Actually there is the possibility of a recession in 2019 also, and 2021, and pretty much every year. But CNBC wants to give us all something to talk about over Thanksgiving and after the recent significant dip in the stock market. Is doom on the horizon? Yes, and with the Fed manipulating things it always is.
The Fed, in the wake of the 2008 Crash kept rates hyper-low and printed money in an effort that they thought would “save” the economy. What the Fed should have done was let the economy correct, let prices find their level in the markets, let Goldman Sachs and GM die, and generally let the economy do what it needs to do. That is, clear the dead wood in the fire of recession.
The problem was that many very powerful and connected people were responsible for that economic “dead wood” and called in favors to get the Fed (and by extension us) to bail them out. As such these connected cronies got away with poor planning and bad management. They went running to the government to save their asses and in turn the entire capitalist/free marketish system was undermined. There is no capitalism without risk and bankruptcy. But the guys on Wall Street didn’t care. Their fortunes and perhaps even more importantly their reputations as titans of finance might evaporate. No, the government would save them.
We at The Sorrentino will never forget the Crash. Let’s just say that we saw it up close and very personal. We’ll never forget that the big shots got off and screwed everything up for a generation (at least) and laid the foundation for deeply misinformed people like Ms. Ocasio Cortez (for instance) to push “socialism.” These statist economic authoritarians figure that if the big banks got bailed out, why not everyone? There is no price mechanism. Just get the government in there to “solve” everything. Supply and demand? Huh? What’s that?
The thing is the Fed didn’t “solve” a gosh darned thing. It not only kicked the can down the road, and it made the can much larger. There is no free lunch. The Fed’s post-Crash actions will have consequences. For every action there is an equal and opposite reaction.
But guess what? When the inevitable recession comes the “socialist” busybodies who lack any understanding of basic economics are going to cry about the “failure of capitalism” when, like 2008, the failure was actually caused by the central planners.
Everything points to a slowdown but the economy was pretty strong, so it’s going to be slowing from what? I think it’s going to be about 3.2 percent this year if we get 3 percent in the fourth quarter,” said Chris Rupkey, chief financial economist at MUFG Union Bank.
One final note. When you read an article that says “economists say” or “economists think” remember that economists can’t agree on practically anything half the time. “Economists” of all people do not speak with one voice. This is a very important point to remember when considering the direction of the economy. It really is a question of which economists think what.