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While reading this post last night about the bond market, I couldn’t help but notice the graphic linked halfway down. It’s a graph mapping the correlation between recessions and some other economic stuff. What caught my eye though is that according to the chart, every single recession in the last half a century has occurred under a Republican.
One Response to “Republicans and Recessions”
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Republicans love recessions.
Wall St insiders sell stocks short and, thus, make a killing while everyone else is ‘dying’ or, at least, losing their shirts.
Secondly, Unemployment always goes up in a recession. At the end of a longer recession, companies have the luxury of hiring from a larger labor pool at lower wages and/or salaries. Some companies –citing hard times –may reduce benefits, cut vacation or sick time.
Stocks –devalued during recessions –are picked up by ‘insiders’ (99 percent of whom are GOP). They hold the stocks until they can sell out on the brink of –guess what! –another recession.
Don’t expect recessions to bring down prices. More often, higher prices are the light that is seen at the end of the long, dark tunnel. In other words, those businesses fortunate enough to survive a ‘downturn’ are in the enviable position of raising prices on the other side.
Recessions militate against a market of this sort, weeding out all but ‘privileged’ businesses, primarily those with juicy government contracts or GOP cronies in office. Only in the textbook model, is it assumed that the oligopolist’s market demand curve becomes less elastic at prices below a certain point. In markets characterized by the continuing decline in the number of ’sellers’, it is obvious that there are fewer motivations for oligopolists to reduce prices.
But cheer up!
“Are there no workhouses? Are there no prisons…then let them die and decrease the surplus population.”
—Scrooge