With how out of whack the current economy is, many are speculating that we may soon be once again entering a recession (if we are not in one already). Situations like this often have people wanting to look to the past to learn what to expect.

However, according to Fred Hubler on BCTV.org, it can be very difficult to know what to expect due to the wildly different situations that have brought on each recession in the past.

With our current economic situation, it is a combination of well-documented factors. The pandemic caused shockwaves in the economy that we are still feeling the ripples from. Russia’s attacks against Ukraine have disrupted a lot of typical imports.

And we are also experiencing unusually high inflation. While all those issues combined may be steering us towards a recession, these are all things that we have not really experienced before, so the way to weather the storm is not obvious based on the past.

For one, in the late 2000s we saw a recession that started being set in motion in part by 9/11 and the economic disruption that caused.

The financial woes really came to a head in 2008 when the housing market collapsed and people were experiencing evictions and foreclosures. While the economic impact may have been similar to what we are seeing now, the root causes were totally different.

Even during the recession of the ‘80s, the situation cannot be correlated despite the country also dealing with inflation as a factor at the time. The Vietnam war was also a contributing factor, but another major difference is that the job market at the time was struggling, whereas now jobs are actually strong for prospective employees.

What all of this amounts to is that while at a surface level some might think that the challenges of a recession can be predicted based on the past, the truth is each time we have previously seen a recession it has been due to extraordinary conditions.

That is bad news in the sense that it means we would have to learn from a new recession as we go. But it is good news in that it means just because some conditions might be similar to the past, it does not even necessarily guarantee that a recession is coming.

For a further primer on what has brought on recessions in the past, you can read the article from BCTV.org here.

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