“Recessions and recoveries are part of any free-market economy. They cannot be avoided when individuals get to make their own decisions.
JPMorgan put together a chart using information from the National Bureau of Economic Research to show how the economy has grown following every recession back to 1948.
They all look basically the same. The GDP drops and then it recovers. The deeper the drop, typically, the stronger the recovery.
And now comes the great recession of 2008, one of the deepest and most painful of all time, and you would expect the recovery to be one of the strongest.
But our friends in Washington DC decided that we couldn’t tolerate another recession, so they created all kinds of regulations and now we have a recovery that looks like this.
Kind of flaccid, isn’t it?
Now to be honest and balanced, it’s not all about the regulations.
The labor force is shrinking. Baby boomers entering retirement are a portion of the decline, but an equally important segment isn’t explained by economic or demographic challenges.
Gee, I wonder why they’re choosing not to work?
The other component of productivity, capital investment, remains below pre-recession lows. Can you blame a company for not wanting to build factories in America where they’ll pay 40% taxes, the highest corporate tax rate in the developed world?
There’s always a bright side.
With such anemic growth, we shouldn’t get an economic bubble anytime soon!
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