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What the Definition of Recession “Is” & Florida’s Resilience - Top 3 Takeaways – July 26th, 2022
- The definition of a recession. The day was September 13th, 1998. It was a day when one of the simplest words in the English language, readily understood by those who command it (and even most who don’t), was called into question. It was the day we learned that Bill Clinton questioned what the definition of is, “is” to the grand jury investigating his affair with Monica Lewinsky and his potential perjury pertaining thereto. Quoting Clinton: It depends on what the meaning of the word ‘is’ is. If the—if he—if ‘is’ means is and never has been, that is not—that is one thing. If it means there is none, that was a completely true statement. … Now, if someone had asked me on that day, are you having any kind of sexual relations with Ms. Lewinsky, that is, asked me a question in the present tense, I would have said no. And it would have been completely true. All these years later that’s no less absurd than it was then. But nevertheless, it proved effective. He wasn’t called slick Willie for nothing. Perhaps that’s the reason the Biden administration is actively seeking to redefine what the definition of recession is. On Thursday, the second quarter GDP report will be released, and with it what almost certainly appears to be a 2nd consecutive quarter of negative economic growth. What’s literally the text-book definition of a recession. However, in a preemptive strike to attempt to redefine what an economic decline, or a recession is, the White House Council of Economic Advisers has stated this:
- What is a recession? While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle. Now, on one hand I could drill down on the fact that most economists are more consistently wrong than meteorologists, with virtually no leading economists suggesting there was any risk of recession entering this year – and most still ignoring reality after the first quarter’s negative economic growth was known. On the other hand, this is an outright lie and downright false. Just as there is a definition to the word “is”, there is a textbook definition to the word recession and it’s this... 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. Right, so two consecutive quarters of negative economic growth is literally a recession. Just as Bill Clinton knew damn well what the definition of “is”, was. But if the Biden administration wants to attempt to play the game, it’s not going to work out for them the way it did for Willie. Because you can lie to people about a lot of things in politics, however you can’t lie to people about what is or isn’t in their wallet. But while the US economy will most likely be confirmed to have been in a recession this week...
- Florida’s resilience is endlessly impressive. Not that inflation isn’t hitting hard here at home, but what’s happening in Florida continues to defy what’s happening nationally. That was true of pandemic policy which allowed Florida’s economy to recover from the shock of the pandemic faster, and that’s true now as the US economy is shrinking around us. As I recently covered, Florida’s economy not only didn’t decline in the first quarter like the rest of the country, it grew by a remarkable 12% year-over-year. And while it remains to be seen what happened in our state’s 2nd quarter economy – we know how much more impressive Florida’s employment picture was. Florida’s unemployment rate dropped to a near-record low 2.8% in June. That’s a rate that’s not only 22% lower than the national average, but Florida’s job growth over the past year has also been 56% faster than the national average. So, the net-net of all of this comes down to an interesting possibility. While we don’t know where the story ends with what’s already likely a national recession, all indications are that what’s happening in Florida appears to be sticking in Florida. Meaning it may be possible for the US economy to have a recession, that’s never felt in Florida. That wouldn’t be altogether different than the differences during the peak of the pandemic where it was easy to forget what was happening around the world unless you left the Free State of Florida. Florida’s resilience is endlessly impressive and the seeds for it were sown during the pandemic.