Does Recession Anxiety Cause Recessions?

As a writer for this publication, I believe that it's important to consider seriously what issues and topics to bring to the attention of our readership. How much crypto news is too much crypto news? Does spotlighting the downfall of private companies that grew too fast affect younger companies attempting to grow? Does talking about the probability of a recession contribute to consumer sentiment that ultimately affects the recession? It turns out it's not just Ukraine, the Fed, or inflation leading us towards a likely recession. It's also all this talk about recession.

Anxiety Click-Bait
More than 80% of Americans now believe that the economy will fall into a recession in 2022. A recession is commonly defined as two consecutive quarters of negative economic growth. The first quarter (Q1) of 2022 was the first such quarter. Cardi B, a cultural icon and barometer of sociopolitical sentiments in the U.S., recently tweeted the following:

Cup Half Full or Half Empty?
If you're working for a startup company, the glory days might feel like they're behind you. Tech optimism, which boomed after a short market downturn at the start of the pandemic, isn't so high any longer. Tech stocks have taken a dive, negatively affecting investments in private companies as well. Investments in the private sector are down, and companies are bracing themselves for a recession. Elon Musk has a "super bad feeling about the economy," planning layoffs of about 10% of Tesla. Our friends at Crunchbase put together this handy infographic revealing which companies have laid off employees. 

Meanwhile, investments in the seed stage are in full swing. Just this past week, Stellate, a caching and analytics startup for API; Ivella, a debit card for couples; and Capra Biosciences, a biotech company replacing petrochemicals with biofuels, all raised seed rounds.

Seed funding in May was, in fact, the only stage that experienced growth over the prior year, proving that in times of optimism or fear, it's always a good time to have a bright idea.