Team Biden’s PR stunt reimagining what a recession is, in Biden-speak, pure malarkey.
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Team Biden’s crack team of political-economists is apparently trying to front-run this weeks GDP release by moving the goal posts.
Not by a couple of feet … or to the stadium parking lot … but to another stadium.
They’re saying “A recession is not fairly defined by a 2-quarter drop in GDP. It needs to be evaluated holistically, after all related data is available and analyzed. And, that takes time. Maybe a year or so after the GDP decline.”
That’s partially true.
The NBER — the “official” recession sanctioning body — does consider multiple factors (i.e. more than simply a 2-quarter drop in GDP) when declaring that a recession has occurred.
But, here’s an acid test question that cuts to the crux of the matter:
Out of the past 10 times the U.S. economy has experienced two consecutive quarters of negative economic growth, how many times was a recession officially declared (holistically after-the fact) by the NBER?
Answer: All 10 times !
Said differently, post-WWII – a 2-quarter drop in GDP has been a perfect indicator of a recession.
In that time period, the NBER has always “holistically” confirmed a recession after a 2-quarter drop in GDP
Nonetheless, Team Biden would advise:
Don’t generalize from your personal experience …and certainly don’t rely on the data … trust us Team Biden economists when we say that everything is fine & dandy.
These guys have no conscience.
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P.S. The pundit consensus seems to be that Team Biden’s front-running “reimagination” is an attempt to defuse the impact of of a bad GDP number.
Obviously, they already know what the “top secret” number is.
Wouldn’t surprise me if the reported number is an infinitesimal increase in GDP.
That would give Biden a chance to boldly proclaim: “See, I told you that we’re not in a recession. The economy is strong.”
Naw, they’re not that smart…
The Homa Files 
July 27, 2022 at 1:10 pm |
[…] When is a 2-quarter GDP drop not a recession? […]