On the menu today: Two consecutive quarters of declining GDP doesn’t sound like a recession to President Biden, and he emphasizes to Americans that Federal Reserve chairman Jay Powell said there are too many areas where the economy is preforming too well. You don’t realize how great you have it, foolish Americans! Meanwhile, more voices across the political spectrum wonder why Biden’s schedule is so light.
Biden: ‘Doesn’t Sound Like a Recession to Me’
President Biden appears convinced he can just spin his way through bad economic news. His statement Thursday morning:
Passing the CHIP bill is going to put another $72 billion dollars for incentives and tax credits to expand semiconductor production. And the Inflation Reduction Act will add another $370 billion in clean-energy tax credits in reconciliation, including incentives to accelerate domestic production of solar panels, wind turbines, batteries, and critical-materials processing. That doesn’t sound like a recession to me.
And then later Thursday afternoon:
There are going to be a lot of chatter today on Wall Street and among pundits about whether we are in a recession. But if you look at our job market — consumer spending, business investment — we see signs of economic progress in the second quarter as well. And yesterday’s — Fed Chairman — the Fed Chairman Powell said — made it clear that he doesn’t think the U.S. is currently in a recession. He said, quote, “There are too many areas” of economic — where “the economy [is] performing too well.” He said “too” well — T-O-O. Too well.
Yes, the message from the president is that, if anything, the economy is performing too well! If Biden thinks that this is a thriving economy, it’s easier to understand why he thinks that in November, Democrats will keep control of the House and “pick up as many as four seats in the Senate.”
Even if you want to reject that traditional definition of a recession, two consecutive quarters of declining GDP isn’t a good thing. Inflation continues to ensure that even though Americans are working hard, they can purchase less. Higher prices mean Americans buy fewer products and services, and consumer sentiment is taking a nose-dive. Rising interest rates are going to slow down the housing market and make it tougher for people to get loans. Businesses are restocking their inventories at a significantly slower pace. All of these are warning signs that the economy is hitting a rough patch. If we’re not in a recession, we’re on the precipice of one.
The likelihood that this quarter’s GDP report would bring bad news was clear for weeks, if not months. And yet with all that time to prepare, the Biden administration’s strategy is to try to redefine what constitutes a recession at the last minute, and then tell people that the economy is actually doing really well, they just haven’t noticed it.
A lot of bad economic news comes in the form of official government figures released by institutions such as the Department of Commerce’s Bureau of Economic Analysis and the Department of Labor’s Bureau of Labor Statistics. Their schedules are clear! I can tell you the next days that the administration will have another bad economic-news cycle. The JOLTS report next Tuesday will show how many unfilled jobs there are; next Friday’s unemployment numbers will likely bring good news in the form of low unemployment; the Consumer Price Index numbers on August 10 will likely show inflation continuing to rage out of control; and on October 27, right before Election Day, we will get GDP numbers for the third quarter. Maybe those numbers will be better, but it’s too early to say.
But it’s not just alleged right-wing maniacs like us who notice that the administration always seems to be behind the curve. In The New Republic a few weeks ago, Alex Shephard lamented that no matter how much advance warning the administration has about a problem, it always seem caught off-guard, flat-footed, and asleep at the wheel:
In a year of crises — Roe, Ukraine, inflation — Biden has been notably tucked away, his major communications coming in newspaper op-eds (another, Monday morning, detailed his goals for a diplomatic trip to the Middle East). With Roe, the situation is particularly galling, given the long lead time the administration was given. That Pete Buttigieg, the secretary of transportation, has recently emerged as the administration’s most effective spokesperson on a range of issues, is itself a damning indictment of the administration’s messaging. (Fox News keeps booking Buttigieg for appearances seemingly out of the desire to spar with someone with a pulse.)
Notice that late summer is turning into a recurring lousy time for this administration. One year ago, Americans witnessed the Afghan government collapse in the face of the Taliban, and those of us who were watching closely noticed that the president stopped making public appearances and taking questions around the same time:
After making no public appearances for four days — during a major foreign crisis — President Biden read a 20-minute speech off a teleprompter on Monday afternoon and took no questions. He immediately returned to Camp David. He had no events on his schedule Tuesday. On Wednesday, he gave another 20-minute speech about vaccine boosters off a teleprompter from Camp David, and again took no questions. Also on Wednesday, the president sat for an on-camera interview with George Stephanopoulos that did not go well. According to the White House public records, Biden has had two phone conversations with foreign leaders in the past ten days.
The president’s strange absence and long stretches of silence during that crisis were the clearest indicators that his age does not allow him to maintain the usual schedule of a president. The New York Times reported this month that the White House rejected a proposed ten-day overseas trip because “such extended travel might be unnecessarily taxing for a 79-year-old president, or ‘crazy,’ as one official put it.”
President Biden has no public events on his schedule for today.
How Presidents Handle Bad News
Every president has bad days and times where they promised that something will happen and it doesn’t happen, or they guarantee that something will not happen and then it happens.
The question is: What do you do in that situation? The morally right thing to do is for the president to admit that he was wrong; that his powers in his office are limited; and that he made a promise he was unable, unwilling, or incapable of keeping. Take your lumps and move on. Some people might even give you credit for leveling with them.
But increasingly, it feels like presidents just try to brazen it out and insist that up is down and vice versa. Bill Clinton might have been the master of this: “I did not have sexual relations with that woman.” It was a strategy so audacious, it was close to insane: Just go out there and insist that two + two = five and hope that you can get enough people to argue about whether it’s four or five or some other number.
As much as I prefer him to other recent presidents, there’s no denying that George W. Bush and his team kept insisting that the Iraq war was “turning a corner” and that the opposition was down to a few “dead enders.” Barack Obama was ushered into office by a crowd that saw him as a messiah figure, and thus he and his team could assert that the stimulus bill was already showing “green shoots” of economic growth that would lead to a “recovery summer”; that the jobs were “shovel ready”; that if you liked your doctor, you could keep your doctor; that ISIS was just the “jayvee team”; and so on. The Obama White House deliberately deployed a strategy it called “stray voltage” — deliberately creating controversies over inaccurate or exaggerated assertions that would draw attention to an issue.
And then there was Donald Trump, who was simply next-level in terms of brazening out controversies and scandals. He dismissed the accusations as “fake news” and often announced or tweeted something new and outrageous and controversial in a different way, and the news cycle moved on. There was always some new shiny object — Stormy Daniels! Omarosa! He’s trashing a cabinet official on Twitter! — that caused yesterday’s scandal or accusation to fade into the background.
With his brazen, “This is not a recession, in fact the economy is doing too well,” approach, Joe Biden is trying to run the same playbook . . . but he just isn’t as good at it as his predecessors. Also, the more a topic impacts people’s lives, the less you can BS them about it.
ADDENDUM: For fans of the Three Martini Lunch podcast, Greg and I have something special planned for the second week of August, when both of us will be traveling. We’ve taped two episodes of listener questions, covering everything from what a GOP supermajority should aim to accomplish in Congress, how big Ron DeSantis’s margin of victory in 2022 needs to be to really launch his expected presidential campaign, why some NeverTrump figures have left all of conservatism behind, what historical event we would attempt to alter through time travel, and the ranking of the Die Hard films. (There were only four, right? The fifth one is a terrible urban legend, much like the fourth Indiana Jones movie or the third Godfather movie.) It’s been a lot of fun to record, and I hope you’ll enjoy listening to it as well.