Uncertainty: The Shock That Sinks the System
What if policy uncertainty isn’t just noise—but the macroeconomic shock itself?
It’s not every day that two powerhouses of insight from opposite corners of the financial thought universe end up circling the same black hole of risk—one cloaked in data-rich conservatism (Goldman Sachs), the other, cloaked in green feathers, wit, and a healthy dose of sarcasm (Doomberg). But here we are, in April 2025, watching these unlikely bedfellows come to the same conclusion: policy uncertainty is no longer just a feature of the macro landscape—it is the landscape.
Both Goldman Sachs and Doomberg see the world sliding toward an economic contraction. Both identify tariffs, whiplash-inducing regulatory shifts, and political volatility as the culprits. But while Goldman quantifies the drag with econometric finesse, Doomberg paints it in vivid hues of industrial sabotage and geopolitical irony. And together, they offer a composite picture of a world where the risks aren’t just rising—they’re being engineered.
The Quant Side: Goldman’s Clean-Cut Anxiety
Goldman Sachs is not known for shrill alarms, but in their April 6th US Economics Analyst report1, they come close. Their models, driven by a new wave of policy and trade-related uncertainty under the returning Trump administration, deliver the bad news plainly:
“Measures of policy uncertainty have far surpassed levels reached during the first Trump administration and could rise further as new policies are announced and other countries respond to US tariffs”.
This time, it's not just tariffs. It’s also fiscal policy, immigration, and entitlement reform that have thrown sand into the gears of investment planning and hiring. Goldman estimates that this surge in uncertainty translates into a 5 percentage point drag on investment growth, increasing the risk of a full-blown capex contraction:
“We now expect roughly flat business investment over the next year, and our quantile regression models imply that the probability of a decline in capex over the next year has risen to 45%”.
On hiring, the picture is equally grim. Goldman predicts that:
Trade policy uncertainty alone could cut 20,000 jobs from monthly payroll growth.
Federal spending cuts would subtract 25-30,000 government jobs per month.
And knock-on effects in healthcare, education, and state/local government could eliminate another 35,000 monthly hires.
Consumer spending isn’t spared either. Weaker equity markets, fears of job loss, and declining confidence are projected to reverse last year’s wealth-effect-driven consumption boost into a ¼ point drag this year.
In short, Goldman sees a recessionary cocktail being stirred—and unlike last time, the ingredients are more potent, and the bartender is belligerent.
The Doomberg Perspective: Chaos by Design or by Default?
Then there’s
.Appearing on the Raise Your Average2 podcast on April 2nd, the Doomberg collective gave voice to the undercurrent that Goldman politely skirts: maybe this uncertainty isn’t a bug. Maybe it’s a feature.
“What we call internally ‘headline risk’ has never been higher… You could have what you think is a great piece ready to go, and it’s set to publish at 7am, and the wires cross the night before and everything you’ve written is now moot by some 180-degree policy change”.
For Doomberg, the cost of this volatility isn’t just economic—it’s existential for industries like autos, which depend on sprawling, just-in-time global supply chains.
“Who wants to own title to a part that has to cross the border three times before it gets put into a car?”
He outlines six reasons why Trump’s auto tariff strategy could backfire, including:
The irrelevance of the US auto market’s size relative to 1986 levels.
The hyper-complexity of modern supply chains.
The timing mismatch between policy shocks and supply chain reconfiguration.
China’s ability to retaliate economically.
The whiplash from stranded EV investments due to Trump’s reversal on electrification.
The superiority of Chinese automakers like BYD, now operating at “escape velocity”.
Doomberg’s narrative is driven by one central idea: Trump is administering chemotherapy to an economy already weakened by 40 years of industrial offshoring. It might cure the cancer, but the patient could die on the table.
“He’s taking a sledgehammer to a problem that probably needs one. But… the timing of the boom that comes out of it? There’s a mismatch. The question is whether the patient dies on the table or not”.
Shared Themes: Paralysis, Retaliation, and Recession
Despite their wildly different styles, Doomberg and Goldman Sachs converge in their conclusions:
Investment Freeze: Goldman sees uncertainty as a quantifiable investment drag. Doomberg sees it as outright sabotage of capital formation. Both expect business investment to flatline or fall.
Labor Market Friction: Goldman forecasts payroll declines and hiring freezes in key sectors. Doomberg describes how unpredictability makes it impossible to plan staffing or logistics.
Supply Chain Chaos: Goldman models exposure by sector; Doomberg colorfully warns of semiconductors and auto parts trapped in tariff limbo, with each cross-border trip a financial landmine.
Consumer Retrenchment: Goldman cites wealth effects and fear-induced savings. Doomberg implies that uncertainty breeds distrust, leading to a pullback not just in spending, but in faith in institutions.
Structural Imbalance: Both sources imply that Western industrial strategy is fundamentally out of sync—Goldman through policy noise; Doomberg through dependency on foreign supply chains and ideological incoherence.
Where They Diverge: Intent vs. Incompetence
The sharpest contrast lies in motivation.
Goldman, as always, assumes neutrality and rationality. Policy uncertainty is an exogenous shock—bad for the economy, but not malevolent.
Doomberg, on the other hand, is far less charitable:
“We have lots of questions about the capability and culpability of the last decade and a half of Western leadership. Whether it is incompetence or malice… it doesn’t matter”.
He draws a direct line between the self-inflicted wounds of the West and the strategic patience of China and Russia:
“We are coasting on the luxuries of wealth produced in prior generations… Russia is still a global superpower. China has more than caught up technologically. They are playing the long game. Are we?”
In Doomberg’s view, uncertainty isn’t just a cost of doing business in a messy democracy—it’s a consequence of having no coherent industrial strategy, and worse, no consensus on whether one should exist.
When Uncertainty Becomes the Shock
If Goldman Sachs is warning of policy uncertainty as a macroeconomic headwind, Doomberg is arguing that we’re already being blown off course—and the rudder is missing.
Where Goldman sees elevated risk, Doomberg sees inevitable crisis.
Goldman hopes for a “soft landing” as businesses adapt. Doomberg doubts there’s enough runway left.
And perhaps the deepest warning from Doomberg comes not from his policy analysis, but from his commentary on bankability—a term that means not just profitability, but predictability:
“The political cycle is shorter than the capital cycle, and that’s not inducive to capital formation and deployment”.
When even the perception of future rules is unknowable, investment stops—not because returns are too low, but because the rules keep changing mid-game.
Doomberg and Goldman Sachs both signal a truth policymakers should heed: when uncertainty becomes endemic, it doesn’t just delay decisions—it reverses growth.
And this time, the patient might not survive the cure.
Want more like this? Stay tuned. The next recession may already be scheduled—check your tariff calendar — let’s not forget, this has the possibility of changing overnight. Thank you for reading.
Goldman Sachs US Economics Analyst, The Impact of Uncertainty on Investment, Hiring, and Consumer Spending, April 6, 2025.
Average., Raise Your. "Doomberg: Policy Uncertainty is the New Systemic Risk." YouTube, 17 Apr. 2025, www.youtube.com/watch?v=96PdnBZZt0s.