Recession? No Problem. Just Pretend It Doesn’t Exist

David HarsanyiJuly 25, 2022

In 2009, mired in the slowest recovery in American history, the Obama administration decided to dispense with antiquated economic metrics and cook up a new, non-falsifiable number that would better accommodate the president. And so, we were introduced to jobs, “saved and created.”

Every month, an administration economist, under the veneer of expertise, would trot out this fake statistic — one that had never been used by the Labor Department or Treasury Department or the Bureau of Labor Statistics or anyone else. And every month, the political media would dutifully report on it without much skepticism. Obama claimed his recovery plan would “save or create three to four million jobs over the next two years.” But once the “saved” part of “created and saved” was removed, we found out the economy had lost 2 million jobs, with unemployment reaching 9.4 percent. Our fortunes only turned around after Democrats lost Congress and gridlock hampered Washington’s ability to inflict any more damage.

All of it was transparently stupid, yet it was flat-out genius compared to the scheming of the Biden administration.

There’s no scientific definition for a recession because economics isn’t an exact science. Yet, for decades, the media, government, economic textbooks, and dictionaries have defined one as two consecutive quarters of negative growth. (Though, when a Republican is president, it’s called a “great” recession.) But now, with the prospects of this week’s GDP report being in the red — the Atlanta Fed estimates GDP will contract 1.6 percent — the administration and media are engaged in a pedantic debate over the real meaning of a recession.

“What is a recession?” the White House Council of Economic Advisers ponders. “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.”

It isn’t? It is true that on rare occasions, as the National Bureau of Economic Research did in the early ’90s, experts will declare a recession when there are non-consecutive quarters of negative growth, but not once has the media covered two consecutive quarters of contraction as anything but a recession.

When Keynesian economic policy failed during the Obama years, every fresh report of bad news was treated as “unexpected.” When the same policy fails during the Biden years, the media treat the economy as weird and unknowable. This week, we’re going to see a new consumer confidence number. It will likely be bad. Interest rates will likely rise, as will inflation numbers. And perhaps the best predictor of a recession, the yield curve inversion, is already with us.

The administration argues we aren’t technically in a recession because of the low unemployment rate. But simply because the Biden administration says we’re experiencing historic job growth doesn’t mean anyone has to play along. Indeed, the private sector hasn’t even regained the jobs lost due to the “man-made” downturn that was caused by needless government-compelled Covid shutdowns. The Chamber of Commerce says 3.25 million fewer Americans are working today than were in February of 2020. (In 2019, presidential candidate Joe Biden argued the economy was “teetering on recession” when there were zero quarters of negative growth and the unemployment rate was at 3.7 percent. Today it’s at 3.6 percent.)

Biden has been assaulting voters with juvenile economic messaging from the start. It was a year ago that the president claimed “nobody” was “suggesting there’s unchecked inflation on the way — no serious economist,” even as many were. Biden’s National Economic Council deputy director Brian Deese said inflation was “actually a good sign” for the economy. Then, the administration and its allies argued that the best method to alleviate inflation would be to shove through a $5.5 trillion welfare state expansion bill. The president claimed Build Back Better actually cost “zero.”

This is the same administration that kept sending checks, created energy scarcity, passed a massive infrastructure bill (with the help of Republicans), but then blamed Vladimir Putin for inflation. It’s the same president who demands “companies running gas stations and setting prices at the pump” bring down “the price you are charging at the pump to reflect the cost you’re paying for the product,” as if gas station attendants are controlling the price of a worldwide fungible commodity. Mayor Pete recommends everyone go out and buy an electric car.

And suddenly a “recession” is an unknowable concept.

David Harsanyi is a senior editor at The Federalist. Harsanyi is a nationally syndicated columnist and author of five books—the most recent, Eurotrash: Why America Must Reject the Failed Ideas of a Dying Continent. His work has appeared in National Review, the Wall Street Journal, Washington Post, Reason, New York Post, and numerous other publications. Follow him on Twitter, @davidharsanyi.