- - Wednesday, July 27, 2022

Over the past few years, the left has consistently used the word “reimagine” when it wants to instantly change the societal narrative with regards to public safety/policing, the Supreme Court, and several other important matters.

However, in recent days, the left has taken the “reimagine” tactic to a whole new level, as it attempts to “reimagine” the very definition of the word “recession.”

Since 1974, generally speaking, the term recession has been defined by two consecutive quarters of negative GDP growth.

In 2009, the International Monetary Fund released a report titled “What Is a Recession?” in which it notes, “Most commentators and analysts use, as a practical definition of recession, two consecutive quarters of decline in a country’s real (inflation-adjusted) gross domestic product (GDP)—the value of all goods and services a country produces.”

In 2022, Investopedia reiterated this commonly accepted description, defining a recession “as two consecutive quarters of economic decline, as reflected by GDP.”

Yet, now that the U.S. economy seems to be on the brink of two consecutive quarters of GDP contraction, the Biden administration is scrambling to arbitrarily redefine the word “recession.”

For instance, on July 24, while appearing on NBC’s Meet the Press with Chuck Todd, Treasury Secretary Janet Yellen was asked, “If the technical definition is two-quarters of contraction, you’re saying that’s not a recession?”

Ms. Yellen responded, “That’s not the technical definition. There is an organization called the National Bureau of Economic Research that looks at a broad range of data in deciding whether or not there is a recession. And most of the data that they look at right now continues to be strong. I would be amazed if they would declare this period to be a recession, even if it happens to have two-quarters of negative growth.”

Then, Ms. Yellen dropped this bomb: “A common definition of recession is two negative quarters of GDP growth, or at least that’s something that’s been true in past recessions. When we have seen that, there has usually been a recession. And many economists expect second-quarter GDP to be negative. First-quarter GDP was negative, so we could see that happen, and that will be closely watched. But I do want to emphasize, what a recession really means is a broad-based contraction in the economy. And even if that number is negative, we are not in a recession now, and I would, you know, warn that we should be not characterizing that as a recession.”

Keep in mind, Ms. Yellen also repeatedly claimed that inflation was “transitory,” before finally admitting rather recently that, “I think I was wrong then about the path that inflation would take.”

Aside from Ms. Yellen, many other high-ranking Biden administration officials have parroted the new recession talking point.

On July 25, National Economic Council Director Brian Deese called the classic recession definition “inherently backward-looking” while on CNN. When CNN’s John Berman pressed Deese with this follow-up, “It sounds like you’re anticipating what will be comments from some saying, two-quarters of negative growth in a row, that’s a recession,” Deese meekly replied, “Certainly in terms of the technical definition, it’s not a recession.”

On July 23, the White House Council of Economic Advisers’ Jared Bernstein was interviewed by CNN’s Pamela Brown. In one exchange, a bewildered Brown wondered, “If the numbers come out in decline next week, the White House will still not consider this country being in a recession?” Bernstein replied, “It is not a definition we’re taking, that the official Business Cycle Dating Committee, they’re the ones who declare a recession, not the White House.”

The day before Mr. Bernstein’s cringe-worthy CNN interview, the White House Council of Economic Advisors wrote a blog post stating, “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.”

When White House Press Secretary Karine Jean-Pierre was asked if the blog post was intended to “change the common definition of a recession?” Jean-Pierre responded with this non-sequitur, “the strength of our labor market, along with the economic indicators, is not what we generally see as we talk about recession or even pre-recession.

Nevertheless, on July 28, the U.S. GDP report for the second quarter will be released. If, as most economists predict, the report shows a second consecutive decline in GDP growth, the Biden administration will have a very difficult time convincing the American people that we are not in the midst of a painful recession.

After all, according to numerous recent polls, the vast majority of Americans already think we are in a recession.

  • Chris Talgo (ctalgo@heartland.org) is senior editor at The Heartland Institute.

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