Reporter uses top Biden adviser's own words to undercut attempt to redefine recession: 'What changed?'
The White House was confronted Wednesday over previous comments a top Biden administration adviser made that contradicts the administration's narrative on "recession."
On Thursday, the Bureau of Economic Analysis announced the U.S. economy shrank 0.9% in the second quarter of 2022, thus meeting the standard definition of recession, which is two consecutive quarters of GDP contraction.
The National Bureau of Economic Research, however, has not officially declared a recession.
What is the background?
In anticipation of the BEA's report, the White House has been downplaying the accepted definition of recession.
According to White House officials, two consecutive quarters of negative GDP growth is not the "technical" definition.
Brian Deese, director of the National Economic Council, strongly reiterated this claim during the White House press briefing on Tuesday.
"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 said. "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."
But what was said before?
In 2008, when he worked for Hillary Clinton's presidential campaign, Deese said the "technical" definition of recession is, in fact, two consecutive quarters of GDP contraction.
"What Senator Clinton has said is that of course economists have a technical definition of recession, which is two consecutive quarters of negative growth," Deese said in March 2008.
\u201cBrian Deese, yesterday: "Two negative quarters of GDP growth is not the technical definition of recession.\u201d\n\nDeese, 2008: \u201cEconomists have a technical definition of recession, which is two consecutive quarters of negative growth.\u201d\u201d— RNC Research (@RNC Research) 1658945401
The comments were made as then-President George W. Bush tried to alleviate recessionary fears.
At the time and as Deese's comment reflect, Democrats seized on the moment to emphasize the unfortunate economic circumstances to help Democrats in the 2008 presidential election.
Anything else?
Fox News correspondent Peter Doocy asked White House press secretary Karine Jean-Pierre about the glaring contradiction on Wednesday, asking why the White House wants to "redefine" the word "recession" while at the same time downplaying the inflation crisis.
"If things are going so great, though, then why is it that White House officials are trying to redefine 'recession?'" Doocy asked.
When Jean-Pierre claimed the White House is not redefining recession, Doocy pulled out Deese's 2008 remarks.
"What changed?" Doocy asked. "What's the difference other than who the president is?"
Jean-Pierre, however, did not directly respond to the question, instead reiterating the Biden administration's recession narrative.
\u201cDoocy: "If things are going so great, why are White House officials are redefining recession?"\n\nJean-Pierre: "We are not."\n\nDoocy: "It's two consecutive quarters of negative GDP growth... How is that not redefining recession?"\n\nJean-Pierre: "That's not the definition."\u201d— Greg Price (@Greg Price) 1658955119
Reporters grill top Biden adviser over recession narrative — then Peter Doocy enters with knockout blow
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 Deese www.youtube.com
White House goes into full spin mode ahead of economic report, disputes definition of 'recession': 'Not the technical definition'
The White House is going into full spin mode ahead of a government report that could show the United States economy is experiencing a recession.
What is the background?
The U.S. economy shrank 1.6% in the first quarter of 2022, according to the Bureau of Economic Analysis.
Economic forecasts for the second quarter are split. Bloomberg's experts, for example, forecast a meager 0.5% growth, while Goldman Sachs economists predict 0.7% growth.
Unfortunately, the Federal Reserve Bank of Atlanta's GDPNow is predicting another GDP contraction of 1.6%. If that happens, the U.S. economy will have experienced two consecutive quarters of GDP decline, which meets the standard definition of a recession.
What is the White House doing?
Ahead of the BEA's first second-quarter estimate, which is expected on Thursday, the White House is downplaying a potentially bad report by denying what most economists agree is the definition of a recession.
For example, the White House Council for Economic Advisers published a blog post last Thursday denying the definition:
What is a recession? While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle. Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data—including the labor market, consumer and business spending, industrial production, and incomes. Based on these data, it is unlikely that the decline in GDP in the first quarter of this year—even if followed by another GDP decline in the second quarter—indicates a recession.
Then on Sunday, Treasury Secretary Janet Yellen claimed on NBC's "Meet the Press" that if the U.S. economy shrank in Q2, then that does not mean the U.S. is experiencing a recession.
"I do want to emphasize: What a recession really means is a broad-based contraction in the economy. And even if that number is negative, we are not in a recession now. And I would, you know, warn that we should be not characterizing that as a recession—" Yellen said.
"I understand that, but you're splitting hairs," anchor Chuck Todd interjected. "I mean, if the technical definition is two quarters of contraction, you're saying that's not a recession?"
"That's not the technical definition," Yellen responded. "There's an organization called the National Bureau of Economic Research that looks at a broad range of data in deciding whether or not there is a recession. And most of the data that they look at right now continues to be strong. I would be amazed if the NBER would declare this period to be a recession, even if it happens to have two quarters of negative growth."
Meet The Press Broadcast (Full) July 24 - Former VP Al Gore, Rep. Elaine Luria, Janet Yellen youtu.be
Brian Deese, director of the National Economic Council, regurgitated Yellen's clams in a CNN interview Monday morning, suggesting the administration's talking points emphasize denying the definition of a recession.
"In terms of the technical definition, [two negative quarters of growth] is not a recession," Deese said. "The technical definition considers a much broader spectrum of data points."
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