BUCK: The question we have to address today is when is a recession not a recession? And the answer is, when a Democrat is president. That’s when all of a sudden, a recession is something else, it’s a recovery, it’s a transition, it’s a mitigation measure, whatever, it’s something else. It’s not actually a recession, especially when you’re almost at the August recess and you got a midterm election coming up.

Here is just a sense… I mean, they’ve got Brian Deese, the economic adviser in this White House who’s out there trying to make the case — there are few people you’ll see popping up on TV not making a compelling case or even a coherent one, trying to tell everybody about how this is not really a recession. Here is what they say sometimes versus other times. Do we have it?

Then vs. now: What is a “recession?”

“The party told you to reject the evidence of your eyes and ears. It was their final, most essential command.”

We are living in a George Orwell novel. pic.twitter.com/Woa3i9evNn

— Young Americans for Liberty (@YALiberty) July 26, 2022

BUCK: Clay, to be fair, if they can redefine the word “woman,” redefining the word “recession” is pretty easy in comparison, but I think everybody sees the game here.

CLAY: If you wonder what the number is going to be, about a week ago this argument began to be trotted out, that it wasn’t a recession until it’s officially called a recession by the grand pooh-bahs in charge of economic analysis. And, Buck, oftentimes they don’t even make their official statement on recession having arrived until a year after the recession has already been here. So, what seems quite clear is Republicans are going to argue, rightly, that the traditional definition of recession is two straight quarters of declining GDP growth.

We already were down 1.6% in quarter one. We’re likely going to be down tomorrow early in the morning when this number comes out for the second quarter. And what that happens, we’ll be in a recession. And what Democrats are afraid of is we’ve already got 9.1% inflation, we’re sitting at a little over three months until the midterm, and in addition to the worst inflation in over 40 years, two generation failed inflation numbers, you’re now gonna also be able to argue that Biden has led the country into a recession.

And so, they are desperate to try to adopt this technical version of recession that won’t be officially analyzed and determined until after the midterms. So, sometime in 2023, all of these… I think it’s like eight guys who are sitting on an economics board that analyze all the data and determine whether we’ve officially hit a recession, then it’ll happen in 2023 when we’re likely already moving through the recession and it’s not an election year. They don’t want to give this ammunition to Republicans.

BUCK: And the reality that the Democrats don’t want to discuss is rates are going up even higher and the recession that we are in right now, whether it is a technicality or not, is probably going to get worse. You’re going to see likely a period of stagflation; so high inflation rates and rising unemployment. That’s likely to be the case. So, they’re trying to do this slow roll, boil the frog in the pot slowly approach to the economic reality we are all in. Here’s an economist over at KPMG saying, “Look, the reality here is that the Biden economy’s not good, and it’s gonna get worse.”

KPMG Chief Economist Diane Swonk: Biden’s economy is “between a rock and a hard place and there’s no way to extract ourselves without there being some pain” pic.twitter.com/vtoZlM342e

— RNC Research (@RNCResearch) July 26, 2022

BUCK: Now, if the Biden administration was staffed with serious people and if Joe Biden had the energy, cognition, and clear synapses in the brain necessary to really understand what’s going on here, Clay, I think that they could say to everybody, “Look, we were in a pandemic, we spent trillions of dollars, and we were in an emergency situation, and we need to get ourselves out of this now, and that is going to require some difficulty, but we’re gonna make smart decisions.

“We’re gonna bring on some business leaders into this White House.” There are things they could do. What they have been doing all year is saying, “Look at all the jobs we created. We’re great. This is a great economy. What are you talking about?” And the American people are looking at them saying, “Can’t afford my gas, my groceries, or my mortgage, buddy. It’s not so great.”

CLAY: They’re in a really tough spot in this respect, Buck. Two-thirds of the American economy is consumer spending. So, if consumers recognize that we’re in a recession, which I think consumers have, what happens? People start to spend money less. And this is what you’re seeing with the earnings numbers that are coming out. Walmart is always a good approximation of the larger national economy. Remember last year when Walmart came out and said, “Hey, we’re starting to see people trade back to generics a little bit.”

Instead of buying the expensive brand of peanut butter they’re buying a Walmart version, they’re saving a little bit of money. They came out and said that. That was last year, last quarter, I believe. Most recent quarter for Walmart, stock dropped 10% because they said people are dialing back spending in a big way. First thing you do is go to generics. Next thing you do is start buying less. And when people are buying less from Walmart nationwide, we’re in a recession, Buck. And people are behaving like we’re in a recession. We talked about this last night at dinner. I’m really nervous about the housing market.

