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Kevin Hassett

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Kevin Hassett
Senior Advisor to the President for Economic Issues
In office
April 15, 2020 – July 1, 2020
PresidentDonald Trump
Preceded byPosition established
Succeeded byVacant
29th Chair of the Council of Economic Advisers
In office
September 13, 2017 – June 28, 2019
PresidentDonald Trump
Preceded byJason Furman
Succeeded byTomas J. Philipson (Acting)
Personal details
Born
Kevin Allen Hassett

(1962-03-20) March 20, 1962 (age 62)
Greenfield, Massachusetts, U.S.
Political partyRepublican
SpouseKristie
Children2
EducationSwarthmore College (BA)
University of Pennsylvania
(MA, PhD)

Kevin Allen Hassett (born March 20, 1962) is an American economist who is a former Senior Advisor and Chairman of the Council of Economic Advisers in the Trump administration from 2017 to 2019. He coauthored Dow 36,000, published in 1999, which argued that the stock market was about to have a massive swing upward and would reach 36,000 by 2004.[1] Shortly thereafter, the dot-com bubble burst, causing a massive decline in stock market prices. The Dow did not reach 36,000 until late 2021.[1]

Hassett has worked at the American Enterprise Institute, a conservative think tank.[2] He was John McCain's chief economic adviser in the 2000 presidential primaries, as well as economic adviser to the 2004 campaign of George W. Bush and 2008 campaign of McCain. He was an economic adviser on Mitt Romney's 2012 presidential campaign.[3]

In the Trump administration, Hassett was the 29th Chairman of the Council of Economic Advisers from September 2017 to June 2019.[4][5][6][7] He returned to the White House in 2020 to work on the administration's response to the coronavirus pandemic. Hassett did not focus on public health policy, but rather influenced the administration's response from an economic angle amid lockdowns and social distancing.[8][9] Hassett built a model that indicated that COVID-19 deaths would drop off to near zero by May 2020.[8][10] Hassett's model contradicted assessments by public health experts, and was widely panned by academics and commentators.[9][11]

Early life and education

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Hassett is a native of Greenfield, Massachusetts, where he graduated from Greenfield High School. He received a B.A. in economics from Swarthmore College and a Ph.D. in economics from the University of Pennsylvania under supervision of Alan J. Auerbach.

Career

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Hassett was an assistant professor of economics at Columbia Business School from 1989 to 1993 and an associate professor there from 1993 to 1994. From 1992 to 1997, Hassett was an economist in the Division of Research and Statistics at the Federal Reserve Board of Governors. He served as a policy consultant to the United States Treasury Department during the George H. W. Bush and Bill Clinton administrations.[12]

American Enterprise Institute

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Hassett joined AEI as a resident scholar in 1997. He worked on tax policy, fiscal policy, energy issues, and investing in the stock market. He collaborated with R. Glenn Hubbard on work on the budget surplus, income inequality, and tax reform. Hassett published papers and articles on capital taxation, the consistency of tax policy, returns on energy conservation investments, corporate taxation, telecommunications competition, the effects of taxation on wages, dividend taxation, and carbon taxes.[12]

In 2003, Hassett was named director of economic policy studies at AEI. Hassett wrote columns in newspapers like The New York Times, The Washington Post, and The Wall Street Journal. He writes a monthly column for National Review and, since 2005, a weekly column for Bloomberg.[13]

In 2007, Hassett argued that the United States was on the wrong side of the Laffer curve in terms of corporate tax rates. Economists and commentators characterized a graph that he used to support his argument as deceptive.[14][15][16][17]

Dow 36,000

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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."[18] The Dow Jones Industrial Average closed at 10,273.00 on the day of the book's publication on October 1, 1999,[19] peaked at 11,722.98 105 days later,[20] then declined 37.8% through October 9, 2002.[21]

Paul Krugman argued on his faculty website that the book contained basic arithmetic errors and was "a very silly book" but regarded Hassett's role as co-author as a "youthful indiscretion."[22] Statistician and blogger Nate Silver described the book as "charlatanic" and suggested on empirical grounds that the authors had failed to notice that at the time of writing stock prices were "as overvalued as at literally any time in American history".[23]

Views on immigration

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According to The New York Times, Hassett's nomination by Trump to lead the Council of Economic Advisers was met with opposition by some anti-immigration groups such as Breitbart News, American Renaissance, the Center for Immigration Studies.[24] Hassett—"like most economists ... believes that immigration spurs economic growth."Prior to Hassett's nomination, President Trump "broke with recent tradition and removed the council's chairman from a cabinet-level position".[24]

Chair of White House Council of Economic Advisors

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On September 5, 2018, Hassett released new analysis indicating that real wage growth under Trump was higher than reported, despite figures indicating that wage growth had not picked up.[25]

