Gross domestic product fell 0.9 percent in the second quarter. This followed the GDP reading of -1.6 in the first quarter. Successive GDP contractions have historically been defined as a recession, but the Biden administration and its advocates We insist that we are not in a recession. Peter Schiff appeared on The Megan Kelly Show to talk about the White House recession. He said this recession is just beginning. The White House mantra is that two consecutive quarters of negative GDP are not the “technical” definition of a recession and that the economy is just entering “another phase of recovery.” Peter said, “I think they believe if you repeat a lie often enough, people will believe it.”
But imagine if Donald Trump tried to do the same.
Do you think the media will go along with that? “
Peter emphasized that two negative quarters are “just the bottom line of the recession.”
We get a negative third quadrant. We get a negative fourth quadrant. We will see GDP shrink for years. This recession is just beginning.”
An increase in unemployment is coming.
People who point out the low unemployment rate and say that means we’re not in a recession, This is nonsense. Unemployment is a lagging indicator. The unemployment rate will rise as the recession continues.”
Moreover, the job market is not strong.
We have a very weak job market. Real wages are collapsing. Wages have never fallen so much in real terms in history. This is a weak job market. When you have a strong job market, workers can ask for raises. They have strength. They can go to their bosses and say, “I want more money or I’m going to quit and take another job.” This does not happen. Workers are forced to work in order to reduce wages. In fact, many workers take second and third jobs because they cannot make ends meet in their main job. This is a weak job market.”
Meghan has read quotes from a number of Biden administration officials in the past saying that two quarters of negative GDP growth is the definition of a recession and then saying the exact opposite last week. Peter said he’s 59 and never heard a recession known any other way.
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Recession refers to whether the GDP is expanding or not. It does not indicate the level of unemployment or the level of inflation. It is there specifically to indicate what is happening with GDP. This is how they define economic growth. I mean, I have a lot of problems with GDPR. But this is how stagnation has been defined. Recovery is when GDP expands. stagnation when shrinking. This is it!”
Megyn cited a report from send Identifying concerns about a “wage-price spiral” as wage increases of 5.1% in the first quarter beat expectations (although not keeping pace with inflation). Peter described the wage-wage spiral as “another fantasy” created by the government in the 1970s. It’s basically a way to blame the private sector inflation created.
Inflation is not created by workers who demand a raise. It is not created by companies that raise prices. It was created by the government by expanding the money supply. This is the literal definition of inflation. …when the money supply is inflated, prices go up. Wages are just another price. They are the price of the work.”
Peter pointed out that the wage figures are likely to be accurate, but The consumer price index is not. It’s closer to 18% than 9%. This means that real wages are collapsing. Meanwhile, the savings rate is at its lowest level since mid-2009. What was happening to the economy in mid-2009?
We were in a great recession. So, the last time we had a savings rate that low, we were in a massive recession. Why is the savings rate so low? Because the recession is forcing workers to indulge in their savings to pay their bills because their salary increases are not enough.”
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