A Brief History of Recessions in the United States

A rising number of financial experts say the United States

is heading into a recession.

By definition, a recession is two sequential quarters with a significant

pervasive decline in economic activity.

averaging out to about one recession every six years.

Welcome to episode 1 0 4 of this shit works a podcast dedicated to all things

networking business development and relationship building i am your host

julie brown and today i'm giving a brief history of recessions in the united states

This episode is sponsored by nickerson A full service branding marketing pr and

communications agency With team members in boston los angeles miami and new york

city Visit them At nickerson c o s.com.

Recessions are typically marked by widespread layoffs.

Bankruptcies.

Higher borrowing costs and turbulence in the stock market.

That was last two.

We've already started to experience those with soaring inflation and the

stock market experiencing its worst.

What we learn by looking at the history of recessions in the United

States is that they are a natural yet unpleasant and sometimes

painful part of the business cycle.

According to the balance.com.

There were 12 recessions in the 20th century.

The great depression was technically two of the nation's

worst recessions back to back.

Let's take a look at each one, its causes and how long it lasted.

Again, this data is all gathered almost verbatim from the balanced.com.

I will include a link to the article in the show notes.

Should you want to look at it more fully after listening to this podcast.

It was caused by speculators losses that spread to trust companies.

These firms acted like banks, but had lower reserves.

Congress created the federal reserve system to , prevent future collapses.

After this panic.

was two closely related recessions.

digits until world war II began.

Several factors combined create the great depression.

continued despite the recession.

A 10-year drought in the Midwest created the dust bowl that devastated farmers.

The new deal ended.

The first recession boosting growth by 10.8%.

The second recession ended when the drought did and the government

increased spending for world war two.

It was a natural result of the demobilization from world war two.

When unemployment peaked at 7.9%.

It was caused by the feds raising interest rates too quickly.

It resulted from tightened monetary policy, following the Korean war.

Although with this recession, unemployment didn't reach its peak

of 6.1% until September of 19 54, 4 months after the recession ended.

The Fed's contradictory monetary policy caused this economic slowdown.

Unemployment reach to Pico 7.1% in may of 19 61.

President John F.

His opponent, Richard Nixon, blame the recession for costing him the election.

The OPEC oil embargo is blamed for quadrupling oil prices.

Sound familiar.

But actions taken by president Richard Nixon also contributed to the recession.

First Nixon instituted wage price controls.

They kept prices too high, reducing demand.

Wage controls made salaries to high enforced businesses to lay off workers.

Second.

Nixon took the United States off the gold standard in response to a run on the gold.

How that Fort Knox, which led to inflation the price of gold skyrocketed

while the dollars value plummeted.

The result was stagflation and five quarters of negative GDP growth.

Unemployment reached a peak of 9% in may, 19 75, 2 months after the recession ended.

Saw the U S economy suffering from back to back recessions in this period.

The fed caused this recession by raising interest rates to combat inflation.

Again, some familiar.

The increased interest rates, reduced business spending the Iranian oil embargo,

aggravated economic conditions by reducing us oil supplies, which drove up prices.

I once heard a saying that history doesn't repeat, but it certainly does rhyme.

Seems a little fitting here.

Don't you think?

During this time, GDP was negative for six of the 12 quarters.

was above 10% for 10 months.

and interacts invasion of Kuwait.

Now onto the 21st century, once most of you will be familiar with.

And its first decade, the 21st century experience three recessions.

Each was worse than the one before it, but for different reasons.

It was caused by a boom and subsequent bust in.com businesses.

dollars worth of new software, because they were afraid the old systems

weren't designed to transition from the 19 hundreds to, to the two thousands.

many.com businesses were significantly overvalued and then failed.

The nine 11 attack, worse into this recession, the economy contracted.

Acted in two quarters clue one by 1.3% in Q3 by 1.6%.

Now onto the great recession, which I'm assuming most of you remember vividly.

The longest contraction since the great depression.

widespread use of derivatives.

For definition, a derivative is an arrangement or instrument such as a

future option or warrant who's valued.

Drives from an is dependent on the value of an underlying asset.

recession that caused it, which if you haven't noticed is a theme here.

Mostly the unemployment lags behind the recessions.

Thanks to the American recovery and reinvestment act.

since the great depression.

5.1% in the previous quarter.

Sending the unemployment rates, skyrocketing to 14.7%.

The federal reserve lowered the Fed's funds rate to 0% promising

Congress issued billions of dollars in aid.

Although the economy grew 33.8% and the third quarter, it was not enough to

make up for earlier losses in the year.

Which brings us to today.

According to Farnoosh Torabi have so money.

Technically the country is in a recession when gross domestic product,

the value of all goods and services produced during a specific period

falls during two quarters back to back.

Additionally, according to Turabi, there's also concern that the central

bank and an aggressive effort to team inflation by slowing down the

economy could just be forcing the economy into a painful recession.

As I said in the beginning of this podcast, Looking at the history of

recessions in the United States, we can see that they are natural

again, not unpleasant and yes, usually very painful, but they are

part of a normal business cycle.

So, what can we do to prepare for the potential 20 22 20 23 recession.

Or any of the ones we may face father down the road in our careers.

Well, Tune into episodes, 1 0 6 and 1 0 8, 2 weeks and four weeks from

now where I offer financial and networking tips to help prepare for

downturns in the next business cycle.

Okay.

After all this recession.

We definitely need a cocktail.

This week's cocktail is called the depression glass.

No, I know depression classes, not because of the depression.

I get it, but whatever.

I was looking for a thread here and I found one.

It has a ton of shit in it that I love, including elderflower in ginger.

So yay.

This is what you're going to need.

One ounce of gin, one ounce of light rum.

One ounce of St.

Germain or elderflower cordial, one ounce of ginger liquor, one ounce of triple sec,

one and a half ounces of fresh lemon juice and one and a half ounces of tonic water.

You're going to mix all ingredients and it highball glass filled

with ice stir and garnish with a lemon witch, and then enjoy.

All right friends, that's it for this week.

Don't forget to tune into my next two solo episodes in two weeks and four weeks

for your financial and networking tips.

To help prepare for the upcoming downturns in the economy.

Thanks so much for being here.

This was a lot, you know, it was a lot of information and maybe a little depressing.

No pun intended, but whatever the future has in store for us, we're

going to get through it together.

Until next week.