In article <t1d4tj$2v7qe$
9...@news.freedyn.de>
<
governo...@gmail.com> wrote:
>
For the last several weeks the White House has been vehemently
denying that the nation was staring a recession in the face,
despite the fact that growth clocked in at -1.6 percent in the
first quarter and there was no reason to believe things had
rebounded in the second quarter. Still, administration officials
from Treasury Secretary Janet Yellen to Press Secretary Karine
Jean-Pierre insisted everything was fine.
Unfortunately, things are not fine, and as many of us predicted
(because it was that obvious), the United States now appears to
be in a recession according to the latest growth tracking from
the Atlanta Federal Reserve.
A Federal Reserve tracker of economic growth is pointing to an
increased chance that the U.S. economy has entered a recession.
Most Wall Street economists have been pointing to an increased
chance of negative growth ahead, but figure it won’t come until
at least 2023.
However, the Atlanta Fed’s GDPNow measure, which tracks economic
data in real time and adjusts continuously, sees second-quarter
output contracting by 2.1%. Coupled with the first-quarter’s
decline of 1.6%, that would fit the technical definition of
recession.
“GDPNow has a strong track record, and the closer we get to July
28th’s release [of the initial Q2 GDP estimate] the more
accurate it becomes,” wrote Nicholas Colas, co-founder of
DataTrek Research.
While a recession doesn’t become “official” until a group of
nameless government officials says so, no one should be naive
enough to believe that the Atlanta Fed’s tracking is so wildly
off that the second quarter actually saw positive growth. Even
looking at the fundamentals, there’s just no argument to support
that assertion. How could US GDP have grown in the midst of a
supply chain crunch, an inflation boom, and gas prices averaging
$5 a gallon nationally, all of which depress economic activity?
Suggestions of such simply make no sense, and it is clear we
have now suffered two straight quarters of economic decline,
with a likely third quarter on the way. That, by definition,
means we are in a recession, whether those married to “the
narrative” admit it or not.
With that reality front and center, there’s every reason to
believe things will only get worse from here. The Fed’s
quantitive tightening has barely begun, with interest rates set
to rise precipitously over the next several years. Rising
interest rates historically lead to a decrease in growth. While
that should help tame cost increases, it means stagnation at
best in the economy.
We are in this position for one simple reason: Joe Biden.
Had the president not pursued an unnecessary strategy of extreme
spending, including the $2 trillion American Rescue Plan, the
economy would have had a softer landing. Inflation would have
been curtailed and the path through the minefield would have
been more straightforward. Instead, Biden refused to accept a
little bit of temporary pain, backing the country into a corner
that will now entail a lot of pain to get out of. Why? Because
he was scared of the political consequences. It’s insane that
we’ve arrived at a place where we have to choose between double-
digit inflation, negative growth, or some combination of the
two, otherwise known as stagflation.
What’s more insane is that you can expect the White House to
continue gaslighting the issue, not admit that we are in a
recession, and pretend your eyes are lying to you. Regardless,
the pain has arrived, and no amount of obfuscation will save
Americans from it now. There’s only one way out of this malaise,
and that’s a period of economic degradation. Biden will not, in
fact, be the first president to defy the laws of economics.
https://redstate.com/bonchie/2022/07/02/the-recession-the-white-
house-denied-has-arrived-n587750