This history of American recessions [OC]

End the Fed peoples heads explode when you show them this graph

This explains the reason why the US dominates the world in wealth. Helped that the US was the only large country that had a manufacturing base that was not destroyed in WW2.

Alternate title: There used to be more recessions.

Here’s a bit more on this chart:

The official designation of a recession comes from a committee at the National Bureau of Economic Research (NBER), a private, nonprofit research organization. The committee considers a wide range of economy-wide, monthly data points, but the NBER views GDP as “the single best measure.” The committee calls a recession once there is a significant decline across these measures for more than a few months.

The NBER’s official designation of a recession, then, doesn’t happen until there are several months of data, allowing it to be sure both that a recession happened and when exactly it started. In other words, the NBER looks backward, not at the present moment.

Using this measure, here’s a few insights:

* From 1855 to 2020, recessions lasted an average of 17 months. In the 20th and 21st centuries, the average recession has decreased to 14 months.
* The US’ longest recession lasted 65 months from October 1873 to March 1879
* The US has gone through 13 recessions since WWII
* The longest recession since WWII was the Great Recession
* The shortest US recession was during COVID-19, from February to April 2020
* Although economic struggles and the Great Depression marked the 1930s, the NBER-defined recession lasted from September 1929 to March 1933.

4 recessions in the life of a millennial.
7 in my parents life time.

This chart makes it appear that the time between recessions is going down.
But also suggests the frequency is high enough that we should not treat recessions as once in a life time events.

Perhaps some context on the definition of a recession and the relative size (other than duration) is necessary.

This chart is not at all accurate. Let’s begin with the “longest recession” from ’73 to ’79.

>
Yet what sort of

>“depression” is it which saw an extraordinarily large expansion

>of industry, of railroads, of physical output, of net national

>product, or real per capita income? As Friedman and Schwartz

>admit, the decade from 1869 to 1879 saw a 3-percent-per annum

>increase in money national product, an outstanding

>real national product growth of 6.8 percent per year in this

>period, and a phenomenal rise of 4.5 percent per year in real

>product per capita. Even the alleged “monetary contraction”

>never took place, the money supply increasing by 2.7 percent

>per year in this period. From 1873 through 1878, before

>another spurt of monetary expansion, the total supply of bank

>money rose from $1.964 billion to $2.221 billion—a rise of 13.1

>percent or 2.6 percent per year. In short, a modest but definite

>rise, and scarcely a contraction.

Rothbard’s History of Money and Banking in the United States, pg 154.

In fact, recessions prior to the Great Depression, were almost invariably mild and over with rapidly.

FDR really smoothed out our economic cycles that Americans that we are trying our best to destroy it to return the insane cycles of boom/bust

According to this chart, there were only three years between the end of the civil war 1865 and 1880 where the economy was growing. So during 12 out of those 15 years, the economy of the USA was supposedly contracting.

And yet the American “economy took off after the [Civil War.](https://world101.cfr.org/cfr_glossary/455) Between 1865 and 1898, coal production rose by 800 percent and railway track mileage by 567 percent. By the middle of the 1880s, the United States had surpassed Britain as the world’s leading producer of manufactured goods and steel.”

https://education.cfr.org/learn/reading/how-did-united-states-become-global-power#:~:text=Its%20economy%20took%20off%20after,of%20manufactured%20goods%20and%20steel.

Not sure how you can reconcile that with the perpertual depression depicted in this chart.

Getting off the gold standard definitely was the main factor in decreasing the length and frequency of recessions, however I don’t see anyone mentioning the increase in transfer payments (essentially, the social safety net) after the Great Depression.

With cuts to medicare/medicaid, food stamps, and welfare in general, you can expect recessions to happen more often and for longer.

Wow, someone really needs to defrag their computer
/j

Perhaps not coincidentally, Keynes’ *General Theory of Employment* was published in 1936

The ~~Great~~ historically speaking, somewhat average Recession

/s idk anything about its comparative depth

Clearly we need to go back to no central banking and less financial regulation. Maybe even a hard money standard!

Interesting the gold standard ended in 1933 and that’s when the frequency of recessions dropped dramatically.

I wonder if the expansion and recession periods post 1933 have different behaviors than pre 1933. For example faster and longer growth but sharp, aggressive recessions stopped through economic policy to continue (artificially) the growth cycles.

Don’t show this image to goldbugs.

Next recession will be after Trump is out of pffice if a democrat gets elected. So we may be safe for another 10 years or so.