Increasing competition and decreasing monopoly. Along with better stabilizing the economy and reducing the most suffering long term. A decent example of this would be Iceland.
We rebuild the small economy. Rebuild our middle glass
Where are you from?
just destroy blackrock and vanguard, the long nose tribe house of cards will fall soon after as all the people harmed by them will rush to pull their roots out.
And when you get voted out of office for allowing an economic disaster to happen "on principle", the guy from the other party can come into office and be forced to clean up your mess. Those "too big to fail" companies were called that for serious economic reasons.
And when you get voted out of office for allowing an economic disaster to happen "on principle", the guy from the other party can come into office and be forced to clean up your mess. Those "too big to fail" companies were called that for serious economic reasons.
Transfer of wealth usually occur during inflation and market crash at times like this. So for me,this is time for aggressive investment. The more stocks drop, the more I buy. I'm just focused on making better investments and earning more as recession fear increases.
Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks.
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
Being heavily liquid, I'd rather not reinvent the wheel. Since this strategy works for you, how can I contact your advisor?
Not to blow her trumpet, but Svetlana Sarkisian Chowdhury is exceptional in navigating tough markets. She has been planner ever since we met in London global economy conference. she's verifiable , so you could just search her and book an apointment. good luck!
thank you for thius tip
The problem is that "the pain" is always inflicted to the lower classes that will lose their jobs, while the upper classes just ride the downturn with slightly suboptimal returns on their portfolios
"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."
Corporate personhood is a legal fiction that allows golden parachutes to happen.
As they say, "the peasant always pays "
Over half of American households pay NO Federal Income Tax. Half! It’s not the lower classes that suffer most. It’s the Middle Class that always gets hit hard. People on welfare still get to vote (for some reason); the (truly) rich have plenty of loopholes in any new laws when the welfare class screams: “Do SOMETHING!” Towards Washington.
@@mikepaulus4766 work harder, stop be a peasant... pull yourself up by your bootstraps.
on a fundamental level i agree the issue though is that we aren't just dealing with companies anymore but megacorporations. whenever we go into a recession only the strong survive works, until you have companies so full of capitol and assets that they can literally weather any storm. once the storm passes they buy up all the removed competition until it is literally only them, they buy out the new competition, stop innovating because there is no competition to compete against, and focus on absorbing as much money from the consumer as possible with things like planned obsolescence.
they became so powerful they literally influence entire countries, and some have even more power than the countries they operate out of. the warehouses that collapsed a while back as i'm sure everyone has heard got tornado warnings but the company believed it knew better and ignored the warning and order people to keep working... and they did because the handful of companies that own everything have too much power and a recession would only let me acquire more.
This
I feel as though this is an extremely important issue that this video did not cover. The video talked about all the businesses in an economy as equal, implying that, in all cases, more supply = more better because more supply = more growth. I don’t think this is fair because ultimately, the happiness of the people is all that matters, not the growth of the economy. Just look at china. The most rapid growing economy of all time….for what? A straight up dictatorship? No thank you!
@@unripetomato4312 Not to mention that the happiness of the population is one of the best indicators for a country's future. Nations like Russia and France in particular experienced staggering levels of discontent and wealth inequality shortly before their revolutions, and those factors where precisely what cause the revolutions.
Looking again to China, let's consider the fact that they've got one of the highest execution rates per capita on the planet. Now granted, they do have more capital offences than any sane country, but the more of your own citizens you need to kill to maintain the current system, the less stable that system is.
Yep, corporate socialism. Its the redistribution of wealth from one group, whether that be other companies or individuals, to mega-corporations. People often call this crony capitalism, but its the furthest thing from free market capitalism. Mega-corporations weild a HUGE stick and can brow beat or pay off politicians to put in policies that continue this trend. It's nothing more than plain old socialism, which as we all know, always ends in failure.
Yep, it's like trying to create competition between a heavy weight boxer and a kid and calling it survival of the fittest. For there to be competition, you need parties operating on a similar level.
I'm not kidding when I say that the market crash and high inflation have me really stressed out and worried about retirement. I've been in the red for a while now and although people say these crisis has it perks, I'm losing my mind but I get it Investing is a long-term game, so focus on the long run.
I can’t focus on the long run when I should be retiring in 3years, you see I’ve got good companies in my portfolio and a good amount invested, but my profit has been stalling, does it mean this recession/unstable market doesn’t provide any calculated risk opportunities to make profit?
There are actually a lot of ways to make high yields in a crisis, but such trades are best done under the supervision of Financial advisor.
The US-Stock Mrkt had been on it’s longest bull-run in history, so the mass hysteria and panic is relatable, considering we’re not accustomed to such troubled mrkts, but there are avenues lurking around if you know where to look, I’ve netted over $850k in the past 10months and it wasn't some rocket-science strat. I applied , I just knew I needed a firm and reliable technque to navigate better in these times, so I hired a portfoilo advlsor.
who is your financial coach, do you mind hooking me up?
Big Credits to 'Ingrid Cecilia Raad'' has a web presence, so you can simply search for, there are some others but it might be difficult to get them, but Janet as been a good guide through the year.
There's also the "The Cantillon Effect", which exacerbates wealth- and income-inequality. When the money supply is expanding, rich people tend to get the new money first (before prices rise), and see less inflation, while poor people get it later and see more inflation. It's part of why trillion-dollar corporations can scoop up single-family homes but more & more average people can't.
@FreddieBob You’re acting like there’s some kind of centuries-long plan going on, but I think you’ve forgotten that the middle class shrank in the late 1800’s/early 1900’s and then grew in the 1940’s-1970’s. Why would a plan to destroy the middle class result in decades-long growth? And why would a plan to destroy the middle class take centuries to execute, especially when the middle class is actually a fairly recent invention? In fact, I think the middle class actually became a thing right around the same time this so-called “plan to destroy the middle class” supposedly popped up, which means the plan to destroy the middle class would only resulted in its invention.
@FreddieBob This kind of master planning is almost non existent in the world and people who think this way are mostly distrustful people who can't imagine that different genuinely good or neutral intentions can lead to a negative result. Regulations are generally not pursued specifically to make markets difficult, they are pursued due to bad actors taking advantage. Most systems aren't specifically created to exploit, people selfishly come later and find ways to exploit systems or, even more common, just use the systems to their own benefit without thinking about how it affects others. Kind of like how we don't wonder how that t-shirt or laptop or coffee is so cheap when we buy it. We're just thinking of ourselves, we don't think first that maybe it's cheap because someone is being exploited somewhere. We don't do it intentionally were just not thinking of others, but it does create systems of exploitation
Pleased this effect has been named.
A variation of this I have been thinking about is inflation primarily caused by wealth inequality. If you had say 10% of the population control 90% of the wealth (and no investment in increasing goods), the could bid up the price of all goods to where the remaining 90% couldn't afford them.
Why wealth inequality isn't included in discussions of increased money supply is highly suspect.
@@oakinwol IMHO, there is little point to differentiating between malice and apathy when it comes to the part of society that wields outsized power in that fashion.
@@rafaelmarkos4489 Society is relationships. In your relationships do people generally engender you to change by attributing all of your inaction, weaknesses, and apathy to malice? In many ways, because of the natural human condition, one could argue that the attribution of malice to people's action is a much much BIGGER problem than apathy. These ways that we judge others, usually more harshly than we judge ourselves, perpetuates these natural behaviors
I think one problem with the assessment about the benefit of an economic downturn is the foundation of many economic theories: they assume a rational human being behaving rationally.
When it comes to reducing the workforce, this then comes in the form of assuming that the underperforming staff are the ones to be laid off first. Having been employed through several economic downturns and having survived the cut, I can say for certain that this is not my experience.
Perhaps gov't interference is to blame here? It's very hard to lay off people nowadays given the labor protection granted by law
@@paulomendoza5606 why would you lay off a good employee instead of a bad one if it is already that hard to lay someone off?
@@paulomendoza5606 Hardly, laying off staff because of an economic need to downsize is quite simple if you've actually done an audit and are following a plan.
That's pretty iron-clad for any possible lawsuit as long you're being fair in your criteria.
Under performing staff are easy to get rid of as long as you bother to track performance, try to work with the staff member to improve it and follow policy.
The people who are difficult to remove are executives and managers, they rarely have actual productivity to check and can either hop away to another department or have weaseled their way into a contract where it's less costly to pay an incompetent to sit in a corner than it is to fire them.
My father worked in many American companies for 25 years now (and counting). In the 90's they were in constant growth and everything was hunky-dory, then hit the dot com crash and they had to "restructure". That was understandable, after all it was a massive bubble burst.
