A top Biden administration official was confronted Tuesday over why Americans should believe officials' narrative on a possible recession when they were tragically wrong about inflation.
What is the background?
The Biden administration began claiming last week that the standard definition of a recession — two consecutive quarters of negative GDP growth — is not the "technical" definition.
The administration has fully pressed into that narrative this week, leading many to believe a forthcoming GDP report — which is due out on Thursday — will show the GDP contracted in the second quarter of 2022, thus fitting the standard definition of "recession."
What happened on Tuesday?
Speaking with reporters at the White House, National Economics Council director Brian Deese made it clear the administration is cementing its narrative.
"Two negative quarters of GDP growth is not the technical definition of recession. It’s not the definition that economists have traditionally relied on," Deese claimed. "There is an organization called the National Bureau of Economic Research, and what they do is they look at a broad range of data in deciding whether or not a recession has occurred."
Reporters, however, were not buying the spin, pointing out in their questions that concerns over the definition of "recession" are out of touch with Americans' practical concerns.
- The first reporter asked, "Why should the average American — who is really concerned about their personal economic situation, and their wages aren’t increasing as fast as inflation, they’re struggling to put food on the table, fill up their tank — why should they care if the U.S. is definitionally in a recession or not?"
- The second reporter asked, "I wonder if you could help us understand how much weight the White House puts on that definition versus just the simple reality that the majority of Americans right now just feel like we are living through a recession right now."
Then entered Fox News correspondent Peter Doocy, who reminded Deese the Biden administration once claimed for months on end that inflation would be temporary.
That narrative, of course, was tragically wrong.
"The president’s economic advisors were telling us last year that inflation was going to be temporary. That’s not true. Now the president’s economic advisors are saying there’s not going to be a recession. Are you sure?" Doocy pressed.
Surprisingly, despite the Biden administration insisting the U.S. will not be in a recession if the U.S. economy experiences another quarter of GDP contraction, Deese told Doocy, "You don’t have to take our word on this."
Deese then used Doocy's question to highlight remarks from large banks — Citigroup, Morgan Stanley, Goldman Sachs — that bolster the administration's narrative.
While banks may agree the economy is not recessionary, the Federal Reserve Bank of Atlanta's GDPNow model is predicting a GDP contraction of 1.6%.
07/26/22: Press Briefing by Press Secretary Karine Jean-Pierre and NEC Director Brian Deesewww.youtube.com