THE BIDEN RECESSION. This morning the Commerce Department announced the economy shrank by 0.9% in the second quarter of 2022. That comes after the announcement last April that the economy contracted by 1.6% in the first quarter of this year. Now, the United States has had two consecutive quarters of negative economic growth, which is the popularly accepted definition of a recession. So it’s official: The U.S. is in a recession.
But it is not official. Denying long-standing standards, the Biden administration will not admit that the economy is in recession. For days leading up to the Commerce Department announcement, senior administration officials made the case that two quarters of negative growth do not necessarily equal a recession, and in this case, although such a situation is exceedingly rare, the economy has experienced two quarters of contraction yet is not in recession.
The administration’s allies are accepting the Biden argument. “Some liberal media outlets are beginning to fall in line with the Biden administration’s spin on redefining what a recession is,” Fox News reported this week. “There’s been a major push by the White House to preemptively declare that even if the U.S. economy has shrunk in two consecutive quarters, that doesn’t necessarily mean the economy is in recession.” To cite one example, on the night before the numbers were released, Politico described the coming government figures as “the first, possibly inaccurate and certain to be revised reading of U.S. economic performance in the second quarter of this deeply weird economic year.”
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But why would President Joe Biden and his senior aides go to such lengths to deny that the U.S. is in a recession? Perhaps the best place to look for an answer is the RealClearPolitics average of polls.
The president’s job approval rating now stands at 37.8% in the RealClearPolitics average. Remember when Biden’s rating seemed stuck in the low 40s? It stayed there for six months or so, but around May of this year, the president’s numbers fell through the 40% barrier and now appear to be approaching the mid-30% range. That is “the worst of any elected president at this point in his presidency since the end of World War II,” according to the analysis site FiveThirtyEight.
Why has Biden gone so low? The economy, mostly. Huge numbers of people believe the country is headed in the wrong direction, and most cite the economy as the reason things have gone wrong. Again, from FiveThirtyEight: “Many factors are driving this overall feeling of dissatisfaction among Americans, but inflation is arguably the biggest reason. Inflation, which is at its highest point since the early 1980s, has consistently ranked as the top issue Americans are worried about. … In the most recent FiveThirtyEight/Ipsos poll, 62% of Americans told us that inflation or increasing prices was one of the most important issues facing the country, ranking far ahead of any other topic we asked about.”
Things are bad now, but they could always get worse. And that is why the White House exhibited sheer terror at the prospect of a recession on top of inflation.
Can you imagine what will happen to Biden’s job approval rating if voters blame him for plunging the nation into recession, in addition to soaring prices? When pollsters ask about Biden, his handling of the economy already rates as the lowest among several measures of job performance. For example, in the most recent Quinnipiac University Poll, just 28% of respondents approved of the way Biden is handling the economy, versus 65% who disapproved. A 28-65 split is pretty bad news if you’re in the White House.
Thus the White House pushback against even more bad news. “Even if [the GDP growth] number is negative, we are not in a recession now,” Treasury Secretary Janet Yellen said Sunday on Meet the Press. “And I would, you know, warn that we should not be characterizing that as a recession.”
So look for the White House to continue making its case that there is something unique about today’s economy and therefore the traditional measure of two consecutive quarters of negative growth equaling a recession does not apply.
If that is true, it would be the first time in 75 years. “It’s rare for there to be two consecutive quarters of negative GDP without a recession,” the Washington Post noted recently. “In fact, George Washington University professor Tara Sinclair said the only time on record appears to have been 1947.”
It’s a pretty weak case, but it’s all the White House has. “We’re not going to be in a recession,” Biden said this week. “The employment rate is still one of the lowest we’ve had in history — it’s in the 3.6% area. We still find ourselves with people investing. My hope is we go from this rapid growth to a steady growth. And so we’ll see some coming down. But I don’t think we’re going to — God willing, I don’t think we’re going to see a recession.”
The people should hope Biden is right. But they fear he is wrong.
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