James K. Glassman is an interesting and noble figure on the American right for his willingness to continue to defend the symbols of right-wing economic thought that have been discarded by fellow conservatives because they expose the ridiculousness of the whole project. Others rebrand; Glassman stubbornly rehabilitates old, discredited brands. One of those is the last Republican president, whom Glassman defends from his post at the George W. Bush Institute. The other is his 1999 book Dow 36,000, which labors under the burden of a title that makes the ridiculousness of the argument impossible to conceal.
But Glassman tries anyway! Today, in a Bloomberg View column, he argues that the rising Dow points to the eventual vindication of his thesis:
The Dow Jones Industrial Average set a record this week, but it’s still far from the mark that economist Kevin Hassett and I forecast in our 1999 book, “Dow 36,000.” …
From its low of 6,547 on March 9, 2009, the Dow has risen 117 percent. Another 117 percent in four years would put it at 31,022, just 16 percentage points shy of the magic number.
But Glassman and Hassett didn’t just argue back then that the Dow would eventually reach 36,000. Nobody disputed the likelihood that one day stock value would rise to a Dow 36,000 level. Their claim was that it was already worth 36,000. They argued — at the height of the tech bubble, natch — that people were systematically undervaluing stocks:
Stocks were undervalued in the 1980s and early 1990s, and they are undervalued now. Stock prices could double, triple, or even quadruple tomorrow and still not be too high.
Fourteen years later, we’re still just over one third of the way toward the level Glassman insisted we were already at in 1999. That’s not called “being right.”