What is a recession, really?
As the economy slowed in early 2008, President George W. Bush insisted the country had not fallen into recession.
“I don’t think there will be a recession,” Bush told ABC News Radio in February 2008. He refused to use the word for months, even as Democratic lawmakers laid into his administration over what they called the “Bush recession.”
A decade and a half later, President Biden is in a similar predicament.
The Bureau of Labor Statistics will release its preliminary estimate Thursday of how much gross domestic product grew — or shrank — in the second quarter. The number is important because GDP fell in the first three months of the year, and GDP contracting two quarters in a row is viewed as a signal that the economy is in recession.
The administration has mounted a campaign in recent days to convince Americans that the economy is too strong to be in recession no matter what Thursday’s data shows. “We’re not going to be in a recession,” Biden told reporters on Monday.
Republicans aren’t having it.
Sen. Rick Scott (R-Fla.), the chairman of the National Republican Campaign Committee, castigated the administration on Tuesday for trying to evade calling a recession a recession, armed with a poster board with the definition on it. His source: Google.
“The Biden administration must be really worried because they are trying to change the definition,” Scott told reporters. “So I assume they are going to call Google to see if they can hurry up [and] get this number changed so that when people go onto the internet and look this up it won’t say if you have two negative quarters it won’t be a recession anymore.”
Even some economists who’ve sometimes been critical of the Biden administration say they’re in the right this time.
“Everything they’ve said is correct,” said Jason Furman, who served as director of the National Economic Council in the Obama administration. “And if anyone goes out and says this is a recession if there’s a negative number on Thursday, they’re just wrong and don’t understand how recessions are defined.”
Douglas Holtz-Eakin, a former Congressional Budget Office director who now runs American Action Forum, a conservative think tank, said he didn’t think much of Biden’s handling of the economy but that two quarters of negative economic growth doesn’t necessarily augur a recession.
“I think it’s a terrible thing to argue that we’re in a recession for political damage,” Holtz-Eakin said. “That’s rooting against the American people. No one should make that argument until it’s definitively true.”
But with polls showing Americans are already sour on the economy, a big public fight over whether the economy is technically in a recession is probably not a good place for Democrats and the Biden administration to be heading into the midterm elections.
“They’ll lose that argument — even if they’re right,” Holtz-Eakin said. “I’m just saying. They’ll lose. Bush lost. That’s the way it works.”
The White House has been making the case that this time is different than previous recessions. Private sector investment and demand remain strong. The economy has been adding hundreds of thousands of jobs a month.
“That’s in contrast to what we see typically during recessions,” National Economic Council Director Brian Deese said in the White House press briefing on Tuesday.
Americans are more pessimistic.
A CNN poll last week found that 64 percent of Americans believe the country is…
Read More: The coming political battle over when a recession is recession
