Treasury Secretary Janet Yellen is catching flack for her comments that the economy isn’t in a recession and doesn’t look to be heading toward a recession in the near future.
Speaking with NBC’s Chuck Todd on “Meet the Press,” Yellen said:
“You don’t see any of the signs. Now, a recession is a broad-based contraction that
affects many sectors of the economy. We just don’t have that,” Yellen said, but she
acknowledged the impacts of uncommonly high inflation numbers.
Both of those things can be true – no officially-recognized recession, but galloping inflation that hurts living standards.
The hue and cry that Yellen & Co. are moving the goalposts on what constitutes a recession
were as predictable as the sunrise. But that’s only if one adheres to the shorthand view of a
recession – two consecutive quarters of shrinking GDP.
By that yardstick then, yes, a recession is unavoidable. GDP fell in the first quarter, it’s likely to do have done so in the second quarter, too. But business economists have made their definition of a recession more rigorous, and more dynamic, than the old rule of thumb:
A recession is a macroeconomic term that refers to a significant decline in general
economic activity in a designated region. It had been typically recognized as two
consecutive quarters of economic decline, as reflected by GDP in conjunction with
monthly indicators such as a rise in unemployment. However, the National Bureau of
Economic Research (NBER), which officially declares recessions, says the two
consecutive quarters of decline in real GDP are not how it is defined anymore. The NBER
defines a recession as a significant decline in economic activity spread across the
economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales. (Emphasis added).
Are the current inflation and price data bad? You bet – and historically so. But again, galloping inflation doesn’t mean recession. Recession means a grinding slowdown across the economy.
Right now, a key economic driver – employment – isn’t rolling over. In other words, until
people start losing their jobs in big numbers, manufacturing craters, and sales dry up, it’s not, officially, a recession.
Here’s the thing about such official definitions….they run head-first into an iron law of politics:
If you’re explaining, you’re losing.
Yes, Secretary Yellen is officially and technically correct about there being no recession. At least not right now.
But as a political explanation, particularly for those voters who are really feeling the bite of high prices, declining real wages and precarious future prospects? It’s always going to be a loser.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
Why are we arguing about the definition of recession instead of looking at the facts of high prices and how to reduce them? Typical government response to a problem.
Why? Because they are inbreed with the Keynesian/communist approach to the economy
Note: she is a liberal who was educated at Yale & Harvard – her foundational belief system is based on governmental control.
Exactly.
Just another elite that doesn’t have to worry about pain at the pump or grocery checkout and the empty shelves.
Yellen has never really been right about the economy. Involved in both over and under corrections. She leans toward the Keynesian/communist approach to the economy and thus has it wrong.
I am sure time will prove her wrong. At this rate the next two quarters will be down.
One thing her and folks in the Federal Reserve haven’t figured out is that the economy has so many factors government & the Fed Res (not government) can’t fine tune it and thus continually over or under correct and screw things up. Leaving the economy find its own way would work much better – but then they would have no purpose in life.
Do not ever forget what a useless, brainless idiot she was as Fed chair.
Still is.
If Janet Yellensky wanted to do something really impactful, she would write to her schools and demand a refund.
The same person who was “shocked” by the rate of inflation. They are going to tax and spend, print more and produce less. It’s always worked before hasn’t it? Meanwhile, 13% of Mexican Americans who have purchased a house in the last 5 years are now losing it.
You can call an onion a pineapple but it’s still an onion. No matter how the Biden administration tries to spin it, we are in a recession.
Yep and November can’t get here soon enough!
It’s like ignoring the elephant in the room. It doesn’t just go away.
Yellen is another of Biden’s brainless, ignorant appointees. Just look at his worthless VP and his recent stupid Supreme Court appointment. Where is he finding these idiots, under rocks???
Another demented woman who ‘s been living off the public dime too long- Term limits, NO corporate or non-profit contributions of any kind, & election cycle spending limits – the increasingly large amounts of money spent in these elections would resolve all of O’Biden’s asinine, pocket-lining, nat’l debt increases!
She is as dumb as they come. The truth of the matter is in black and white and if you can’t see it, you sure don’t need to be in the position you are in.
Yellon has no soul. No, No ……..no soul. She speaks in word salads. She is a one worldler and socialist as she has lead me to believe. The TRUTH: The economy in in the toilet circling the drain Janet.
Yellen’s a liar.
Where did this person go to school? I know we were probably still using Morgan dollars at the time but money is money and recession is still recession no matter how they try to make you think it’s something else.