The Biden administration says a recession by any other name would smell as sweet
The Biden administration continues the Obama administration’s emphasis on labeling, as though calling something by a different name would fool people into actually seeing it differently. Why do they do this? The main reason is that they believe in the power of words to shape perceptions.
And this is true to a certain extent, particularly for those on their side. For example, how many Democrats now call illegal immigrants (or, to be more retro, illegal aliens), “undocumented migrants” or something of the sort, and believe they should have full rights? Quite a few.
So when is a recession not a recession? When the administration decides it’s not:
What is a recession? 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. Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data—including the labor market, consumer and business spending, industrial production, and incomes. Based on these data, it is unlikely that the decline in GDP in the first quarter of this year—even if followed by another GDP decline in the second quarter—indicates a recession.
First of all, I don’t think most people care what it’s called – they know what they know, and a poor economy is one of those in-your-face realities that it’s harder for government to lie about, although they can certainly try. Call it macaroni, call it whatever you want – it still stinks.
And then there’s this:
Question: 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?
Answer: 10. pic.twitter.com/yrR1kwlC4r
— Michael R. Strain (@MichaelRStrain) July 25, 2022
NOTE: The title of this post comes, as you probably know, from the balcony scene in Shakespeare’s “Romeo and Juliet”, one of my favorite plays. Juliet doesn’t know Romeo is listening, and she’s musing on the fact that she’s fallen in love with the scion of her family’s hated enemy:
Jul. ’Tis but thy name that is my enemy;
Thou art thyself though, not a Montague.
What’s Montague? it is nor hand, nor foot,
Nor arm, nor face, nor any other part
Belonging to a man. O! be some other name:
What’s in a name? that which we call a rose
By any other name would smell as sweet;
So Romeo would, were he not Romeo call’d,
Retain that dear perfection which he owes
Without that title. Romeo, doff thy name;
And for that name, which is no part of thee,
Take all myself.
Rom. I take thee at thy word.
Call me but love, and I’ll be new baptiz’d;
Henceforth I never will be Romeo.
I imagine that the administration believes (or at least hopes) that a majority of the American public are idiots who will happily swallow whatever pablum is proffered rather than believe their own lying eyes and shrinking disposable incomes. And generally when things are going well, a large portion of the public will believe all sorts of BS and utter nonesense churned out by the ruling class via their mainstream media handmaidens.
But here’s the thing, and there’s no getting around it: It really doesn’t matter what they say because even the densest midwit will still feel the pain of inflation. And even the most loyal Democrat voter can’t help but notice how they’re truly worse off today than they were during the previous administration, despite all the mean Tweets and Russia hoaxes. You can’t redefine “misery” no matter how hard you try.
On the other hand, there’s this, from the Tao Te Ching:
“Naming is the mother of 10,000 things.”
“Whoever controls the image and information of the past determines what and how future generations will think; whoever controls the information and images of the present determines how those same people will view the past.” “He who controls the past commands the future. He who commands the future conquers the past.”
George Orwell
…and this from Mao Zedung (or whatever his name is):
“Let hyperinflation bloom…”
In any event, we’re deep in hostile Humpty Dumpty territory, teetering, tottering, mouthing empty word, signifying nothing…
(You’d think that “Biden” would at least provide a citation…oh, I forget, he’s an inveterate…among other things…plagiarist…)
Muh norms.
“…would smell as sweet…”
https://twitter.com/Cernovich/status/1552017668177178624?cxt=HHwWgMClzZT274krAAAA
Can the administration name even one economist who didn’t define recession in the traditional way before, say, the last two weeks?
An economist during, I think, Carter’s administration got tired of arguing this same issue so he called it “A banana.”
It was Alfred Kahn, who at least had a sense of humor.
Alfred Kahn, one of Jimmy Carter’s economic advisers, was once rebuked by the president for scaring people by talking of looming recession. Mr. Kahn, in his next speech, substituted the word banana for recession.
“This is a banana”
https://youtu.be/-7ht3owHqKg
Coming from a Biden near you.
This is to be welcomed. It is self-sabotage. The longer the denial and the deeper the recession, the more obvious their incompetence. And their support, slipping away like grains of sand through the fingers of a hand.
I don’t suppose the average voter is going to care whether it’s called a recession. They know prices are sky-high and they are worse off than they were.
This is likely to be a shallow recession, considering the federal government is still spending money like they had it.
