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A recession is not an economic fact that magically happens when some predetermined values for some set of indicators are reached. A recession will happen when

A recession is not an economic fact that magically happens when some predetermined values for some set of indicators are reached. A recession will happen when there is a mix of two things: 1) a big financial/economic issue that affects an important sector of the economy (crisis), 2) widespread panic. There are already multiple candidates for 1), but what hasn't happened is 2). Why? That's anybody's guess. My guess is Trump. For people to panic, there needs to be sustained media coverage and focus. But now whatever Trump says is more important than anything else for the media. If you look at the media since Trump became president, the most important issues have been all stuff related to his government, and whenever the media has focused on anything for too long, he's come out with some other thing that the media shifts their attention to. So we've had lots of small panics, which by now have mostly desensitized the public. If someone like Trump can continuously interrupt the media, they effectively control it through disruption, and then the media cannot focus for long enough on anything for people to fully panic and cause a full blown recession.

onetimeposter1 7y ago
2008 and the ensuing recession happened because of an actual event (Lehman) and a credit crisis. I'd say those are 1 in your model. We haven't had anything of that magnitude yet, so I disagree that in today's economy condition 1 is satisfied. That said, panic is a real component of crises and Trump's ability to shift focus could actually be a real asset, though it will be many years before historians and economists recognize it.
- ta1234567890 7y ago
  > 2008 and the ensuing recession happened because of an actual event (Lehman) and a credit crisis. I'd say those are 1 in your model. Yes, and also 2. Without panick and a lot of intensive short selling, Lehman wouldn't have happened.
- Seanzie 7y ago
  But consider Hyman Minsky’s theory that in capitalist economies stability engenders instability. It could be true, that good times plant the seeds of bad times, similar to the way that forests that go many years without fires, build up tinder.

onetimeposter1 7y ago

2008 and the ensuing recession happened because of an actual event (Lehman) and a credit crisis. I'd say those are 1 in your model. We haven't had anything of that magnitude yet, so I disagree that in today's economy condition 1 is satisfied. That said, panic is a real component of crises and Trump's ability to shift focus could actually be a real asset, though it will be many years before historians and economists recognize it.

ta1234567890 7y ago
> 2008 and the ensuing recession happened because of an actual event (Lehman) and a credit crisis. I'd say those are 1 in your model. Yes, and also 2. Without panick and a lot of intensive short selling, Lehman wouldn't have happened.
Seanzie 7y ago
But consider Hyman Minsky’s theory that in capitalist economies stability engenders instability. It could be true, that good times plant the seeds of bad times, similar to the way that forests that go many years without fires, build up tinder.