In 1999, James Glassman and economist Kevin Hassett, who eventually both worked for President George W. Bush, famously wrote a book predicting that the Dow Jones Industrial Average would go to 36,000 within three to five years. Of course, instead of the Dow going on the rocket ride they predicted, the financial crisis sent it spiraling into oblivion, bottoming out at 6,547 in March of 2009.
But with the Dow having climbed to its record high this week, Glassman is back, writing in Bloomberg View today that “Dow 36,000” is achievable “quickly,” as long as a slew of conservative policy ideas are embraced:
To get it, we need policy changes that will create a better environment for businesses to increase revenue, profits and jobs: a rational tax system that keeps rates low and eliminates special deductions and credits;…entitlement reform to bring down costs and provide incentives for productive seniors to keep working; sensible environmental, workplace and financial regulation that allows entrepreneurship to thrive; a K-12 education system that boosts student achievement and holds teachers, administrators and politicians accountable …
Chime in and make your own list, because it’s time to focus on what counts in an economy: growth. Even with relatively high risk aversion (let’s say, what we have now), faster growth would significantly increase stock prices.
How fast can the U.S. grow? Four percent is attainable, but I’d settle for 3 percent. Get there quickly, and we’ll get to Dow 36,000 quickly, too.
When asked if he feels “the need to apologize to someone who read your book, went in and got creamed,” Glassman replied, “Absolutely not.” Former Reagan and George H.W. Bush administration economist Bruce Bartlett had, perhaps, the most proper reaction to Glassman’s new prediction: “Nitwit Jim Glassman is again predicting that the Dow will reach 36,000. Time to sell everything?”
Glassman proves, like many before him, that those clinging to the economic ideology of the Bush years feel no need to grapple with the economic catastrophe Bush left in his wake. And of course, the stock market’s recent meteoric rise has had little benefit for workers in the real economy.
Glassman is now the executive director of the George W. Bush Institute.