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The mainstream American, i.e., Keynesian, economists call what happened from the early 1980's onward (until 2008), with the ever-less-severe economic downturns along the way, the Great Moderation.  This from their perspective vindicated their idea that recessions should be, and can be, eliminated from the system.  Their idea was that once they could actually start enforcing the law against recessions (which was passed in 1978) in the 1980's, they would progressively work at, and succeed at, eliminating recessions.  They did not think they would be able to eliminate recessions completely all at once, but they figured that they would be able to do so over the course of time - and, in fact, until 2008, the recessions were milder over the course of time. 

That is why the downturn, the very severe one, of 2008, caught them so thoroughly by surprise. 

The severe downturn of 2008 did not catch me by surprise at all - I predicted it, both the severity and the approximate timing (2007-2010), when I found out about the law against recessions in the summer of 2001. 

I predicted it because contrary to what the mainstream Americans might want to believe because of their orientation toward avoiding recessions at all costs (or even actually do believe, among the mainstream American economists who actually know about the Kondratieff wave, which is probably not many of them), the Kondratieff wave does work and has not been eliminated. 

In fact, the only reason why the mainstream American economists were able to successfully start enforcing the law against recessions (called Humphrey-Hawkins) at all was because they started doing so when the economy was well into the plateau phase of the Kondratieff wave.  The plateau phase of the current Kondratieff wave started in the early 1980's, and the law against recessions started being actively enforced immediately in the wake of the stock market crash of October 1987. 

What enforcing the law did, effectively, was extend the plateau phase of the current Kondratieff wave for years beyond when it would have otherwise ended - and, under those circumstances, the downturns along the way naturally got milder and milder, too (see next paragraph - it has to do with the stock market going up). 

But the plateau phase cannot, and does not, last forever - and it, in fact, ended in early 2000 when the stock market went exponential.  The stock market wants to go up a lot during the plateau phase anyway - and this time, that was taken as far as it can go, the stock market went exponential. 

The authorities managed to squeeze out one more mild downturn (as opposed to a severe one) out of that - but the reality was that the Kondratieff wave was past the plateau phase in the meantime, and the pressure from that was going to keep building as time went on.  I foresaw that when I found out about the law against recessions in the summer of 2001 - and so on the basis of that, I predicted that when the next big down cycle was due in 2007-2010, the pressure would be built up to such a point that it would probably (actually, nearly guaranteed) overwhelm the Fed.  That is what happened. 

And I made a prediction beyond that, as well.  Since the only way an economy can go down a lot if there is a law against recessions being enforced - with the Fed tasked from the beginning with enforcing it - is if the Fed loses control, I knew that the only way my prediction could come true was if the Fed lost control.  And given how much things were out of balance in the summer of 2001 already and given how much more out of balance they were likely to get by 2007-2010 under the circumstances of the continued enforcement of the law against recessions - which they did - I knew it was highly likely that the imbalances would be so bad when the Fed lost control that the Fed would not be able to get control fully back again, and I think that is what happened (the link "About the Fed having control of the economy" describes this). 

So I actually predicted that once the big downturn happened sometime between 2007-2010, the stock market and the economy would go back to doing what they normally do in a big downturn - go down, up, down. 

We have had the first downturn - the one that happened in 2008 - and the upturn started in March 2009, as slow and inconsistent an economic upturn as I expected it to be, given where it is happening in the big picture (but I am not surprised that the stock market upturn in March 2009 was as sharp as it was, that is typical of the start of a bear market bounce).  And so I fully expect the second downturn to happen, too (that is why I put up this website). 

And that is why the Great Moderation was never real to begin with - because it was not going to last. 

The Kondratieff wave cannot be overcome - so the longer one tries to do so (overcoming the last part of it, the big downturn, see the description of the Kondratieff wave at the My model link), the worse the consequences will be.  And that is why it was for all practical purposes virtually assured that when the authorities decided to continue to enforce the law against recessions from 2000 (when it expired) onward, they were guaranteeing that there would be a big downturn sometime in 2007-2010, which would be followed by a major partial recovery (it would be a major one just given the sheer size of the moves that happened in the more than 10 years before it, going all the way back to the late 1990's, but then the authorities also kept pumping it up even more because of their continued attempt to enforce the law against recessions), and then there would be another major downturn (in the end, the cycles will not be denied). 

And that is why the conventional American economists are so wrong in what they are trying to do.