Do We Actually Need Recessions?

Подписаться 2,6 млн

Просмотров 306 тыс.

50% 1

This video was made possible by our Patreon community! ❤️
See new videos early, participate in exclusive Q&As, and more!
➡️ / economicsexplained
▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
Most people would agree that recessions are terrible things, they cause widespread fear amongst people that will be anxious about their savings, their livelihood, or even their next meal.
On a nationwide level, economic downturns are events akin to natural disasters, they do massive damage and for the most part are widely accepted by society as an “inevitability”, rather than a “rarity” …
But do we really need recessions?
▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
📚 Want to learn more about recessions? We recommend reading "The Big Short: Inside the Doomsday Machine", by Michael Lewis
👉 amzn.to/30sybYd (as an Amazon Associate, we earn from qualifying purchases)
Enjoyed the video? Comment below! 💬
⭑ Subscribe to Economics Explained 👉 bit.ly/sub2ee
⭑ Enjoyed? Hit the like button! 👍
Q&A Streams on EEII (2nd channel) → / @economicsisepic
✉️ Business Enquiries → hello@economicsexplained.com
Sources & Citations → bit.ly/ee-sources4
Follow EE on social media:
Twitter 🐦 → / economicsex
Facebook → / economicsex
Instagram → / economicsex. .
▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
#Recession #EconomicsExplained #FinancialCrisis
▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
EE Fan Exclusive Offer:
Sign-up for Acorns! 👉 www.acorns.com/ee (after registration, Acorns will deposit $5 in your account to help you get started with investing!)
▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
ECONOMICS EXPLAINED IS MADE POSSIBLE BY OUR PATREON COMMUNITY 👊🙏
Support EE by becoming a Patron today! 👉 / economicsexplained
The video you’re watching right now would not exist without the monthly support provided by our generous Patrons:
Morgon Goranson, Andy Potanin, Wicked Pilates, Tadeáš Ursíny, Logan, Angus Clydesdale, Michael G Harding, Hamad AL-Thani, Conrad Reuter, Tom Szuszai, Ryan Katz, Jack Doe, Igor Bazarny, Ronnie Henriksen, Irsal Mashhor, LT Marshall, Zara Armani, Bharath Chandra Sudheer, Dalton Flanagan, Andrew Harrison, Hispanidad, Michael Tan, Michael A. Dunn, Alex Gogan, Mariana Velasque, Bejomi, Sugga Daddy, Matthew Collinge, Kamar, Kekomod, Edward Flores, Brent Bohlken, Bobby Trusardi, Bryan Alvarez, EmptyMachine, Snuggle Boo Boo ThD, Christmas

Опубликовано:

12 июн 2024

Ссылка:

Скачать:

Готовим ссылку...

Добавить в:

Мой плейлист

Посмотреть позже

Комментарии : 956

@EconomicsExplained 4 года назад

Thanks as always for watching :D See new videos early, participate in exclusive Q&As, and more! www.patreon.com/EconomicsExplained

@simpleman72685 4 года назад

Every Recession that has happened in the past 100 in the US was a result of huge tax cuts to the wealthy and deregulation of worker's rights. This causes more money to be moved around at the top and the shareholders get greedier. The extra money cause inflation and since people aren't getting pay raises they can no longer afford the new prices. The lower gains scare the shareholders which causes a sell off. From there businesses spend less over fear of running out of money and the first thing they do is hiring and pay freezes. When that doesn't work then the job cuts come. The shareholders see this and sell off again. The cycle continues until it doesn't anymore. Usually bailouts kick off the rebound, then we raise taxes and increase worker's rights and things get better again. And yes we were on our way to one this summer. The Federal Reserve was throwing billions into overnight lending in November and the stock market responded making its final run up before the crash. Fundamentally, capitalism can't handle huge amounts of wealth gap between the wealthy and the poor. That's why the economy always improves as we help the poor.

@henrygustav7948 4 года назад

1817-1821 debt paid down & budget in surplus (depression began 1819) 1823-1836 debt paid down & budget in surplus (depression began in 1837) 1852-1857 debt paid down & budget in surplus (depression began in 1857) 1867-1873 debt paid down & budget in surplus (depression began in 1873) 1880-1893 debt paid down & budget in surplus (depression began in 1893) 1920-1930 debt paid down and budget in surplus (depression began in 1929 1998-2001 debt paid down and budget in surplus (recession 2001 2008)

@henrygustav7948 4 года назад

@@simpleman72685 www.businessinsider.com/how-bill-clintons-balanced-budget-destroyed-the-economy-2012-9

@cranberryeater7459 4 года назад

@@simpleman72685 I concur with Henry Gustav. 1929-33 Cause: Banking panic and constrained money supply. International switch to a gold standard. New trade tariffs. 1937-38 Cause: Balancing budget for the New Deal. Declining corporate profits, and corporate investments. Constrained fiscal policy. 1945 Cause: End of the European war, decline of Govt spending. 1949 Cause: Economic tightening policies 1953 Cause: Federal Reserve asserted independence from the U.S. Treasury. Lending constrained due to fear of inflation. 1958 Cause: Easing of lending policies (1955) lead to tightening lending policies. 1960 Cause: Increased interest rates 1973 Cause: OPEC quadrupled oil prices 1980 Cause: Increased interest rates 1981 Cause: Iranian revolution and fluctuating oil prices 1990 Cause: Inflation and Consumer Confidence 2001 Cause: Dot-com bubble, decline in corporate revenues and investments 2007 Cause: Subprime lending 2020 Cause: Extensive debt, globalization, deficit in trade, and Covid-19

@shubhamsehgal2336 4 года назад

I am a little poor on hearing so can you please turn on auto generated captions. Thanks!😅

@Occidentally 4 года назад

The stock video industry will never have demand shock while Economics Explained is still making content.

@michaelb8559 4 года назад

Doing his part

@AwesomeHairo 4 года назад

He uses the same ones for years, though

@iDetzy 4 года назад

But imagine the great recession when he eventually quits :O

@jamesmamma4763 4 года назад

@baby turtle small minded. Your stuck looking at what they want you to look at.

