On January 21, 2008, the day that George W. Bush entered his last day of his Presidency, and with the Presidential race heating up, the Associated Press predicted a recession ahead. The report defined recession “as an outright contraction of economic activity and employment lasting at least six months.” In the June of 2019, again in the middle of a heating Presidential race, a Politico report said that “Manufacturing as measured by the Federal Reserve has declined for two straight quarters, the technical definition of recession.” In 2008, the Associated Press got it right. In 2019, Politico got it wrong because it had manipulated the definition to fit a political purpose. Recession is not the decline of manufacturing but all economic output, and the United States was not under a recession that year. So, it is puzzling why both publications suddenly want to remind their readers that the technical definition of recession is not the only definition or even the true one.
On Wednesday, Politico reported that the White House is preparing for an economic slowdown. Reporting that a forthcoming report will suggest that the U.S. economy has shrunk for a second quarter in a row. The authors wrote that it is “a classic — though by no means the only — definition of a recession.” The Associated Press went further and dedicated an entire article to why the literal definition of recession doesn’t mean an economy is actually in recession. But the report’s opening line got it right: “By one common definition, the U.S. economy is on the cusp of a recession. Yet that definition isn’t the one that counts.”
It is true. What economists and other experts define as recession doesn’t matter at the ballot box. As Harry Truman once quipped, “it’s a recession when your neighbor loses his job; it’s a depression when you lose yours.” It’s the people’s pocketbooks that count, and that one is not looking good right now. The pacing inflation is bad enough news for the Democrats. If people begin losing their jobs, there will be a tsunami in November. No patriotic American should want this.
The White House seems to think that the problem is the message, not the economic reality. Both the Politico and the Associated Press reports mention the White House’s efforts to spin the narrative to prevent the R-word and inflation as campaign problems for the Democrats. But the truth is, what journalists write won’t have an effect at the ballot box. The only effect will be further loss of credibility with Americans who are already suspicious of them. And if the administration keeps avoiding the admission of reality, it too will further lose its credibility. To tell the American people that the economy is doing well, and that they should not believe their lying eyes, will be snobby elitism that will only anger the hard working Americans more and encourage them to punish the President and his party.
As a candidate, Joe Biden promised to be honest and forthright with Americans. He has an opportunity to prove that he meant it. He should admit that there is a looming problem and, instead of spending his time worrying about his image, focus on solving the piling troubles of the U.S. economy. Much of the troubles are his own doing with excessive spending and regulations that are breaking the backs of U.S. producers, employers, and consumers. Journalists, on the other hand, should remember what their duty is: reporting the unbiased truth to their readers, not being the extended arm of the White House communications office.
The combination of recession and inflation is called stagflation, a phenomenon that only happened here in the 1970s. We should all hope that the President manages to arrest inflation and prevent a recession. This is his job. But also, Biden should hope that he succeeds for his personal interest too. During the first stagflation, as a presidential candidate, Ronald Reagan took the line from Harry Truman but added, “recession is when your neighbor loses his job. Depression is when you lose yours. And recovery is when Jimmy Carter loses his.” If Biden fails like Carter did, he will end up with the same fate. And if he and journalists insist that people should not believe their own lying eyes, they will just add to the credibility problems they already have.
Chuck Warren, is co-host of BreakingBattlegrounds.vote radio show which can be found on these Salem radio stations: The Patriot in Phoenix and The Answer in Tampa and managing director of September Group LLC.