{"id":66838,"date":"2024-02-15T07:17:55","date_gmt":"2024-02-15T12:17:55","guid":{"rendered":"https:\/\/olduvai.ca\/?p=66838"},"modified":"2024-02-15T07:17:55","modified_gmt":"2024-02-15T12:17:55","slug":"irony-alert-outlawing-recession-has-made-a-monster-recession-inevitable","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=66838","title":{"rendered":"Irony Alert: “Outlawing” Recession Has Made a Monster Recession Inevitable"},"content":{"rendered":"

Irony Alert: “Outlawing” Recession Has Made a Monster Recession Inevitable<\/a><\/h3>\n

Those who came of age after 1982 have never experienced a real recession, and so they’re unprepared for anything other than guarantees of rescue and permanent expansion.<\/i><\/p>\n

The mainstream view is that recession is caused by economic-financial factors. The mainstream view is wrong, for recession is ultimately caused by Wetware1.0–human nature.<\/b>\u00a0Human nature–our innate attraction to windfalls and something-for-nothing, our ability to habituate to extremes and normalize counterproductive dynamics–manifest as economic-financial factors, but these are effects, not causes.<\/p>\n

The mainstream view is that\u00a0recessions are bad, so let’s make sure they never happen.<\/i><\/b>\u00a0In other words, let’s outlaw them by flooding the economy and financial system with Federal Reserve monetary stimulus and federal stimulus via increased deficit spending.<\/p>\n

The history of the past 40 years “proves” these policies effectively eliminate recession:<\/b>\u00a0all recessions since 1981-82 have been shallow and brief, basically a spot of bother that lasts one quarter.<\/p>\n

Our Wetware1.0 has responded to this “no recession guarantee” in ways that count as\u00a0unintended consequences<\/i>.<\/b>\u00a0Massive “emergency” stimulus that became permanent policy has created a bubble economy in which low interest rates and unlimited credit for those who are\u00a0more equal than others<\/i>\u00a0has sparked demand for income-producing assets, which then sparked a speculative mania.<\/p>\n

We’ve habituated to both the bubble economy and the speculative mania so that these are now considered normal.<\/b>\u00a0But behind the comfortable normalization, something counterproductive has taken hold:\u00a0we’re now addicted to the bubble economy and its crazed twin, speculative mania.<\/b>\u00a0If the bubbles pop and speculators go broke, the economy and financial system will both implode.<\/p>\n

Without ZIRP (zero-interest rate policy), capital actually has a cost, and the bubble economy cannot survive if capital has a cost. Once capital has a cost, then speculation becomes risky, and speculation cannot survive if risk actually has a cost.<\/p>\n

\u2026click on the above link to read the rest\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Irony Alert: “Outlawing” Recession Has Made a Monster Recession Inevitable Those who came of age after 1982 have never experienced a real recession, and so they’re unprepared for anything other than guarantees of rescue and permanent expansion. The mainstream view is that recession is caused by economic-financial factors. The mainstream view is wrong, for recession […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1806,24078,2500,431,534,587,1264,3067],"class_list":["post-66838","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bubble","tag-charles-hugh-smith-2","tag-history","tag-interest-rates","tag-monetary-policy","tag-of-two-minds","tag-recession","tag-unintended-consequences"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/66838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=66838"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/66838\/revisions"}],"predecessor-version":[{"id":66839,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/66838\/revisions\/66839"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=66838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=66838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=66838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}