Recessions are Opportunities

There’s been a lot of talk, and frankly fear-mongering, in the press about the current recession. It’s “the biggest financial disaster since the 30s” by some accounts, although it’s hard to reconcile that with inconsistent economic data (such as the fact of contuining GDP growth through the first half of 2008). With all the comparisons to the Great Depression, it’s worthwhile to discuss briefly my take on it. I am an incessant optimist, but I just have to respond to all the negativity. First off, recessions are a normal part of the business cycle. The business cycle is: make investment, operate business, depreciate capital, close business.  You invest capital in order to be able to run a business, produce products, be more efficient. At some point, that capital must be depreciated, because the factory machines are worn out and need replaced, or the product is no longer relevant in the… read more →