Nobel winner Robert Shiller: A recession that could discredit Trump looms large
Published: Oct 14, 2019 12:48 p.m. ET
That’s Yale University finance professor and Nobel laureate Robert Shiller talking to Time about what he sees as an inevitability.
“There will be a recession. The question is when,”he said. “I’m tempted to say that we’re overdue for one, because this expansion will be the longest in history. That’s assuming the economy isn’t already in recession.”
In his recently published book “Narrative Economics: How Stories Go Viral and Drive Major Economic Events,” Shiller contends that “if enough people begin to act fearfully, their anxiety can become self-fulfilling, and a recession, sometimes a big one, may follow.” These trade headlines, he says, are weighing heavily.
“It’s going back to a 1930s narrative about a tariff war, a trade war,” he explained. “It’s unsettling people. It’s causing some people to curtail their spending. Distrust of President Trump is building.”
He suggests that Trump, in the spirit of self-preservation, is constantly generating news in an attempt to distract from the reality of an expansion that is clearly getting long in the tooth and is due for a slowdown.
“If we start a recession, it will discredit him,” Shiller told Time. “And public opinion could turn against him, and make him seem not so invulnerable.”