What's wasn't logical, was that those "restructurings" started happening every 5 years, then every 3 years, every 2 and eventually pretty much annually. The company would annually lay-off workers in one region and... announce hiring shortly after. It didn't matter if sales did well or not, they constantly rotated people.
It soon became clear that it was done solely to boost stock prices by employing some accounting wizardry and bullshitting investors with completely sham decisions. It made literally no sense to reorganise everything and have workers waste time readjusting that often, but you could throw it in slides and hope to hire interns to replace senior and mid level staff salaries.
In short, it was irrational and it ultimately hurt the productivity of the company, but worked short term. It was a bother for everyone and a lot of stress for those that did get laid off, but it worked for the financial sharks that saw their wallets swell.
@@paulomendoza5606 Usually when there is a layoff, they fire entire teams or close a full single factory. Thus they get rid of both good and bad employees.
If the company was auditing individually every employee and offering their employees to move to the other teams/factories (assuming they can move because it would compromise their husband/wife job) then they would get rid of only the bad employees. But that doesn't happen as it would cost money to go that length.
Amazing video, so cool that we get to see such in-depth documentaries for free nowadays, some of them are x10 better than what we get in college lol
I kind of wish he included the demographic reality that the entire world doesn't have enough consumers because our population will peak at most at 10 billion due to almost nobody having babies. Worst of all, once you start not having as many babies it is extremely hard to get those people to start having babies again. So the current economic downturn is NOT a recession: it's actually worse than a depression. There's actually nothing we can do about it; more than half the world will simply see near apocalyptic levels of collapse. Oops! I guess we should've been having more kids all along.
The good news is that the growing nations that see a collapse they can also reverse that to some degree by transitioning back to subsistence farming which results in a major baby boom. In maybe two hundred years those countries will have very healthy economies.
By the way, as far as demographics are concerned, the US and Mexico are the only countries outside of Africa that will be able to weather the storm. Although, we Americans need to get started baby making fast or this same demographic reality will hit us too in about 30 to 40 years.
This has a knock on effect which is extremely desperate: our levels of research are about to evaporate as the US will be the only country in the world even remotely capable of conducting research, but will be seeing unprecedented levels of isolationism put us back into our shell. The problem with that is that Climate Change isn't exclusively man-made; it is also being caused by other factors that require a scientific solution... And America is going to be hit HARD by Climate Change. Of course, climate change also needs a scientific solution, but I digress. At any measurement we need to find some way of conducting research when globalism doesn't exist. I don't know if any of you are aware, but virtually all of our research in the US relies extensively on other countries: that's why research speeds have gone absolutely insane and tech has been exploding in recent decades. Yeah, the Golden Age of Earth is over. Globalism is dead.
Should we try to revive it? Should we just let it happen? Eh, I don't think this corpse can get moving again. The collapse of Globalism is because nobody had enough babies. There's no undoing that. All we can do is seed the eventual return of globalism by having 3 to 5 kids each.
As far as Africa goes... It's not a positive outlook. They don't have the education levels to be able to jump start an industrial revolution on their own and global resource supplies actually indicates that Europe might become colonial again. As much as ideology might affect decision making for the better right now... Hunger will change their minds. I'm not really sure how that's going to turn out. It's honestly kind of depressing to think about because Europe doesn't have an out other than conquest. Who knows? Maybe they're invent a new kind of "conquest" that doesn't require human suffering? I sure hope so. Africa could genuinely use Europe's expertise in industrialization... But that just infects Africa with the same problem the rest of the world has so who knows how long that can last?
It's awkward to me that he had it and then lost it, if you have that boom and bust cycle you could literally smooth it out 50% tax on everything above that straight line, 50% stimulus for everything below it, the other half used as a measuring stick, if money runs dry, lower the slope until you get a strate-ish line and no one will run out of money to the point of starving, more workforce, more production, more better, less work for the same lifestyle, free market works only for people who know how to handle it, when you are on loan to buy food it's not so fun and everyone has a bad time not only the person in debt especially in a case of a default.
@@Ryanowning "more cheap houses more kids" quoting my self quoting someone else,
If you have cheap housing and cheap food people will want to have kids, more free time more "fun" time, less kids dying in poverty,
Expensive food and floorspace => more work time, more mate competition, less kids, it's that simple really, people don't want to make dead children, if the earth is going to explode in 10-20 years why have children, better live your life to the fullest up to that point... Which is kind of the reason why the earth might explode, too many hedge their bets on the earth exploding so will make everything in their power to make that a reality, people really hate loosing a bet, even when it's life at stake.
Start betting on the earth living for a trillion years and you may live to see it end in a trillion years with me next to you as we watch the stars turn into blackholes.
@@ГеоргиГеоргиев-с3г Explode? Why would Earth explode in 10 to 20 years? What are you even talking about?
@@Ryanowning thanks for the question i wanted it : shorthand for all the ways to mess up live as we know it(doesn't matter which one), global warming, Corporate dystopia, totalitarianism, Nuclear winter, Meeting aliens, on top of the more mundane: famine, AI singularity, people sticking to their screen and forgetting to eat, and all the many many more scenarios.
Actually we probably wouldn't meet extraterrestrial aliens only the good old terrestrial ones once we put them there.
Just like what happened in America and the three times it was discovered "for the very first time"
"they are also effective at getting rid of underperforming workers" Man I've been in the work force 22 year and I've never had a single job that made me felt like I mattered no matter how hard I performed, we're all just cogs in the machine, discs to put on a grinding wheel until we're ground down to nothing. Maybe people are waking up to the fact that we shouldn't have to kill ourselves for a paycheck when that paycheck doesn't even give us the ability to survive.
This, also all the companies I’ve worked for actually went through a contractor, they pre-plan on laying off their contractors ahead of time, performance is tracked but it’s just lip service lol.
Look up the news article this channel is citing: this video pretty much lied about this. They pulled out because they DIDNT want to play ball with the workers union, and were using this as an excuse. It's the same as current day retail stores pulling out of cities citing "shoplifting" despite no notable increase to reports at the scale claimed. It's all misinformation to put the blame on normal people instead of these corporations.
You might want to change your career trajectory.
how are you here when that paycheck doesn't "even give us the ability to survive"
@@ericpowell4350 I worked for a bank. No seriously, they go through contractors and believe me, the clients are very very rich. There is no reason for them to do that. It is simply out of greed.
Well said EE. When you stop small wildfires, it weakens the forest and allows for the old, weak growth to strangle new life. Eventually, the whole biome is vulnerable to burning down. The economy is similar. Keynes was a brilliant man but his theories willfully ignored the fact that no one wants to pull back fiscal stimulus when they need to.
A 7-10 year business cycle clashes pretty strongly with a 4-8 year political cycle. Nobody wants to be the one to shut down the buffet and put the economy back on a diet.
The same can be said about national governments and UN intervention/aid especially in the third world.
@@EconomicsExplained What about the federal reserve?
So basically, boomers have to go.
@Evan Galea Keynes was absolutely not a brilliant man. He was short sighted and had no understanding of the fundamentals of sustainable economies. Everything he pushed for was for short term success and didn't care about economic longevity because "in the long run, we are all dead". But hey, keep printing money and infinitum and repeat the mistakes of the past, maybe it will work out differently for us.
Amazing how people would rather have hyperinflation and a stagflation risk instead of a corrective recession because they want to keep their stock portfolios up
A recession can delay retirement. I know people who lost hundreds of thousands of dollars so far this year.
@@bobbygunz9254 Would you rather have hyperinflation where costs of living go up 15% per year? The loss of purchasing power will also delay your retirement
@@chris-pj7rk Either they have so much in retirement that hundreds of thousands don’t matter, they made the mistake of not investing more in bonds very close to retirement, or they already had a few years till retirement and they can afford to wait.
@@Patriciacraig599
@@marianparker7502< How can this your trader or adviser be reached?>
This video really highlights how economic theory has little to do with economic reality. Corporations going broke in times of economic downturn? Not the big boys, they just print themselves more money.
Economics is mostly alchemy. And yes, most or all economic theories and videos contain multiple instances of "...and then X, Y and or Z corrects for that." Uhhh, right. Okay, but what if X, Y and Z went our for smokes 40 years ago and never came back? Asking for a friend. That part is never addressed, because it's never addressed in the real world, either.
What businesses exactly are capable of literally printing money? (ignoring the money multiplication effects of fractional reserve banking)
@@geeee8933 it's mainly referring to how many big businesses get massive bailouts due to government lobbying, which makes them pretty much immune to this since, y'know, a power company going bankrupt would generally be a bad thing.
