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How To Stop Recession

Posted by Non-Hamster on February 1st, 2008

Really, when you think about it just a little bit, you'll see that it's painfully easy to stop the onset of a recession or whatever term is currently being used to describe the economy going south.  It's all a matter of not acting on negative news prematurely.  Yes, you want to be prepared for unpleasant possibilities, that's why things like alarm systems and car insurance sell so easily.

What causes recession?  Well, putting it simply, manufacturers and retail businesses hear that so-called "important" people in the financial world are predicting a downturn in the economy.  Because of what they heard and more importantly who they heard it from, they start taking those predictions into account when they make important decisions.  How much product to make, whether or not to hire new employees or layoff existing ones and so on.

When manufacturers start slowing things down in their effort to be ready for the recession, lots of ordinary Joe and Jane Sixpack's find themselves with less money to spend.  Because they have less to spend, they tighten their budgetary belts and slow their spending.

When ordinary folks start slowing down their spending, retailers feel it pretty quickly and will respond by not buying as much stock from the manufacturers and wholesalers.  This in turn gets them to tighten things even more... more layoffs, plant closings or slowdowns. and so on.

Then the geniuses on Wall St see all this and talk even more and louder about recession and we've gone full circle.  This vicious circle continues, going a little bit faster in to the economic dumper each time around until sooner or later there's that recession that some financial know-it-all was talking about to begin with.

Obviously, we can't stop the aforementioned know-it-all from talking, this being a free country and all.  However people at the top of this chain of events CAN be a lot more discriminatory as to what opinions they act on and how fast they do so.

This "recession" that's being yakked about in the news does NOT have to be.  All we need is for the right people to wise up and stop it.

Oh, one more thing. The news media.  Because they positively love spewing out the most sensationalist version of any story they report, minor bad news gets amplified into a catastrophe in very short order.  Next thing you know what might have just been a slowdown turns into seven years of starvation.

Maybe the best thing we could all do is turn off the six o'clock news.

Technorati Tags: news, recession, economy, vicious+circle, news+media, sensationalist, money

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  1. Azlan on 03.02.2008 at 08:04 (Reply)

    it’s difficult to stop it from happening.. next best alternative is to start thinking another way to generate some extra cash.. i.e online business.. though it might not be that much but at least there’s something to cover the needs…

    Online Business with a kampung boy

    1. Non-Hamster on 03.02.2008 at 20:31 (Reply)

      taking steps to cover a potential recession by getting additional income going is fine.. even a great idea but the best option is to prevent recession in the first place and that just means not caving in to the media hype that’s trying to start one.

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