In 1999, Kevin Hassett co-authored a book that offered its readers the following advice:
[T]he 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.
Five months after Hassett’s book was published, the “dot com bubble” burst.
In 2004, the New York Times asked Hassett what he made of the claim that a bubble was growing in the U.S. housing market. Hassett replied that liberals were prone to see false bubbles, because of their ideological commitment to government intervention. He then conceded that there might be “bubble dynamics” in some regions, but that the housing market was healthy, on the whole.
“’I don’t think a catastrophe is very likely,” Hassett told the paper.
On Friday, Politico reported that president Trump plans to name Hassett as the chairman of his White House Council of Economic Advisers.
If nominated and confirmed, Hassett would lead the office tasked with projecting the future economic implications of the Trump administration’s tax and budget plans.
Trump has evinced little interest in the advice of academic economists. It is unusual for a president to complete his first month in the Oval Office without nominating a single economist to the CEA. And his administration has already announced that, unlike during Obama’s tenure, the CEA chair will not be a cabinet-level position.
The administration did, however, (reportedly) instruct the existing CEA staff to assume that economic growth will hover around 3 percent over the next decade when calculating the impact of tax cuts on the deficit. The CBO and Federal Reserve project annual economic growth to hover around 1.9 and 1.8 percent, respectively, for most of the coming decade.
Hassett is a scholar at the American Enterprise Institute, where he has produced research showing that tax cuts for the rich are actually progressive, and that income inequality has not grown significantly in recent decades.