Why Did The Great Recession Happen?

Why Did The Great Recession Happen?

If you’ve ever looked at the suggested reading list on my web site, you know that I read some stuff that’s not related to business and certainly not to our industry.  Not directly that is.  But I think it helps me understand the environment we operate in and perhaps get a perspective I wouldn’t otherwise get.

William R. White is an economist who was recently awarded the apparently very prestigious Adam Smith prize.  He presented a lecture when he accepted the prize called, “Ultra Easy Money: Digging the Hole Deeper?”`He talks about the causes of The Great Recession, the policies used to counter it, and some of the significant downside of continuing those policies this long.  It’s thirty pages, clearly written, and has no math or charts.  You can find some books (including on my web site) that deal with the topic, but they are just a bit longer than 30 pages.

This is an academic paper, and Dr. White won’t have you on the edge of your seat gripped by the plot by page four (Spoiler alert- the central banks and politicians did it).  But it’s just thirty pages double spaced with big type, and if you read it, you will learn things you never hear in the mainstream media.   And you certainly didn’t hear them during the elections.  It raises issues every politician must avoid, because if they brought them up, they’d never get elected.

Yet, they are critical issues and tell you about the long term, macroeconomic environment you are going to be doing business in.  Here’s the link.

4 replies
  1. Kel
    Kel says:

    Wow, interesting read. Not sure it’s time for a Cowboy to be calling the shots, the repercussions of which will be felt around the world and potentially trigger a number of chain reactions.

    • jeff
      jeff says:

      Hi Kel,
      Glad you found it interesting. I made it available because I suspect most people don’t understand the impact of debt because nobody in the mainstream is willing to talk about it. The bottom line is that there’s no longer a relatively painless way out of it, but that it’s hard to see solid long term economic growth until we do get out from under it.
      Thanks,
      J.

  2. Andy - RoundPegSearch.com
    Andy - RoundPegSearch.com says:

    Thanks sharing this interesting paper Jeff.

    It’s important to try and educate people about some of the monetary / fiscal ‘rules’ that bankers / analysts etc know but mostly keep to themselves (I suspect because, in the main part, they want to exploit them for personal gain).

    People might also find this footage of Darren Shirlaw interesting – he explains how you can forecast the markets & economy to people attending the annual conference his business puts on.

    Its been documented in a few places that back in 2007 Darren spoke to the Academy of Chief Executives in the UK and explained that the economy globally was about to go to custard for which he got the worst speaker rating they had ever had. However around a year later they begged him to come back because everything he told them happened.

    https://youtu.be/5ApG7aGZe_k

    • jeff
      jeff says:

      Hi Andy,
      I like your approach to recruiting. Round Peg actually has a sense of differentiation from other recruiters on its web site.

      The long term cycles of the stock market aren’t new. Partly, as you say, people keep it to themselves. But more than that, taking advantage of them requires a kind of patience and contrarian approach most people can’t psychologically take. I mean, I know about it and can’t always do it.

      I went and started watching another of Darren’s videos. He really talks in platitudes and generalities. Of course, he’s trying to sell something and doesn’t want to give away the secret sauce so who can blame him. I don’t think there’s any doubt he’s brilliant, but it felt like he was talking down to his audience and it made me vaguely uncomfortable. I think I might listen to a bit more of him and see what I think.

      Thanks for the link.

      J.

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