‘We’re living in an Orwellian hell’: Top economist blasts Facebook for ‘fact-checking’ recession

Facebook affixed a “fact-check” label to an article by a top economist declaring that the US is currently in a recession – a move it called “Orwellian”.

Two consecutive quarters of negative growth is the standard definition of a recession, and Phillip Magness, director of research and education at the American Institute for Economic Research, posted a comment on Facebook about the country currently in recession.

The post – which is no longer visible – has been flagged by Facebook fact checkers as misleading.

“We live in an Orwellian hell,” he tweeted.

“Facebook is now ‘fact-checking’ anyone who questions the White House’s puns on defining a recession.”

Biden on Thursday (pictured) insisted the country was not in recession, despite new data showing a second straight quarter with negative growth

Phillip Magness, an economic historian, thinks the US is in a recession - but the White House disagrees

Phillip Magness, an economic historian, thinks the US is in a recession – but the White House disagrees

Magness then tweeted, as the row continued: “Recession.” nm 1. 2 straight quarters of negative GDP growth while the media doesn’t like the president. 2. A vague, holistic, ill-defined condition that you are not allowed to talk about until the NBER makes a decision in a year, provided the media likes the president.

The long-running dispute was given further impetus by a White House fact sheet, released July 21, in which they said determining whether or not there is a recession was “holistic.”

“What is a recession? While some argue that two consecutive quarters of real GDP decline constitutes a recession, that is neither the official definition nor how economists assess the state of the business cycle,” the White House said.

“Instead, official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at data, including the labor market, consumer and business spending, production industry and income.

“Based on these data, the drop in GDP in the first quarter of this year, even if followed by another drop in GDP in the second quarter, is unlikely to indicate a recession.”

Biden, seen on Thursday, insists the country is not in a recession

Biden, seen on Thursday, insists the country is not in a recession

The White House in this July 21 fact sheet said the United States was not in a recession.

The White House in this July 21 fact sheet said the United States was not in a recession.

Magness explained in a July 27 Wall Street Journal op-ed, “A Recession by Any Other Name,” that the NBER is not “the official arbiter of recessions.”

He argued that the federal government has often used the general definition preferred by most laypersons.

“Rather than addressing underlying economic issues, the White House is playing puns,” he wrote.

He said their appeal to the NBER was “a very practical decision” because the NBER was often very slow in making its statements.

“The White House’s attempt to maneuver its way around a recession shows the dangers of politicizing economic terms,” ​​he continued.

“Mr. Biden’s economic advisers are trying to buy time by exploiting the otherwise defensible NBER methodology. They hope this will insulate the administration from electoral backlash in the event of a downturn.

Biden and his administration went out of their way Thursday to downplay a troubling new economic report that added to the evidence of a recession — instead trying to focus on major legislative progress on measures to tame inflation, curb debt and preserve America’s competitive advantage.

U.S. gross domestic product fell 0.9% in the second quarter, after falling 1.6% in the first quarter

U.S. gross domestic product fell 0.9% in the second quarter, after falling 1.6% in the first quarter

The economy has added more than a million jobs in the past three months, even as economic growth slowed, in another puzzling signal

The economy has added more than a million jobs in the past three months, even as economic growth slowed, in another puzzling signal

The US unemployment rate has been observed since 1948, with periods of recession shaded in grey.  There has never been a recession that was not accompanied by a rapid rise in unemployment

The US unemployment rate has been observed since 1948, with periods of recession shaded in grey. There has never been a recession that was not accompanied by a rapid rise in unemployment

The desire to accentuate the positive reflected the political tensions that are already playing out in the run-up to the midterm elections.

Republican politicians are sounding the alarm that a downturn has already begun, a claim disputed by Biden and his fellow Democrats who wanted the public to focus instead on a pair of likely congressional victories.

Republicans said the report showing the economy contracted for the second straight quarter was evidence of a “Biden recession” at a time when inflation is at its highest level in four decades.

Biden, in turn, cited near-record unemployment and signs of continued business investment in the economy.

He said: “It doesn’t look like a recession to me.”

The president celebrated the passage by Congress of a $280 billion bipartisan package to boost the U.S. semiconductor industry and the sudden resurrection of a Democrat-only proposal to cut prescription drug costs , fight climate change, fund the IRS, establish a minimum corporate tax and reduce the deficit. .

Other White House officials followed Biden’s lead and ignored the gross domestic product report showing the economy shrinking at an annual rate of 0.9%.

“Where we are now, we are on the verge of doing some really historic things that would help move the economy forward,” said Brian Deese, director of the White House National Economic Council, when asked about the troubling report on the GDP. .

“That’s our goal.”

In a rare press conference, Treasury Secretary Janet Yellen admitted that Americans are fundamentally concerned about inflation, not back and forth between Democrats and Republicans over whether the GDP report showed that the economy had entered a recession.

“We should avoid a semantic battle,” Yellen told reporters, adding that “Americans’ biggest concern is inflation” and that they generally feel good about their ability to find a job and stay employed.

Yet the Treasury Secretary deployed her own rhetoric saying growth was “slowing”, as the GDP report showed the size of the economy had shrunk over the past six months.

Yellen described the downturn as positive for an economy returning to normal after the pandemic — a contrast to Republicans’ argument that it was a shameless failure caused by Democratic policies rather than a convoluted attempt by the world to emerge from the coronavirus pandemic.

Republicans moved quickly to capitalize on the report, with the Republican National Committee declaring it indicative of the “Biden recession.”

Nearly 8 in 10 Americans described the U.S. economy as bad and about 7 in 10 disapproved of Biden’s economic leadership, according to a June survey by the AP-NORC Center for Public Affairs Research.

Consumer sentiment, as measured by the University of Michigan, began to decline as inflation persisted as a threat, with Democrats’ confidence relatively low.

The Federal Reserve, which sharply raised interest rates on Wednesday to further slow the economy in an effort to reduce inflation, signaled that more hikes are on the horizon, a sign that the battle against the inflation – and ensuing political skirmishes – could continue until the November election this year.

Leave a Comment

Your email address will not be published.