Washington trying to time economic policy can't be done, expert warns: 'You can't forecast the weather'
Americans are living in a Groundhog Day of policy forecasting gone wrong, former White House economist says
Former White House Council of Economic Advisers Chair Tomas Philipson criticizes economists' efforts to predict the economy and time policy on ‘Mornings with Maria.’
During an interview on "Mornings with Maria" Friday, former White House Council of Economic Advisers Chair Tomas Philipson argued forecasting the U.S. economy and trying to time policy is a strategy that's not working for the D.C. establishment.
TOMAS PHILIPSON: Not a joke for Americans to see their paychecks basically carry less and less when they start to buy things. But it's a general problem with what economists call a cadency economist, which I'm certainly not in the camp on, but pretty much the whole D.C. establishment is in that camp. Which says that they think that government officials understand the economy and can time policy, even though no one can.
US Federal Reserve Chairman Jerome Powell (Photo by AL DRAGO/AFP via Getty Images / Getty Images)
Not even the private sector on Wall Street, which has much better incentives to trying to forecast economy -- but forecasting the economy and trying to time policy, it's like, trying to plan a wedding on a sunny day. You just can't do it because you can't forecast the weather. And we see this again and again. This is just Groundhog Day of cadency and policy going wrong when government officials don't understand what's going on and therefore mistime things.
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WATCH THE FULL INTERVIEW HERE:
Former White House Council of Economic Advisers Chair Tomas Philipson responds to President Biden calling the U.S. economy the ‘strongest in the world,’ during his trip to Spain on ‘Mornings with Maria.’