Wonder why the US economy is NOT in recession despite the fact that we've had two consecutive quarters of shrinking GDP?
The White House provides 90% of the budget for a company in Cambridge, MA that is contracted to announce the beginning and end of recessions. They redefined the term and say we are NOT in a recession.
Earlier today President Biden confidently claimed that a recession was not inevitable1 despite the fact that the American people have suffered through two consecutive quarters of shrinking GDP.2 The Oxford English dictionary defines a recession as “a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”3 How could the president claim that a recession wasn’t inevitable given the fact that the GDP has declined for two consecutive quarters? The answer is simple - the company Biden pays to decide when we’re in a recession has changed the definition of what constitutes a recession.
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Instead of relying on the longstanding, objective definition of recession the White House pays a small company run by MIT economists called the National Bureau of Economic Research to determine when the economy is ACTUALLY in recession. The NBER’s methodology is proprietary and takes into account various factors and determines the start and end of a recession on a case-by-case basis. The subjective nature of NBER’s method prevents anyone from questioning their determinations and gives the company the freedom to play politics as they see fit. In this case, President Biden seems very confident that the NBER won’t declare a recession until AFTER the midterm elections and since he pays their bills he should know.