Sen. Elizabeth Warren described herself on CNN Sunday as “very worried” that the economy may fall into “recession.” She did not also share her fears of a Simon & Garfunkel breakup or predict the Johnstown Flood.
The U.S. gross domestic product (GDP) shrank the first half of this year. It contracted by 1.6 percent from January through March and by 0.6 percent from April through June. Two straight quarters of a receding economy means recession.
But in Elizabeth Warren’s Cambridge, Massachusetts, which summons economists to a secret meeting at an unnamed date, they imagine that eight academics rather than 335 million people determine whether the economy grows or recedes. This transforms a simple, objective criterion heretofore understood by everyone reading this article as determinative of recession or expansion into a convoluted formula interpreted by subjective (and in several cases quite partisan) economists that lends itself to politicization and opacity.
This R-word becoming a weapon to wield against other R-words seems a point of redefining recession.
Consider the last Republican president. The National Bureau of Economic Research (NBER) declared a recession about three months after the economy collapsed and did so even as the GDP already had begun to expand (albeit following a sharp drop).
CNN reported in June 2020 that “NBER wasted no time in announcing a recession, a stark contrast to previous downturns when the body took upwards of a year to declare what most people already knew. This was the fastest that NBER has declared any recession since the group began formal announcements in 1979.”
The previous Republican in the White House, George W. Bush, presided over two recessions according to the NBER. But not once during those eight years did the economy experience two consecutive contracting quarters.
The NBER did not announce the end of the 1990–1991 recession until after the 1992 presidential election even though it had ended in March 1991. The media used the convenient lag just as they used the convenient 2020 rush to drag a Republican president’s reelection bid.
“Japan has got a plan: public works projects, investment incentives, and tax cuts, all designed to get the Japanese economy back up to speed,” John Chancellor noted on the July 23, 1992, NBC Nightly News. “The cost in dollars: over $50 billion. This is standard government therapy to end the recession. It would be nice if the American government could do that to end our recession.”
More than six months after the 2022 recession started, the eight eggheads who meet between Harvard and Central squares still refuse to acknowledge it. (READ MORE from Daniel J. Flynn: Biden Ukase Affirms Failure of Obama Student Loan Takeover)
Joe Biden, Elizabeth Warren, and their admirers in journalism refuse to acknowledge it, too. Aloof, delusional, oblivious, callous, and out of touch strike as a few of the descriptives such people might apply to George H.W. Bush, George W. Bush, and Donald Trump had they denied the downturns that occurred on their watch. People now suffer at the checkout counter, in their 401(k)s, and on their mortgage payments, and the political class’s predictable response involves great efforts to mitigate their own suffering at the ballot box. Not only did the political class just raise taxes — a universally panned anti-recessionary tactic — but, given the profligate spending of the last three years that forced the Fed to create currency to fund the government, quantitative easing, another tool to work out of troughs, no longer exists on the menu.
In her two-birds-one-stone sentence, Elizabeth Warren denies the 2022 recession and gives a free pass to President Biden and a Democrat Congress for helping to cause a downturn should the recession that has already arrived someday find NBER recognition. She maintains, “I’m very worried that the Fed is going to tip this economy into recession.”
Rich — her words; less so, unfortunately, us.
