After teaching high school economics for 15 years, I can explain what causes a recession. Simple— decreased demand. When consumers buy fewer goods and services, suppliers have to cut back as profits disappear. Businesses lay off workers. Those now jobless have less income, and they buy less. That adds up to many lost restaurant meals, movie tickets, and concert or sporting events not purchased. Those establishments then lay off some staff, and there goes the whole ball game (i.e., the overall economy), so to speak. It’s now a downward spiral. A contraction. A recession.
But why do people initially cut back spending and demand? Fear is a culprit, and that’s fueled by the media. Past recessions have been caused by global events, overproduction, too much debt, or when money gets too expensive (i.e., high-interest rates discourage borrowing and spending). The 2008 crisis was largely in housing. Banks practically threw money at people, and many took on more debt and more house than they could truly afford. It eventually came to a bust.
It need not have been so bad. Even when unemployment hits 9-10%, still 90-91% of people are working. But the media signals through their negative reporting that “Your job may be cut next.” People shudder. They close their wallets.
Today, the fundamentals of the U.S. economy could not be stronger. Companies cannot even find staff to hire with our 50-year record low unemployment rate. Business is booming. Paychecks are fat. The stock market hit highs in February 2020, the likes of which we’ve never seen.
Enter Coronavirus. Here’s the definition from the World Health Organization: “Coronaviruses are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS).” Though not new, the current strain, COVID-19, is novel. It, too, causes flu-like symptoms. While it’s more easily spread, 80% of those, who contract it will have virtually no or very mild symptoms. The young, middle-aged, and healthy have little to fear any more than seasonal flu, which killed 61,000 Americans last season and over 12,000 so far this season. Why no hysteria over that? The elderly and immunocompromised should always be extra vigilant with hygiene with any circulating viruses.
The liberal media barely mentions the above. A cruise ship circling at sea or histrionic words like “Trump-virus” are better visuals and headlines to gain audiences. Calling for large scale shutdowns of the economy is no more warranted than telling people not to drive their cars because there were 38,800 vehicle fatalities in 2019. If we all stayed home last year, there would have been no car crashes, and almost 40,000 more people would be alive. Of course, without cars, our lives, our freedoms, and the entire economy would be so severely disrupted we would scarcely want to live.
If there’s one thing you can take to the bank, it’s the strong correlation between presidential elections and the economy. When an incumbent president has a recession in year 3 or 4 of his term, he’s out (Carter, George H.W. Bush). If the economy is doing well, voters stick with whoever is in office, and party matters not (Reagan, Clinton, George W. Bush, Obama).
Anyone looking at the economic data during the first two months of 2020 would easily conclude a Trump landslide. Even those who say the links between the two variables might have weakened, some would forecast a Trump reelection. What single event would make voters want to change course? Answer— a recession. Now you know why the Democrat candidates and media are secretly rooting for a downturn soon, and by needlessly scaring Americans over a virus strain that is not Ebola but more flu-like, both are hoping to get a Democrat elected in November.
Jeff Szymanski works in political communication for AMAC, a senior benefits organization with over 2.1 million members.
If there was ever a President in office who can RESTART this Economy and get it roaring again — it is DONALD J TRUMP. Let us pray like mad for wisdom for this guy and his administration and then get out and bring the RED in November!!!
This article is aging poorly, and it will look even more embarrassing two weeks from now.
Not sure, but think that Trump said maybe recession on 3/16/2020 but sometimes does not know what he says, maybe this is fake news. Wake up people & do what is best for this country * not for one party.
It is not just the media, read about socialism & one of the goals is to control the media. Myself, I like to hear both sides.
Pay attention & see what happens in one more week.
“Adapt, Improvise and Overcome”
Stock Market appears to be having somewhat of a recovery in view of pandemic viral crisis However. Commercial business sector (Dept stores etc) Is at risk as are small. Businesses Thankfully.our POTUS and White House as well as National Health agencies are working diligently TOGETHER! Great leadership and actions?