@relaxity999 4 года назад

@baby turtle what you are saying is true but how you are saying it is kind of messed up since you're assuming someone is keeping white men away from posing as leaders on stock images. What you don't understand is that the stock image industry is based on demand

@vulcan5176 4 года назад

"Unlikely that a natural disaster will push the US into recession" *Yellow Stone Super Volcano has entered the chat*

@vlogdemon 4 года назад

2020 be like 😳😳😳

@spatusion398 4 года назад

That would plunge the world into a volcanic ice age.

@IAmNotABot 4 года назад

Meh still no recession, as the whole country will be wiped out ;)

@cristoux 4 года назад

guys don't even mention it lol

@Gokes93 4 года назад

*world

@ultimatestoryteller 4 года назад

I like how EE is posting more videos than usual , but still hasn't compromised with the quality. Great job , brother. *#VideoMakingGoesBRRRRRR*

@SuperCaptain4 4 года назад

@Rajeev Vij BRRRRRRR IS THE SOUND OF THE MONEY PRINTER BRRRRRRRRR

@arokjuata3365 4 года назад

@Rajeev Vij it's a meme, it's just the way it is

@dbased1915 4 года назад

@Rajeev Vij BRRRR is the sound of the money machines printing at redline and emitting smoke.

@yuapanda 4 года назад

I think EE is in Queensland, Australia. Isolation just ended this week. Video frequency might drop off from now...

@dibparada 4 года назад

Increased demand means the supplier needs to increase production if it wants to have a more significant profit. ¯\_(ツ)_/¯

@integ3r 4 года назад

Is monetary policy now really just about maintaining overinflated asset prices and bad debt?

@raybod1775 4 года назад

Eventually, the Federal Reserve and other central banks will fail. At best they are creating economic stagnation, at worse history tells us there will be hyperinflation.

@Pedrosa2541 4 года назад

It's also about winning next elections, at least in the case of Trump.

@zacharygottlieb4369 4 года назад

Ray Bod STAGFLATION! STAGFLATION!

@retro8919 4 года назад

Yes, beautifully put

@integ3r 4 года назад

@@raybod1775 Well you say that but 2k8 happened and who went under? Oh they all got bailed out by the state and here we are 10 years later and we're just seeing the same thing.

4 года назад

Recessions are a necessity when we keep having economic bubbles, most often caused by debt.

@MemoryExport 4 года назад

Yes, and it's strange that EE didn't mention that

@paxundpeace9970 4 года назад

Do recession scrap debt? No.

4 года назад

@@paxundpeace9970 normally they should with people or companies defaulting. The problem is the money printer.

@GuinessOriginal 4 года назад

Krisztián Kőrösi more of a dead cert than a necessity

@KuraIthys 4 года назад

@@paxundpeace9970 Yes they do. That's kind of the point of them. There's several ways this happens. If you renegotiate with your lender, you've effectively undermined the profit they get from lending to you. That's a very loose form of removing some debt from the economy without actually paying it back in full with the associated interest. If someone defaults on a loan, the debt outright vanishes in a puff of smoke. Sure they lose their collateral, if any, but the associated debt still vanishes. There's also the indirect effects that when things are bad lenders become more fussy about who they lend to. This too drives down debt levels, since even if nobody is defaulting, the number of new loans made slows down relative to old ones being paid off. Lower interest rates are a bit more confused. They should discourage lenders from giving out money, but at the same time they encourage everyone else to try and borrow more...

@illusive-mike 4 года назад

The problem with "optimizing the economy" through recessions is that only the businesses benefit from it, not the people. Not only do many workers have to go through the suffering related to shaky employment, but the way high unemployment drives down wages means that any long-term growth doesn't translate to higher standards of living for the workers since short-term instability enables wage stagnation. Similarly, connecting inflation to low unemployment seems to rely on the kind of economic sorcery that obscures the "need" for sustained profit margins and inequality. So I'd say if most people don't really benefit from recession-enabled growth anyway, then the vast majority of people don't need the recessions and can live easier without the cycle of debt-enabled booms and deadly busts.

@niki123489 4 года назад

Here is a little short video that I watched a few years ago. It's about monetary policy. ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-aXiNZWJKnVI.html

@Invizive 4 года назад

Large businesses benefit from it more than people because they can rely on the government whenever their overzealousness leads them to downfall Without this help employers would be "filtered" just like the employees. Otherwise the point of recession is lost

@mrniceguy7168 4 года назад

I’m sure businesses that struggle financially are huge beneficiaries of this

@jordanknight336 4 года назад

Sounds like communist propaganda to me.

@Judah119 4 года назад

Mr Nice Guy, its the established conglomerates that are the beneficiaries.

@Brown95P 4 года назад

Economics: "We essentially study people." Also Economics: "Mass unemployment does assist with long-term growth."

@bobchannell3553 4 года назад

Yeah, I see it. Letting a certain portion of society loose their incomes, homes, and livelihoods, is a small price to pay for improved economic efficiency. Yeah Yeah, I see it. Totally agree. As long as as it's not my income, home or livelihood.

@hansnotig6250 4 года назад

yeah right, what are some more unemployed and homless people compared saving big overvalued companies for the rich...

@Midas526 4 года назад

@@hansnotig6250 That's a very different argument - recessions are one thing, doing bailouts to try to contain the damage and maintain status quo is entirely another. As the video notes, part of the usual outcome of a recession is to allow excess and recklessness to fail. Without that, you run into "moral hazard" - the situation where one party in a deal is able to act in a negative or destructive way but not feel any consequences for it. The bailouts are completely contrary to that objective. Heck, even in nature, a large, overgrown forest burning to the ground actually can allow for a more diverse and healthy ecosystem in its wake. The bailouts are awful; they reward bad behaviour and punish good behaviour, and the people that are most often victims - both of recessions and of said bad behaviour - wind up footing the bill. They shouldn't be a thing at all; that's not how free markets are supposed to work, frankly. However, associating that with recessions isn't quite right, either. If anything, recessions are supposed to be the means by which that stupid and reckless behaviour is punished, not protected.

@nygamery 4 года назад

@@Midas526 I agree, the only issue is that the individuals who's reckless behavior caused recession usually don't end up unemployed or broke. Their company may go bankrupt or they might loose their position, but they quickly go to another company as they're still seen as a valuable executive or ceo and that's if they don't get a bailout and give themselves a large bonus to encourage them to do better next time. I understand how a recession can help "cut the fat" in terms of employees, if only it could do the same with the higher ups who now bank on them.

