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Recession Likelihood High,consumer advocate Tom Martino explains why.

by Max Baker Consumer Advocate Tom Martino airs Mon - Friday 10am to 2pm on 630 KHOW. Editors Note - 630AM leans right on the political spectrum with other hosts such as the infamous Michael Brown and ultra-conservative Dan Kaplis whereas Martino helps consumers and stays neutral on politics. Martino dives into some of the most complex consumer issues and his numbers are staggering in terms of refunds, fixes, returns to the consumer. The number is north of 100 million in value. Moreover, Martino allows people to vent and often the radio show discusses prevalent social and cultural topics and this is where Martino shines with wisdom, compassion but he doesn't hold back. In these radio moments Martino shifts his assertive tone towards reality therapeutics or tough love.


He has years of experience analyzing historical trends so his opinions are not anecdotal but rather intellectual observations. He has noticed patterns and here is an example from yesterday's broadcast on the topic of the likelihood of a big recession. Martino discusses this likely scenario like a formula below:

Low unemployment = Employers competing for a small labor pool of talent and skill.

Small Labor Force = Decreased production (example, lumber up by over 400% in some settings) Decreased Production = Decreased Supply = Spike in Inflation

Spike in Inflation = Fear in marketplace = People stop buying things and this vicious cycle intensifies. Listen to Martino trot out his thesis here, this is brilliant radio. Martino isn't just discussing the formula above but ends his segment with a warning. The warning is that policy makers need to be mindful to prevent their social, political and economic philosophies interfere with economic policy, and Vice versa

Now there are other economists that pose other theories on monetary policy. Modern Monetary Theory. MMT advocates say that government should be responsible for setting economic policy, which is currently part of the Federal Reserve's responsibility in mainstream economics. In MMT, however, the Fed would have less control in setting monetary policy and would primarily help fund the government's debt.

But there are a number of economists who have been critical of MMT, saying rising deficits are dangerous because they push up interest rates and lead to hyperinflation, which could have adverse impacts on investment returns. This author believes the answer isn't this or that but most answers are a synthesis of opposing philosophies. This is more of an Eastern philosophy as written in 4th century BC Tao Te Ching and made popular in the West by Georg Wilhelm Friedrich Hegel who was born in 1770 and studied in Berlin. Conclusion: For today's context, especially with the trillions spent recently and our climbing debt of 26 trillion I would back Tom Martino's explanation based on his wisdom and experience in the real world vs the ivory tower of academia.