He showed that recessions are actually caused by a failure of consumer demand. When people sense that they might lose their job, they - perfectly sensibly - cut back on their spending. They buy fewer DVDs or restaurant meals or holidays. But this causes a fall in demand for services - and more people lose their jobs, causing demand to fall further in turn, and on and on, in a spiral. He called it "the paradox of thrift": what is rational for an individual consumer is irrational for the society as a whole.