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For the First Time in History We have Willfully Crashed the Economy…

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For the First Time in History We have Willfully Crashed the Economy…

For the First Time in History We have Willfully Crashed the Economy…
March 23
14:48 2020

The economy has its ups and downs.  Occasionally, it slips into recessions and even depressions.  These economic downturns are never intentional – until now.

The recessions and depressions of the past – and we tend to get them every ten years or so — are usually a sudden crash based on economics.  Oh sure, they are often caused by mismanagement of the economy by utopian politicians who do not understand that economics has rules.  You cannot simply manipulate things to achieve theoretical desires.

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The Novel Coronavirus has resulted in American – and the world – doing something that has never been done before.  We willfully crashed the economy.  Not only the economy but the best and most spectacular economy this nation has ever seen.  Yep!  We shut it down like the last day of a carnival.

Coming out of a very slow recovery from the 2008 recession – and with signs that the sluggish economy was slowing down even further in the last year of the Obama administration – we saw an economy defy history and soar like never before.

It was not just the stock market that was doing great — breaking one record after another.  The good economic news was seen in the historically low unemployment, the edging up of wages for average workers.  Blacks and Hispanics — who have been left off the economic gravy train since the Great Depression — were enjoying record high employment and wage growth.  Expendable income was increasing.  Consumer confidence was at an all-time high.

Our current economic downturn was NOT caused by a congressional-created “bubble” that was doomed to burst – as was the 2008 recession.  It was not the result of a collapse in consumer demand – as was the Great Depression.

This was an intentional shut down of arguably one of the strongest economies in American history – surpassing even the Gilded Age, the Roaring 20s, the Eisenhower years of “peace and prosperity” and the Reaganomics that brought the nation out of the depths of economic stagnation and inflation.

In a very real sense, it was a voluntary shutdown of the entire global economy.  It was led by China, which was the source of the problem – the Coronavirus – AND the Draconian responses.  Just as the virus rolled over the world, so did the extreme political and economic reaction.

In the midst of the Coronavirus crisis, we had another intentional attack on the world economy.  Saudi Arabia slashed oil prices to unprecedented lows – with a good news/bad news result.  Good news, because it was a body blow to the Russian economy – that is almost totally dependent on oil.  Bad news because it undermined American oil production – making it difficult for energy producers to pay off their debts.

One can debate the need and wisdom of literally shutting down the American economy to such a degree, but it is beyond refutation that we did it willingly.  It was not caused by events beyond our control – as were all those other past economic downturns.  They may have been the result of foolishness, but they were not intentional.

This time we purposely popped the economic balloon.  The Coronavirus will fade into history, but how long will it be before we can restore a dynamic economy from which we were all benefiting just a few weeks ago?

So, there ‘tis.

About Author

Larry Horist

Larry Horist

Larry Horist is a conservative activist with an extensive background in economics, public policy and politics. Clients of his consulting firm have included such conservative icons as Steve Forbes and Milton Friedman, as well as the White House. He has testified as an expert witness before legislative bodies, including the U. S. Congress, and lectured at major colleges and universities. An award-winning debater, his insightful and sometimes controversial commentaries appear frequently on the editorial pages of newspapers across the nation. He can be reached at lph@thomasandjoyce.com.

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1 Comment

  1. Yankee Doodle Shamrock
    Yankee Doodle Shamrock March 25, 19:52

    Please keep an eye on Sweden, which has not effected close down procedures. Watch how sick their populations gets. Look at Italy and how it is suffering. The economy is the economy. Lives are lives.

    Reply to this comment

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