So it’s official now
[1] https://www.whitehouse.gov/cea/written-materials/2022/07/21/...
Is this not the same thing as ‘alternate facts’?
The fact the media on whole has decided it's ok to redefine a commonly accepted definition when the administration promotes it lends itself to the media being a mouthpiece for the administration.
I am willing to understand nuance and a changing definition, as I am sure there are parts of the economy people are learning to deal with. Gig workers, workers headed back from retirement and more. This doesn't even touch on the self fulfilling prophecy of hearing that the country is in a recession.
I am less willing to accept a change in a short timeframe and right before numbers are released.
That's not how recessions work. There is always people predicting a recession and always people predicting a turnaround or growth. It's quite simple, however, to engineer a recession when you raise interest rates for such a heavily indebted economy.
I am unsure the point you are making. My point was related to mindset and I should have clarified. If a group of people, normal non economic expert citizens, believe a recession is here they change their behavior. The media plays a part in amplifying it. At that point it doesn't matter what is happening at a macro economic level.
I am for introducing nuance to the judgement of a recession or not. I am not for doing it right before numbers are released the admin saying, "Well, there is nuance in the determination" before the numbers are released. At best all you are doing is introducing confusion to the non economic expert citizens and at worst you are attempting to gaslight people.
I hope that helps explain my thoughts.
Well, if you want to be specific, the NBER (which calls the game on what is a recession or not) defines it as "a significant decline in economic activity that is spread across the economy and that lasts more than a few months."
The "two quarters of declining real GDP" (GDP increased by 7.8% in nominal terms) is the pop-economics yardstick.
Are you aware we had a recession in 2001? And yet that managed to happen without having two consecutive quarters of negative GDP.
However, wouldn't you agree there is nuance here? In Q4, GDP rose 6.9%, a number so big that we haven't seen that in decades- it appears around the early 1980s was the last time we saw those kinds of numbers. There has been a lot of whipsaw effects as we get out of covid- supply chains are all over the place, companies placing orders to get goods in to avoid snarls, only to now find that demand for goods, which boomed during the pandemic, has now eased as people have reverted to spending on going out and traveling, etc... There seems to be a lot of mismatch in supply and demand again.
The unemployment rate is at 3.6%- an astonishingly low number- these lows were last seen in the 1960s and 1970s.
On the flipside, inflation is high, gas prices are high and that hurts a lot of people- I live in a city, so this is mostly irrelevant and driven by forces out of anyone in the US govt's control.
There is evidence of some rockier times ahead, but when I think "recession" I think of a lot more pain than what we are currently experiencing.
The news has for the most part has not called out Biden’s many missteps. Not even John Oliver is making fun of it.
up until literally 2 weeks ago the media was on about the "biden boom" (lmao)
“It’s not about what’s true, it’s what you can get people to believe.”
Even just 15 years ago it was nowhere this overt or coordinated. The turning point seems to be shortly after JournoList and CabalList started when different independent media organizations began to collude to push a unified "narrative" rather than the truth.
Get used to it. We're back to the status quo (of incompetent media). In fact, it was the same for the previous admin, just in a different way.
The System doesn't like outsiders. If you haven't paid your dues, sucked up, kissed the ring, etc. then you're marginalized. Put another way, how would it look if someone with no experience was decently effective? Say about as effective as the current highly experienced (politician) that's POTUS?
I'm no fan of Don T, but given humam nature and The System, he was doomed to "fail" no matter what. As in, perception is reality (and most people now have a bias that isn't going to change).
Believing in the mainstream media is the adult equivalent of believing in Santa Claus.
https://www.politifact.com/factchecks/2022/jul/27/instagram-...
They are basing it off facts. The NBER is the one who defines a recessions. They haven't done so (that I'm aware of) as of right now.
It might be that it will eventually be the case, but the arbitrator of this hasn't ruled on it.
Calling it a recession officially now would be the alternate fact.
Basically, it's like how someone can be guilty of something, but you still have to say "alleged" before referencing the crime.
Yes, you might have a million witnesses, but they aren't guilty until they are guilty.
And I'd much rather have a government that abides by these rules than not. Offhanded remarks based on willful disregard to order should not be encouraged.
For example: "Of course economists have a technical definition of recession, which is two consecutive quarters of negative growth."
-- The head of Biden's National Economic Council, in a past life, apparently.
You can find many other examples in the past of his advisors defining a recession as two quarters of negative GDP. And you can find many examples in the past of the press defining a recession as two quarters of negative growth.
"two negative quarters in a row is a standard indicator for an economic recession."
-- Washington Post, fact checking Donald Trump
What has changed?
The party in power.
https://www.bls.gov/charts/employment-situation/civilian-lab...
https://www.statista.com/statistics/269959/employment-in-the...
It is also not adjusted for population growth, the way labor participation is.
its really hard to imagine how the fed assumed 'free money' was a sober policy to drive one of the worlds largest economies on. the best we can hope for now is the student and automotive credit bubbles dont burst under the strain of half-percentage-point increases, which i suspect will continue throughout 2023 as inflation crests 15%.
Next, pick a country and its inflation rate. The Euro? https://www.nytimes.com/2022/07/01/business/eurozone-inflati...
Pick another currency that meets the requirements of being a reserve currency and then look at its inflation rate.
For addressing inflation, the fed's tools are rather blunt (adjusting interest rate). The issues of disrupted logistics and energy cost increases are ones that the fed has little direct control over. The monetary policy tools are being used to the greatest degree they can. The fiscal policy tools have been left rather idle as those require political will to use.
Returning to the reserve currency question - is there another currency that meets the requirements? Saying "the euro" is ok - and that represents the second largest reserve currency holdings, but, if you are pointing to inflation, it is hitting just as hard in Europe. The yen and the pound sterling have their own issues and China's currency has another set of issues.
The crystal ball gazing of "what about 15% inflation and reserve currency" misses out on what is happening to the rest of the world and what can and is being done to address inflation.
I don’t understand all the details.
Personally, I think it would be great to understand the economy at a more basic level rather than what’s put out for the general public to consume in the often overly simplified terms.
For example, the condition of the economy vs the Fed raising rates will be interesting.
The Fed is trying to slow the economy but much of the inflation problem is supply side related.
Have you ever actually watched?
If you want cable news that isn’t complete D good R bad, or the reverse, CNBC is the way to go.
Ever watch Fox Business? They talk politics all day long. I try to deal with it during commercial breaks but it can’t seem to stick to business.