Kevin Hassett, Trump’s nominee to be a top economic adviser, got a chance Tuesday during his confirmation hearing to explain the infamously wrong prediction about stock markets he made in his 1999 book Dow 36,000.
The book, in which Hassett and James Glassman predicted during the run-up of the dot-com bubble that the Dow Jones Industrial Average would soar to 36,000 in a matter of years, has provided liberal detractors with ammunition against Hassett over the years, even as he has gained bipartisan credibility in his role as a scholar at the American Enterprise Institute for his work on taxes, spending programs and Deflategate.
Instead of rising as Hassett predicted, stock markets collapsed shortly after the book’s publication. The Dow stood at 10,273 on the day of the book’s publication and shortly afterward stopped rising. By 2002, it had fallen by more than a quarter to below 8,000. Today, it is just over 21,000.
On Tuesday, Sen. Bob Corker, R-Tenn., provided Hassett with an opportunity to explain the prediction during a hearing on Hassett’s nomination to be the chairman of President Trump’s Council of Economic Advisers.
“I think that one critic of mine once looked at that book and called it a youthful indiscretion,” Hassett said. “I think as youthful indiscretions go, it wasn’t such a bad one.”
He wrote the book to help explain the value of long-term investment in equities, he said.
“Looking back, folks who bought and held were glad that they did,” he said.
During Tuesday’s hearing, the free-market economist also stood by his past advocacy for positions that are at odds with some of Trump’s populist agenda items.
Asked by Corker if was is a free-trader, Hassett said that he was and has “historically” advocated for liberalized trade.
He also defended immigration as a way to increase economic output growth.
“If we get more input of labor, we get more output,” he said, explaining that he approaches the issue from an economist’s point of view and not from the viewpoint of, for instance, border security.
“My ancestors were Irish immigrants, they were not allowed in the country because they had a computer degree, I presume,” Hassett quipped.
