The last recession became a situation in which my career was all but wiped out, I wasted from place to place, and other descriptions I am pleased to gloss over today but are nonetheless noted in the prior blog posts. Credible ruminations by a retired banker about another potential crisis of the kind the produced the last recession draws some curious interest.
In other articles and books I’ve read is the idea of an economic cycle. Boom and bust cycles. The concept that in current times, there is a track record going back decades of an imprecise trend in which these cycles seem to be nearly decadal makes you wonder. One of my college professors years ago made brief, off-topic comments to the same and there have been others who have reiterated similar stances to me in informal conversation.
I am not entirely convinced, but it does appear there is a cycle. Is it skipped at times. Sure. However, we appear to be in times in which such cycles may be more likely to occur than not. Part of it may be the side-effect of living in a more complicated society. More technology, laws, social conventions, accumulation of cultural nuances, global interdependence, and the need to reconcile the interests of parties with different agendas that don’t always align. Who knows? Anyway, all of that may be a necessary prerequisite for the entire civilization to advance. In the meantime, those recessionary cycles, what about them?
Perhaps they do occur on time. Perhaps they can be delayed or reduced in their impact. Is a subprime mortgage crisis due? Are we on course to forget the lessons of the past and repeat the same errors and follow the same paths again? If nothing else, despite comforting answers to those questions, at least the everyday person with some memory can try to learn from these cycles to be better prepared for the next occurrence.
See William Poole’s exploration of potential recessionary factors in his article: Are we heading toward another subprime mortgage crisis?