Chart of the Day: Energy and Recessions

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What’s the effect of rising energy prices on the economy? Stuart Staniford looks at historical data and says that before 1970 the answer is: nothing. There’s no effect at all. But since 1970, the effect is profound: every single recession since then has been preceded by a runup in energy prices.

And what does that runup look like? Well, it looks an awful lot like the runup we’ve exprienced over the past 24 months. That’s the heavy black line in the chart on the right. Does that mean we’re inevitably headed for another recession? Nope. But since I was being economically optimistic yesterday, I’m going to revert to my true nature today and be economically pessimistic. “I doubt energy prices can go a whole lot higher without triggering another recession,” says Stuart, “so it depends on whether the world can scrape up a few more mbd of oil to keep growth going without prices rising too much more.” Or, alternatively, perhaps a mild slowdown will cool off energy prices without triggering anything more serious.

Still, this is worth watching carefully. There are half a dozen economic shocks that could tip a fragile recovery back into recession, and for my money, an oil shock is the most likely of them.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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