Are We In A Recession?
The Biden administration is playing word games as the economy collapses.
Photo by Tom Williams-Pool/Getty Images
To be or not be in a recession, that’s the question. The Biden administration appears to believe it can be answered any way they like.
Traditionally economists define a recession to be two consecutive quarters in economic contraction. A recession is what was called after the occurrence of this ten times in the past. Given the economic data from the last two quarters–GDP fell by 0.9 percent in the second quarter following a 1.6 percent contraction in the first quarter–it is safe to say we are in a recession now.
Economist James Knightley claimed a downturn was “really only a matter of time,” considering the pressure on American households from inflation, equity markets, and the coming “housing downturn,” which he said “reinforces the feeling that it’s only a matter of time before we’re in a proper recession.”
The Biden administration maintains that we’re not in recession.
The White House claims that “while some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle.” The statement goes on to say the National Bureau of Economic Research (NBER) defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
It is possible to use NBER’s traditional definition of economic recession, which includes two quarters. A recession is defined as an economic downturn that lasts more than six months (or two fiscal quarters) and which has been ongoing for at least a month.
I find this parlance disagreement frustrating. Perhaps two-quarters of an economic contraction is not enough to define a recession. The NBER may not declare we are in one. This does not alter the fact that today’s economy is in a serious downturn that is threatening American workers.
The definition of “recession” can surely be changed on a whim, but that does not change the reality we experience in periods of sustained economic contraction, which we have long used the word “recession” to describe. The interconnectedness of language and thought is a fascinating fact. Our interaction with the outside world is influenced by our cultural background. This includes language, customs and habits.
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Our actions, the rules we follow, and our very perceptions of truth are based on a shared language. The Biden administration could quite literally claim that the economy is not in recession. It will, at the very least, be true in that sense. Janet Yellen, Treasury Secretary, may believe that our economy is resilient. And as our technocratic overlords continue to fact check us, they perpetuate their perceived reality.
We shouldn’t be surprised if the Biden administration doesn’t do something about this issue. In fact, they really aren’t worried about our economic woes–they are busy going after climate change.
While they attempt to change how we perceive the state of our economy, it continues to suffer gravely. Americans also know this. Americans also know this.