@Origami84 4 года назад

"It is a recession when your neighbour loses his job, it is a depression when you lose yours"

@planets9102 4 года назад

You know we could have things like partial ownership of companies by its workers and democracy in the workplace and restrictions on debt to prevent this. But shhhh don't say that alternatives to capitalism (that aren't state control and despotism) are plausible, it's this or gulags, anything else is heresy.

@anagram 4 года назад

Recessions are good because businesses can exploit everyone who doesn't have money to provide better for the people who have money. Great...

@brianyang5075 4 года назад

Large business get paid by government to employ people and then the people have to pay the government to pay themselves. Lol it just slavery with extra steps.

@neeneko 4 года назад

In a way they are like any other disaster, natural or otherwise. Many people end up in a weaker position and spend the next generation rebuilding, while a few people end up in a stronger position because they had the resources to exploit all the cheap land/labor/etc that the disaster made available. So wealth concentrates, and the winners are in the best position to shape the narrative and set policy to encourage it happening again.

@jmitterii2 4 года назад

Sums it up. Just over the past 40 years, fewer and fewer business per nation... just in the last decade there have been fewer startups and more consolidations into oligopolies as well as local monopolies. www.washingtonpost.com/news/on-small-business/wp/2015/02/12/the-decline-of-american-entrepreneurship-in-five-charts/

@thewhitefalcon8539 3 года назад

It always turns out that everything is worse in the US than us non-USians think it is, but: Have you tried not being in debt?

@DanCojocaru2000 4 года назад

While I understand the point of view that recessions do a reshuffling in employment and this is good *for companies*, I personally think that an economic model that treats good things for companies as good things in general is a bad one for people. In the recession case, companies will hire unemployed people for cheap. Sure, but product prices won't fall. We'll be lucky if they stay the same. From that point of view, people are worse off. What's the point of economic growth if people don't do better?

@Invizive 4 года назад

Without bailouts incompetent companies would fail and the process would work properly Right now only one side receives the blow

@GuinessOriginal 4 года назад

Dan Cojocaru people can be better off without economic growth. Economic growth is only there to make the rich richer

@ryanking9884 4 года назад

I agree. I have found that Economics Explained often views the economy from the macro view while undervaluing the negative impacts to the individual. It seems like a view of economics that lacks compassion.

@GuinessOriginal 4 года назад

Ryan King yep. It's OK for big business and corporates to fail outright and get bailouts but not workers. It's also OK for companies to commit fraud with the furlough scheme because hmrc have pretty much said that they won't be investigating any claims of fraudulent use of the scheme because its too big a job, yet they're happy to chase disabled people off benefits and hunt down sole traders and self employed who might have skipped paying a few grand in tax. Meanwhile companies in the cayman Islands can get away with paying nothing

@mirceskiandrej 4 года назад

"but product prices won't fall." last few recessions were followed by deflation, meaning, product prices actually were falling. On top of that, deflation is very bad for the economy.

@fearlesspotato3429 4 года назад

"Recessions are the product of prosperity" Latin America: you guys had prosperity before the recession?

@AK-kr3uy 3 года назад

it is laughable. more like a product of debt-injected prosperity

@aczeartk7032 2 года назад

Southern Europe: Y'all have had prosperity after 08??!?!

@georgemitchell2288 Год назад

Actually, its "Recessions are the product of (someone's) prosperity."

@breabanm 4 года назад

So for the average consumer the lesson is: stay away from debt and have some cash stashed away that you can use to survive at least 6 months of unemployment.

@grapefives7762 4 года назад

Debt isn't necessarily bad theres good and bad debt if you can use debt as an investment and pay it off its good but if your debt isnt helping you in any way then yeah scrap it

@chrisbrown6168 4 года назад

Dave Ramsey?

@adamz9835 4 года назад

And the advertisement and marketing industry is doing it's damnedest to make sure you fail at that goal 😁😉

@DareToSavorVanillaWithBacon 4 года назад

Inflation devalues any cash you might stash, so it's better to invest it, either in bonds, stocks, funds, whatever.

@LoserGopher 4 года назад

Companies should also save for 6 months of bad times rather than asking for handouts every time a recession hits then

@Mic_Glow 4 года назад

Recent crisis showed that 70% of office staff in my company is not needed. And we got more workers (fired/ no work in other companies). Previously no one wanted to join and job positions were open for months (except the office ones ofc.)

@dumbbroadcasts 4 года назад

The business cycle: Americans work themselves to death (boom), they realize they havent enjoyed any of their time, then they ask for a vacation (recession)

@effexon 4 года назад

This is how it should be. However, globalized economy makes everything blurred and complex.

@ohiotoledo3787 3 года назад

Yes america is the world

@atklm1 4 года назад

Not to worry. The recession of which impacts you are feeling now, are the result of someone else's prosperity that you have never had, and statistically never will have.

@cyrilzaldevar1817 4 года назад

Ah, I really like watching this Channel's videos

@EconomicsExplained 4 года назад

thanks mate :)

@TheTariqibnziyad 4 года назад

@Rajeev Vij his DNA

@andregoy6996 3 года назад

@@EconomicsExplained check mate!

@adamklam1 4 года назад

Some part of me has always felt paranoid.... that maybe.... recessions and upturns cleverly are just disguised 10 year cycles of squeezing and easing the wealth extraction rate from the populace , so that everyone feels "its because of the recession" and "oh no we haven't even recovered from the last recession"... every recession. im not saying natural disasters arent real... just that the endless stream of non-solutions and frustrating incompetence is just intentional problem creation for scapegoating the results of a nefarious plutocratic system. hopefully just paranoia...

@bluesclues132 4 года назад

it's not paranoia, it is fact.

@problemat1que 4 года назад

The productivity-salary graphs used to be parallel, then suddenly diverged in 1980...

@r4ven_ii247 3 года назад

Marx said something along those words

@thegreatestchigone5813 4 года назад

Last time I was this early Greece was a thriving economy. Thanks for all the likes

@davidcooks2379 4 года назад

Before joining the Euro?

@mattipra 4 года назад

1969?

