So, I went looking for what historians believe caused recessions and depression in American history.
Even the downturns that coincide with tariff increases are generally attributed to speculation and collapse of a foreign bank or market.
There's no causal relationship between the tariff increases and the downturns.
The 1828 recession that many people are blaming on the US increasing tariffs was happening because the United Kingdom had banned trade with the US. The tariffs were a, "yeah, fuck you too!" measure that didn't really affect the loss of trade. The increases were also set to match the tariffs that England had placed on the trade it had just banned. Oh, and it lasted about a year. Hardly the existential crisis that some people are making out to have been.
The 1820s saw a lot of recessions, actually.
Hmmmmm... The '20's seem to be bad times no matter what two numbers are in front of them.
History might not repeat, but it rhymes.
Also, the Great Depression was shorter and less severe than many in the late 1800's and early 1900's! It lasted 3 years 7 months and the economic downturn was around 25%.
The Panic of 1873 aka The Long Depression lasted 5 years 5 months and the downturn was about 34%. Some historians say it really lasted until 1896. It was caused by (surprise) economic problems in Europe and a domestic bank that was invested in those European problems failing.
Look it up!
I'll bet you'd never even heard of The Long Depression!
That there are many, compelling, arguments to the cause of the Great Depression that contradict each other, you cannot say, with certainty, that any one thing caused it. Written by very highly educated and competent economists.
As with everything affected by the invisible hand, it's the combined circumstances that do it.
It's speculation AND tariffs AND changing the monetary policy AND deflation AND... AND AND AND.
Market is falling? That is a Buy opportunity for the those who can, and are not timid.
ReplyDeleteNobody said you have to sell into the fall, thereby locking in possible loses.
Are there folks who bought lower, captured gains from the higher, and then bought back in as the fall continued, thereby enjoying gain from the market turmoil? Some cash in pocket and you still own the stock.
The thing that makes me suspicious of the whole game is when the daily news tells you what the market did today, without the reference point. Or when splits have occurred.
Jerry
I know that Britain, and Europe, saw a lot of hard times from 1815 to about 1850---hangover from the Napoleonic Wars.
ReplyDeleteThis will be the 5th recession in my adult life. My 401k gets knocked down on average every 5 years. Maybe if I get to retire the money will be there, maybe not. The stock market and economics is all voodoo.
ReplyDeleteJohnKing
I also like how the stock market traders who tell you not to panic.. ARE ALWAYS PANICKING.
ReplyDeleteThe same asshats who say "Buy low, sell high! Don't panic sell, or panic buy" are always doing the opposite of what they preach.
JOhnKing