You may recall that late in 1999, just months before the Dow peaked near 12000, Kevin Hassett teamed up with James K. Glassman to write Dow 36,000-- a work so dangerously stupid, so nauseatingly blind, so willfully obtuse, that it became a landmark in bad financial advice.
Here's a shorter version of Dow 36,000: Come on in, Noobs, the water's fine! Contrary to recent warnings, stocks are wildly, maniacally undervalued, because... it's different this time! And we have some bad math to prove it. Apparent market risks are really mirages, kids, and if you don't put your savings into stocks right now, you could miss the big, big, big money. Other investors are actually being rationally exuberant right now, and we think you should take the plunge, too. Please understand that we're never gonna survive unless we get a little crazy, but, really, you'll find it's not so "crazy" after all. Put you're money in the market now. You won't be sorry. Trust us.
Eight years after Hassett and Glassman told casual investors to plough their savings into stocks, the Dow was dipping down near 12,000, almost exactly where it had crested in January of '00. During these embarrassing years, Hassett and Glassman could've 'fessed up and admitted they were horribly wrong, and that their work led a lot of people to lose a lot of money in the stock market. However, instead of doing that, they decided to just lie about what their book actually said.
So, to review: McCain has Coburn advising him on the social issues, and Hassett advising him on economics. In my mind, these are two of the worst possible choices. You would have to work very, very hard to find advisers who would do more damage to the country. Seriously, I'd rather have apes throwing darts at random policy menus rather than trust the judgment of these two clowns.
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Full disclosure: Since 2004, YRHT has been predicting that "the painful deflating of America's credit bubble" would last throughout the rest of the decade. YRHT expected that this deflation would keep the Dow within a 7000-12000 range, paralleling the 700-1200 range it kept from 1968 to 1982. (This is not an original insight.) Except for last year, the Dow has been roughly "bottled" in this range since 1997. If the 68/82 parallel holds, we may have to wait another year or two before the Dow breaks out of the 7000/12000 "bottle" for good.
As always, I am not advising anyone to do anything with any financial instrument.
Labels: Cons, Cronies, Dismal Science, Markets, McCain