@YiannissB. 4 года назад

Ah yes, my grandpa once told me about these times... Miss you grandpa😭

@Jonas-lj5zb 4 года назад

Love your videos, but I think you are portraying some of the consequences of recessions in a better light than they deserve. Do you really think that the massive banks who are "too big to fail" (meaning they get bailed out pay taxpayer money), and were probably primary contributors in causing the recession (since they control the money supply and amplify the business cycle) are the "industries that are going to deliver the greatest sustained benefit to society in the long term"??? Other businesses that come out ahead are mega corporations who already dominate the market. They end up being able to gobble up an even larger piece of the pie after a recession, since smaller, less robust businesses go bankrupt, leading to further monopoly. Convince me otherwise.

@1293ST 4 года назад

the thing I learned today is that debt is just renting money with money and that GDP doesn't matter because everyone jinxes it with debt and overconsumption.

@adamz9835 4 года назад

Debt and over consumption are part of how the American economy has continued to grow. If wages aren't keeping up with consumption people must go into debt or growth slows.

@rsync9490 4 года назад

@@adamz9835 And then the economy eventually collapses when there is any interruption, because people have to continue making payments on those debts. If they don't then, like a domino effect, everything starts bellying up.

@andrewcampbell4393 3 года назад

@@rsync9490 THEN the super rich become extremely rich since the whole country is for sale so at least some ppl are benefitting lol

@FingeringThings 4 года назад

Last time I was this early, London housing was affordable

@emiliopenayo4738 4 года назад

@chris0000924 4 года назад

It is now...sort of

@Zer0Tr1gger 4 года назад

*Cries in California housing*

@emiliopenayo4738 4 года назад

@@theparker3759 awesome

@Cheesblenders4all 4 года назад

ok boomer

@benjaminchen8857 4 года назад

I don’t agree with this conclusion. Job stability is, in my opinion, very important, and ultimately worth less growth in the short term. It’s bad in a social way, but also in the economic sense of finding new employees is a huge burden. It in fact makes social mobility worse, and a slower growth would still yield better results. Like you always say, stability is the most important thing in a market

@menschderguckt 4 года назад

That's why people in Europe don't get fired and remain in the company (the government will pay for post of the salary). After the recession is over, people just go back to work.

@effexon 4 года назад

@@menschderguckt in Europe they have slipped from this due to temptation of outsourcing and migration workers... it was good in 90s, good products and companies, coz good things take years to develop and work and easy temptation of layoffs will kill this. Ofc there are tradeoffs. Quality of life and family are way way better. Competition for jobs is more decent this way.

@mirceskiandrej 4 года назад

System that prioritizes job stability is inherently inferior to a system that does not. Imagine two competing companies that produce cars, they need 100 employees to produce 100 cars. New technology is developed that allows the company to produce 100 cars with 50 employees. If company A is in a country that disincentivizes firing of workers keeps 100 workers and produces 100 cars with new technology, it will need to charge more for each car than the company from country B that was free to reduce workforce. In time, company B win conquer markets since it can produce cheaper cars or cars of higher quality and it will come and buy company A once company A gets close to bankruptcy. People in country A will be poorer than people in country B since they have to pay more for the same car than people in country B.

@Timbo5000 4 года назад

@@mirceskiandrej Systems don't exist to create maximum output or profit for companies, they exist to increase the quality of life for the people. This means a proper balance has to be found between economic growth and stability. In my opinion we're currently out of balance. Balance isn't even kept in mind, as the goal of most actors within the economy is maximum profit/growth regardless of the consequences. Recessions do not need to happen and are the cause of overextending economic growth beyond what the consumers even want. More steady growth seems superior to me. It sacrifices some short term profit for a much more stable future with much fewer recessions.

@neeneko 4 года назад

One of the difficulty in economics is even agreeing on what 'success' looks like. One of the modern problems is that the camps that favor instability have been making loads of money, so they have been able to influence how economics is taught and what policies are put in place. In order for the stability camp to ascend again and have their metrics matter is to, well, be wealthier and have more influence.

@iandyke4412 4 года назад

Through social study courses, I learned that there is also a business element in economic down-turns, when reading the market wrong (typically overproduction) causes failure, which then spirals into unemloyment and consumers losing faith. Can also see this play out to some degree with over-speculation enabled by shady lenders and such, i.e. Great Depression. I wanted to make sure that this understanding is still valid, as it was neglected in the video. In any case, it all comes back to consumer choice, but it seems that business decisions have great influence in eliciting change in sentiment as well.

@bobchannell3553 4 года назад

I watched this video, but I have noticed that a lot of short videos like this are very shallow in their analysis. In some cases, superficial.

@sergiocervantes5933 4 года назад

@@bobchannell3553 Yeah? Why don't you enlighten us with your intellectual superiority🤔

@anshuman2089 4 года назад

@@sergiocervantes5933 What Bob means is a little knowledge is a dangerous thing.

@effexon 4 года назад

Yes, many businesses either choose or have to trust that trend will continue, so they will order 1000 or 1mil of product to their stores. Then, something happens and either trend suddenly changes or consumers cant afford it, they are stuck with warehouse full of useless stuff, costing a lot. For small business this is simple. For big business, many try to lobby politicians etc to subsidize their bad decisions. As a consumer, I dont have much choise in this, nowadays it requires lot of extra work to find out if particular product is in their warehouse, if not , when I can expect to have shipped to me, where it is shipped from etc... And lets not forget last 2008 crisis, banking sector "overproduced" loans, living like its no end, benefiting from no restrictions of loans just as much as citizens of credit cards... If they would have done "homework", crisis wouldnt have been as bad. So more often than not, companies deliberately read the market wrong coz it is good business.

@KuraIthys 4 года назад

@@bobchannell3553 A short video largely created for a non-expert audience is shallow. You don't say. Please, do enlighten us how you'd cram several years worth of underlying knowledge into a 10 minute video understandable to people that have never studied the subject at all?

@brianalonsoojeda 4 года назад

why do we never mention the role or the value of workers when we talk about economics?

@effexon 4 года назад

Yeah, I dont like this common analogy of big workforce=bad thing and big cost, coz workforce does useful things => value for other people who then want to buy product/service.... companies often try to cop out of this by reducing people, then with some delay service level decrease (eg. delay in customer service due to less people working there, bigger workload), then people notice they dont get money's worth they got last year and stop buying that thing... quite simple. But when you look things from some Ivory tower, it is easier to lie to yourself and your colleagues or affiliates how things are. I've yet to see companies owning their blunders and mistakes without intervention from customers, journalism or other external pressure.