You ask why there is no hysteria over the flu, but the true answer should be obvious given your interest in economics and thus your familiarity with statistics and forecasting. The flu has a death rate 20x lower than COVID-19, so while the flu may have a history of killing more people in absolute terms, the percentage associated with COVID-19 is much higher. Add to that the projected number of people likely to become infected in such a short amount of time, and you have a legitimate reason to worry. Yes, this works out in the Democrats’ favor for the reasons you articulated. But you have a responsibility to make it clear to your readers that neither Democratic politicians nor the liberal media are primary causes of the the economic downturn. To place the sole blame on them is to promote a conspiracy theory and discredit the advice of public health officials who do not have anything to gain politically from this pandemic.
I pray daily for Good to triumph over EVIL?
Very wise anaylsis. Don’t believe the garbage the media is feeding you! Be wise, use precautions and stay safe!
thank you for some real truth, Sir.
Excellent article. Our mainstream media is an arm of the Democratic party.
The media loves misery. They will never learn how to make lemon aide out of lemons. I would like to see how they write the obituary for their grandmother. Need to be a mental midget to write for most newspapers and be a reporter.
The other part of the equation is the left’s long term goal to erode our basic American values. Move education to the left (teach a ‘version’ of history which leaves out important facts), take over the media (and present their version of the truth) and keep repeating the lie until it becomes the truth. Classic Marx. Not Groucho.
Is it too much of a stretch to suggest that the left wing media has colluded is this uncalled for panic to take down President Trump? Far out, but not that far out. Just saying.
Going on a ship confined to a small space with about 3000 strangers bobbing in water is like a prison for me. Easily getting seasick only adds to the dislike of the experience. Corona virus epidemic highlights the unhealthiness of living in close quarters with people who may carry a disease that can be easily spread. No thanks. I’ld rather be at home with my dog.
BO had a great economy ? Are you kidding me ?? Under 3 percent growth for twelve years . More like inept Republican leadership . I don’t listen to the Free Press but that’s all that’s on the virus , the economy is tanking , it’s the end of the World ! Turn the boob tube OFF and VOTE !!
Praise God. This election will be different no matter what the economy is or what is happening in the world, in this country or in the oval office. Why? Because….We, the American citizens/voters understand the evil of the left and that they will stop at nothing to remove Trump from office. WE will not let this happen….However, if the cowards (the left and the media) would make themselves known…we would be glad to find a way to put them out of their misery. Their evil trick of a deadly virus is killing many innocent people….These evildoers do not deserve to get away with it “Scott Free.”
Just heard interview with authors of book called “Tightrope” on the very liberal MPR (Minn. public radio) station. It was all about oppiod crisis, and how “we” ignore the downtroden folks in this country who got messed up with alcohol or drugs, resulting in more suicides and incarcerations, and that “we” are not helping them with government programs. No mention of the low unemployment and higher wages, that gives everyone more opportunities than ever. One of them even implied that the “Trump era” has been bad for these folks. I hope the government is not still supporting this liberal media outlet in any way. This is a perfect example of the suttle support that the liberal media gives the Democrats, and of course they want everyone to adopt their way of thinking, now that an election is looming.
Political correctness rears its ugly head again, Jim.
Mr Trump is very good at giving the back of his hand to the PC movement.
Good for him!
Let’s use round numbers for this: 60,000+ people died of the flu last year. About 40,000 people died from car accidents too. Tragic but not unexpected. No one gets out of this world alive. Enter the Coronavirus. How many in 2020? We all will eventually die of something. BUT a cruise ship circling off our coast and people in China wearing masks make for more thrilling and chilling visuals for our leftest news media. Fact: there are over 300 cruise ships with about 2,300 passengers each plying the waters of the world at any one time. That’s almost 700,000 people. Statistically, some will fall ill and some of those will die. The same if they were on land. What can we do? If you get sick, stay home and drink plenty of fluids and see a doctor if necessary. Wear a seat belt and drive defensibly if you travel by car. Cruising? Use hand sanitizer and common sense. Don’t let the Chicken Little media scare you into believing the sky is falling. It’s not.
VOTING FOR REPUBLICANS IS THE BEST AND ONLY ANSWER IN THIS ELECTION