Thursday morning, the Commerce Department admitted what most Americans already knew — the nation is in the midst of a recession. The economy has contracted for the second consecutive quarter this year. During the first quarter, gross domestic product (GDP) shrank by 1.6 percent, and it shriveled another 0.9 percent during the quarter that just ended. Thus, the Biden economy now meets the standard benchmark economists have used for decades to define “recession.” Inevitably, the White House, its accomplices in Congress, and the corporate media are again trying to gaslight the voters.
The party line, as recently parroted by Treasury Secretary Janet Yellen on NBC’s Meet the Press, is that we aren’t in a recession until the National Bureau of Economic Research (NBER) says so. She said, “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.” But NBER can take as long as 12 months to officially declare a recession. As Gerard Baker writes in the Wall Street Journal, “This is like being told by a doctor that you are officially sick a year after your funeral.” Clearly, Biden and the Democrats want to avoid the “r” word before the midterms.
This won’t fool the electorate. Indeed, a number of recent polls indicate that the public believes we are already in a recession. A recent Morning Consult/Politico survey, for example, found that 65 percent of registered voters believe the United States is in a recession, including 53 percent of Democrats. A new USA TODAY/Suffolk University poll found this: “By 5-1, 76%-15%, those polled say the country is on the wrong track rather than heading in the right direction. A majority of those in every demographic group – across party lines and region, race and age – agree on that.” Yet Biden insists that we are on the right path. A recent statement from the administration says:
Coming off of last year’s historic economic growth – and regaining all the private sector jobs lost during the pandemic crisis – it’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation. But even as we face historic global challenges, we are on the right path.… My economic plan is focused on bringing inflation down, without giving up all the economic gains we have made. Congress has an historic chance to do that by passing the CHIPS and Science Act and Inflation Reduction Act without delay.
This last call to arms includes a tax and spend bill the Democrats have the chutzpah to name the “Inflation Reduction Act of 2022.” It was exhumed on Wednesday after Sen. Joe Manchin (D-W.Va.) executed the latest of his trademark flip-flops. Having repeatedly pledged not to vote for any bill that would exacerbate inflation or raise taxes during a recession, Manchin made a deal to do just that. It would be an understatement to describe this legislation as irresponsible. Yet the Democrats will likely pass it without hesitation, whereupon Biden will eagerly sign it. Republican Senate Leader Mitch McConnell (R-Ky.) denounced the bill, saying:
Apparently our Democratic colleagues do not want to be responsible for just skyrocketing prices alone. They want Americans to be faced with skyrocketing prices and higher taxes and fewer jobs, all at the same time. Democrats have outlined a giant package of huge new job-killing tax hikes, Green New Deal craziness that will kill American energy, and prescription drug socialism that will leave us with fewer new life-saving medicines. A reckless taxing and spending spree that will delight the far left and hammer working families even harder.
The timing of this is strange to say the least. Presumably, they badly need to appease the climate fanatics in their base. But, for the moderate voters that are already leaving their party in droves, it’s as if the Democrats are determined to demonstrate to the country that they are unfit to govern. The one-page summary of the bill reveals it to be the opposite of what the economy needs. It includes $369 billion in spending on “Energy Security and Climate Change,” as well as $64 billion meant to extend the Affordable Care Act. This comes to a total of $433 billion that will be poured like so much kerosene on an already inflationary economy.
Even worse, from the perspective of the recession, is the bill’s “revenue” components, which include $313 billion in new corporate taxes and $288 billion in “Prescription Drug Pricing Reform” (a euphemism for price controls). Health and Human Services (HHS) will “negotiate” drug prices with pharmaceutical companies, and any medication that can’t be produced profitably for the HHS price will vanish from the supply chain. It also includes $124 billion from “IRS Tax Enforcement” and $14 billion from plugging the “Carried Interest Loophole.” Collectively, all of these things will act as a sheet anchor for the already-sinking Biden economy.
All of which comes down to this: Despite the refusal of the White House, the Democrats, and the corporate media to use its proper name, we are now in a recession. Combined with rising inflation, it looks increasingly like the bad old days before the advent of President Ronald Reagan 40 years ago. Joe Biden inherited a growing economy rapidly recovering from the pandemic. Now, just a year and a half later, he and his congressional accomplices have halted its growth, increased the cost of everything, and managed to create supply shortages heretofore unimagined by most Americans. Inevitably, as is Biden’s wont, he’s lying about it.