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. All of it was transparently stupid, yet it was flat-out genius compared to the messaging of the Biden administration.
Get ready for a very dumb debate over the word “recession.” It’s true, 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 all, more or less, defined a recession as two consecutive quarters of negative growth. 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 discussion 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.
Every fresh report of Keynesian economic failure during the Obama years was treated as “unexpected.” When the same policy fails during the Biden years, the media depicts our sputtering economy as weird and unpredictable. Is it? 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. And perhaps the best predictor of a recession, the yield curve inversion, is already with us. It’s not that weird.
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 we have 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 these kinds of juvenile economic talking points 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 had said early that 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 also claimed Build Back Better actually cost “zero.” This is a president who demands that “companies running gas stations and setting prices at the pump” bring down the price, as if the local 7/11 attendant can control the price of a fungible commodity. Then again, Mayor Pete just recommends everyone go out and buy an electric car.
Presidents don’t create or save jobs. They do, however, propel inflation when sending checks into an overheated economy, creating energy scarcity, and passing needless infrastructure bills (with the help of Republicans). So it’s not surprising that the same people who tried to redefine inflation are now, conveniently, treating a “recession” as an unknowable concept.