Huffpost Business
The Blog

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Larry MacDonald Headshot

Global Recession? Jobs Gone? Everyone a Scapegoat.

Posted: Updated:

We love to point the finger at whomever we think responsible for the recession, whether the corporations, the do-nothing congress, the Chinese low cost labor, or our lack of innovation. The list goes on and on.

Have you ever wondered how it got to be a global event? Are any of our current crop of scapegoats really so powerful that they can influence the entire world economy? Doubt it.

Some cycles take so long we may not notice them. A 24-hour day cycle is easy. The seasons are familiar, too. But once you get to a year, things get hazy. Four years for the Olympics and high school and college, but do you know any eight or ten-year cycles?

When you recognize that you are in a cycle, such as the yearly changing of the seasons, you don't panic and think that spring may never come do you? You know you can't hurry it.

The yearly cycle, if watched in time-lapse photography would show the birthing of plants in the spring and their death in the fall. The seasons are the inhaling and exhaling of mother earth, it might seem.

If you have wondered what powers, aside from God, have greatest sway over nature, you may come to the conclusion that in our local solar system the almighty natural power is the sun. It controls everything on the planet, granted subtly.

The majority of people believe that the seasons are caused by the earth being further from the sun during winter and closer in the summer. Not true. We have the seasons because the earth's axis is tilted slightly. As it goes around the sun, either the northern of southern hemisphere receives more direct sunlight, resulting in the seasons.

So the solar output of the sun doesn't change during the seasons to a significant extent. You can think of the sun as having a constant brightness, or can you? Perhaps the amount of visible light is fairly constant, but the output in the other spectra is varied.

There is an 11.1 year sunspot cycle that closely aligns with the global economy, which you can see here.

We don't know why there is a correlation, just that there is one, reasonably constant over the last several hundred years. It is not a perfect mirror image, but close enough to notice a distinct pattern.

The point I am suggesting is that we are in a totally natural cycle of expansion and contraction. The cycle sometimes behaves a bit like a manic depressive, going wildly up and then crashing down. At other times, it is a rather mild expansion and contraction.

In such a cycle, there is nothing that can be done to change the course. So many years of atypical, read manic, economic expansion is followed inevitably by an equally dramatic contraction. Like breathing in and breathing out, you can't stop the cycle short of a cataclysmic event.

The attitude that someone, or some law, or some program will mollify the effects of the cycle is unrealistic. Like in a perfect storm, you have to ride it out... if you can. Those who can't are swallowed by it.

So if you want to know when the recession will be over and things back to normal, just look at the dates and overlay the 11.1 year cycle, and you will be pretty close to prognosticating the recovery.