--- title: Why recessions are inevitable - The Hustle description: Recessions are inevitable, but how you respond is up to you. image: https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/812331629-final_size-Morgan27s20Musings-032028129_20220615231104.webp --- # Why recessions are inevitable ![Morgan Housel](https://53.fs1.hubspotusercontent-na1.net/hubfs/53/assets/hubspot.com/web-team/WBZ/HubSpot%20Media/Blog%202021/Images/Nav/Optimized/TheHustle_Icon_Dark.svg) [Morgan Housel](https://hs-sbup.thehustle.co/author/morgan-housel) [Morgan Housel Twitter profile ](https://twitter.com/MorganHousel) Published: June 16, 2022 Updated: October 11, 2023 As markets continue to wobble and more people discuss the possibility of heading into a recession, let me share a fundamental truth about money: ![Why recessions are inevitable](https://hs-sbup.thehustle.co/hs-fs/hubfs/The%20Hustle%20News/Assets/Images/812331629-final_size-Morgan27s20Musings-032028129_20220615231104.webp?width=595&height=400&name=812331629-final_size-Morgan27s20Musings-032028129_20220615231104.webp) - If markets never crashed, they wouldn’t be risky. - If they weren’t risky, they would get expensive. - When they’re expensive, they crash. So markets will always crash, because if they didn’t, they would become more susceptible to crashing. **The same is true for recessions** When the economy is stable, people become optimistic. - When they get optimistic, they go into debt. - When they go into debt, the economy becomes unstable. - When it’s unstable, you eventually get a recession. A lack of recessions plants the seeds of the next recession, which is why we can never get rid of them. In other words, stability is destabilizing —  something economist Hyman Minsky figured out half a century ago. It’s one of the most useful observations in investing because it explains why volatility is both inevitable and caused by people acting reasonably. **Here’s why this is important** If you view every debt-fueled recession, market crash, and asset bubble as an example of your fellow people acting crazy, you might become cynical, which makes it hard to be a long-term optimist, even when you should be. If you view them as inevitable, you realize they’re just part of the ride and an occasional reminder that the fasten-your-seat belt sign should never be turned off. None of this is fun, but virtually all of it is inevitable. Try to enjoy the ride. 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