Recessions are always NEEDED to wash out excesses in business. While it temporarily hurts everyone, it enhances progress in all aspects of life. Look at what happens under socialism/communism…when inefficiences are not cleansed out of “business”, then the whole system becomes unwieldy and uncompetitive.
America was in decline during the late 60s and 70s. Thanks to JFK, he cut the top marginal tax rate from 90% to 70% which bought a few more years. Reagan cut it from 70% to 33%. Only then was an sustained economic boom started which, except for a few years, continues until today. Excesses are found in every market, and that is a part of human psychology.
I am doing a presentation on Charles Munger’s speech of “24 Standard Causes of Human Misjudgement”. The way to profit from this is to understand human misjudgement and their causes and “exploit it”.
In America, the little guy firmly believes that their fate is in their own hands. However, many Americans on the left are looking to Uncle Sam to be their sugar daddy and they welcome socialist tendencies. Well, if we ever go that route, we can welcome 10-15% unemployment rates and very heavy tax burdens that the european countries generally enjoy.
Even the rich in Europe create bank accounts in other countries to escape the high tax burden needed to make sure the little man doesn’t have to work too hard.
