What makes a recession not a depression? When President Joe Biden says that it isn’t?
Axios reported Thursday that the White House’s economic advisors changed their definition of what a recession was. A recession is defined as two to three-quarters of economic decline. However, the Administration claims that “by most measures”, according to Axios “the largest economy in the world remains comfortably in expansion mode.”
The White House is trying to prevent the heightened recession talker that would accompany two quarters with shrinking GDP.
You can change the accepted definition.
The White House Council of Economic Advisors claimed that a decline in GDP during the first quarter of the year, even if it is followed by another decline in GDP in quarter two, does not indicate a recession.
This is Cecilia Rouse, CEA chair, and Jared Bernstein, CEA member.
At an annualized rate of 1.6%, the economy contracted in the first quarter. Atlanta Fed’s growth tracker predicts that the economy will shrink by 2.1% in the second quarter.
We are technically in a recession, but it won’t be officially declared until next week. The contraction seems to be accelerating and not easing off, just like the “transitory inflation”.
Fox News’ Art Laffer, an economist who was one of the architects of Ronald Reagan’s boom years, stated this week that the “Recession is here” and would “last for a while.”
Many Americans believe we are already in recession, even some well-known names.
According to surveys, Americans have the lowest level of confidence in America’s economy. Business executives are also the most disillusioned since the outbreak of the coronavirus epidemic. Even celebrities are beginning to pay more attention to this problem, including rapper Cardi B, Andrew Yang, and Tesla CEO Elon Musk.
Can’t even put gas in your car. Are you fed up with being told by the Secretary for Transportation that you must spend $60 million on a Tesla? Steak is now a rare treat. Are you curious how long it will take to get your 401K back where it should be?
These are just a few of the many pains Americans feel during the Biden Administration. However, the Administration wants us to believe that everything is fine.
How is the White House’s denial therapy going to play out politically?
The Administration has a bad habit of telling Americans exactly what they don’t know to be true.
Biden will attempt to convince us that we are not in recession when the second quarter growth figures — actually, shrinkage — come out next week.
Yet, Americans’ wages are decreasing. Today, there are still fewer Americans without jobs than there were before the lockdowns. Baby formula, tampons, and a wide range of other seemingly random goods are not available to us. Even though the housing market is slowing down, more people are being priced out of homeownership by rising costs. The interest rates are on the rise. Retirement portfolios are shrinking. Credit cards are exhausted. Tech companies are slowing down or eliminating new hires, and even laying off employees.
Perhaps the most telling sign that the economy is really in trouble is the AT&T report yesterday that they expect a $2 billion cash flow deficit this year. Why? The reason? People would rather gnaw at their phones than go without them.
Amidst all this doom and gloom, instead of a Clintonian “I feel your pain” approach, Biden is going for the old “Who are you gonna believe — me, or your own lyin’ eyes?”
Glorious news, comrades! Your economic growth ratio has been increased from 10 grams to negative five grams!