Redefining Reality

After a report saying that the nation has experienced a second quarter of negative growth in GDP, which has been the definition of a recession for more than fifty years, the White House is denying that we are in a recession because two quarters of negative growth is not the definition of a recession as everyone has thought for the past half century.

Just like we thought that a vaccine was a product that prevented the spread of an infectious pathogen. We were set straight on that one by the Biden White House. A vaccine does not stop the spread of a disease, like the smallpox vaccine did, it merely “reduces the risk of hospitalization or death.”

So we are now told that a recession is not defined by negative GDP, but is defined by “a much broader spectrum of data points,” which for some reason they cannot list for us. Probably because they have not made them up them yet. After all, the second negative GDP quarter was only announced yesterday.

From Politico we learn that the “National Bureau of Economic Research's Business Cycle Dating Committee can determine whether the U.S. economy is in a recession, based on a multitude of factors that can only be found several months or up to a year after a recession actually begins.” And, presumably after the current election cycle has passed as well.

Economist Ben White provided a tweet reading, “Yeah I did a bad tweet a while ago referring to two negative q’s in a row as  a recession. Should have known better at the time but it had been a while since I’d studied recession criteria and that’s not it.” Right. It had, "been a while since I’d studied recession criteria."

That was not particularly illuminating, so he amplified that the actual definition is “NBER and lots of data points beyond GDP.” He, too, does not elaborate on the “lots of data points.”

Wikipedia, which cannot be used for toilet paper because it is a virtual source, admits that its article, “may be affected by the following current event: Increased political debate in the United States.” No shit.

Anyway, it says that a recession, “In the United States, a recession is defined by the National Bureau of Economic Research (NBER) as ‘a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales’."

Wikipedia follows that with the statement that, “In the United Kingdom and most other countries, it is defined as negative economic growth for two consecutive quarters,” which is basically saying that the NBER, and the White House, are full of shit, which is kind of awesome.

Note that, despite its name, the NBER cited repeatedly above is a private economic research organization.

I don’t really care what the “lots of data points” are, two quarters of negative GDP growth tells me we are in a recession, and my observation and common sense told me that several months ago.