Because all those theories treat aggregate supply-demand curves as continuous assuming that there are numerous actors competing at every level of every industry. This is true in many cases, but not when you have hardcore consolidation like we do today.
It's like discretizing a signal in electronics: if your steps are tiny with respect to the spectrum of values then you can approximate it like a continuous process. If they are too large to ignore then you're just doing poor modelling.
If every industry is operated by a handful of companies OR if every industry has a strategic bottleneck (e.g. many farmers sell to a single suppliers that then supplies many supermarkets) then you can't just pretend that you have real competition. Markets fail more of then then not, particularly the more complex the economy becomes.
What you get are those "too big to fail" behemoths that aren't subject to market forces and have incredible political power to skew the playing field in their favour.
@@meganegan5992 that’s not the same as the companies printing money. And I think folks are overestimating the number of companies that are “too big to fail.” Government is most likely to step in to support companies whose failure poses systematic risk to the economy (ie banks); there’s less incentive/reason for the government to prop up a large but still comparatively isolated company in non-financial sectors (look at PG&E, for example)
Trust me bro, food insecurity, evictions and increasing stress are a feature of this system.
He said "things in the US are actually fairly good"
15% true inflation, food shortages, supply chain issues, intentional gas shortages, etc say otherwise
The economy being good doesn't mean it's good for the people.
The rich are more powerful and more wealthy then ever before
Seriously! Idk how you can factually prove that recessions are necessary and “good” and then be like 100% A-OK with capitalism
@@timothypickarski5234 lol I was being sarcastic
@@timothypickarski5234 yeah capatalism invented economic downturns lol. Show me the miracle system that is perpetually wealthy for all and never blew up in everyone's faces in a single generation
What happens when corporate entities raise prices for years, but fail to raise buying power to workers' hourly wage?
Eventually people will be forced to demand higher wages just to survive
Capitalism eats itself and the working class pays the price.
Well, the Fed is the reason we have inflation.
Higher profits for the corporations and lower standard of living for the workers
A recession
Never felt more helpless as an unemployed in 2008 and 2011, never felt more powerful last year, when everybody was looking for me. This economic roller coaster is mentally tough to ride.
The people who refuse to work due to government stimulus will be unemployable when the economy goes into a recession. Every business that sees that gap in the resume and they will know that employee is only worth hiring during a worker shortage.
Something similar happened to people who got layed off in 2008.
@@badluck5647 Doubt it.
@@urubissoldat5452 During the great recession, employers were discriminating against people who were unemployed for over a year even though there was a poor job market. What makes you think employers won't discriminate against workers who were unemployed when jobs were plentiful?
@@badluck5647 covid.
@@urubissoldat5452 There hasn't been a lockdown in months. No one is going to believe someone couldn't work for over a year due to covid. Even if you disagree, most HR people I know see it that way.
"Underpeforming employees" is comstantly adjusted, meaning that a stellar employee 10 years ago is now extremely slow and unproductive. As an employee, your exploitation will get worse in this economic system, which is why the number of hours worked every year creeps up and why you're burnt out. Realize this, and you realize that nothing benefits you, neither recession nor good economic conditions.
"We pretend we work as they pretend to pay us" - Soviet Worker
"Underperforming" means anything from "I don't like the way you solve problems" to "I don't like your opinions".
Generally people's ability to command higher salary increases with time and only goes down when they near seniority
@@adrianafamilymember6427 and have house for free
I think a majority thought a pandemic would slow everything down and people started spending instead. The pandemic spending increase bypassed a correction cycle. It will be interesting to see how this recession plays out because of that.
We have been in a recession since 2009 if we use more honest government figures calculated the way they were in the 1980's. Technology has improved our standard of living since then but based on 'the old way' of defining a recession we've been in one for over a decade. The cycle hasn't been bypassed - it has been re-defined away and ignored.
Why did the spending increase? Because of government stimulus, the money were printed out of nowhere, and it will make the recession much worse because of an increased inflation due to a higher monetary supply.
Stimulus wad added because everyone failed to realize, that with goods so easily available, we have transitioned away from saving and waiting in times of crisis. People now try to get everything they may need or want before someone else can get it.
You're at home, no rent to pay, earning more than when you had a real job, so you go shopping
@@donchaput8278 that is actually not the cause of the stimulus Quantitative Easing. It was the fed that injected trillions of dollars into the stock market to avoid companies to default, and at the same time turning down interest rates to 0% again.
A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time! I have been reading of investors making about $250k profit in this current crashing market, and I need ideas on how to achieve similar profits.
On the contrary, even if you’re not skilled, it is still possible to hire one. I am a project manager and my personal port-folio of approximately $750k took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my port-folio this red season. I’ve made over $150k since then.
@@instinctively_awesome8283 There's a very bad downturn in my port_folio. lost over 32 thousand this month alone. Would you link me up with your handler?
@@instinctively_awesome8283 This is a scam. None of these people are real.
@@isaacdalziel5772 this are bots report them
agreed. My plan is to wait for trades to get cheaper,, fix up my entry level unit in an amazing location that is unlikely to depreciate much and use the opportunity to buy a bigger place that is more suited to my lifestyle- because those properties are more likely to drop.
Painful honesty... Yes, a recession's effect can be lessened by structural designs. A worker in Sweden or Denmark is going to suffer less pain in a recession than in the US or Britain. But recession, in its entirety, cannot be avoided at some point.
@@ericalorraine7943
lookup Priscilla Dearmin-Turner online, she's the real investment prodigy since the crash and have help me recovered my loses.
I remember listening to Priscilla Dearmin-Turner on CNBC news when she revived Grumac in 2018. She most be so good for everyone to talk about here.
@@davidhudson3001
Thank you, Going through her profile in her webpage, she smashed all her state certificate and accreditation
I just look up her name online and found her webpage, thank you🙏
@@davidhudson3001 as a fellow bot I have a hard time making investment decisions. Thank goodness you showed me her
An important thing to point out about the model of supply and demand is that it no longer works as a model. Both supply and demand are artificially engineered. Today companies will intentionally reduce the supply or demand of a rival business. Some are much better than others. Dumping perfectly good milk b/c the government gives farmers a check to ruin supply
Or company flat out exploiting their market gains at the consumer's expense. Think of Apple inventing a new proprietary charger port for their devices, now everyone has to buy a new charger to use these devices rather than continuing to use what they already have. It creates waste too when everyone throws out their old one that still functions perfectly well but it's now obsolete. This isn't "the most efficient distribution of goods". Many companies are incentived to be wasteful to keep demand artificially high.
@@ZachJ-0 Exactly, just like Amazon was caught dumping hundreds of thousands of unsold products every week. It's more profitable for them to destroy perfectly good products then lower their costs due to excess supply. Grocery stores do the same thing with food all the time, even locking their dumpsters so homeless people can't get at their perfectly good food. Its pretty sickening actually.
Sort of funny. I live in Wisconsin, the US Farm bill ties the price of a hundredweight of milk to the distance from Eau Claire. The furthest place in the US is California.
Happy cows don't come from California, happy cow farmers do.
Broke dairy farmers come from Wisconsin.
@@ZachJ-0 help me understand your interesting comment zach. how can something that functions perfectly well become obsolete. thanks
@@DrSchor in this specific "hypothetical", because it no longer is capable of serving its purpose. As soon as the phone, laptop, tablet, or whatever is replaced; all those chargers cannot work. They are incompatible with the new devices, or obsolete, despite the chargers still being capable of functioning they no longer have anything to plug into. But apple will sell you a new charger and cable for an additional $50 to the $1,200+ you just spent on your new phone! (A phone they purposefully designed to stop working after a couple years, forcing this upgrade. That's not even hypothetical, they actually did that)
Inflation begins when dollars are printed. Printed dollars are a data input to the CPI. The CPI print is the feedback loop from printed dollars. Keynesians have been trying for decades to print dollars to create inflation-used as a signal to show the stimulus is working. Then before inflation gets entrenched, deflate by destroying printed dollars. The problem here is the Fed didn’t remove the dollars it printed to stimulate. So the higher prices are here to stay for a while. The dollar strength is transitory. You will see a weak dollar once those bonds the fed has on its balance sheet become difficult to sell as higher yielding assets will be more desirable to investors.
I lost everything in the last recession and learned from it. I made sure to live below my means and save every possible dollar. I also invested correctly and diversely instead of buying material things, restaurant meals, and expensive vacations. I've been waiting all these years for the next recession so I can capitalize on irresponsible debt. If this video is correct, it will be a very exciting investment shopping spree for me
Consider the economy as one huge engine that produces the life styles that humans live & prosper & create a healthy financially secure future for their families . Corruption, manipulation , creation of unhealthy political policy & diplomatic environments is a recipe for engine failure. People are equally losing money in the financial market in the midst of all these.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire. Personally I hired ‘’Nicole Ann Sabin’’ a financial advisor who I copy her trades and with a good 7% in ROI monthly.
