Reading: Nathan Nunn (2008): The Long-Term Effects of Africa’s Slave Trades

A Month-Long April Fools Festival of Kevin Hassett: Dow 36000 Round I

Clowns (ICP)

Is Kevin Hassett really going to chair the Council of Economic Advisers?

That gives me an idea. April Fools Season is started--32 days to April Fools Day inclusive. Can we find 32 examples of Kevin Hassett writing things that are really stupid--so stupid that they should have gotten him bounced from his cushy chair at AEI immediately for intellectual incompetence? The answer is yes--we could find 32 things from Dow 36000: The New Strategy for Profiting from the Coming Rise in the Stock Market alone. But the journey--one a day between now and April 1--will be rewarding...

Dan Froomkin reminds me of number 1, from the very sharp Barry Ritholtz:

Hoisted from the Archives from 2012: A Reminder: Why You Should Not Trust Anything James Glassman and Kevin Hassett Might Ever Say...: Glassman is running, and Hassett is speaking, at a George W. Bush institute conference tomorrow. It is thus worth reminding everyone of their 1999 book Dow 36000: The New Strategy for Profiting from the Coming Rise in the Stock Market. Let me turn the mike over to Barry Ritholtz, from 2009:

Lessons to Be Learned From Dow 36,000 | The Big Picture:

This book will convince you of the single most important fact about stocks at the dawn of the twenty-first century: They are cheap…. If you are worried about missing the market’s big move upward, you will discover that it is not too late. Stocks are now in the midst of a one-time-only rise to much higher ground–to the neighborhood of 36,000 on the Dow Jones industrial average [by 2003-2005]...

Call it the audacity of cluelessness: Let us congratulate James K. Glassman and Kevin Hassett, the authors of the incredibly money-losing advice in their book Dow 36,000, on their 10 year anniversary. The book forecast that lofty number would be obtained in 3 to 5 years; it was published precisely 10 years ago today. In the ensuing decade since this book (and I use the term lightly) was published, the Dow is still below where it was 10 years ago, rather than tripling in price. The Nasdaq remains more than 60% below its highs of one decade ago.

I tried to read the book as a history lesson, but it was, to be blunt, unreadable. I got through enough to learn the basic argument they made: Stocks have been undervalued for decades, and over the ensuing years, we should expect a dramatic one-time upward adjustment in stock prices. Why? People were about to figure out what only these two geniuses already knew (hubris anyone?)...