Jared Bernstein

That was not as bad as the housing bubble, which led to a shutdown of global credit markets and an unemployment rate in this country that went up over five points.

What we worry about in the case of the AI bubble is something called the wealth effect.

And that means that if the stock market tumbles enough so that people feel and in fact are a lot less wealthy, they're going to spend less.

And real consumer spending has been driving this economic recovery.

Should that retrench because of a bursting in the AI bubble and this wealth effect, it's potentially recessionary.

The mitigation typically takes the form of fiscal policy, unemployment insurance, the usual kinds of programs that we implement when the economy takes a hit.

There's not that much you can do to deflate a bubble, or at least not much that you can do safely, except what we're doing right now, which is to try to talk about it, to raise consciousness among investors so that the numbers and risks are more transparent versus more opaque.

I've always thought that opacity is really your enemy when you're talking about this kind of finance.

So I think the more we can be transparent about the valuations that are in place, about the expected returns, about the potential economic impacts of AI, the better chance we have of rationalizing some of this potential irrationality.

A pleasure to be with you.

A pleasure to be with you.

Well, it would be possible to do if you took over agencies that would resist you very, very strongly. Some of the most our agencies, our statistical agencies are staffed by people with tremendous integrity who would fight as hard as they could. But we've seen some of the tactics that this administration uses against such folks. So, of course, it's worrisome.

Well, it would be possible to do if you took over agencies that would resist you very, very strongly. Some of the most our agencies, our statistical agencies are staffed by people with tremendous integrity who would fight as hard as they could. But we've seen some of the tactics that this administration uses against such folks. So, of course, it's worrisome.

And the consequences, well, you partially outlined them earlier yourself, Rachel, and you were spot on.

And the consequences, well, you partially outlined them earlier yourself, Rachel, and you were spot on.

If you're an investor, a global investor trying to figure out where our economy is going, if you're a student thinking about an occupation where you might be needed in the future, if you're a local town trying to think about your infrastructure, think about all the trade data we've been talking about over the past few days with that

If you're an investor, a global investor trying to figure out where our economy is going, if you're a student thinking about an occupation where you might be needed in the future, if you're a local town trying to think about your infrastructure, think about all the trade data we've been talking about over the past few days with that

other problem that's going on over there with this budding trade war. All of that information is essential to not just, you know, number crunching nerds like myself, but to the well-being of markets, the country and the people in it. So these folks are, you know, really playing with fire when they suggest manipulating the numbers like that.

other problem that's going on over there with this budding trade war. All of that information is essential to not just, you know, number crunching nerds like myself, but to the well-being of markets, the country and the people in it. So these folks are, you know, really playing with fire when they suggest manipulating the numbers like that.

Really important question, because I think once you start thinking about that, you can get worried pretty quickly. First of all, let's be very clear that these committees are typically staffed by volunteers. They cost virtually nothing to run. And for two decades, they've been advising our statistical agencies on making their good work even better, improving transparency.