Nobel Laureate Economist Richard H. Thaler believes that the stock market rise could belie a potential fall.
Thaler, a University of Chicago professor, won the Nobel Prize in economics this week.
Thaler believes that the market is too complacent to be truly stable.
“We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping,” Thaler said, in a phone interview on Bloomberg TV. “I admit to not understanding it.”
Thaler has also been critical of President Donald Trump, saying that his “ratio of certitude to knowledge is nearing record highs.”
The economist is right to be critical of the tax reform’s chances of passing, as two landmark legislative initiatives undertaken by the White House—both aimed at healthcare reform—failed in the Senate, with the second attempt to repeal the Affordable Care Act not even making it to a vote.
The Republican party is also showing schisms within itself, as Senator Bob Corker has entered into a public spat with the president, with the two launching insults at one another. The lack of support from even a single senator could dramatically tip the balance of the upcoming tax reform legislation. As it stands, the Republicans hold a 52-48 edge over the Democrats and two independent senators. That means that if the entire opposition chooses to vote against Republican legislature, the GOP can afford to have two senators not vote along the party line (in the event of a tie, Vice President Mike Pence casts the tie-breaking vote).
With Senator Corker publicly battling Trump, that could affect the overall result of the tax reform bill being pushed through by the White House. Several high-profile senators like Senator John McCain and Senator Susan Collins were instrumental in blocking the healthcare reform bill, demonstrating that senators will not be rubber stamps for all the legislation that passes from the White House to the House.
“Nobel Economist Thaler Says He’s Nervous About Stock Market,” Bloomberg, October 10, 2017.
“Trump Allies Fear His Corker Feud Is Putting the GOP Tax Plan at Risk,” Bloomberg, October 10, 2017.