pull down to refresh
285 sats \ 1 reply \ @Undisciplined 15 Mar \ on: Will Economic Detox Lead to a Recession? (Wolf Richter) econ
This is very similar to what I've been saying. Any major change to economic policy will likely lead to a correction, because the incentives will have changed and resources will need to be reallocated to reflect that.
A recession is just a correction that takes a long time. That has less to do with the severity of the correction than it does the flexibility of the economy.
Deregulating alongside these changes to tariffs and DOGE should reduce the time it takes to reallocate resources to where they're most urgently needed.
That has less to do with the severity of the correction than it does the flexibility of the economy.
Actually this is a really nice framing. Agility is key and this has been a huge issue in Europe the past few years. More agile national economies are doing pretty well despite inflation, and the sluggish ones are doing awful. From that perspective there's a lot of hope for the US.
Also, it's mostly psychological. We'll tighten our spending when we believe we're in a recession. This may very well be the logic behind the narrative to not watch the stock market too closely and focus on the long term - wouldn't surprise me to be honest and I'd say that's a smart move especially now that people are still listening.
PS: If this projected bear case will happen despite optimism, I do hope it can break the S&P-to-Bitcoin peg though, because that phase was very nice but it's time to move on.
reply