@badluck5647 3 года назад

Every video on a nation's economy mentions the value of skilled labor.

@retro8919 4 года назад

Recessions are completely needed for a healthy free market economy, hence why we don’t have a healthy economy. The fed keeps building bubbles and then re-inflating them dangerously with extremely reckless monetary policy which has destroyed the free market and price discovery by backstopping the market

@xXWorldgamefunXx 4 года назад

You think a """" free market """" (which literally doesn't exist and can't exist) won't have recessions? Sure..

@WoolleyWoolf 2 года назад

“Need to find some way to pay for yesterday.” Mate, these one liners are shockingly succinct. Well done to you and your team.

@blazeitilluminati655 4 года назад

Since I'm this early I'll go ahead and say thank you for this channel and all your videos, they've genuinely helped so much. At school, macroeconomics was always a bit tricky for me but these videos break them down really nicely. Greetings from central Europe!

@madensmith7014 4 года назад

2:00 "patreon go brrr" made me laugh a bit

@gmunz3643 4 года назад

“Spoiled brats scared by their own excess?” Yeah try telling that to the 20 million unemployed people. Try telling that to everyone that had to foreclose in 2008. These people were never living in excess. Theyre living on next to nothing.

@theAppleWizz 4 года назад

A lot of them had balloon rates and or did not have the income to get the loan in the first place.

@JavierIAcuna 3 года назад

Yeah well, education is a big factor on choices you get to choose from. Specially in STEM fields.

@WoolleyWoolf 2 года назад

Never stop with the aussie cynicism and sardonic humour - it’s what makes these eco videos unique and more relatable. We love being pessimistic: “not bad,” “not much,” “can’t complain,” “not far,” “no worries,” “not long.” Lol 😂

@dylanpainter4803 4 года назад

6:44 ...very nice map there. Definitely accurate.

@free_at_last8141 4 года назад

Merchandise Morty, your only purpose in life is to buy and consume merchandise.

@hassaan95 4 года назад

If we are able to stave off a recession with quantitative easing like we are currently doing, does that just delay the inevitable recession? Or the measures we took let us bypass it until the next cycle comes around?

@swordis45 4 года назад

This video has really opened my eyes to a lot of misinformation that goes on in society. thank you for your clear and concise analysis of an economic anomaly.

@axelandersson6314 4 года назад

6:42. Using a non mercator coloured in outline of the united states on a mercator map of he world. -Ding

@apacheattackhelicopter8185 4 года назад

EE: Employees are hard to come by European countries that have had unemployment rate of 10% for decades: Are we a joke to you?

@jakephillips5140 4 года назад

lol now do under-employment

@falxie_ 3 года назад

It'd be really awesome if we made the changes necessary to prevent regular recessions in the future

@deiandimov8590 4 года назад

Another great video! Keeping high quality and even more videos recently. Its interesting, can you recommend some economic literature for people interested in economy that want to further increase their knowledge in the field?

@JP-lg8ew 4 года назад

Love watching your videos...throughly enjoy...can you make video on EXCHANGE RATES ???

@peaksaren4717 4 года назад

Friendship ended with economic upturns, recessions are my new best friend

@wertywerrtyson5529 4 года назад

There are alternative economic models that could prevent the boom and bust economy. Check out Hayek and his criticism of Keynesian economics.

@hansnotig6250 4 года назад

thought the exact same! all the stimilus packages ar ejust distorting the free market... companies with reckless leadership get rewarded, which will lead to more financial crisis in the future!

@Croz89 4 года назад

The problem with a lot of these alternatives are a) Getting everyone on board in a globalised world, b) Avoiding creating stagnant inefficient monopolistic economies where competition is very difficult, and c) preventing more suffering from occurring than under the current system.

@hansnotig6250 4 года назад

ThotSlayer please elaborate on that...

@atirix9459 4 года назад

Yes, it is likely that the pseudo-keynesianism that is prevalent now (where stimulus is always pushed for by politicians, to a higher or lower extent) is basically just a big bubble blower, and even much worse than actual keynesianism.

@JK-gu3tl 4 года назад

@@thotslayer9914 No, they don't.

@SipheDlamini 4 года назад

Economics Explained makes these very complex concepts so easy to understand in relatable and concise ways. They make a person confident to bring up these topics in conversation. ❤️ Keep it up!!! 🙌👐

@imSimranpreet 4 года назад

Thought provoking analysis and an awesome watch. Thanks 😊

@wendygo7962 4 года назад

Isn't a recession a reaction to debt? So recessions are necessary, because we constantly spend more than we earn. You think money is a problem? We just print more, add some zeros to a database.

@hansnotig6250 4 года назад

Yesss please, let's try to stop the recession by adding more fuel to the fire👏

@vincemassara3283 4 года назад

How do you think government bailouts impact the "fat trimming" of a recession?

@bothi00 4 года назад

Discovered your channel recently and am digging the content ! Insightful and accurate. Would love to see a breakdown of Ireland's economics, and if there truly are any concrete differences between Fine Gael and Fianna Fáil :')

@severinbechtold1873 3 года назад

Interesting perspective!!

@WineZ22 4 года назад

a man made calamity. What a thing. And stopping it means that we have to slow down the economy (at least that's what those investor and money hungry people said)

@ZiggyZ3 4 года назад

I don’t agree with that perspective that recessions are a necessary evil. I feel like a lot of your videos have been apologizing for the dark side of economic systems, especially wealthy capitalist nations. I would argue recessions are the result of a lack of fore-site and a poorly regulated economy. Even if this was inevitable, it’s callus to say to the people who just lost their livelihood “too bad, so sad you just lost capitalism, that’s just the way it is?”. Why is it that we can say these things are inevitable but we don’t do anything to mitigate or heal the damage done by a recession?

@prithvishetty6938 4 года назад

The government needs people like you, if people like you could replace those greedy arses then ,we would see a lot of change

@TheSwordfish009 4 года назад

greedy elites are a product of the populace. The last recession was due to regular people taking out too much debt and getting houses they could not afford. They lost their homes at the same time and caused a recession. They did it to themselves. No one forced them. If they avoided that trap, saved, and invested they would've avoided that pain. Furthermore, if they did not allow themselves to fear losing money in the stock market and held their investments, most of them would've tripled their investment by now.