On September 13, 2018, on an official visit to Ireland, when questioned if the U.S. considered Ireland as a tax haven, said that: "It's not Ireland's fault US tax law was written by someone on acid". Hassett had labeled Ireland as a tax haven on several interviews in August–December 2017, when advocating for the Tax Cuts and Jobs Act of 2017 ("TCJA").[26] In July 2018, Seamus Coffey, Chairperson of the Irish Fiscal Advisory Council and author of the Irish State's 2016 review of the Irish corporate tax code posted that Ireland could now see a "boom" in the onshoring of U.S. intellectual property, via the Irish Capital Allowances for Intangible Assets (CAIA) BEPS tool which is enhanced by Hassett's TCJA legislation.[27] In February 2019, Brad Setser from the Council on Foreign Relations, wrote a New York Times article highlighting the failings of Hassett's TCJA in addressing the use of tax havens by U.S. corporates and why the TCJA incentivized U.S. corporate use of tax havens.[28]

On June 2, 2019, it was announced that Hassett would be stepping down from his role within the coming weeks.[7]

Return to the Trump administration

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On March 20, 2020, it was announced that Hassett will be returning to the White House on a temporary basis to advise President Trump on economic policy amid the COVID-19 pandemic.[29][30][31] On April 15, 2020, the Trump administration announced Hassett's appointment as a senior advisor.[32] Hassett, who has no experience in infectious disease modeling, built a model that forecast a far lower coronavirus deaths than actually happened, and additional modeling provided grim prediction about the adverse economic effects, such as a 40% reduction in GDP and unemployment numbers in the tens of millions.[8] Hassett's model indicated that coronavirus deaths would peak in mid-April, and subsequently drop off to near zero by May 15.[8][10] Hassett's model contradicts assessments by public health experts.[33] Within the administration, Hassett encouraged the administration to re-open the economy.[8] In early-May 2020, Hassett said there might not be a need for more coronavirus economic relief, invoking the possibility that economies in nearly all states could be re-opened by the end of May.[34] When Hassett's model was released to the public, it was widely criticized by academics and commentators.[9][11]

Hassett has reportedly been shortlisted for nomination as Chair of the Federal Reserve if former president Donald Trump were to win re-election in 2024.[35]

Bibliography

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  • Hassett, Kevin. "Spending, Taxes and Certainty: A Road Map to 4%", in The 4% Solution: Unleashing the Economic Growth America Needs, edited by Brendan Miniter. New York: Crown Business. 2012.
  • Alan J. Auerbach and Kevin A. Hassett, eds. Toward Fundamental Tax Reform. Washington: AEI Press, 2005. (ISBN 0844742341)
  • Kevin A. Hassett. Bubbleology: The New Science of Stock Market Winners and Losers. New York: Crown Business, 2002. (ISBN 0609609297)
  • Kevin A. Hassett and R. Glenn Hubbard, eds. Inequality and Tax Policy. South Bend, Ind.: Washington: AEI Press, 2001. (ISBN 0844741442)
  • Kevin A. Hassett and R. Glenn Hubbard. Transition Costs of Fundamental Tax Reform. Washington: AEI Press, 2001. (ISBN 0844741124)
  • James K. Glassman and Kevin A. Hassett. Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market. New York: Times Books, 1999. (ISBN 0609806998)
  • Kevin A. Hassett and R. Glenn Hubbard. The Magic Mountain: A Guide to Defining and Using a Budget Surplus. New York: Free Press, 1999. (ISBN 0844771279)
  • Kevin A. Hassett. Tax Policy and Investment. Washington: AEI Press, 1999. (ISBN 0844770868)
  • Hassett, Kevin A. (2008). "Investment". In David R. Henderson (ed.). Concise Encyclopedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty. ISBN 978-0865976658. OCLC 237794267.

