Despite some experts predicting that a recession is on its way, Nobel Prize winning economist Robert Shiller says that President Donald Trump’s enormous effects on U.S. spending confidence will last for years, staving off any recession that could have ordinarily been foreseen.
In an interview with CNBC on Friday, Shiller predicted that the “Trump effect” would carry the boom economy through any choppy waters that could be ahead.
“Consumers are hanging in there,” the Yale University professor noted. “You might wonder why that would be at this time so late into the cycle. This is the longest expansion ever. Now, you can say the expansion was partly Obama. But lingering on this long needs an explanation.”
Shiller said the continued growth of the economy had as much to do with what President Trump says and symbolizes as it does with the policies he has helped implement.
“I think it has to do with the inspiration for many people provided by our motivational speaker president who models luxurious living,” Shiller said.
While Shiller acknowledged that there were troubling signs in the Wall St. futures market and other areas of the economy, he suggested that consumer spending could easily outweigh the vagaries of the Dow Jones. On the other hand, he said, President Trump needs to make it past the impeachment inquiry if his effect on the economy is to hold.
“If he survives that, he might contribute for some time in boosting the market,” said Shiller. “We’re maybe in the Trump era, and I think that Donald Trump by inspiration had an effect on the market — not just tax cutting.”
Shiller said that while a recession was inevitable after a period of growth this expansive, it may not come nearly as quickly as other economists are predicting. And even when it does finally arrive – as late as three years from now – it will likely be a mild one.
“Let’s not make the mistake of assuming it’s right around the corner,” Shiller said. “If the economy is strong, which is what he built is case on, ‘make America great again,’ he has a good chance of getting re-elected.”
Shiller’s prediction of reelection jibes with a new report out from Moody Analytics, which has correctly called the presidential race for forty years running (their only exception being 2016, ironically). They predicted last week that, if the economy hold strong until next November, Trump will prevail over the Democratic nominee and even increase his electoral college share.