@ZiggyZ3 4 года назад

TheSwordfish009 I’ll agree with you that the common people put greedy elites in power either by voting or spending habits. But typically people don’t up elites unless they believe those elites have their best interest at heart. Those elites tricked people into giving them power. While this us common, a deceit is the fault if the deceiver not the deceived. I’m worried about what individuals do when they are in power and how they account for the spending habits of the lowest common denominator. It seems foolish to make financial policy or aggressively loan to people with the assumption that they should be financial geniuses. That’s how you get a recession.

@trevorcuthbert7173 4 года назад

Well put together keep up the good work!!

@rastapoi 4 года назад

Love those video stocks cuts. Some are pure gold.

@danielshaikhali5108 4 года назад

I am only here for the way he says “ BHAT” or BUuT

@GuinessOriginal 4 года назад

Daniel Shaikhali two vowels in bad

@danielshaikhali5108 4 года назад

Guinness ??

@andrewhenley2161 4 года назад

He has an idear

@extracurricular1 4 года назад

It seems the main priority of most of these countries is to make sure asset prices stay afloat without crazy inflation.

@JohannY2 4 года назад

Very very insightful, thanks.

@roncuz808 4 года назад

Great video and great explanation! Took economics before but never enjoyed the professor's boring lectures and going so in-depth into what makes GDP or curves.

@menschderguckt 4 года назад

I'm fine with going into debt to be more productive with that extra cash, but I believe it's not good for the economy and people in the long run to take loans to consume more (a car is consuming not investing).

@majacovic5141 4 года назад

exactly

@nessmess500 4 года назад

What about how recessions impact the environment in a positive way due to less consumption, or how marketing psychologically influences consumers' egos and desires to purchase in the first place? Would love to hear more of your take on these factors

@JjJj-sd4bx 4 года назад

We as a community choose who we support by buying

@JuiceExMachina 4 года назад

Very insightful video

@jasonbirchoff2605 4 года назад

Really liked this video. Particularly at the end where you pointed out that the recession we collectively fear is really a feedback mechanism that we should really see in a different light. Though I think one of the reason we fear recessions is more about the fact that our system isn't built/maintained in a manner meant to leverage the fact that they provide feedback on the state of the economy. For example, if a hypothetical country was to make full use of this feedback mechanism it would mean worker displacement would be temporary. So the Government carrying the salaries of labor participants in the short term is something I would expect. This sounds like our unemployment system. But I would disagree. Mainly because becoming unemployed should be entirely friction less. your Job lets you go that information passes to the unemployment system and you begin receiving checks pro-rated initially immediately. In addition to being shut off from getting any new credit until you get a new job. With communication that lets you know how long you have to find a new job and what to do if your having trouble finding a new job. Probably with pointers to new training based on observations of the job market. With friction reduced to zero the job displacement brought on by short term recessions are non events. just periods of flat GDP growth. There are probably a few other adjustments you need to make. But mostly its around reducing friction. Today when these inevitable events occur no one has certainty what tomorrow will look like because political decision makers can decide to not do the right thing. Generate more certainty around these inevitable events and at least short term recessions become non events. as for natural disaster induced recessions the foundation that was created to handle the short term recessions would provide tools for policy decision makers to leverage in these use cases also. so its a win win there.

@haaasful 4 года назад

The Recession we had to have. Aussies will know who Keating is and what he did in the eearly 90s.

@MAC-vi7fy 4 года назад

Next rather currebt Australian recession is be caused by china. Irrespective of the fact that Corona Virus started in China or not

@sajee6198 4 года назад

AK that was an explosion to an already incoming recession anyway. We suffered from significant productivity decreases such as the bushfires, drought and lots of outsourcing. Coupled with the LNP’s fiscal polices and COVID19 hooo boy.

@MrDylsha 4 года назад

buckle up cowboys and cowgirls 🤠

@ddandymann 4 года назад

@@MAC-vi7fy It is Australia that allowed it's economy to become completely tied to, and reliant on, China. A shift in Chinese economic foreign policy was inevitable, it is down to the Australian government to have a plan B.

@GuinessOriginal 4 года назад

ddandymann geography and world economy kinda dictated that tbh

@EdMateosG 4 года назад

I love all of your videos, but I don't agree with many of your viewpoints in this one. Any economy that has idle workers it's clearly not at its full potential, as those people could help improve the life quality of the entire country if they were working, for example they could bag products in the supermarket, if necessary, and they would be more helpful than staying home unemployed. We should try to measure countries economies in terms of their productivity (their ability to improve the citizens lives with the least amount of energy and reasources possible), not just how much they consume. And hiring an overqualified person at a discount is very clearly a waste of resources that could be allocated better elsewhere, so I don't think it's a redeeming point for a recession.

@EdMateosG 4 года назад

Recessions are due to overly optimistic outlooks for the future of the economy that need to be corrected after some time, and thus a given country's output "zigzags" around the actual line that describes their real production capabilities. And overshooting and overcorrecting this line actually hinders the long-term output that could have been achieved if resources had been managed optimally (idle workers during recessions, too many things that are produced in the good times that nobody actually needs...). The actual economic system is not perfect, we are due for a complete overhaul that abandons the expansionist policies that promote overconsumption and instead look for new ways in which we could improve our productivity and manage to direct our efforts towards long-term goals and not only towards short-term ones, as it happens today.

@EdMateosG 4 года назад

The invention of fiat money was a great success that allowed to fund a lot of new projects that would have never taken off with a system based in barter. It's high time we research a new currency system that promotes guided productivity instead of just consumerism.

@ZagreusTheGod 4 года назад

I really enjoy watching this channel. One of the handful that I consistently watch and look forward to.

@tonedowne 4 года назад

Recessions are not necessary. It is a feature of a stupid system. The physical reality is that things have to be able to cool down as the growth rocket is a kamikaze ride. I liked the explanation of employment. Unemployment is a conscious choice that has been made. Increasing the rate of unemployment, and under employment, keeps a downward pressure on wages and bargaining power of employees. When politicians talk about jobs these days, it is a carrot on a stick that is designed to always be just out of reach.

@Zendefone 4 года назад

Yes, recessions are a form of corporate cleansing.

@EconomicsExplained 4 года назад

Yes very good point, one of the big takeaways here!