@@PhilipMurray251 >>
Wages has stagnated for 20 years even with so much inflation and "economic growth"
Deflation doesn't sound that bad for the average worker.
I feel as though a recession is just going to enrich those well off further.. Our terrible housing policy in Australia has favoured investors and particularly early investors (most of which have paid off their loans). As prices drop their purchasing power arguably increases.
Just seems like the middle and lower class will suffer as per usual.
Mate fight those bogus politicians via camping out with yo mates in the territories spider, uh snake and emu
But seriously it feels like you guys are fighting everything from nature to your political to where you are living.
Learn just learn whatever you can it will help in the long term.
It's working exactly like the system was designed to. It's what the rich built up and they for sure ain't going to be taking the hit.
There is a theory going around that we should be looking at upper / mid / lower classes as "owner" and "worker" classes. "Owner" class people make most of their money from things they've already setup (passive income) even well off small buisness owners (making 200k+ per year) would be classified as "worker" if they take a active role in the buisness. Without a very foolish child wrecking what their father, grandfather (whomever) set up, the owner class is immune to economic fluctuations. Yeah, they might have to sell their mansion but as little as 4million wisely invested in stock can net you 40k per year. You won't live like royalty, but you'll never go broke.
@@adrianafamilymember6427 And don't forget the fire hawks!
But if you let investors earn money safely forever by always having a bull market, won't it cause the rich to pull away from the poor even faster?
I just hope that this recession implode the housing market, it is depressing having to spent 50% of my income to rent some shithole while watching home prices increase by ten times what I can save without starving every year.
Its extremly fucked here in canda. If you join the military pray that you dont get stationed in Vancouver or ontario. Its basically not possible to pay rent on a privates salary.
I am sorry but probably wont. All I expect is small correction just like in 2008, and that crisis was caused by housing market.
@@komerczka The recent gains we saw are unsustainable. So something will give. Already the government is forced to push forward policies to limit speculation and help first time home buyers. As it gets worse more extreme measures will be taking. More things like banning foreign speculators, empty home tax, increase taxes on those owning multiple properties, and taxing speculators more. Making real estate investment unprofitable in the short-term will go really far in reducing demand.
It will depend per country. But in most western Europe (me: Netherlands) there are simply too few houses. A small correction will probably take place (10-15%), but then the housing market will then totally lock up with far too few people sizing up anymore, locking up all price classes. Combined with increased building costs, not getting permits due to environmental issues, and a massive refugee influx. It will get way, way worse.
@@berryvanhalderen7574 In Europe there is an issue with space. Land is very much finite. I live in Canada where land is more plentiful but people crowd to a small number of cities like Toronto and Vancouver. Although supply is kept low because investors buy up majority of available real-estate. I think that is an issue every developed country is facing.
What is missing here is that big capital always finds itself winning on both the up and down cycle. The cycle is used to funnel money upwards and ruin the Gini coefficient of wealth distribution among the populace.
The problem is that during the good times businesses hoard the riches that are being made and get tax cuts by the oligarchy. While in the bad times the working people lose their job and have their salaries stagnate.
If only there's a solution.. Oh wait, labor unions, get rid of captive audience meetings! Both sides need to compete and both sides need equal bargaining power.
The liberal solution to this is to create more unions. The conservative solution to this is to kill corporate tax cuts, or more importantly kill all corporate subsidies. The problem is politicians rarely follow through on their promises on either side. I'm not a fan of public sector unions but I find some private sector unions to be beneficial as long as they're optional to join and are just a part of the industry rather than dominating the industry like the shoreline workers union for example.
@@kennethkho7165 the problem is that corporations spend millions for union busting
@@kennethkho7165 Here is a thought... evaluate the break up value of a company.
Look at Starbucks. They are so screwed. They will be forced to raise prices to absorb the cost of unions.
So their already overpriced coffee is more expensive. So the question becomes, will the consumer be priced out of the Starbucks brand?
Secondly, how will investors react if their Starbucks stocks aren't preforming as expected?
Third, unions do very little for customer service. You can't fire the worst hire.
My guess? Starbucks is considering all their options.
Workers need improved conditions too! The ball has been too much in the court of employers up until now and quality of life has deteriorated to the point where most workers can't afford the basics of home ownership and is completely out of reach for many! While inequality grows like a hockey stick we need a way to level it a bit or workers will just rebel.
They want us to rebel, but they know we won’t.
I gotta wonder how much of that problem is caused by an unwillingness to move though. Not being able to afford a home in San Francisco or NYC is much different than not being able to afford a home in Southbend Indiana for example. How many people could have their quality of life triple just by moving but don't because they don't want to due to family or friends or something else?
If lots of people feel they have nothing to lose, you can bet things aren't gonna look pretty
Revolutions are part of bigger cycles too. Sometimes you need a bloodbath to remember where social classes stand. It doesn't mean that because the workers started it that it will end in their favor though.
It's as if capitalism only benefits the owners at the expense of the working class 🧐🤔
I'm dubious of calling it a good thing when it's harder to get a job. It might be good for the GDP, but i don't believe it's good for a large majority of the people. And the economy should be in service of the people.
You're basically arguing to keep the economy well short term in exchange for increasing the risk long term. We're in a state were it eventually will happen
@@tomlxyz
Our technology has vastly improved the amount of resources we can produce. If we want to maintain this new normal, then we must keep productivity up. And in a decade there will be a new new normal which requires even more productivity.
But maybe, i'd argue, it'd be fine for CEOs to have to sacrifice a couple yachts in order to afford employees. That, perhaps, it wouldn't kill the shareholders to have to occasionally eat at McDonald's because the employees aren't working themselves to death for fear of being fired. That maybe, the economy would be fine if a smidge of negotiating power was given to the workers. That maybe, it would be nice, if everyone with the desire to exchange their labour for money, could do that, instead of sitting around producing nothing.
But- you could be right that despite continually rising real gdp per capita (far outpacing median income), we haven't increased how many people we can afford to employ. But I'm doubtful.
@@the1exnay companies don't employ as many people they can afford, they employ as few people as possible. The former is dysfunctional
@@444-w8k
yeah. I was just saying that i don't believe it's a bad thing for those people that they do employ to have bargaining power. Despite the likelihood that they will use that power for things other than increasing GDP. And i was relatedly saying that i don't believe that full employment is a bad thing.
There's plenty to be said about whether particular measures to reach full employment are good ideas or bad ideas. But I wasn't talking about that in my comments
In today's over financialized world, the competition means wealth and capital fall into fewer hands, not necessarily represents better services and better pay. One evidence would be the staggering salaries. Competition can't be analysed properly without measuring the context.
This video hits on something I’ve been saying for a while. The crash we are heading into now is not a new crash, it is the 2008 crash that was delayed through QE. Rather than letting the system reset itself, the Fed stepped in with QE and propped up the failed business models that led to the crash. It just reinflated the bubble. It didn’t create a new bubble.
My fear is that this reinflated bubble will be worse than the original bubble.
Credit Expansion is generally the reason why bubbles form in the first place. If someone wants to "solve" the problem and not take their lumps, the solution is more credit expansion, but faster this time. The business cycle isn't really all that natural, but formed by cycles of credit expansion and contraction. Before Central Banks collapses and ressessions were usually short lived and centralized, and the source of the expansion was banks that overleveraged themselves at the expense of those who saved their money in then. Since the central bank formed, what would be a local problem limited to a single industry now encompases the entire economy, and the reason why is that the central bank is the biggest source of credit expansion in the system. All banks are interconnected, and because banks can't fail it just means that they throw our money around and when they lose it they can ask for the government to cover their losses and the central bank to loan or print them money.
It depends on who you ask if this is going to be bad. In '08 banks, despite selling junk debt, got off scot-free. They even got to keep most of the real estate while the market 'recovered'. That's why real estate prices never really went back to 1940's prices. Whatever happens now, I'm quite confident that the current players at the table have a trick up their sleeve to keep and even grow their capital through the next bust cycle. One does wonder if all the junk is not going to surprise them with a black swan event.
@@jakman2179
Look into Kondratieff waves. This cycle of major booms and busts has been around through all of capitalism. The Great Depression happened in a time when the dollar was pegged to gold and the central bank had very little influence.
