Joe Biden almost certainly saw this coming. The president spent the last week before the Bureau of Economic Analysis report, which showed another quarter of negative growth, prepping the nation for the bad news: We met the “technical” definition of a recession.
Biden basically said, “Definition? Schmefinition! I’ll make up my own. That’ll get those crazy right-wingers frothing at the mouth in no time.”
This, Biden proceeded to do with gleeful intent. The entire pundit class went to war over the arcane definition of an economic term. Meanwhile, the nation was distracted from the reality of what the 0.9% negative growth in the second quarter meant in comparison to other major economies.
Newsweek reports that the “United States saw worse economic growth than seven other major economies in the second quarter of 2022.” Only China with its COVID-19 lockdowns performed worse.
Even Mexico’s economy outperformed the U.S. economy.
Of the major countries which have released growth figures for the second quarter, encompassing April-June, Spain performed the best with an annualized growth rate of 1.1 percent.
It was followed by Italy and Mexico, both on 1.0 percent, then South Korea with 0.7 percent and France on 0.5 percent.
Germany and Singapore both recorded zero growth, although as their economies did not shrink this was still better than the U.S. figure.
“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, the White House statement said.
“But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure.”
Brave words. But aren’t these the same bozos who were wrong about inflation?
The Biden administration has spent a lot of energy trying to manage perceptions of the economy. Remember when inflation was going to be “temporary”? That experience should be instructive. Insisting that inflation was just a blip didn’t stop consumers from noticing that prices were rising. Nor did it protect Biden’s approval ratings, which dived even as the administration continued to insist that everything was fine.
Of course, inflation wasn’t the only reason for Biden’s unpopularity, which intensified right around the time that America was flooded with disastrous images from the Afghanistan withdrawal. But inflation was certainly a major contributor, and it is now probably the biggest factor in Biden’s catastrophically low ratings. There’s just not much that political messaging can do when consumers have to stare reality in the face every time they go to the grocery store.
Biden’s rhetorical distraction in trying to redefine bad economic news is an effort at altering perception. When it comes to the economy, perception can be a reality. If workers think that prices are going to rise, they will ask for a larger raise. If companies believe that, they will raise prices. This is what happened in the late 1970s — until Ronald Reagan and Paul Volker ruthlessly wrung inflation out of the economy by ignoring perception and inflicting pain.
Yet their economic confidence is low because real incomes are falling and interest rates have spiked, making it harder to buy a house or a car. You can’t message people out of thinking their economic circumstances have gotten worse — or out of worrying that this portends ill for the future.
So all the spin efforts are likely to come to naught. But contra angry conservatives, it’s probably harmless — except as it’s emblematic of a dangerous tendency on the left to believe they can control reality by controlling the words we use to describe it.
Biden’s attempt to spin his administration out of the coming disaster won’t work because the real-world economic conditions don’t match what’s coming out of his mouth. In the end, it doesn’t matter how you define “recession.” What matters is that average Americans are suffering.