Last month, we reflected on the similarities between two economic forecasts from Larry Kudlow, the current director of the National Economic Council (NEC). As you may recall, Mr. Kudlow’s 2007 insistence that there was no looming recession didn’t exactly pan out. Only time will tell if his assertion that “recession is so far in the distance I can’t see it” will prove to be similarly myopic. In any case, another Larry chimed in just yesterday. Larry Summers, a former director of the NEC himself and President Emeritus of Harvard University, shared some of his own economic augury via Twitter. After admonishing the other Larry’s current boss for pointing toward equity markets for policy validation, Mr. Summers gave the following, quantifiable prediction of the country’s chances of recession:
This happened to be a morning before stocks shot high enough to make Cheech and Chong jealous, with another 800+ point intraday swing to the upside in the Dow just this afternoon. Regardless, I give Mr. Summers more than enough credit to figure that his sentiments wouldn’t be substantively swayed by markets’ sudden embrace of a little green to complement all the red we’ve seen in the past several weeks. That leaves us with two Larrys with very different visions of how the second half of Trump’s first term will look in economic terms. We have their homework and red pens at the ready. Good Judgment will be periodically checking in to see how both prognostications look in the quarters to come.
Ryan Adler is a Superforecaster and Director at Good Judgment who specializes in legal analysis for Good Judgment’s question writing team. He also administers the SCOTUS Challenge on Good Judgment Open, which invites probabilistic thinking about court decisions. Ryan can be reached at firstname.lastname@example.org.