Kondratieff waves are caused when an economy reaches its maximum growth utilization rate. The easiest way to visualize this was the railroad expansion in the 1840’s. When the railroads were being built, there was massive demand for the companies building the railroad, as well as all of the peripheral industries that supported the building of railroads. Once all of the tracks had been laid down, the demand for new railroads fell off and the entire economy collapsed. That collapse freed up capital for the next crest which was electrification.
The 2008 crash was the collapse of the tech sector. There was massive tech growth as everyone was buying computers and tvs and cell phones, but once everyone had them, there was no real need to replace them. Therefore tech industries have to spend more and more on research in hopes that their newest iteration will convince enough people to replace their existing products to make a profit. It has reached it’s maximum growth utilization rate and rather than letting the collapse recirculate all of that tech capital, QE pumped a bunch of money into the stock market to make those companies appear profitable again, at least on the surface (think stock buybacks).
Credit expansion therefore plays a role, as it increases the purchasing power of the economy and drives the increase in the growth utilization rate, but it is not the only factor. These collapses would happen with or without the influence of central banks.
@@TheCommonS3Nse You're actually wrong about the depression and dollar being pegged. It was unpegged for most of it and ignores the credit expansion that was occuring then. Unless a currency is near 100% backed it tends to create the credit expansion waves.
Additionally, for an organization that "didn't have much influence" they seemed to do a good job of inflating the Dollar for the benefit of the Pound Sterling after WW1. It's worth pointing out that also caused a crash around 25, but a much amaller and shorter one because it was ridden to the bottom.
I'm not convinced by the Kondratieff Wave theory, but will keep my opinion on it at that as I need more research into it.
A bit of research and I'm not having glowing hopes for it. Every single Downturn it claims is also attached to a period of credit expansion preceding it. There may be a coinciding effect of the 'peak' of a technology, but calling them the source of them seems faulty.
1837, The Second Bank of America was disbanded shortly before it occured.
1870s, shortly after the civil war when Greenbacks were used to pay for the war, and the Bank of England was overleveraged. 1930s, Central Banks of multiple countries were printing money because of war debts. The Central Bank in US helped keep the show going until it couldn't and collapsed, the recession that followed was exacerbated into a depression by policies that attempted to stop the correction.
1970s, stagflation from super low interest rates and an overregulated economy topped by the oil crises.
Interesting that among all of the conversation about the need for competition, there was not mention of the role of monopolies in our global and national economies.
He doesn't want to go missing because some corporation kidnapped him.
Okay, so if deflation causes wage stagnation, why did we have wage stagnation with inflation? Sure it'll be answered later in video, just something that stood out so far
We didn’t have wage stagnation? During these last months wages have increased
@@conor2683 I'm taking about for most of the last few decades. Obviously now some wages are going "up", though it's not actually compensating for all the inflation that has happened.
I'm from Argentina. Inflation always makes our real salaries (measured in USD) go down with time, it makes us poorer. If I was asked what do I want, instead monetary policies being forced down my throat by the government and the Central Bank, I'd choose an inflation rate of 0,0% ± 1%.
@@gaston6814 A great portion of the "inflation" is merely from cappies raising prices just to increase profits, not because they have to.
We have the opposite of wage stagnation right now we have a death spiral of wage increases actually. Workers demand higher wages > Workers receive higher wages > businesses offset higher wages by increasing prices > prices of everything goes up > Workers demand higher wages...
If a recession is needed, what about the possibility of large unqualified companies withstanding a recession thanks to government support while small and medium companies meet their end.
This was addressed when he said that if governments providing support undermines the requirement of investers to make sure they are investiing in strong companies.
In fact the negative effects of government support for failing business was a key point in the video.
@@rcmwalker1987 it was not specified for large corporations and the inherent advantages they have though. I wanted a more detailed explanation in general.
@@metalknight599 large business ≠ economically nonsensical. Large business are more likely to be "strong" compared to small or medium ones, since more effective business tends to expand
I think we can infer from the comments on government support in the video
Major issue is housing, cost of housing spikes, store owners need more to survive, too many people own more then 5 houses, this is extortion as it lock too many people into renting driving the cost of housing/rentals threw the roof, thus increasing the cost of everything, including materials to fix houses, heating/electricity production/gas
Also ruins the market for industry because no one can get into it without lots of money
I love how people pretend those $1400 checks did anything for the economy. That amount of money isn't even enough to pay rent in most places for a month. But it was a great cover to give 5 trillion dollars to oligarchs.
Its not like they need that excuse. The Trump tax cuts passed after all. And are mostly still in effect if i remember right
Exactly
Recessions are like forest fires. You'd rather deal with minor ones every 5-10 years than one truly catastrophic fire every 100 years.
What would you categorize the 2008 one as?
@@blaisetelfer8499 I would say that was a minor one because we bounced back pretty well from it.
@@beastmode3079 The panic 1867? The great depression was pretty obvious
How about deal with none ever? That would be a much better alternative, and definitely achievable.
It isn't. No country can avoid recessions.@@programking655
Deflation helps the little guy, inflation helps the rich.
It may seem inconsistent that we have a very low unemployment rate and are heading towards recession. But this is because we have changed the way we measure employment. A large proportion of the employed are under-employed part time and casual workers who are struggling to make ends meet. It is these very same people that will be laid off first, and they will need to be laid off in droves with the coming recession. If this is true, then the unemployment rate is going to skyrocket overnight.
We currently have roughly a 40% unemployment rate in the USA (only about 60% of the population is employed); this is before you take into account the number of those employed who are only part-time or otherwise 'casual workers'.
Situation is a fair bit more severe & grim now than the numbers in the fed's cooked books would imply.
@@DBArtsCreators the fed neither a saint or hope Agustin just there
So biden admin lied? Imagine my shock.
The reason so many can’t find full time work though is because companies do t want to higher full time workers cause full time workers get benefits like healthcare while part time workers don’t so it’s cheaper for a company to have 3 part time workers that work for less $ and no benefits than 1 full time worker who’s pay will slowly increase and does receive benefits. Could it be argued that the highest paid full time workers would be the first to go?
@@kayleehog That sounds right, based on the fact that we live in a capitalistic economy and how the world/businesses priotitise profit over the needs of people working for them. Which is why I believe we should become socailists.
Now do a video on economic inefficiencies caused by market makers having the ability to manipulate buy/sell pressure of securities by sending whatever buy/sell order they want off exchange into a dark pool instead of letting them go to the exchange for true price discovery.
Oh yes please
This!
I totally agree it is a good time to capitalize on the market for long-term gains, but it wouldn't hurt to know means of actualizing short term profit, I been reading off investors making over $600k in profits currently, and I need ideas on how to achieve similar profits.
You’re right! The current market might give opportunities to maximize profit, but in order to execute such effective transactions, you must be a skilled practitioner.
@Flynn Chasin I lost over $9000 this week, which is money I'm putting aside for retirement ; who is this individual that advises you?
This recommendation literally came at the right time, I’m down by $22,000 in stocks .. its crazy! I just looked up Diana online and researched her accreditation. She seem very proficient, I wrote her detailing my Fin-market goals and scheduled a call.
You scammers are still at it? 🤡
Step 1: own $10m to play with
I literally felt like an addict missing his biweekly dose of economics explained last few weeks. Just yesterday I was thinking "where has he gone when we most need him."
This is an excellent summery of economics. I'm sharing this with several friends who have told me they never received a good understanding of economics and how it effects the world. Thank you.
I'm glad you like the content . The helpline is shown above👆 I'll introduce you to something new.••
Absolutely nailed it. We need the ‘pain’ portion of the cycle. The governments stupidly avoided it with the 2008 crash - the world truely needed to rid itself of some of those corrupt and inefficient financial institutions, but the governments bailed them out - avoiding the short term ‘pain’ and allowing them to continue to operate.
Eventually it will be unavoidable, but there will be much more pain involved because they’ve let it go so long.
The Recession we need to have. The Profit they have made.
A lot of people are waking up to the fact that "good for the economy" does not translate to "good for me".
Tax the rich. They have too much money we just need to scrape it back. The longer they have it the longer they will bid up asset prices and buy up all the commodities and real estate
@@oakinwol
The people who would make the decision to “tax the rich” are filthy rich themselves. People like nancy pelosi and mitch mcconell would never shoot themselves in the foot like that.
I’m all for taxing the rich, but only if they stop taxing the poor. Middle and lower class people shouldn’t be paying federal income taxes
@@oakinwol they can evade taxes. In addition to off shore tax havens they do stuff take out loans with their assets as collateral at a 0% interest rate. The banks allow this because it curries them favor in business. Now the rich file their taxes and had no income because the loan is counted as debt, they get to spend that money tax free. They have many more exploitations of the tax code like this. We need politicians who are willing to close these loop holes and fund the IRS after they're closed to go after these robber barons.
