A recession by any other name
By Matthew Gagnon
There’s an old saying in politics, “if you’re explaining, you’re losing.”
Essentially this axiom means that if someone, typically a politician, is forced to explain why something is true or why they are right about an issue, they are already losing the argument. Quick, emotional, and easy-to-understand arguments that support a person’s natural suspicions are powerful, and no amount of dry, long-winded technical explanations can really fight against that impulse.
To me, it is a little bit like explaining a joke. If you have to do it, the joke isn’t funny.
As any observer of politics will tell you, the statement is unquestionably correct. I, as a long-winded and detail-oriented fan of nuance and depth in policy debates, wish that it wasn’t, though. Great debates about complex issues of policy deserve to be discussed at great length, and in exquisite detail, and I would prefer if we fought political battles out on those terms.
And yet, much to my annoyance, there is a certain wisdom in the gut instincts of the everyday citizen.
Take the state of the economy. Most people you talk to today feel like the economy is in real trouble, and that growth is shrinking. In a recent CNBC poll, roughly six in 10 of those surveyed believed that the United States was going to enter a recession in the next year; 52 percent of respondents think the economy is going to get worse over the next 12 months, and only 22 percent believe it will get better. According to CNBC, this is the worst economic outlook results they have found in the 15 years that they have been conducting the survey.
So we know that the aforementioned gut reaction of the general public is decidedly negative.
The White House, recognizing this, has tried a number of times to talk us out of our pessimism. The Biden administration is pointing to, and taking credit for, a low unemployment rate and growth in jobs. The president’s allies even call it the “Biden jobs boom,” and try to convince us that the economy is in a stronger position than ever before thanks to the president and his agenda in Congress.
And yet we are about to get some cold, hard data that will tell us more about the state of the economy than Biden’s rhetoric can. Later this week we are going to get a report on economic growth (or lack thereof) in the second quarter, and if that report shows that the United States has experienced a second consecutive quarter of declining gross domestic product, we will have entered a recession according to the most common definition.
In response to the increasingly anticipated bad news, Treasury Secretary Janet Yellen spent the past weekend attempting to pre-emptively convince us that no matter what people try to say, the United States is simply not in a recession, leaning on the “official designation” that will be handed down by the National Bureau of Economic Research. “Most of the data that they look at right now continues to be strong. I would be amazed if they would declare this period to be a recession, even if it happens to have two quarters of negative growth,” Yellen said in a Sunday interview on Meet the Press with Chuck Todd. “We have a very strong labor market. when you are creating almost 400,000 jobs a month, that is not a recession.”
Predictably the “explaining” has resulted in the Biden administration effectively “losing” on the issue.
According to a Quinnipiac poll last week, Americans give the Biden administration dismal marks on its handling of the economy, with only 28 percent of registered voters approving of the administration’s economic management, and 66 percent disapproving. In a June Gallup survey, when asked “are you satisfied or dissatisfied with the way things are going in the United States,” only 13 percent answered yes, while a stunning 87 percent said no. All those explanations seem to be more than a little unconvincing.
Yellen is actually correct that the NBER is the entity (in this country, at least) that is generally tasked with declaring whether or not we are in recession, but no one seems to really care about what their ultimate designation ends up being.
The feelings of the general public right now are based on their own personal experiences, and those experiences tell them that things aren’t going well right now. Things are more expensive, future prospects look bleak, and their economic confidence in the future is low. That screams recession, and no attempt to spin or explain will shake that feeling from anyone.
Gagnon of Yarmouth is the chief executive officer of the Maine Policy Institute, a free market policy think tank based in Portland. A Hampden native, he previously served as a senior strategist for the Republican Governors Association in Washington, D.C.