@Menaceblue3 4 года назад

*IF* failed corporate businesses and models are liquidated by the market and restructured into a different form or business... But we know such things don't happen with corporate bailouts, stimulus packages, etc.

@Terwano 4 года назад

Hey Economics Explained, when would be the best time to leverage your position for a higher paying job/position? Before the downturn, during the downturn, or right after? When would be the best time to look to "move up" and why?

@ImKittyCow 4 года назад

great question, im an engineer who is about a year from graduating and joining the workforce and ive often wondered how advantageous this corona situation actually is for me. Clearly its going to be harder to get a job than if nothing at all had happened, but the people who are entering the workforce this very month are in a worse position. Also, it basically paves the way for the next 10 years to be solid growth

@GuinessOriginal 4 года назад

KittyCow lol no it doesn't. There's another financial crisis round the corner

@monad_tcp 4 года назад

I would say that any time is the best time for that, as long as you're prepared to stay some months without work.

@Terwano 4 года назад

@@KevinJDildonik Are you're talking to me? because you haven't addressed what I asked. Which is basically how do you gain more from the crisis. Not sure why you have to mention you're in top 15% or anything like that... I'm not middle class or top 15%, but i've also been unaffected by covid... in fact, i'm already making more money...

@monad_tcp 4 года назад

@@Terwano the most basic way of profiting from this is buying land for cheap

@pizzaandproperty1246 4 года назад

Keep it coming love your work 👍🏼

@auxiliaryboxes 4 года назад

Love your content! It's like I'm getting an Economics 101 class for free with this channel!

@pary8245 4 года назад

You often use "is a function of" when you mean "increases with/decreases with". Functions aren't always monotonically nondecreasing.

@andriypredmyrskyy7791 4 года назад

I don't agree. Sure he might specifically mean "increases or decreases with" but a monotonic function is still a function. What your complaint boils down to is "I wish he was more specific" because he definitely isn't wrong. No harm with wanting better meaning. Definitely agree that it would be better to say "is proportional to" or "these two follow each other" or some other more descriptive phrase. As it stands, however, he's just calling a square a rectangle. Monotonic function -> function.

@diarmuidfaherty9458 4 года назад

Option 1: Study Economics in university for the next four years costing 12,000 euro. Option 2: Binge watch Economics Explained, cost at zero.

@leoperez6737 4 года назад

My tuition is about 3.5 times that :'(

@stephenadams2397 4 года назад

Zero != opportunity cost

@effexon 4 года назад

@@stephenadams2397 This is very true, as time is very valuable asset for student.

@effexon 4 года назад

I'd recommend old book 101 of economics. Unfortunately cant remember link or name of book, it was freely available. 50s or 60s revision, original made maybe in 30s. Those basic principles dont change much, just details and the point in time we are in waves.

@lizadey5347 4 года назад

Assets bubbles have finally to be deflated and that causes someone pain.

@Optimal_Production 4 года назад

This is a great video as always! Keep up the good work!

@jonathanbrotto7278 4 года назад

Like a controlled forest/brush fire when there is too much let it be for the example greenery to have space for the healthy vegetation to thrive later on.

@hansnotig6250 4 года назад

Not quite right, the stimilus packages are distorting the free market... it would be a controlled bush fire with some fire fighters protecting some big, old and sick trees, which wouldn't have survived a natural (free market) bush fire...

@Hazie404 4 года назад

I like this comment alot

@gamerx112 4 года назад

could interest on debt be frozen in times like these? if so why doesnt the governments do this? a step too far?

@americanhero8606 4 года назад

Real talk. How many of you in the comments have even read about Henry George? He had a very compelling explanation for why the growth/recession cycle is actually NOT really necessary, or "unavoidable".

@621Tomcat 4 года назад

Last time I was this late, it was my first economics explained video!

@Tenchinu 4 года назад

Im glad me getting fired is helping the economy

@edwalker598 4 года назад

could you make a video on the economics of drug legalisation? (to celebrate 420k subs)

@duke3423 4 года назад

Really like your videos :) Will you make one on Mariana Mazzucato's work?

@jamieogilvie3478 4 года назад

Recently changed degree to include economics, imagine your vids are gonna help me through it

@RazinShaikh 4 года назад

"Recession is a product of prosperity" It is extremely sad to see how mainstream and unquestionable Keynesian economics has become. No, recession is not a fact of life and we don't need recession for prosperity. For anyone interested to know why, please check out Hayek's work and his criticism of Keynes.

@Judah119 4 года назад

Then I’d love for you to explain why we have a recession every 4-7 years

@Hunterchuck 4 года назад

Not quite what Keynes was talking about when discussing recessions and how to deal with them. His perspective was that the government should have involvement during those times to regulate the economy through policy that protects workers and small business. The goal from Keynes perspective is that there should be some monetary policy that helps increase productivity and decrease unemployment to jump start the economy again. Recession is due to many different factors, not necessarily how 'EE' puts it in this video which is a very narrow explanation. i do agree that Recession is not necessary though but how the economy is run would need to change if we were to do away with recessions. If you are for privatized industries then you might as well just admit to recessions being a 'necessary' thing.

@hansnotig6250 4 года назад

Out of Space cheap debt spilling into other markets, like stocks, housing etc. til they get way overvalued, et voilà you got your bubble, now just wait til it bursts👏

@caesar1700 4 года назад

'Recession' is so brutal that it should be the name of a death metal band.

@Menaceblue3 4 года назад

Who wants to see "Recession" and their new #1 hit single in rock and roll, "No jobs"?

@effexon 4 года назад

@@Menaceblue3 how about making huge buck with trillions from stimulus packages? Sounds more like "Kickstart my heart" by.. ehm Mötley Crue.

@noonehere4332 4 года назад

effexon Kickstart My Wallet

@inexplicable01 4 года назад

So funny to see the clips of your own youtube videos have kurzgesgat recommendations on the side. It's like looking at my own recommendations :D.

@jdwin504 4 года назад

Economics : recession are you going to visits us this year ? Recession : yesn't .

@yusufmohamed6035 4 года назад

Last time I was this early cover-19 wasn't worse than the flu

@theenlightenedone7937 4 года назад

It still is not for most of us only for the elders...

