by Eric Zuesse, The Duran:
In a hearing by the U.S. House Financial Services Committee, on Tuesday June 13th, U.S. Treasury Secretary Janet Yellen was asked and answered the following questions from the Republican Rep. Tom Emmer of Minnesota:
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[EMMER] The National Bureau of Economic Research [NBER] is the official recession scorekeeper.
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According to the White House pre-pandemic or before the pandemic the
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definition of a recession was pretty easy, it was two consecutive quarters of economic contraction.
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However, somewhere along the way in this new uh Biden Administration, President
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Biden’s tenure, the administration seems to have changed the definition of recession, in the National Bureau of
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Economic Research, [and] asserts that a recession is now quote a significant
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decline in economic activity that is spread across the economy and lasts more than a few months close quote. This has
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had a bit of a gaslighting effect on the American people, so I’d like to drill
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into it just a little bit. Secretary Yellen, does the National Bureau of Economic Research give any weight to
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real [meaning inflation-adjusted] personal income when determining if we are in a significant economic decline? [YELLEN] They look at a wide array of statistics
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and the second definition that you gave of a broad contraction that lasts more
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than several months that is how the NBER — [EMMER INTERRUPTS] Reclaiming my time, the answer is yes.
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Does the National Bureau of Economic Research directly consider inflation when determining if we are in a
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significant economic decline? [YELLEN] Inflation is not part of an economic
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decline. [EMMER] Okay, well the National Bureau of Economic Research while it doesn’t directly consider inflation, inflation is
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embedded into real income. …
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Unless Americans have gotten a 15.3 percent pay raise in the last two years
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they’ve effectively gotten a pay cut. Madam Secretary has the average American
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Income increased 15.3 percent during the Biden Administration?
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[YELLEN] We have the strongest job market — [EMMER INTERRUPTS her non-answer to his question] — and the answer is claiming my time. I thank you
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Madam Secretary. The answer is easy. It’s no. Since President Biden took office, the average real personal income has
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only increased 2.4 percent.
Although congressman Emmer stumbled in his words during his interrogation of Yellen, and he said (without any evidence) that “the average real personal income has only increased 2.4%” since Biden took office, and he probably meant then to say instead that “the average non-inflation-adjusted personal income has increased only 2.4%” (which is far less than the inflation-rate, and so real income was actually going down instead of up), Fact Check dot org reported, on 27 April 2023 that, “after adjusting for inflation, real weekly earnings went down 3.6%” since Biden took office. Furthermore, on 16 May 2023, the U.S. Bureau of Labor Statistics headlined “Real weekly earnings down 1.1 percent for year ending April 2023” and they presented a graph showing that ever since Biden entered office, there has been negative growth, actual declines, in “in real average weekly earnings over this period.” So: according to the pre-Biden — and pre-Trump — definition of “recession,” America has been in recession at least for workers, though the billionaires (whose wealth comes from investments instead of from work) might be (and actually were) experiencing boom-times.
Furthermore, the NBER provides no precise or meaningful definition of “recession” but instead ONLY this vague statement as its definition: “The NBER’s definition emphasizes that a recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months. In our interpretation of this definition, we treat the three criteria—depth, diffusion, and duration—as somewhat interchangeable.” And it even says “There is no fixed rule about what measures contribute information to the process or how they are weighted in our decisions.” To cap it off, they acknowledge that, basically, they wait until a President’s term of office has already expired before they will announce that a “recession” had occurred: the Committee that makes the decision, they acknowledge, “waits until sufficient data are available to avoid the need for major revisions to the business cycle chronology. In determining the date of a peak in activity, it waits until it is confident that a recession has occurred.” So: the NBER serves the sitting President and not the public; it is a propaganda agency for the President’s re-election, it’s not an authentic news-source.