In summation, tax the rich isn't nearly enough to counteract the entrenched power structure they've built for themselves.
@@ZachJ-0 I hear what you're saying, but honestly it's just more excuses. Black people in America had every reason to think they couldn't change this country. The power was much more intrenched and it was literal animosity they were dealing with not simply rich people apathy and selfishness. But leaders like MLK fought, and they fought hard, and they fought peacefully, and they didn't stop, and they gave up their lives for it. People who want to sit at home comfortable or walk in protest once a year and expect change are just virtue signaling. No one was ever given anything in any country. People fought. And the peaceful fights are the ones that bring about the most lasting change most consistently. Black people walked instead of riding the bus. It was frigging hard, but they did it. And the busses changed. What are we willing to do is the question. Are we all willing to go through some hardship and support each other to fix the system? And if we cant even support each other through hardship why should rich people care enough to come out their current pockets to do it?
Competition is a very healthy part of the economy, as long as the competition is between the workers competing for jobs. Companies having to compete for workers is bad economics apparently. Wouldn’t want employees to have too much bargaining power, then companies might have to cut back on stock buybacks and dividends to afford paying employees more
It's almost like competition is a mythology for capitalism while monopolies are what actually define capitalism!
"For the system to continue to give a few of us a good life and not completely collapse, a bunch of people need to take a loss and lose their jobs, homes, life savings, etc." Great system we have here.
We should go back to feudalism
its almost like capitalism is destined to fail
I understand the cold hard facts presented in this video. But in reality, the only ones who genuinely suffer from these 'necessary pains' are the ones who are doing all of the work.
Real humans suffer during these recessions; people get mentally unwell, physically unwell, lose their homes, jobs, friends, family. Since the economy is not a real living thing, it doesn't have to deal with the fallout of going through these so-called necessary evils. Who cares if the economy comes back stronger if you now have PTSD from being evicted, anxiety from years of financial struggles or health problems from routinely skipping meals or eating poor quality food whilst the economy was bad? All the while the Owning class mostly breeze through recessions having masses of resources to keep them comfortable.
A recession would be a little easier to bare if we had faith that we too could bounce back afterwards, obtaining the things we were working so hard to achieve before we had it ripped away... but for Millennials and Gen Z it would seem that life just gets harder and harder between each recession. Prices go up, don't come back down and our jobs don't increase salaries to match it. So we just earn less and less each year, all the while being told such price hikes are 'necessary' by people who have likely never had to skip a meal in their lives.
I think we as a society need to take a really deep look at what is truly important, because if we continue sacrificing the less fortunate just to please The Economy, we are no better than our ancestors who sacrificed one another on an alter to a made up God just to ensure a harvest.
Most economists have the luxury of never being the ones sacrificed at the altar of The Economy, so I guess the attitude makes sense.
@@rafaelmarkos4489 I honestly don't judge those more fortunate than myself for not understanding a situation they've never been in. Unfortunately, I think some modern societies lack the ability to feel and show empathy. You needn't have given birth to appreciate that a person who just birthed a whole new human will likely need time to recuperate and relax etc. In the same way, I like to think that a little empathy might go a long way in helping to fix this strange mindset that 'The Economy' is somehow more important than actual living human beings...
@@who41683 Mostly because by the time Christianity rolled around, we had other means of ensuring harvests... there was a time before that in 'the west' as you describe it.
@@who41683 First, that's definitely not true, you do not want to know what your enlightened European ancestors used to get up to before the Christians got around to existing (and even quite a bit after depending on where they were from), and second, even if it was, what has it got to do with her point?
I agree
Ideally, the purpose of the democratic state in a market economy should be to balance the accumulative tendencies of the market with redistribution.
The Financial crisis should have led to more money being redistributed to the lower classes through increased taxation of those who've benefited most and consequently investment into the rest of the population.
Housing prices will never go down. This is part of the plan.
plan by the rich to keep the people poor and homeless, aka trickle up economics
Indeed
"You will own nothing and be happy"
That was said back in 2007/2008 - housing priced will only go up. We know what happened next.
I think their may be corrections, maybe even severe corrections, but it's a pretty safe bet that houses will be worth a lot more in real terms 40 years from now, even compared with how unafordable they are today. I could see 100 year intergenerational mortgages happening.
On thing that I believe was missed is the growing gap between executive salaries and front workers. It seems to be easier for corporations to lay off workers and over exploit the ones that stay than to reduce the bonuses and salaries of those on top
I've spent the last 3ish years waiting for the massive correction that was due anyway before COVID. And like others have mentioned, we're in some messed up timeline where everyone found themselves richer, more stably employed, and less fiscally responsible. Absolutely nuts.
Agreed. What is logic.
More and more people think a recession, even a depression should happen, will happen in the future, and the more we keep putting it off, the worse it will be. I agree with this for sure.
Here we go our gen(Z) might be broke for awhile but its conditioning us.
Um, how about no. Recessions are always (almost always) the result of policy errors. There is no need for a deep recession.
Shame that all that theory rarely translates cleanly into reality. Companies with disproportionate market power survive too. Some companies also gain disproportionate market power as a result. The housing market is inflated to obscene levels, but investors will do their level best to keep them inflated despite the downward pressure they put on consumer demand. Among other issues
You make a great point. I think EE's thesis falls apart once you realize that businesses are not a meritocracy (what is). Businesses survive because they are well connected, "too big too fail", and/or very lucky. During a downturn, investors will try to make safer investments but does that necessarily translate to better? I am not convinced.
I've been doing my own value investing for around ten years now - completely agree with this video. The distortions of the current government approaches are deeply worrying (The percentage of zombie companies in the S&P is very high, possibly the highest it's ever been, some of the highest long term valuation measures of all time matched only by 1929 and 1999, etc), to say nothing of how straight up everything is a bubble (Equities, housing, you name it). I think when this all finally goes sideways, it's going to be a big one; but, I do think - and hope - that things will eventually be better in the aftermath, as well.
How better did things become after the latest bubble?
@John Dew Bruh how're you too young? I was born in 2000 and remember being poor. Not being able to buy anything, having to give up my savings so that my brothers and sisters could eat.
@John Dew . 2008 was the closest thing we had to the crash in 1929 which set the country back a couple decades until WWII got us back on track. Millions of people lost their home and even more were left unemployed in 2008. For those affected it was pretty bad. For anyone who had a portfolio with stocks it was also pretty bad as the market got cut in half. Who knows how many millions of Americans had to postpone retirement for many years as a result of the 2008 crash.
@@morfreeda Well, I wouldn’t say they got better after the housing bubble burst, mostly cuz all the same problems have been perpetuated through to this day.
But, if this bubble bursts and housing actually gets attainable for the average person again, that would certainly be a positive outcome.
@@Midas526 do you think housing is the solution? Though I agree owning a house has its perks many people brush off the pros of apartments. Affordable housing. Efficient land development, prosperous communities due to dense living. Then again owning a home is nice.
I recently lost all of my reserves due to changing life circumstances, thankfully they mostly went to improving my life long term. This has put me in a unique position where I now have a good amount of stability and a decent room to start saving and investing long term over the coming years as many others struggle. This comes after having a had a very rough life before some shorter upsides so while I sympathize with everyone else right now I am hellbent on enjoying this opportunity.
So long as you don't use it to look down on other people like these wannabe entrepreneurs on Facebook saying "its the market" as an excuse to keep prices the same
Eh saving is pointless.
If you die tomorrow saving us worthless
Live in the moment .
Woah, I've always thought that the Australian automotive industry went under largely because of structural problems like too many manufacturers in a small market unable to achieve economy of scale, and a lack of vision that kept the industry pumping out fuel-guzzling large sedans when there is no longer a market for them. Now it turns out that it was just workers taking too many sickies. I have been enlightened.
You've pretty much summarised my thoughts on that subject. I wouldn't think that a few workers taking sickies to extend long weekends is a peculiarity of the motor industry or of Australia in general but other industries survive it nonetheless. Indeed, Australian car manufacturers were by & large held up as models of efficiency for low volume output by their foreign overlords. Other Australian industries that largely didn't survive include whitegoods and other household appliances, textiles & footwear and other mass produced consumer goods I can't think of at present, and all for the same reasons that the motor industry disappeared (apart from the bit that you point out where the latter persisted with products that people no longer wanted to buy).
The entire boom and bust model is pretty bad for the future. It inherently requires that we go through a period of suffering every few years, just to increase efficiency. I say there are ways to do that which don’t also trigger unemployment spikes and drops in standard of living.