See also

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References

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  1. ^ a b Watts, William. "Dow 36,000: Industrials briefly top milestone, putting spotlight on 1999 book". MarketWatch. Retrieved March 18, 2024.
  2. ^ Thomas, Lauren; Mui, Ylan (February 24, 2017). "Trump picks conservative think tanker to chair Council of Economic Advisers". CNBC. Retrieved April 18, 2017.
  3. ^ "Who Are Obama's and Romney's Key Economic Advisers?". nationaljournal.com.
  4. ^ Michelle Jamrisko (April 7, 2017). "Trump Names Hassett to Head Council of Economic Advisers". Bloomberg News. Retrieved April 9, 2017.
  5. ^ Long, Heather (April 10, 2017). "Meet Trump's newest economic adviser: Kevin Hassett". CNNMoney. Retrieved April 11, 2017.
  6. ^ Lawler, Joseph (September 12, 2017). "Roll call vote PN457". United States Senate. Retrieved September 12, 2017.
  7. ^ a b Nick Timiraos; Alex Leary (June 2, 2019). "Kevin Hassett, Chairman of Council of Economic Advisers, to Leave Post". Wall Street Journal. Retrieved June 3, 2019.
  8. ^ a b c d e "34 days of pandemic: Inside Trump's desperate attempts to reopen America". The Washington Post. 2020.
  9. ^ a b c Tankersley, Jim (May 6, 2020). "No Virus Deaths by Mid-May? White House Economists Say They Didn't Forecast Early End to Fatalities". The New York Times. ISSN 0362-4331. Retrieved May 8, 2020.
  10. ^ a b "Draft report predicts covid-19 cases will reach 200,000 a day by June 1". The Washington Post. May 4, 2020. Retrieved May 4, 2020.
  11. ^ a b Yglesias, Matthew (May 8, 2020). "The Trump administration's "cubic model" of coronavirus deaths, explained". Vox. Retrieved May 8, 2020.
  12. ^ a b Kevin Hassett curriculum vitae on AEI website.
  13. ^ "Kevin Allen Hassett". bloomberg.com. March 27, 2011.
  14. ^ Yglesias, Matthew (August 2, 2007). "Laffer Curve Revisited". The Atlantic. Retrieved May 5, 2020.
  15. ^ "Economist's View: Yet Again, Tax Cuts Do Not Pay for Themselves". economistsview.typepad.com. Retrieved May 5, 2020.
  16. ^ "Trompe l'oeil". The Economist. ISSN 0013-0613. Retrieved May 5, 2020.
  17. ^ "The Most Mendacious Graph the Wall Street Journal Ever Published: Paul Gigot and Kevin Hassett Smackdown/Hoisted from 2007". Brad DeLong's Grasping Reality. Retrieved May 5, 2020.
  18. ^ James K. Glassman; Kevin A. Hassett (November 14, 2000). Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market. Three Rivers Press. ISBN 9780609806999. Retrieved April 12, 2017.
  19. ^ "U.S. stocks take a fall - Oct. 1, 1999". money.cnn.com.
  20. ^ "Dow's peak, 3 years later - Jan. 14, 2003". money.cnn.com.
  21. ^ "Stocks get pummeled on GE, autos, investor pessimism - Oct. 9, 2002". money.cnn.com.
  22. ^ Paul Krugman, Dow 36,000: How silly is it?, MIT, retrieved April 12, 2017
  23. ^ Silver, Nate (March 9, 2009). "Dow 36,000 Guy Accuses Obama of Sabotaging Economy". FiveThirtyEight. fivethirtyeight.com (blog). Archived from the original on January 25, 2013. Retrieved March 7, 2018.
  24. ^ a b Rappeport, Alan (April 12, 2017), "Choice of Pro-Immigration Economic Adviser Riles Trump's Base", The New York Times, Washington, retrieved April 12, 2017
  25. ^ Jim Tankersley (September 5, 2018). "White House Says Wages Are Growing When Measured Differently". New York Times. A mystery of the current economic recovery is why wages are stuck in neutral while economic growth revs faster. On Wednesday, the Trump administration tried to solve the puzzle by producing its own measure that shows wages are, in fact, growing
  26. ^ "'It's not Ireland's fault US tax law was written by someone on acid'". Irish Independent. September 13, 2018. The economist [Kevin Hassett], who has previously referred to the Republic as a tax haven, said there had been a need to introduce reforms in the US, which have brought its corporate rate down to 21 per cent.
  27. ^ Seamus Coffey, Irish Fiscal Advisory Council (July 18, 2018). "When can we expect the next wave of IP onshoring?". Economics Incentives, University College Cork. IP onshoring is something we should be expecting to see much more of as we move towards the end of the decade. Buckle up!
  28. ^ Brad Setser, Council on Foreign Relations (February 6, 2019). "The Global Con Hidden in Trump's Tax Reform Law, Revealed". New York Times. Retrieved February 24, 2019.
  29. ^ Nam, Rafael (March 20, 2020). "Economist Kevin Hassett returns to White House to advise Trump amid coronavirus". TheHill.
  30. ^ "White House to bring Hassett back as economic adviser amid crisis". POLITICO. March 20, 2020.
  31. ^ "Trump brings back Kevin Hassett as temporary economic adviser". Reuters. March 20, 2020 – via reuters.com.
  32. ^ "President Donald J. Trump Announces Addition to White House Staff". whitehouse.gov – via National Archives.
  33. ^ Zeballos-Roig, Joseph. "A White House economic adviser devised a head-scratching model that shows coronavirus deaths will hit 0 in just 10 days". Business Insider. Retrieved May 5, 2020.
  34. ^ Jason Hoffman; Veronica Stracqualursi (May 2, 2020). "White House economic adviser says additional coronavirus stimulus package might not be necessary". CNN. Retrieved May 3, 2020.
  35. ^ Leary, Andrew Restuccia and Alex. "WSJ News Exclusive | Trump Economic Advisers Float Three Names for Fed Chair". WSJ. Retrieved March 18, 2024.
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