Recessions are kind of like forest fires from what I see.
They are destructive, painful, cause loss of property, kill things and generally are undesirable. But (to an extent) they are also necessary.
In the Western US fire used to be a regular occurrence. Natives would start fires, lighting would start fires, they would burn until they ran out of fuel and burn out. But this kept forests healthy. There used to be more bigger stronger pine trees and less undergrowth. Somewhere along the line it was decided fire was bad and we were going to set up fire towers and stop fires with maximum effort.
Which was all good, until it doesn't work and we simply can't because there is too much built up fuel and the fire rages out of control completely destroying the forest. The previous fires, while more regular, were smaller because the amount of fuel never accumulated to the levels it does with modern fire suppression methods.
In this analogy we've somehow decided that we are going to stop people from experiencing economic pain at all costs. This is humanistic. And we want things to keep growing and we don't want to see destruction. But what happens is a lot of trash builds up. Malinvestment. Corruption. Paper profits over actual production. Unlimited credit spent on consumer items. No personal savings. No problem, firemen Uncle Sam and the Federal Reserve are here to save the day! And no one can argue with this happening because who wants to see anyone get burned through no fault of their own?
But (just to torture the analogy) what I suspect will eventually happen is enough malinvestment, corruption and lack of responsible behavior will build up they won't be able to put the fire out. No one will. And it will burn the system flat to the ground instead of just clearing out a little brush and giving space to strong trees.
This isn't to suggest the government shouldn't help in this case. It's an unusual situation obviously. Just allowing little fires to burn prevents big fires later. Everything can't be free to everyone all the time. Reality doesn't work that way unfortunately. Failing to behave ethically, productively and responsibly, failing to save and to prepare for rough times, trying to consume and grow unsustainable without regard to risk can't be forever consequence free. That's not a moral statement, just a practical one.
Not to spoil your fine analogy, but as you probably know forestry services and farmers have engaged in controlled burns[1] for quite some time as part of sound wildlife conservation methods.
In keeping with your analogy, what may be wrong with current economic governance is the lack of letting a recession run its course and, for example, letting big banks who gambled too much fail instead of propping them up.
The revolving door between, say, Goldman Sachs and the Dept of Treasury has something to do with this, I think.
They are destructive, painful, cause loss of property, kill things and generally are undesirable. But (to an extent) they are also necessary.
In the Western US fire used to be a regular occurrence. Natives would start fires, lighting would start fires, they would burn until they ran out of fuel and burn out. But this kept forests healthy. There used to be more bigger stronger pine trees and less undergrowth. Somewhere along the line it was decided fire was bad and we were going to set up fire towers and stop fires with maximum effort.
Which was all good, until it doesn't work and we simply can't because there is too much built up fuel and the fire rages out of control completely destroying the forest. The previous fires, while more regular, were smaller because the amount of fuel never accumulated to the levels it does with modern fire suppression methods.
In this analogy we've somehow decided that we are going to stop people from experiencing economic pain at all costs. This is humanistic. And we want things to keep growing and we don't want to see destruction. But what happens is a lot of trash builds up. Malinvestment. Corruption. Paper profits over actual production. Unlimited credit spent on consumer items. No personal savings. No problem, firemen Uncle Sam and the Federal Reserve are here to save the day! And no one can argue with this happening because who wants to see anyone get burned through no fault of their own?
But (just to torture the analogy) what I suspect will eventually happen is enough malinvestment, corruption and lack of responsible behavior will build up they won't be able to put the fire out. No one will. And it will burn the system flat to the ground instead of just clearing out a little brush and giving space to strong trees.
This isn't to suggest the government shouldn't help in this case. It's an unusual situation obviously. Just allowing little fires to burn prevents big fires later. Everything can't be free to everyone all the time. Reality doesn't work that way unfortunately. Failing to behave ethically, productively and responsibly, failing to save and to prepare for rough times, trying to consume and grow unsustainable without regard to risk can't be forever consequence free. That's not a moral statement, just a practical one.
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