@FinanceOptimum 4 года назад

*Great vid - this dude has more B-roll than the Fed has fiat* 😂

@davidschaftenaar6530 4 года назад

So we've got ourselves a binge/purge cycle. The answer to me seems simple: Stop the binge, end the acquisition of debt. If I remember correctly, ancient Judea had this system where all debt would be forgiven every fifty years or so. I'm curious as to what effect a system like that might have.

@neeneko 4 года назад

One bit this leaves out that has changed. Historical, fortunes were tied to stability... the people with the most influence over policy had their wealth tied to things staying predictable and growth. Today, the people with the greatest fortunes (and most influence over policy), their wealth is not tied to economic output but instead economic instability. Flipping companies, debt, a constant need for low cost assets to buy up and a market for high cost assets to sell off, they make a profit whenever things CHANGE, regardless of going up or down. The real money today is not in slow steady growth, but in jumping from fast moving thing to fast moving thing, and those people encourage policy that creates instability.

@bluesclues132 4 года назад

speculative finance.

@Randomguydrm 4 года назад

Austrain Business cycle theory: am I a joke to you? Mises wrote how fake Fiat money creates recessions esp with fractional reserve.

@AbdulMeykal 4 года назад

I sometimes feel as if no one ever heard of Hayek. He literally won a Nobel Prize explaining the business cycle theory

@iSevios 4 года назад

That's because Mises' and Hayek's premise was that individuals are rational actors and will adjust their behaviours to accommodate for the respective change in monetary policy. (developing a theory from a praxeological basis, which is the correct way to do it) Unfortunately, the empirical evidence suggests that the general populace could care less (or even understand) the intricacies of monetary policy. The government currently sets the cash rate in the economy, this means that if people shop around they will get a very cheap and low rate on their mortgage repayments (at least, in Australia). But the data shows that people don't do that! (from either apathy or laziness). This is not rational!! Now imagine if the interest rate was set using the mechanisms of the market! - it would fluctuate so erratically and change day-to-day that any signal you obtained would be useless to make a long-term decision about investing in a high cost asset. Austrian Economics is like doing High School physics, it's all technically correct until you realise that when you go outside (the real world) you haven't accounted for wind resistance or friction.

@AbdulMeykal 4 года назад

@@iSevios People are rational when it comes to their own economic decision making, for the most part. They'll respond to price changes in a generally predictable way

@iSevios 4 года назад

@@AbdulMeykal Except they're not - at least, not in the way we can predict (i.e low prices good, high prices bad). Kahneman has demonstrated this before and it's a recurring theme in behavioural economics.

@iSevios 4 года назад

@Bruno Pereira I am actually well versed in the Austrian interpretation of the business cycle. It is not an all encompassing solution. Hayek and Mises and Rothbard said some profound things but there are also deeply flawed assumptions that are made. Think of the world less so as some virtual machine where you implement an economic "theory" on a populace. The strongest critique of Austrian economics is it's unattractiveness in the POLITICAL marketplace (i.e what voters in a democracy want) and its place in a globalised world that has become more hostile and volatile in the passed couple of months. It doesn't matter if a theory is "theoretically" perfect if it can't be tangibly enacted with success.

@kaelanirevyruun1676 4 года назад

LOL the info bubble up the top... “patreon go brr”

@deleteduser8949 4 года назад

9:20 Where do you get these images from, with the logo on a glass skyscraper? I searched, but couldn’t find anything.

@ace5 4 года назад

Best video ever!!! Keep ‘em coming

@deathbutton1 4 года назад

> This is an economy that is producing an extremely high standard of living for its participants which is in reality the only goal of an economy. lol

@Timbo5000 4 года назад

If that was the goal we'd not be overextending our growth all the time, causing recessions. Wonder for whom maximum growth is actually a good thing.... HMMMMM.

@effexon 4 года назад

@@Timbo5000 Yeah, people in old times worked coz they needed either food, housing or other stuff essential for life or family. Otherwise they would vacation or just spend time with relatives or friends in town. Now people have to return to work from pension, so it will never end? Ofc I see sportstars, some businesspeople, companyowners etc just golfing, so it is good for them. Some young people work to pay for their parents housing food etc coz parents are not in pension but were laidoff... so things are nuts. For environment it is simple: less work=less money to spend to useless stuff = should be less pollution and resources wasted. Quality of life: the less i need to work to get my basic needs , the better => time for family, friends etc.

@UltimateGattai 4 года назад

@@effexon didn't they have double digit interest rates too? If you had money in the bank you were laughing.

@effexon 4 года назад

@@UltimateGattai yes. but wages rose quickly too, so 20year mortgage was soon small if you were smart. Banks were only ones benefiting, they didnt pay much for your savings interest. So maybe not that much different than now, but people were optimistic coz they knew wages rose also even 5% per year.

@Alex-im4zi 4 года назад

15:08 NO!, THEY ARE NOT! Check out the Austrian business cycle theory, its all (in 90% of the cases) about central banks printing too much money! (making interest rates too low... Its long to explain)

@hansnotig6250 4 года назад

Thank you, I was thinking the exact same!!! in theory a recession could be good, but not when governments are distorting the free market by saving sick companies and creating even more debt...

@effexon 4 года назад

I thought interest should go up if you print lots of money... How can this be both ways, low interest and much printing? EDIT: can it be that interest=indication for demand of debt (when low, interest is low), when high => higher interests... when QE or printing (just for businesses already running nicely with minimum staff and cost) it just goes to hard assets or stock prices(zero difference in demand or employment in those cases, business as usual, numbers change a bit).

@effexon 4 года назад

@@hansnotig6250 yeah these "economic principles" all seem to be from 70s or 80s when everything (parameters of economy) was different.

@Nikola-tn8fu 4 года назад

You might hear this often but your Videos are incredible

@pscoelho 4 года назад

Excellent video!

@carlospulpo4205 4 года назад

Any predictions on the austerity measures and increased taxes that the countries that made the money printers go brrrrrrr? I would like to see a video on how the governments historically recover from such spending emergencies.

@snex000 4 года назад

@Bruno Pereira Or USA in 1920 compared to 1929. Similar circumstances, massive difference in government response.

@ThrottleKitty 4 года назад

"Do bubbles have to pop?" "Yes little Timmy, if not the world would be totally full up with bubbles"

@tretolien1195 4 года назад

Hey Economics Explained could you do a video on the use of mathematics in Economics and how effective the models they enable are at describing the markets during times of crisis.