Joseph (son of Jacob) and the business cycle
Business cycles are part of every capitalist economy. In fact, there is a reference to a business cycle in the Bible, as explained by Joseph, the son of Jacob. José had the ability to interpret dreams in prophecies that occurred in real life. In one case, Joseph interpreted the dream of the Pharaoh of Egypt. Pharaoh “dreamed of seven skinny cows that came out of the river and devoured seven fat cows; and seven dry ears that devoured seven fat ears.” Joseph interpreted the dream to mean that there would be seven years of bad economic times (famines). In these difficult times, the Egyptian and surrounding kingdoms would be in an economic depression. However, Joseph interpreted that after seven years of hard times, seven years of prosperity (economic expansion) would come to all known lands. Both the good and bad economic times described by Joseph show a pattern, and it is no exaggeration to say that Joseph is actually describing a business cycle. Business cycles, as Joseph characterizes them, show that there will be periods of economic gain and periods of economic suffering.
Now for more recent times, when my mom was born in the 1930s, the US economy was not doing very well. In fact, the economy was in depression. Unemployment was high and the median household income fell by 40 percent. Also, when I was born in the 1970s, luckily, the economy wasn’t as bad as it was in my mother’s day. However, the 1970s was one of the worst economic decades in American history. In fact, inflation rose 6 percent annually in the 1970s. This period in our economic past is known as the stagflation period because unemployment and inflation increased annually. Today, the American economy is better than it was in the 1930s or 1970s, but the economy is not as good as it was in good economic times. For example, today, personal disposable income has decreased. Yes, GDP has grown 1.3 percent during the second quarter of 2011, but the current unemployment rate is 9.1 percent. These numbers are not large, but at least they show that economic growth is taking place.
As for recessions in general, the last recession in the United States began in December 2007 and ended in June 2009. American recessions have historically lasted from about six months to a few years, with the exception of the Great Depression which lasted a year. 43 months total. Recessions are countered by economic expansions, which tend to last longer than recessions. To make a point, the United States throughout its history has been in more economic expansions than recessions, with the longest expansionary period lasting 120 consecutive months.