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Biden Administration Tries To Avoid Recession By Changing The Definition of Recession

John Galt

Updated: August 3, 2022

definition of recession
Editor’s Note:

EDITOR'S NOTE: The saying “words have consequences” became something of a meme during the 2016 and 2020 elections. At the time, it seemed mostly leveled against the Trump administration for reasons we’ll not get into right now. But it seems timely to resurrect the phrase after the Biden administration attempted to redefine the word “recession” last week. The word “recession” not only reflects a conventional measure (two consecutive quarters of GDP decline) but it brings in a whole regime of signs, from household and investor sentiment to a shift in business policy. All words come with a regime of signs often invisible yet forceful. And the ultimate consequence of these signs takes place in the realm of “action,” not information. Of course, the Biden administration and many Democrats know this, which is why they attempted to terminate a conventional measure; one we’ve been using as a practical gauge of the economy for quite some time. Biden is doing this because he knows this gauge is political kryptonite. And so his administration obfuscates its historical use in order to supplant it with a less useful measure that’s beneficial to the administration. It’s a cheap and clumsy attempt at propaganda; one that no thinking American (regardless of party affiliation) will buy. 

When is a recession not a recession? When a Democrat is in the White House, apparently.

The traditional rule of thumb for when an economy is in a recession is a decline in gross domestic product for two consecutive quarters — a shrinking economy for half a year. Under previous presidents, that was not a controversial definition. In 2008, Joe Biden’s National Economic Council director, Brian Deese, wrote, “Economists have a technical definition of recession, which is two consecutive quarters of negative growth.”

But here’s Deese Wednesday: “Two negative quarters of GDP growth is not the technical definition of recession.” He’s not the only one. Treasury Secretary Janet Yellen Sunday: “we are not in a recession now” even if GDP declines for a second straight quarter. “That’s not the technical definition.”

You can guess the reason for the spin: When the second-quarter GDP number came out Thursday — surprise! — it was negative for the second straight quarter. Just don’t say the R-word. President Biden’s response: “That doesn’t sound like recession to me.” It’s like a three-card-monte dealer looking you in the eye and saying, “That’s not the queen.”

Two fig-leaf excuses are offered for this rigamarole. One is that unemployment is falling — but with inflation around 9%, the stock market down about 10% this year, the labor force shrinking and business output restricted by the millions of unfilled jobs, the fact that people are working harder while their dollars aren’t going as far is not much to crow about.

Yellen also argues it’s not a recession until the National Bureau of Economic Research says it is. But the NBER does historical statistics, so it often takes a year for it to declare a recession. Talk about trying to run out the clock.

Treasury Secretary Janet Yellen claimed the National Bureau of Economic Research has to declare a recession.
Treasury Secretary Janet Yellen claimed the National Bureau of Economic Research has to declare a recession. (Source: REUTERS/Elizabeth Frantz)

What is it with Democrats trying to change the meaning of words? Ask them what a woman is, and you get “menstruating persons” or “I’m not a biologist.” Mothers are now “birthing persons.” If a word sounds good, they cram everything into it, like Kirsten Gillibrand tweeting, “Paid leave is infrastructure. Child care is infrastructure. Caregiving is infrastructure.” They tell you that filling Supreme Court seats is court-packing but adding seats to the court isn’t and that just about everything is racism except discriminating on the basis of race.

It’s less Orwell than Lewis Carroll’s Humpty Dumpty: “When I use a word, it means just what I choose it to mean — neither more nor less.” When asked how he “can make words mean so many different things,” he replies, “The question is, which is to be master — that’s all.”

The goal is to be master of the press. The New York Times, the Associated Press, and CNN all shrugged — who really knows what a recession is? In 2019, by contrast, CNN fact-checked Donald Trump for downplaying questions about the possibility of a recession even though it admitted that “the US is still in its longest uninterrupted economic expansion ever; nobody knows for sure if or when a recession might hit.” At the time, The Washington Post tut-tutted that Trump had the definition of a recession wrong, reminding him, “A recession is two quarters of negative economic growth.”

Working the refs only gets you so far. Earlier this month, White House Press Secretary Karine Jean-Pierre claimed that the United States is “stronger economically than we have been in history.” Who’s buying that? Even when Biden says there is no recession, the headlines still use the word “recession,” so all this is about as useful as Richard Nixon saying “I’m not a crook” or Christine O’Donnell (remember her?) running ads saying “I’m not a witch.”

Meanwhile, Biden and the Democrats have learned absolutely nothing from spending trillions of dollars in 2021’s American Rescue Plan and falling just two votes shy of spending trillions more on Build Back Better. Even many left-leaning economists and journalists now admit that printing a whole bunch of extra money added to inflation. Biden, for his part, is the last holdout, claiming that “the idea that caused inflation is bizarre.”

Now they are at it again with a bill to add more than $400 billion in green-energy and health-care spending. But don’t worry: They’re calling it the “Inflation Reduction Act.”

Dan McLaughlin is a senior writer at National Review. Twitter: @BaseballCrank

Originally published on NY Post.

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