Boom and bust isn't efficient for people and capital, it's efficient for corporate wealth. We must move beyond our current neoliberal economic system to escape the boom and bust cycles.
@@Dedjkeorrn42 exactly. The government always bail out corporations, but not regular people.
I don't think there are. The more governments intervene to prop up businesses and markets the bigger the problem they are building up for us all when the inevitable does happen.
Boom and bust is only there because of exorbitant housing prices. Housing crisis is the source of all crises.
@@Dedjkeorrn42 a point made in the video is that the fundamental cause of the boom and bust cycle is human nature.
An even bigger point is that recessions are quite literally needed and excessive policies to assuage them come with often worse consequences.
I mean, we've *had* countries shunned the so called neo liberal economic system and implemented extensive controls on the economy. Turns out if you don't let the market work as it should, there's a big crash at the end.
I really wish people understand that you quite literally cannot escape the market (or neo liberal economics as you put it). It can't be legislated away. Policy that tries to obstruct it will incur penalties elsewhere.
As for efficiency, that's quite literally progress. Progress is simply finding more efficient ways to do things, more efficient systems etc. It benefits every one.
Can you imagine how un-Australian you have to be to sit there and say with a straight face "taking a sick day for a slightly longer weekend is a bad thing"
I'm a Blue-Collar worker mate and I can tell you we've earned those extra days off. When you're working in a factory in winter, sweating in your hi-vis all so your boss can say "this line went up", you take advantage of everything you can get.
It's not "laziness in the workforce". It's a genuine need to rest the body and mind.
Economics Explained: (well done). I'm sure you know how we all appreciate your work, and how well respected you've become. But this 'how to fix it' category of videos is even more valuable than 'how it works'. Thank you for your work.
Could you please make videos on the history of how recessions make a better economy through real examples? I think it would be better if you could use examples that are not that famous so that we can have new insights.
I think that panic of 1907 the excessive railroad and such industries suffered greatly and weeded out a ton of investment schemes
I can only think of ex soviet union countries declining for 7 to 8 years then a boom period for nearly a decade until 2008 recession
Most relevant question out there. This is where reality diverges from theory, and unfortunately with EE he all too often remains stubbornly glued to his theory.
@@ShubhamMishrabro it's kinda weird that socialism has been gone for 30 years yet Eastern Europeans seem to still blame it for all their problems. At what point do they say wow we've had capitalism for decades and we're still vastly behind Western Europe.
seemingly always left out of economic theories: finite planetary resources, degradation of the environment, cost of waste, increasing wealth inequality
The problem with economics as theorized by most economists is that they accept extremely exploitative preconditions that become self-enforcing. And let's not forget that despite the fact living standards have improved globally under the global capitalist framework that the price of this may very well include rendering large swaths of our planet uninhabitable.
Capitalism per se has nothing to do with environmental damage.
Humans have been doing damage to environments long before the term capitalism was uttered.
The Soviet Union gave zero fucks about the environment. Did Mao care as he had sparrows killed by peasants? No.
The only reason capitalism is brought up in this conversation is because of its relative success. The reality is humanities effect on the environment is the normal state of things, whereas the ecological thinking of the last few decades (primarily from capitalist countries) is actually an aberration.
It's good we are getting to grips with it, but this idea that capitalism caused the issued is silly.
Love your content, but this piece was much more partial in that it seems to almost admire the ability of large corporations like Amazon to squash out competition, and applaud the "need" to flush out workers. Also attributing the closure of the Australian automotive industry to some sick days around public holidays is a pretty weak argument at best (you usually provide some good lines of evidence for your arguments, but to make this argument I think you need a few more points of substance). Competition in the market is important, but it doesn't mean that competition needs to be a zero sum game. Massive corporations don't need to completely squash out small operators to have a functioning market. When I moved to WA from the east coast I was shocked to see Woolworths and Coles couldn't operate after 5 pm on the weekends, but then found out this gives an opportunity for independent groceries to compete with the big two players in this space.
I wish this was #1 on Trending....lots of people need to see this! Another great video, thank you.
As an engineering student (Far far from an economist) I really do enjoy these videos that give me a glimpse into how economics works. The basic understanding these provide is something that I feel is what everyone should have! :)
More interesting than engineering explained 🤣🤣
I'm a government accountant, can practically feel the recession coming on. It's like how some people can stand outside and can tell you it's going to rain soon while it's still clear out. All I can do at this point is brace for impact and hope my 401k doesn't tank in the process
It doesn’t matter if it tanks. Just ride it out and wait for it to eventually go up again. The economy recovered after the crash of 1929 and it recovered after 2008. Those who held on to their 401ks in 2008 were fine, it was only those who cashed out who suffered and lost money. Unless you’re close to retiring, that is.
@@praetorian389 Question is whether the vehicle will be just scratched and everything will be fine after tires are replaced, or whether we will have to get a new one. And I think that the west will have to replace significant portions of our economic vehicle as it is squeaky and there are huge holes in the gas tanks. You know, we are losing money to various strange countries for oil and natural gas.
Without mechanisms to break up financial enterprises of a relatively large scale, "burning the brush to reduce the impact of major forest fires" ends up feeding the poor to the rich.
The fix is not to rob the poor through inflation, taxation, or recession; rather to eliminate holding companies and subsidiaries, as well as promote single-industry-only businesses.
Remember when the US had the courage to break up Bell
@@padraigmarley2844 The promoted capitalism that followed reshaped telecommunications as Americans know it. Imagine how much more fertile the business landscape would be if, for example, Amazon were limited to consolidating the product listings of other stores(arguably their primary industry), and had to rely on external companies for manufacturing, logistics, and web hosting. Internalizing a private economy within a company potentially undermines public economy and the effectiveness of regulation, leading to overcompensation and overcomplication.
These cycles only hit the common worker who depends on wages. To be on the safe side, just have an appreciating asset, stable portfolio or a business that produces things that people need.
Homeowners in 2008: lol no
"just have an appreciating asset, stable portfolio or a business"
You say that like it's easy...most people are barely making ends meet these days.
I hope you all understand that when the federal reserve lowers interest rates, commodities, stocks, and real estate increase in price. The ones who benefit are the holders of those things. Thank the federal reserve for increasing income inequality and creating this bubble.
This video has a big "some of you may die, but that's a sacrifice I'm willing to make" vibes
😂. Yeah that's all definitely true. I remember as I went from a very lean economy where I had to battle to get any sort of job and that work ethic was rewarded and then went into different labor markets where working to hard made others look bad or other types of toxic labor markets where production was often not the goal. Often they actually lock out productivity and can even creep up to a business level where completing or providing quality work was undesired.
The UK housing market has become more unafforadbile.
Hungarian housing market also did the same...
That pain analogy at the end of the video is pure genious. Kudos to the said teacher.
Love this economics channel, I just get the feeling we are going to be in need of some further new economics theory now that we are faced with some incredible modern challenges. The rise of AI and robotics on the supply of workers for one. The destruction of the natural environment and the lack of recycling for another. Then there is the lack affordability of housing. It seems to me that if you apply only the survival of the fittest, supply and demand, and other Keynes rules to these modern problems we are all going to be either at war or living in some ghastly society that nobody wants. If we are smart enough to invent incredible new technology, we had better get smart enough to add some new economics principles too.
technology has been steadily improving for the last 2.5 million years after people started using stone tools. invention of new technology is nothing new.
Well said
@@DrSchor technology hasn't been improving linearly it's been improving at an accelerating rate and will continue to do so. People have a built-in biological limit how quickly they can adapt to change and does that change happens more quickly it overwhelms the innate biological capacity of humans.
@@hidesbehindpseudonym1920 hello hides. I did not know that people have a built in biological limit. fascinating stuff. what is an example of the overwhelmed human capacity? thanks for teaching.
Very true, for every 10 jobs destroyed by automation/AI only 2-3 jobs are being created. We're eventually going to get to a point where there are not enough jobs for everyone and, as a society, we need to start planning for that eventuality.
Great content! Would be interested to see how you think the scales for and against an economic recession would tip when you layer on growing market concentration, how larger firms weather a downturn differently from smaller independent businesses, and how that might affect the cycle.
It is only necessary because we care about corporations more than people. If we had sane priorities the only people in pain would be the people who caused this mess by demanding higher and higher profits without justification.
Yes, EE missed that hole on their point.
Good point, but how do we get rid of the ones who hire and fire?
Besides, the point of this video is that there are cyclic patterns in economy, and if you try to stop a cycle, it may destabilise the whole economy.