The $62 billion chip subsidy, which has now ballooned to $280 billion is a nice bit of pork to spread around. Yes, we need to increase semiconductor manufacturing before China blows up Taiwan, but Intel was already spending $12 billion on a manufacturing plant in Arizona, and Nvidia was spending $7 billion, also on a plant in Arizona, while Taiwan Semiconductor (TSMC) is spending billions on a plant in Arizona and Texas. Sounds like TSMC sees the writing on the wall in their home country.
Does anybody know what the federal budget is for 2022? $6 trillion dollars. What’s the expected deficit? $1.8 trillion. Might be $2.3 trillion. What’s the interest payment on the national debt? $305 billion.
Ceau?escu was executed in part for economic sabotage.
Brian E,
Since the federal government is still “spending money like they had it” will that not continue to fuel inflation? In which case, it will continue to depress the economy and thus lengthen and deepen the recession… yes?
Geoffrey Britain,
I was going to add that inflation is a bigger problem than the recession.
But the cure for inflation is slowing the economy by raising fed rates. There’s the whammy. The fed by increase the rate by another 75 basis points, with a target of 4% by the end of this year. Is that enough to tame inflation? Probably not. Remember the fed funds rate hit 20% in 1980. In some sense, I don’t think any administration is looking forward to bringing inflation under control, because it benefits the massive debt hole the country is in.
What happens to the federal budget if rates just increase to the historical norm of 6%?
All of this has been building for the last 30 years, as politicians have been unwilling to put America’s fiscal house in order. Inflation is the coward’s way of dealing with the problem.
“some analysts state that the Fed must essentially throw the kitchen sink at the inflation dilemma. “The FOMC should be in five-alarm fire mode right now,” wrote Amherst Pierpont Securities Chief Economist Stephen Stanley? on Wednesday. “Inflation is still accelerating on a month-to-month basis, the pressures are pervasive, and in recent months they are more and more focused in categories that tend to be persistent.”
This article was suggesting the fed may raise rates 1% this month.
The question is why did the fed keep interest rates so low for so many years.
Brian E, the original budgeted 62B$ now exploded to 280B$ Chips act is likely to pass congress this week. Another example of runaway spending that is totally out of control. As you point out, this government handout to chip manufactures is unnecessary as Intel and other major players are building in the US thanks in part to investors providing funds for new facilities. This bill is unnecessary and wasteful in a time when proper policy would cut spending. Furthermore it opens the door for pharmaceutical, auto manufacturers and a host of others to demand the same preferential treatment. The government should not be picking winners and losers. This is Solyndra on steroids.
Why isn’t this understood yet?
Inflation is SUPPOSED to accelerate.
Dislocation is SUPPOSED to accelerate.
Desperation is SUPPOSED to accelerate.
Poverty is SUPPOSED to accelerate.
Despair is SUPPOSED to accelerate.
Chaos is SUPPOSED to accelerate.
Hate is SUPPOSED to accelerate.
Along with its correlative, UNITY(TM)…
(It’s much easier to “reset”, or “transform”, when everything is reduced rubble…)
Why isn’t this understood yet?
A witticism going around various comment threads: “It’s not really a recession, unless it comes from the Recession region of France – it’s just sparkling misery.”
The language game is the MO of the left. It works most of the time because most of our political and policy debates occur in the realm of abstract theory. The left can bluff its way through with fancy words and a few studies from academic ideologues. A lot of the left’s recent problems have come from trying to play the language game with issues that are tangible and imminent.
So compare climate change versus COVID. On climate change, every person alive today will be dead before climate change theories are proven or disproven. Everything is in the realm of theory. No person can perceive an average annual temperature increase of a few degrees. It is very difficult for people to get a sense of whether we’re having more heatwaves or other extreme weather events now compared to what can be remembered in an individual lifetime, let alone what was recorded in past decades and centuries. Most people don’t understand what it means that the computer models have overshot temperature observations for decades now. And so the language game works.
On COVID, though, it didn’t work. The dire predictions of 2M dead in the US by June of 2020 were actually tested on a perceivable time frame, and they were off by two orders of magnitude. When people could see with their own eyes that the COVID restrictions were not justified, they ended, eventually.
On the economy, I think that the left will run into the same problem. Economic performance is tangible and imminent. You can’t bamboozle people with a dog and pony show and a few sympathetic studies.
What I keep coming back to is why the left can’t seem to figure out when the language game is going to work and when it isn’t. I guess when your only tool is a hammer . . .
The “language game” will, if things go to plan, segue into the “threats, intimidation and coercion (with perhaps violence) game”.
Harsanyi on the “recession” “conundrum”:
“Call It Whatever You Want, The Economy Sucks”…
https://thefederalist.com/2022/07/27/call-it-whatever-you-want-the-economy-sucks/
H/T Powerline blog.