BUCK: Yep.

CLAY: Right? Because just think about it out there. We talked about this last week with Art Laffer, too, economic genius, but there are a lot of people out there, probably many of you listening to us right now who have 15 or 30-year mortgages in the two and a half to 3% range, and you might have been thinking, hey, we just had another kid. Maybe it’s time to move.

I’d like to be in this other neighborhood, or maybe you’re downsizing and you’re like, it’s time to move. But then you think, wait a minute. In order to move, my overall mortgage gonna go to 6%. Why would I move when I’ve got a two and a half or 3% mortgage locked in? And you’re starting to see housing prices come back substantially all over the country, even in hot markets.

BUCK: This is supply and demand. You’re gonna have fewer possible buyers for all of these houses because they won’t be able to afford the financing as the rates rise as well as the challenge of paying all their other bills, right? Most families are living within a pretty confined budget space month to month, and you see these numbers about how many people even have the savings to deal with a $500 emergency nationwide it’s pretty small.

But when you have fewer possible buyers in the housing market, you’re going to have the effect on price. A lot of people obviously also have seen their equity go up dramatically in their houses in the last couple of years. And now the question is, what are they going to do, right? Those prices are gonna be coming down, the housing market could slow down pretty dramatically. And that obviously affects building, that affects —

CLAY: Yeah.

BUCK: — the broader economy in a lot of really important ways. And they keep pushing us on this idea, well, unemployment’s really low. Yeah, but not for the reasons they want people to believe. Because of low labor force participation, because a lot of people retired during covid. And I also think that they’re not measuring… I think there are a lot of people that are just out of the job search right now because they’ve decided that they have better options or they’d rather just move in with family. So, when you’re looking for some kind of an upshot in this economy, I think it’s really hard to find one, and the people in charge are both dishonest about this and incompetent in the handling of this. That’s a big challenge.

CLAY: And let’s talk about this potential basis point rise which we anticipate’s gonna be a three-quarter basis point rise. They did this last month, which was the biggest interest rate rise since 1994. The expectation is the Fed is gonna raise another three-quarter basis points today. When and/or if that happens, Buck, think about the challenging dynamic that we’re in. We may be in a recession and rising interest — raising interest rates simultaneously, which almost never happens. Usually, you’re cutting interest rates during a recession to try to stimulate demand.

So, you’re doing something that actually could add more fuel to the recession fire, and the reason we’re having to do it is because they so mismanaged things that they allowed inflation to get out of control. So, they could destroy the recession simultaneously getting worse while maybe not even being able to address the underlying inflation, which is why we’re in one of the most difficult economic markets in terms of just trying to handle it, and we’ve got maybe the dumbest, least business-centric management that we have ever seen in our lives in the White House right now.

BUCK: This is all ultimately cause and effect. The Fed, the government put too much money into circulation. This was a problem of monetary policy. They overstimulated the economy. They artificially kept rates too low, they spent too much money, we’re at 30 trillion, roughly, now in the national debt. Joe Biden comes in after a period of overspending — let’s be honest — during lockdowns, that happened. Trillions of dollars spent. He spent $2 trillion more and wanted to spend another $5 trillion over 10 years after that for Build Back Better.

The cause and effect here economically is clear. You spent too much money, you manipulated the economy too much, and so now there’s going to be the pendulum swing in the other direction. The political cause and effect should be the people that wanted to do this even more than they already did and have no idea how to actually operate within a free-market economy to make things grow and improve and get better for all of us, they need to be held to account in this midterm election, otherwise you’re gonna have more of this. They still think if we could spend more. Remember the stimulus package under Obama? Remember what the criticism was when the Obama economy?

CLAY: Wasn’t even a trillion.

BUCK: Wasn’t even a trillion. And their whole thing, though, was, “Oh, we didn’t spend enough.” That was always the thing. It’s always more spending. Right now, if Joe Biden could, would he spend $5 trillion for Build Back Better votes?

CLAY: A hundred percent.

BUCK: One-hundred percent he would do it. They think they know how to put the money to work better than the American people do. They have to be taught a lesson. We’re just talking about how it’s gonna be an interesting day the next 24 hours or so you’re gonna see the markets get really choppy because you could have another big interest rate rise from the Fed, you know what that means. You know that’s going to spook the markets a lot. Interest rates going up, dollars gonna be affected by this, the GDP report tomorrow. We got a recession, friends.