Nobel laureate economist and New York Times columnist Paul KrugmanSecond, there are three main reasons for the collapse of the US economy. One is the war in Ukraine. The other is disruptions in the supply chain. Finally, the US government’s overspending, BidenThe overheating of the economy following the easy money that is distributed to the public as soon as he takes office. Krugman He admits that many economists, including himself, are wrong in their predictions about rising inflation, but he doesn’t think the price hike will be permanent. The war in Ukraine and supply chain problems are temporary factors of inflation and impact all world economies.
He predicts that the decline in commodity prices, which is one of the factors that has increased inflation over the past period, will also affect other sectors. Krugman. Many stores in America have sold out over the past year, many of these products are out of stock and they are trying to empty their warehouses with huge discounts. Krugman says inflation is still well above the acceptable figure, two percent, and will decline after a while. He also thinks there will be a recession in the economy, but unlike the 1980s, it will be short-lived. Despite this, he fears that the Fed is too exaggerated in its fight against inflation. Because the Fed is under pressure.
KrugmanDespite Washington’s determinations, it is now openly so “recession” the word is spoken. Joe BidenIt also came out of her mouth. Before Elon Musk He said he predicted a recession in the economy. chief of JP Morgan Chase Jamie Dimon reiterated the same concern. The former Treasury minister, who ruled that incentive checks distributed during the pandemic would increase inflation, and the Fed ignored this warning. Larry Summers It proposes two years of exaggerated unemployment, 10 per cent, against the containment of inflation. predict the 2008 crisis Nouriel Roubini by those who have joined the chorus of the return to the past. the day before Mark Zuckerberg He drew a disaster scenario during the meeting he held with Meta employees.
It turns out that some of these predictions are correct. The rise in the price of oil and the rise in food products do not stop. As the Fed increased interest rates, American purchasing power declined. Record house prices fell as demand slumped. But due to the absence of chips, the production of automobiles stopped, second-hand vehicles began to gain value. Older-model luxury sports cars also add to their value. It appears that the price increase will continue for a while under the influence of external factors and that employees will pay the price.
Layoffs and downsizing have already begun. Netflix has cut the cost of losing subscribers for its employees, laying off 300 people in the past few weeks. Those who warn of the recession in the economy Elon MuskTesla has delayed vehicle deliveries due to the disruption of production in China, meanwhile it has begun to lay off its employees. Moss provides a total of 10 percent tensikat. Investing billions in a trifle called the Metaverse to get rid of your own problems: investigating the unauthorized use of people’s data, etc. Mark Zuckerberg and invoices its employees. Meta has discontinued the free laundry and dry cleaning services it offers to its employees and announced at the meeting held the previous day that they will be hiring fewer people this year. Many Silicon Valley companies have already passed their offers to their recruiters.
In American capitalism, tensikats do not necessarily depend on the economic course. The gift of legendary General Electric CEO Jack Welch to the business world is to lay off 10 percent of his employees each year and hire new ones. Therefore, competition will increase and the most enthusiastic people will be replaced by poor performing employees. Other leaders, who adopt this principle, accelerate the recession they normally would, using the economy as an excuse. Rapid unemployment will reduce inflation, but the cost to people will be heavy.
COMPANIES MAKE PROFITS
The interesting thing is that all the companies that have complained about the economic downturn have announced profits and their incomes are higher than ever. The oil companies have announced a profit of $ 45 billion in the first quarter of this year alone and do not intend to jeopardize their profitability as global gasoline prices are rising. The same situation is the forerunner of alarm bells in the economy. Elon Musk It also applies to. Despite challenges in the supply chain, Tesla continues to outperform competitors like Toyota in delivery and ordering.
In America, economic recession talk is often repeated by the business community when there is a Democratic president in office. Elon Musk He does not hide his intentions. He has announced that he will vote for the Republican candidate in the next election. Going even further Donald Trump He said it was much easier to do business on time. The Democrats’ high tax policies, their desire to bring more regulation into business, the protection of employee rights don’t appeal to bosses.
Krugman Economists like. But this short period does not come until the mid-term elections in November. The exaggerated reaction of the Fed, which some say is an independent institution, is that there are just a few days left for the elections on the calendar. The economy will normalize in a year or two, but not in a month or two. Voters going to the polls for the deteriorating economy in the 2024 presidential election. When the business world is already talking about economic hardship, they are actually overthrowing the government and laying the groundwork for choosing someone they can do business with more easily.