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Romney's key economic advisor also predicted DOW 36,000 back in 2000.
August 4, 2012 10:09 AM

It just goes to show that you can make a wildly inaccurate prediction and still get hired by a someone running for president:

On a conference call with reporters, Romney advisers ripped the study -- conducted by the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute -- as "biased" and "a joke."

"The study doesn't take into account important aspects of Governor Romney's plan, which will have a positive, pro-growth impact on the economy," senior adviser Eric Fehrnstrom said.

Kevin Hassett, an economic adviser, contended Romney's plan to lower income tax rates for people at all income levels would boost the nation's economic growth by about 1 percentage point per year.

Who is Kevin Hasett?

Hassett is coauthor with James K. Glassman of "Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market." It was published in 1999 before the dot-com bubble burst. The book's title was based on a calculation that, in the absence of the equity premium, stock prices would be approximately four times as high as they actually were. In its introduction, Glassman and Hassett wrote that the 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."[7] The Dow industrials index closed at 10,681.06 on the day of the book's publication[8] but by the end of 2004 it remained at essentially the same level -- 10,783.01, having dropped over 25% in the meantime but recovered. As of March 9, 2009, the trough of the 2008-9 bear market, the Dow Jones was at 6,547.05, 81% below his 36,000 prediction.

See how easy it is to make a prediction, sell some books, get it completely and utterly wrong, and still have a career advising presidential candidates 12 years later?

TPM has more.

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