Recession and Unemployment in the US: Have we learnt anything yet?

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This is not the first time the US experiences an economic recession. The US has experienced at least 47 recessions since the 17th century, although historians doubt the accuracy of the number, as clear economic statistics were not available for 17th or 18th century. There were 11 recessions between 1945 and 2001 and the average duration was 10 months. However, this time the impact is far and wide and it is already 3 years, and no one knows where the light is at the end of the tunnel, or even worst, how long the tunnel is.

Unemployment still holds good at above 9 percent. Joblessness is the monster child of economic recession. Being jobless is like trapped in an ever-struck elevator. You never know what to do next. You desperately want to get out of the elevator and you don’t want to stay where you are. You want both at the same time yet you see no way of escape. 

Surprise Recession?

Most economists agree that the majority of recessions are man-made. Natural calamities and disasters have the capacity to trigger a recession but very few recessions are triggered by nature.  If recessions are man-made why can’t we prevent recession and unemployment? This time the impact of economic recession is severe because China and India are growing, so do Brazil and Russia. These are large countries with huge population and manpower. When such economies grow they consume a large chunk of the same factors that help run western economies. Is this situation totally unexpected and came out of the blue? Absolutely not.

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China liberated its economy in 1978 and India in 1991. The US was very much aware that manufacturing was moving to China as large corporations in the US shifted their manufacturing base to China to take advantage of the low cost of production. This activity was going on for the last 2 decades. Why didn’t the policy makers in this country realize then that one day the entire manufacturing is going to shift to China, and we have to take corrective measures to grow our economy and pull our of a recession? Does that tell us something about the lack of vision of American policy makers? Yes sure. We were caught up with overconfidence and global policemen business and totally ignored how to run our own home,

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Are We to Blame?

Now, are those lousy policy makers to blame for everything? What about average Americans in this country? Are we not to blame for the state of our economy? Financial responsibility; how many of us really put those two words into practice? Those who are financially responsible find it smoother to sail through troubled waters. No economy or country could survive if it continuously over spend, over borrow and accumulate debt. We have to learn to live within our means. We have to develop good spending habits. If we earn only 2000 dollars a month, then we have to realize that we cannot afford a 5 bedroom townhouse. If end up taking a mortgage for a 5 bedroom house, then we will have to face the music one day or other, because the monthly mortgage would eat into our savings and other expenses. What next? Just use plastic currency, go for credit cards and end up paying 21 percent interest. Where will this take us? Recession.

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Lets us Move Ahead

Even after so many economic recessions and painful unemployment stories one would expect the government and the people to show the guts to learn some basic lessons. The problem is acceptance. How can anyone learn if they fail to accept there is problem? The first step of learning is acceptance of the problem.

If the banks follow rules and regulations when they lend money and people exercise financial responsibility half of the problems will be solved. Then we need a new wave of economic resurgence suitable for the 21st century geopolitics. Once we put the remedies in place the US will always remain the best country in the world with a powerful economy, because this country has what it needs to make it to the top.

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Comments 3 comments

Charles Hilton 5 years ago

You said...

"If the banks follow rules and regulations when they lend money and people exercise financial responsibility half of the problems will be solved."

The question is: what rules?

The continued deregulating of the financial sector since the Reagan years has resulted in the economic chaos that burdens us today. We have to first re-implement regulations before they can be adhered to.

The American people have to wake-up and stop believing the destructive myth that moneyed interests---be they banking or manufacturing or energy---are going to regulate themselves. Just the opposite: they're going to milk the cash-cow regardless of the economic and environmental cost to society.

Forget about the non-existent "invisible hand" of the market. The only thing invisible hands are good for is picking our pockets.

Excellent hub, though!


Lets Learn profile image

Lets Learn 5 years ago Author

Thanks for your comment. Rules and Regulations are not tie the banks down. The banks must be able to do their business, we need them to grow to run our economy. But blind lending to anyone to grab interest and accumulate customer base would only derail the economy, just like the one we are witnessing now.

Those who derail the process must be punished. Today if look around those who led this country to the mess are living in luxury homes. It is the ordinary who people suffer.

Lets Learn


gjfalcone profile image

gjfalcone 5 years ago from Gilbert, Arizona

Loving Lets learn,

Many good points. Take care. gjf

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