Dude, Where’s My Recession?
The economy is taking a flyer, especially compared to other industrialized nations, but the president isn't getting much credit for the great numbers.
To some degree or another, political parties have probably always wished darkening skies on their opponents, particularly when the opposing party occupied the White House. They have traditionally done so quietly while saying aloud, “The President may be from the other party, but we’re all Americans, and we wish him success.” But the underlying schadenfreude was akin to saying, “Is that my friend in the sand-trap, or is that the lousy so-and-so on the green?”
The days of inter-party collegiality are long gone. The current atmosphere began when Speaker of the House Newt Gingrich encouraged the Republicans under his sway to refer to Democrats not as the loyal opposition, but as “enemies.” That approach is, sadly, alive and well.
I hate to see anyone arguing for our failure as a country, yet we see it all the time in partisan politics. Right now, we hear many elected Republicans and their media cheerleaders talking about our “failing economy,” when by most every measure, our economy is doing very well.
It is reminiscent of the Trump tactic that calls the world’s newspaper of record, The New York Times, the “failing New York Times,” when in fact, the paper, which made significant early and on-going investments in its digital presence and products, is more financially successful than ever.
If you view a lot of Fox News, see a lot of right-wing web sites, or listen to a lot of right-wing talk radio and podcasts, you probably think that the Times is overwhelmingly liberally biased, and may in fact believe the Grifter-in-Chief when he says it’s failing.
In fact, the NY Times is the world’s newspaper of record. When nearly every other print source is laying reporters off, the Times hires and maintains a reporting stable that is the envy of the journalistic world in both training and experience. Much to the chagrin of detractors, like all great newspapers, there’s a “Chinese Wall,” or very bright line, between the editorial side and the news-gathering side.
You can choose to believe in the strength of the economy or not, but real-time measurements show that strong construction and manufacturing data helped the economy grow by 6% last month alone, and the Atlanta Fed is now estimating almost 4% US GDP growth for the third quarter
The huge Wall Street bank, Morgan Stanley, recently moved its GDP forecast up to 1.9%. This is not recessionary territory. Their Chief Economist, Ellen Zentner, remarked, “The economy in the first half of the year [grew] much stronger than we had anticipated.”
Unemployment is hovering at 50 year lows, and inflation is steady at 3.2%. A bit higher than the Fed’s target of 2%, but heads and shoulders better than any other comparable economy like the European Union or South Korea.
Thanks in part to the Bipartisan Infrastructure Act, we’re building and fixing again. Likewise, the Inflation Reduction Act is investing in remediating climate change, and the CHIPS and Science Act is spurring investment in science education and semiconductor manufacturing. All these initiatives have been met with private investments that are up 7.7%. Taken together, these are signs of a growing economy.
Of course not everyone agrees, or is even feeling the benefits of newly resurgent economy yet. Food prices remain stubbornly high, and car prices are stratospheric. Even though wages are now outpacing costs, it will take time for real people to feel real impact—but it’s happening, as the following numbers show.
If you love numbers more than I do—my eyes glaze over—drill down with some credible facts from marketing professor Scott Galloway: “GDP growth accelerated from 2% to 2.4% last quarter. Unemployment remains low (3.6%), and job growth continues to exceed expectations, with 372,000 new jobs created in June. Inflation fell to 3% in June, its lowest rate in two years. Contrast that with other nations, including France (4.5%), Germany (6.4%), and the U.K. (7.9%). More importantly for voter economics, U.S. wage growth is now outpacing inflation. Perceptions haven’t caught up with reality, but they will.”
Not everyone is benefitting from the economic uptick, and more than a few have no idea it’s even happening. Bloomberg News: “With Americans skeptical of his handling of the economy, President Joe Biden is leading a marketing blitz to mark the one-year anniversary of the Democrats’ landmark climate and drug pricing legislation. While officials are counting on the measure to fuel the president’s reelection bid, seven in 10 Americans surveyed in a Washington Post-University of Maryland poll said they had heard little or nothing about the law.”
And so it goes.
©2023 Jon Sinton
Great to read this refreshing (in both its informative, as well as succinct-yet-indepth, nature) bit of good news that practically every "news" outlet either refuses to report or knowingly downplays the significance of how our robust economy has been able to rebound from the ravages of the pandemic. Thanks for the reminder that all is not so dire other than the fact that politics as usual is, sadly, still politics as usual.
Every time the Fed raises rates, they reiterate that the economy is strong. They wouldn't push rates if they thought the economy couldn't handle it. Inflation is the result of an over-heated economy. As you, note it's bizarro world logic to suggest that inflation and record low unemployment suggest a "failing economy."