On Oct. 15, 1929, the Yale economist Irving Fisher gave a small speech to an industry organization in New York City. It was the type of speech that would have been forgotten by history. But The New York Times was there. And Fisher, then one of the more respected economists in the nation, decided to make a bold prediction that would prove to have comically bad timing. Fisher declared that stock prices had reached “what looks like a permanently high plateau.” Within two weeks, the stock market would crash spectacularly, ushering in the Great Depression. Ouch.
In more recent years, economic forecasters haven’t been exactly hitting it out of the park either. They’ve consistently predicted that the economy would do worse than it actually did. Like when many thought that the pandemic recession would be long and painful. In reality, it was the shortest recession in U.S. history. And who can forget the seeming constant predictions that another recession was just around the corner? Like when the Fed began jacking up interest rates in 2022, or after President Trump announced high tariffs on “Liberation Day.” Yet still, no recession (although, many point out that economic growth is disappointingly “K-shaped,” with richer Americans and AI-related companies thriving and spending enough money to keep the economy out of a recession while poorer Americans are struggling; check out a recent Planet Money episode for more on this).