APRIL 1960 – FEBRUARY 1961 (10 months)
The Early 1960s recession, also called the Recession of 1960, was yet another chapter in the modern economic cycle that has shown its ugly side so many times to the U.S., as well as to the world. This recession was characterized by, once again, astronomically high unemployment rates, incredibly high inflation, and a bad Gross National Product rating.
These all worked together to cause consumer confidence in the system to plummet, and caused a downward spiral to develop that swallowed many businesses. This in turn caused unemployment to rise, and so the cycle began again.
What ended the recession was the call President Kennedy made on January 30 of 1961 to increase government spending to improve the Gross National Product. This helped reduce unemployment, helped bring back confidence in the economy, helped out many businesses, and helped the recession to come to an end that very year.
MARCH 2001 – NOVEMBER 2001 (8 Months)
The Early 2000s recession took place in the U.S. for a number of different reasons. One was the collapse of the dot.com bubble. A false high, created in the initial, money-making wave of the internet that swept the world, finally came crashing down to a realistic level.
Also, the September 11th attacks made against the Pentagon and the World Trade Center Towers caused a huge stir among Americans. Although Americans rallied and stayed positive through the whole thing, the economy took a hit as people stopped spending money.
JULY 1953 – MAY 1954 (10 months)
The Early 50s recession, also known as the Recession of 1953, was mainly brought about because of the post Korean War financial bungles that often accompany the end of any war. False highs, this time in the form of a large inflationary period, came crashing down as the war came to a close and more funds were put into national security than were ever before.
Another factor in the Early 50s recession was that in 1952, the Federal Reserve changed its policy. They reformed the monetary policy to be more restrictive, and in doing so, hoped that it would control inflation.
Thus, with further straining of the post-war economic environment, a small collapse was in order. The modern economic cycle will need to relieve pressure once in a while, and the system relieves the pressure with these “recessions” as we call them. They happen every so often, and part of the Fed’s responsibility is to try to make it as smooth as possible.
1907 – 1908
The Panic of 1907 was the first major financial crisis to plague the U.S. in the 1900s, the last recession having been back in the 1890s. The Panic of 1907 was actually a severe monetary contraction that manifested itself as a recession. Many people lost jobs, many businesses went out of business, and many financial institutions were challenged by the panic.
What brought on the panic was when a run on Knickerbocker Trust Company deposits caused a monetary contraction. This occurred on October 22, 1907, and was the incident that was to blame for the panic. The lack of confidence is really what drove the recession home.
As you can see, confidence plays a huge role in preventing recession. And when consumers, money holders, and laborers lose that confidence, runs are started, and things turn bad for the economy. Confidence is imperative to any economy