The Bush Boom: Revisited

Now that the stock market is several thousand points below what it was when George W. Bush took office, it's probably worth revisiting some past commentary by our conservative friends. I'll start with this book:

In case you can't read that, the title is "The Bush Boom: How a Misunderestimated President Fixed a Broken Economy." You can buy it at Amazon for only $5.77 (a steal!) The book's author is Jerry Bowyer, who presciently wrote the following in June of 2007:

. . . so first there's Lehman bros income up, Goldman did okay and now we see that Morgan's doing well. All of these guys were fingered as threatened by the 'sub-prime-contagion-apocalyptic melt-down. Well it looks like not so much. Sure, they got hit a little in the fixed income divisions but what the press missed is the tremendous benefit of deregulation.

In 1995 Clinton and the Rs in Congress, dismantled FDRs banking regulation regime, allowing commercial and retail banking in the same entities. A wave of mergers (along with a wave of media handwringing about them) followed. Now they're diversified. The guys doing mortgages are under the same roof as the guys doing big corporate deals, so if mortgages get a little dicey, that's okay, because mergers and acquisitions business is making up for it.

Deregulation is the driver of banking resiliency and is, I think, the missed angle of this story.

Indeed. That's from an email Bowyer wrote to Larry Kudlow and which Kudlow promptly posted on his blog and described as "very insightful."

Speaking of Kudlow, has anyone in the history of punditry been more catastrophically wrong about everything (except maybe Bill Kristol)? Check out this now classic bit of triumphalism from October of 2007:

If things are so bad, why are they so good? . . .

Yes, there is home deflation on Main Street and loan deflation on Wall Street. It will continue. But what about the rest of the story? When you listen to the hedge-fund short-sellers and the liberal politicians as they attempt to discredit the Bush economic boom, you could almost fall for their bear-market seduction. But the seductress turns out to be an economic harlot — not a beautiful woman.

The true message of the strong economy is that we’re virtually guaranteed of a Goldilocks soft landing or better — and certainly not a recession. . . .

The print and broadcast media do not give President Bush much credit for his economic policies. But somehow I have to wonder whether low unemployment, strong growth, negligible inflation, and record stock markets do not deserve just a bit of praise.

It is still the greatest story never told.

And here is Kudlow again, in December of 2007:

There is no recession. Despite all the doom and gloom from the economic pessimistas, the resilient U.S economy continues moving ahead—quarter after quarter, year after year—defying dire forecasts and delivering positive growth. In fact, we are about to enter the seventh consecutive year of the Bush boom.

The pessimistas are a persistent bunch. In 2006, they were certain a recession was just around the corner. They were wrong. Instead, the economy posted two consecutive quarters of near or above four-percent growth.

Earlier today, a doom and gloom economic forecast from Macro Economic Advisors was released predicting zero percent growth in the fourth quarter. This report is off by at least two percentage points. These guys are going to wind up with egg on their faces.

Whoops! It gets better, though:

I believe the economic pendulum will soon swing in favor of the GOP.

There's no recession coming. The pessimistas were wrong. It's not going to happen. . . . The Bush boom is alive and well. It's finishing up its sixth consecutive year with more to come. Yes, it's still the greatest story never told.

I'm really not being selective here. I literally chose the first two Kudlow articles that showed up when I googled him. The rest are just like this. For the last 6 years he's been screaming from the rooftops that we're in the middle of the Bush Boom and it's "the greatest story never told." In particular, he's repeatedly cited the stock market as being the ultimate barometer of the success of Bush's economic policies.

Today the market closed at 8579. It closed at 8545 on February 27 . . . 1998.

Look, I've been wrong before. Who hasn't? But if I had been this consistently and embarrassingly wrong about something over a six year period, especially about a subject on which I hold myself out to be an expert, I don't think I'd be able to show my face in public any more. Sorry, Larry, it's time to pack up your bags and find something else to do with your life.