All Posts

During the 1970s, the United States suffered from double-digit inflation, rising unemployment, and bleak economic prospects.  Declining domestic industry and increasing global competition sowed the seeds of doubt in American minds and the OPEC oil embargo shook the economy to its core.  The crisis culminated in a period of stagflation, a stagnant economy ill with both high unemployment and inflation.  Monetary policy and the Federal Reserve had failed in both of their mandates: full employment and price stability.  The global monetary order created by the Bretton-Woods agreement collapsed and the US found itself forced to detach the dollar from the…

The U.S. economy has drastically changed ever since the onset of the coronavirus pandemic. Businesses shuttered, teleworking at an all time high, are all part of the “new normal” we are living through. The lack of economic growth has called for the Federal government to enact very low interest rates in order to spur economic growth and prevent an economic crisis like we had in 2008. What do low interest rates mean? The cost of borrowing any money is now extremely low compared to before because the government wants people to borrow money to spur economic growth. This low interest…

There has been a drastic increase in worker violations since the onset of COVID-19. The American employer has responded by seemingly being passive with regards to the exploitation of their labor as times have become especially dire. There is no time to be prideful with fighting for their deserved liberties, as now COVID has led many to the mentality of survival. Many workers are grateful for just having a job, as with an unemployment rate of about 8.4%, getting too picky can easily lead to them being one of millions not having a stable source of income. The Washington Center…

Since January 2012, the Federal Reserve has maintained a target of 2 percent inflation for the US economy.  The target allows the Fed to perform its congressionally mandated jobs of maintaining price stability and maximum employment.  Before the 1970s, economists believed inflation and unemployment had a permanent negative correlation so that low inflation and low unemployment could not be achieved at the same time.   However, the 1970s oil shock brought on a period of high inflation and unemployment known as stagflation.  With the high rates of the 1970s, the Fed needed a new way to control inflation.  At the time,…

As part of the historic 2nd quarter contraction in the US gross domestic product, investment spending decreased by a massive 49% under the duress precipitated by the COVID-19 pandemic.  Poor general economic conditions translated to uncertainty in the minds of investors.  Meanwhile, investors received government relief aid that they did not use to invest.  As a result, there is now an estimated $1.5 trillion in unused capital in private equity funds alone that could be invested as soon as negative economic conditions recede. This massive glut of capital could create an explosion of investment and is therefore referred to as…