Matthew Yglesias:
Bush 36,000: I, for one, cannot think of a better man to serve as custodian of the Bush legacy:
Former President George W. Bush took a step closer Thursday to establishing an “action-oriented think tank” alongside his future presidential library by naming James K. Glassman, the longtime journalist and former administration official, as its founding executive director. Mr. Glassman, who served in the Bush administration as chairman of the Broadcasting Board of Governors and later undersecretary of state for public diplomacy and public affairs, will be charged with building a public policy institute intended to advance some of the issues that Mr. Bush embraced as president.
Glassman is, of course, better known to bloggers who like to make fun of know-nothing conservatives as the author of the late nineties bestseller Dow 36,000. I think that’s the kind of detachment from reality you need to dedicate your life to bolstering the reputation of the Bush administration.
It's true, we have had fun with James Glassman and his coauthor Kevin Hassett for quite a while--so much so that the last time I was supposed to be in the same room as Hassett (at Stanford), he said he would flee the jurisdiction if I showed up.
I cannot think of a president save perhaps James Buchanan for whom James K. Glassman would be a more fitting executive director. And I cannot think of a job for which James K. Glassman is better suited:
Dow 36000 Once Again: I see that James Glassman and Kevin Hassett are writing in the Wall Street Journal today, lying about what their Dow 36000 book says. There are two different Dow 36000 books that they could have written.... The second book would say: "THE DOW SHOULD BE WORTH 36000 NOW!! THE DOW WILL BE WORTH 36000 SOON!! IF YOU DON'T BUY STOCKS NOW, YOU ARE MISSING THE ALMOST-CERTAIN OPPORTUNITY TO TRIPLE YOUR MONEY OVER THE NEXT SEVERAL YEARS!!" Which book did they write?...
I'll Stop Calling This Crew "Orwellian" When They Stop Using 1984 as an Operations Manual: James Glassman? Back in 1998, 1999, and 2000--as the dot-com bubble approached, reached, and receded from its peak--James Glassman and Kevin Hassett were telling the investors of America to buy, buy, buy more, more, more stocks in their book Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market.... [Glassman and Hassett predict] stock returns [will in the long run be] the same 2.9% above inflation as Treasury bond returns. That forecast of stock returns all by itself makes it impossible for Glassman to [truthfully] support Bush's plan for Social Security privatization.... [T]he Bush administration says that under its plan you only win from private accounts if the stocks and bonds in your private account make more than 3% per year...
More Glassman and Hassett Blogging: Ah. I had forgotten that the Atlantic Monthly--failing to consult with anybody knowledgeable... or half knowledgeable... or quarter knowledgeable...--gave James Glassman and Kevin Hassett their first platform for "Dow 36000".... J.E. emails: "Although he seems to regret it now, Glassman got fairly specific with a stock market prediction back in 2000. He pledged to donate $1000 to charity if the Dow was less than 23,000 in January 2010, and said that his coauthor Hassett would do the same..."
And Today's Winners of the Mendacity Sweepstakes Are...: The authors of Dow 36000: The New Strategy for Profiting from the Coming Rise in the Stock Market pretend, once again, that their book did not say what it said: "TCS: Tech Central Station - DOW 36,000: Five years ago, economist Kevin Hassett and I wrote a book called Dow 36,000. Maybe you have heard of it. The book made the bestseller lists and won accolades from, among others, the current chairman of the president's Council of Economic Advisors. For some, however, the book became an object of derision because -- just in case you haven't noticed -- the Dow hasn't actually risen to 36,000 yet.... Dow 36,000 was not a prognostication. Sure, the Dow will hit 36,000 and probably, eventually, 360,000. But I don't know exactly when, and I don't believe investing is a game of forecasting what's going to happen tomorrow or next year..." However, those of us unlucky enough to own Dow 36000: The New Strategy for Profiting from the Coming Rise in the Stock Market can go to our bookshelves, pull it down, and read that "the Dow should rise to 36000 immediately"--i.e., in October, 1999. But Hassett and Glassman say, they are going to be cautious and conservative. They are not going to forecast that the Dow will rise to 36000 tomorrow, but instead they "believe the rise will take some time, perhaps three to five years..." (p. 18). However, they acknowledge that they might be wrong: the rise might come much quicker. As they go on to say later on the book, the fact that Glassman and Hassett "conservatively" don't expect the rise of the Dow to 36000 to occur for three to five years--i.e., until 2002 or 2004--does not mean that investors should delay. Investors should "seize the opportunity now [i.e., in 1999] to profit from the rise in the Dow to 36000 (p. 125)." On pages 18 and 19 of the book they go so far as to sneer at one of their American Enterprise Institute colleagues--someone who told them back in 1998 what Glassman is saying now. For when one AEI colleague heard their title, he gave a cynical laugh and said, "As long as you don't say when [the Dow will reach 36000], I suppose it is all right." Glassman and Hassett's response was: "we aren't laughing. The case is compelling.... 36000 is a fair value for the Dow today... stocks should rise to such heights very quickly. As you read on, you will... learn to invest in ways that take advantage of a remarkable time in financial history...." [And] we haven't even gotten into the fact that Glassman and Hassett got their math wrong. As the Economist's Clive Crook told them in May 1998, the 36000 number was "wrong, plain wrong.... Your reasons for believing that the Dow should be at 36,000 are wrong in the same way that it's wrong to say two plus two equals five.... Using your own method, provided only that you put the right variable into the formula, the market is about fairly valued." Note how they don't mention the subtitle--it would make the falsity of the claim that "Dow 36000 was not a prognostication" too obvious.
And the Economist, March 6, 2009:
How's that working out for you?: THE Washington Post has an interview with James Glassman, co-author of Dow 36,000 (with Kevin Hassett), up on its website today. In 1999, the year of the book's publication, the Dow's lowest point was just north of 9,100 points. For those who aren't aware, the Dow's current price is just north of 6,700. A snippet:
[B]ased on our calculations, we believed that stocks would rise to roughly 36,000. We said in the book that it is impossible to predict how long it will take for the market to recognize that Dow 36,000 is perfectly reasonable, but then, of course, we did take a guess.
You said three to five years.
Obviously that hasn't happened. I think the question investors are facing now is, "is history a guide?" In "Dow 36,000" we looked at history in, I think, a completely reasonable way and said a) you ought to be in the stock market b) stocks are very much undervalued...
Do you still think it will hit 36,000?
I have no doubt about that. I think that is absolutely true. But I'm not going to tell you what date.
Aw, c'mon. Tell us the date!
