The divisive events of 2020 and the uncertainty they bring have left some of my brothers and sisters of Generation Z feeling disenfranchised and empty-handed compared to older counterparts. Fear and worry can be sensed, even through mask-covered faces. There are questions about the future. Yet we can look to the past to offer us some much-needed understanding.
As a college student, I've observed the ambition and optimism drain from the faces of peers. My generation entered adulthood on the upswing of the longest period of economic growth in U.S. history only to have opportunity appear to disappear nearly overnight. The study of economics suggests uncertainty emerges whenever there is a recession. Yet there is an enduring certainty we should not forget: The American economy is dynamic and will produce another expansion.
From planetary movements to water cycles, many things in life work through cyclical patterns. The economy is no different. Through a concept known as the business cycle, economists know that the economy expands and contracts in a pattern. There have been 33 cycles since 1854, according to the National Bureau of Economic Research (NBER). Our location in the cycle can be understood via economic indicators.
This essential concept is both under-taught and under-discussed outside the academic community. What are we to do with this knowledge?
We should learn from our peers. Workers in seasonal industries are accustomed to annual cycles. Their knowledge can help us navigate the larger business cycle we find ourselves in.
We should learn from our elders who've survived past recessions. One widely held insight is that it is advantageous to prepare for economic hard times. Savings is a function of this process.
Another function of savings is investment. Consider that some of the greatest business enterprises in our state's history started in small Arkansas towns during NBER-defined recessions. These include Murphy in El Dorado (1907), Tyson in Springdale (1931), Dillard in Nashville (1938), and Hunt in Stuttgart (1961). Sam Walton opened his first retail store late in the recession around the end of World War II (1945).
It's possible another great enterprise will be formed in this recession. We should work to create an economy based on equal opportunity, where individuals have the liberty to pursue their economic dreams.
We should also confront our fears. Some fear to take on the responsibility of starting a family because of weak economic conditions. Yet life is short and one should not stand idly by in pursuit of these dreams. According to the NBER, the average postwar recession is 11.1 months.
We can adapt and beat these obstacles like we have overcome numerous past challenges in our lives.
We should fear not. There is one thing a recession can never deprive one of: hope. So do not throw your goals and dreams out the door.
Because no matter how harsh the winter, spring grows closer each day.
Dylan Saettele is an economic analyst with the Arkansas Policy Foundation's Post-Millennial Project.