Tuesday, June 12, 2018

It's California's fault................

     Did you know that these here United States have had a recession every decade since California achieved statehood?   According to these statistics, that's the truth.  So, is a recession lurking around the corner?

     Ben Carlson, in his A Wealth of Common Sense blog, says, "Someone who thinks correlation implies causation in these things would assume that means we’re due for a recession in the next couple of years before the new decade hits."

    Carlson, wiser than most, confesses not knowing.  He concludes his post on the subject like this:
Recessions typically occur because certain parts of the economy get overheated and then corrected. Yet even economists don’t have an overarching model or theory that can accurately explain when, why or how that will happen.
The reason this is the case is that something as complex as economic activity is mainly controlled by human behavior, not rational economic textbook theory.
Charlie Munger once asked a group of college students, “How could economics not be behavioral?” His response: “If it isn’t behavioral, what the hell is it?”
Human behavior isn’t predictable enough to rely on the calendar to forecast the next recession. The next one could occur in 2019 or 2025. I wouldn’t be surprised either way.

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