former top Trump White House economist
CNBC • • business
Key Points:
- Former White House economist Tyler Goodspeed argues in his new book that recessions are fundamentally unforecastable because they result from unpredictable shocks, making precise predictions unreliable.
- Goodspeed highlights the critical role of energy-related shocks in triggering recessions, noting that energy is deeply linked to many sectors and difficult to substitute in the short term, as seen in past economic downturns.
- He points out that the 2008 financial crisis recession was significantly worsened by record-high energy prices, which, combined with rising mortgage costs, created a dual financial shock for American households.
- While recessions cannot be prevented, Goodspeed warns that contractionary fiscal and monetary policies during downturns can exacerbate economic pain, advocating instead for targeted relief to support affected individuals and households.
- Despite inevitable recessions, Goodspeed notes a long-term trend toward longer economic expansions due to improved shock absorption, but emphasizes that no expansion can last indefinitely.
