Wealth & Money Quote by Austan Goolsbee

Austan Goolsbee’s sentence lands like a polite door closing. The language is technocratic, even dry, but the intent is unmistakably political: tamp down expectations that clever tweaks to the tax code can reliably goose investment or act as a stabilizer when the economy lurches. “Not promising” is the kind of understatement that lets an economist sound measured while delivering a warning shot to the policy class.

The subtext is aimed at a recurring Washington faith: that incentives can be engineered with near-mechanical precision. Goolsbee frames the audience narrowly - “policy makers interested in using tax policy” - then narrows it further toward two popular ambitions: stimulating investment and smoothing the business cycle. That second phrase is doing heavy lifting. It invokes the hope that taxes can function like a macroeconomic thermostat, countering booms and busts without the messy politics of spending, regulation, or central banking. His verdict suggests the evidence doesn’t support the fantasy.

Context matters: Goolsbee built his reputation studying how firms and high-income households respond to tax changes, and he served inside a Democratic administration during the post-2008 period, when stimulus debates turned on what could move quickly and predictably. The line reads like an empirical rebuke to both supply-side triumphalism and bipartisan gimmickry: investment decisions aren’t just about marginal rates, and business cycles don’t politely wait for Congress to adjust the code. It’s a plea for humility, and a nudge toward tools that work faster, target better, and don’t require pretending the tax system is a joystick for the economy.