Your words are nice, but you fail to back them up with feasability
@@ZetaFuzzMachine in my opinion the government needs to take a more active role in moderating the profit motive, in general. I don't think we should "get rid of" anyone btw. I am definitely not qualified to solve the problem of cyclical crises in the neoliberal economy but I think regular people definitely shouldn't take the brunt of the austerity measures. I think redistributive measures need to be taken after periods where the profit motive was out of control for too long.
@@franklyqueso the point is, people are moved by the profit motive as well. You go to work because they pay you, and the more they pay the more willing you are to do a job. It's just plain wrong believing corporations are any different. You can't really moderate the corporation profit motive without telling people they should abandon or lower their salary exectations.
At the end, it's two sides of the same coin, companies are not evil behemot, they're just people that produce stuff for other people to consume. Consumers are the one that ultimately will always pay austerity measures, which is the reason why they are so unpopular.
@@lagoduria6415 I think the set up you just described is unethical but I agree it is the way we have chosen to do things lol. It is more profitable to always pass costs down to consumers and to always do the bare minimum while spending the least. It doesn't really work for the vast majority of people.
Yes reminder of the difficult times of the 90s in Australia thanks to the Keating govt of the time. The US went through very high inflation in the 70s and Paul Volkers made tough decisions.
Those "difficult times" seems like heaven compared to what is presently being experienced and what lies ahead. It's amazing how people won't stop moaning about high interest rates when the alternative is so much worse.
This was the topic of my lecture today.
FED GOVERNMENT... the recession we need to have.... The Fed Gov needs to be restructured too, like businesses/economies, long overdue. Could be an interesting topic for this Channel. Gov bloat slows the economy immensely.
Ideally we try to increase productivity while also giving a decent floor to everyone so during these poor times people don't go hungry and still have a place to live. We should have the government try its best to redirect productivity into basic necessities like hosuing and health care, right now a lot of it just goes into generic business which doesn't help the everyday consumer.
The government won’t fix anything. What we need is for the government to keep their hands out and let the market find its own equilibrium.
@@rangvald4036 no, the market optimizes for profit and that doesn't necessarily align with the what society needs. The people of a country are it's government when the government is set up correctly. They can make decisions as a collective.
@@jasonlaboy funny
@@jasonlaboy standing in a political standpoint you’re not wrong - but viewing economics with politics in mind means that you’re entering the real world - compromises, voters, enterprises - my point is, economy on its own should be a natural selection: people who lack understanding or action have to go, good or bad; it’s a matter of removing a member of the society that contributes negatively in terms of economy with only two tools: time and money. The reality is this process is never “natural” cuz human intervention is almost always biased. Counting on politicians while not being one is simply a pov of pushing that responsibility of naturally eliminating the problem to the government completely -> do you see the problem on both sides now?
@@rangvald4036 Oh, yeah, the infamous Market's invisible Hand... Do you still believe in fairy tales ?
"In the same way that recession get's rid of underperforming businesses, they are also effective at getting rid of underperforming workers."
I'm not sure if 'effective' is the right word. The people who get fired first when a company is in stormy waters are rarely if ever the people who's underperformance caused the companies predicament. Layoffs are selected on social standing and hierarchical power. Work performance is but a small part of social standing. Company politics is social studies, not economics.
As always, profits have a tendency to decline so the private sector uses their connection to government to keep their speculative value afloat. Which in turn creates a bubble that can only be resolved through austerity. The owners cash out and the working class get to carry the burden of an economic model completely comfortable with their immeseration.
The beauties of capitalism workers getting screwed one recession after another.
This is a pretty good explanation of basic economic theory and the role that recessions play. We only run into problems when it comes to how countries handle recessions that invertedly make recessions worse, the most notable example I can name is the theory of trickle-down economics which end up creating massive wealth inequality.
I'm not really in phase with the statment "try to find something in your environment that is built by the governement and not by the private sector, it would be challenging". It is absolutely not, atleast in Europe. Streets, hospitals, roads, firestations and so much more are constructed by the gov
Unfortunately instead of countercyclical policy we've seen procyclical policy. Large tax cuts in 2017 when the US had a solid economic boom going on were particularly poorly timed. Also during and after the pandemic it can be said that the government splurging out money in the way it did was too aggressive. Similar pro-cyclical policies have been seen in several other countries as well. The next downturn will be exacerbated by lazy and unprincipled policymaking.
Problem was that Trump enacted policy for approval/electability. It didn’t have much to do with economic planning. The largest QE jump was at the start of CoVID, at the end of Trump
Me who can't afford a house even though I have a good job waiting for the economic recession and real estate market crash 🥺
We could just build housing for all those in need but that'd hurt profits, so even those like you with a decent job have to suffer.
I really liked to see a video talking about the good and important side of recessions, and it was really interesting the filter on employee quality. really good video
"Global economic activity tends to increase over time despite temporary setbacks."
Yes. And those setbacks kill people, let alone poverty and evictions.
People will die in recessions no matter what. Now, which would you prefer? A 2008 style recession where houses are hard to afford? Or a 1930’s style inflation where you can’t buy food?
@@malamutehunter I reject the premise that these results of recessions are inevitable. I'd prefer food and housing were guaranteed.
“Of course no one saves for anything anymore, we just get a loan!” 😂
Glad you're uploading again, I was worried something had happened to one of my favorite channels!!
So basically the world is at the mercy of a few rich companies and the government is their girlfriend who does what she’s told
💯💯💯💯
I mean, in a way, it's always been like this. The ability to create economic wealth is the true power.
I'm far more worried about governments controlling corporations than the other way around right now.
@@MartinMartinm The working class creates all wealth on Earth we deserve what we created!
@@biodiversityfanatic2454 yes, and this starts by going against corporate interests for nationhood.
Unfortunately, too many are using outdated standards to judge current economic trends. We are a new economy that moves entirely too fast to really see a trend( 5, 10 year cycles).
Trends are now weekly
I appreciate that you called out many of the issues with government fiscal policy, investor recklessness, and workforce supply. It all plays a part.
On a platform riddled with fluff, hidden among cat videos, reactors and overbearing shouty youths, lie little gems like this. Important, informative, balanced and real. Thank you for making economics accessible.
Nice! I wonder what happened then with the financial sector in 2008 where huge salaries and uncontrolled greed drove us to recession? Did CEOs salaries decrease then? Are they low now? Are these rules only for workers?
What about companies that only reinvest 10-20% of their profits into themselves, and the rest is given to shareholders or owners in case of private company. What effects would it have if they actually reinvest more, increasing the salaries of employes, expanding more and speeding up technological development cycles?
Left out that companies this way can employ sometimes tens of thousands of people on what is minimal expenses for them. And if the goverments don’t let them have their way, it is enough for them to mention layoffs.
The companies would immediately realize that they can earn more money by not doing this and go back
I would like to know the numbers on how that money that currently goes to shareholders/owners is distributed. Then the question becomes does the rich holding money out of circulation by leaving it in investments or tied up in real estate or in big ticket items like yachts etc help or hurt the economy.
@@patrickhenry1249 They will start giving their investors empty jobs title and wages to replace their dividends. Forcing companies reinvest a certain amount of profits never works, too many loopholes.
There are definitely times when it makes sense for a successful company to share some of its profits with shareholders, so long as it's in the form of a tangible and taxable dividend.
But stock buybacks are basically a reagonomic tax loophole for shareholders. Buybacks also intuitively feel less "stable" than dividends IMO. It's much more sensible to value stock price based on an underlying dividend than to rely on a vague hypothetical notion that the company *might* perform a large buyback at some point in the near future.
That's an even worse idea because the shareholders are the people who think quarter to quarter
Very cool system we have where poor people have to suffer every few years so that rich people can make a lot of money during good times that poor people have no real benefit from.
literally
Capitalism is failing!
@@biodiversityfanatic2454 Actually this is working as intended. "Market cycles" are just part of capitalism's designs
@@ashvio yes 100% it's inherently unstable and with every crash the billionaire oligarchs rob the working class more and more. Downturns and imperialism (another dynamic of capitalism) lead to both world wars. I wonder if it'll be different this time my bets on no it won't!
@@ashvio Then Capitalism as a whole is an awful system
I happened to search Economics stuff for my son. Finally landed up with impressive think tank of Economics. No words to appreciate impressive stuff on Economics.
Worse, the government bureaucracy that needs recession correction the most is immune from all this.
The government exists to serve capital! They exist to do what's best for profits and Wall Street!
I've been feeling this for a while. The COVID-19 recession was so dramatic and so quick, the response so swift, that the cool down and restructuring that comes with a typical recession seemed to be lost.
Because the vast majority of the developed countries dont have a large population of workers to replace their Boomer class thats hitting retirement