When the topic of recession comes up, you’ll encounter differing perspectives everywhere you look. In taking an honest look at the facts, there’s a temptation towards extreme emotional and reactionary thinking. For example, many people fall into these two, broad-based opposing camps:
- Recession deniers. Some people flatly refuse to accept that America is undergoing an economic recession. The textbook definition of a recession is when a country experiences a GDP decline for more than two quarters—which is what has happened. Recession deniers sidestep this by simply redefining the definitions, despite undeniable facts. We are in a recession. The sooner we face it, the sooner we can work to get back on track.
- Recession worriers. The second error lands on the opposite side of the spectrum. This might include end-of-the-world types who head for the wilds of Montana with their gold and emergency food supplies. This position also represents a false reaction. The last thing you want to do is allow the recession to terrify you.
At Portage Bank, we offer a more balanced perspective on the recession.
How Did We Get Here?
There are plenty of technical reasons chronicling the current downward economic trend. We could look at how the Fed chased empty money after the same economic supply of goods and created new money to buy up treasury debt, thus creating inflation. Inflation is to blame for ushering in the recession, as well as the consequent raising of rates to control inflation. All of these facts and much more play into the conversation. But sometimes, it helps to step back and gain a deeper perspective.
What is the Real Story Behind the Recession?
People love to complain about our American heritage, accusing us of rampant greed, wealth, and privilege.
America has indeed risen to heights of prosperity unlike anything the world has ever witnessed. But what people forget is that we didn’t begin that way. Only a few short years ago, most Americans had no money, few resources, no privileged lifestyles, loan options, or LinkedIn networking benefits. We built an entire civilization in a landscape offering little more than tumbleweeds.
But America is like a wealthy family in one sense. Parents who start poor and work hard to follow their dreams and rise up often face a very real challenge: getting their children to appreciate the hard work behind the four-car garage.
In our country, we have a similar problem. The people who worked to get us here are gone. Generations of children born into privilege often, in their entitlement, tear down what their parents so painstakingly built. To rephrase a famous old American quote: “Hard work begot property, and the daughter devoured the mother.”
The result? An unprecedented abandonment of hard work on behalf of younger generations.
But labor and wealth always go together.
As soon as you try to separate labor and income, you wind up with poverty in some form or another. Recent shutdowns created a sudden halt in productivity. Entire generations consequently wonder why they should show up at work at all. Why work at retail, scooping ice cream, or mowing yards when you can make just as much watching Netflix on unemployment checks?
Businesses went under, and mass labor forces disappeared almost overnight. Is it surprising that a recession was the result?
Where Do We Go From Here?
It’s bad, yes, but it’s not hopeless. There are some bright spots in our current financial landscape:
- Due to the lack of workers, there are plenty of job openings, which is almost unheard of in historical recessions. Be inspired by the great heritage of this nation. One of the most rewarding things in life is to work hard at following your dreams. Portage wants to support you in that.
- Some businesses thrive even in the worst recessions. Find out who’s still killing it, and then learn from them or work for them if you can!
- High-interest rates can work for you. At Portage, we can offer the most competitive rates. Open a Money Market Account with us and stay ahead of the recession.
- Most importantly… recessions come to an end. If you plan carefully, you can even come out ahead on the other end.
Bank with a team of people who can take an honest look at what we are facing while applying smart strategies for navigating the times we live in. Contact us and find out how we can help through all the highs and lows of economic recessions or whatever you may be facing.
