They never seem to learn, do they?

The idealogues who use the ups and downs of markets to critique political figures. These, rigid, rabid partisans care not the least about your investing dollars; rather, the hardcore political junkies are more than happy to lose you money, so long as they can score political blood in the process.

Michael Boskin is only the latest in a series people who will LOSE YOU MONEY if you listen to their political drivel.

Remember Quit Doling Out That Bad-Economy Line, the worst timed Op-Ed in the history of publishing? Well, Boskin is giving that idiocy a run for its money-losing leader status with this “classic” political polemic in the WSJ exactly 9 months ago today.

Boskin’s screed managed to bottom tick the lowest market price in decades: March 6 2009: Obama’s Radicalism Is Killing the Dow. Had you avoided equities based on his political critique, you would have missed the best rally in 75 years.

What was the blame that Boskin — the man who helped institutionalize the under-reporting of inflation for a generation — made?

“It’s hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president’s policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.”

This leads to an obvious question: If the market sell off was caused by the new President’s policies — then just 6 weeks on the job — what caused the 65% market rally since that Op-Ed was published? By Boskin’s own logic, it must be those same Obama policies. (My own, non-biased, non-partisan, non-money losing views as to why the market has rallied are here).

When you see the world through ideological glasses, than everything is clearly black and white, unlike in the real world, where there are nuances and shades of gray. Miss that and you miss reality. This is part of the reason why Politics as an investment strategy is a surefire way to hurt your own finances.

I am not a defender of Obama’s economic policies; I am an equal opportunity critic. After 8 years of bashing Bush’ awful economic policies and massive deficits, regular readers know I give the Obama errors no quarter. Indeed, I have been called one of his 14 most strident economic critics.

But the sort of partisan, money losing silliness that Boskin pushed via the WSJ should act as a reminder to investors everywhere: Mixing Politics with market action is a  money losing venture.

Markets are Rorschach tests; they frequently reveal more about the commentator then the commentator reveals about them. The ones who try to draw political conclusions from markets are deadly to your financial well being.  Avoid these people like the capital destroying viral infections they are . . .


Markets Are Rorschach Inkbot Tests (March 2, 2009)

Was the ‘00-03 Crash Bush’s Fault? ‘09 Obama’s? (March 5th, 2009)

Obama’s Radicalism Is Killing the Dow
WSJ, MARCH 6, 2009

Category: Politics, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

24 Responses to “Michael Boskin on “The Obama Crash””

  1. VennData says:

    While Boskin was telling you to bail back in early March due to the Commander-in Chief, ironically, that said-same Commander-in-Chief told you to buy:

    Obama Says Buy Stocks Now: Good Deals There for Long-Term Investors (March 4th)

  2. keithpiccirillo says:

    Damn right.
    Generally, don’t policy decisions take a long time horizon for markets to digest? Health care stocks seem undervalued relative to other sectors, but they have trended up despite possibility of industry reform.
    Talking heads are all fluff unlessthe words come out of the mouth of someone like David Byrne.

  3. keithpiccirillo says:

    Venn, as a point in time that was just the luck of the straw.
    This is a decent example of confirmation bias, yet another area we all need to get a handle on.

  4. GB says:

    IF the Bush administration looked the other way at appraisal fraud, etc. I often wonder if the changing of the guard caused some investors to sell real estate due to fear of changing laws or actual inforcement by the dems. Just a thought I had since it did seem like all these sub-prime problems starting occuring a year or year and a half before Bush left. But it was probably more due to actual laws of economics.

  5. the bohemian says:

    “Markets are Rorschach tests; they frequently reveal more about the commentator then the commentator reveals about them. The one who try to draw political conclusions from markets are deadly to your financial well being. ”

    no doubt-

    ideologues- the worst kind of people- because it is always the other party that is causing the problem- I will give one big shout out BR- in that you are very pragmatic in how you see the world-

    more people should do the same

  6. VennData says:

    Well there’s luck, but then there’s a viewpoint of value that the Commander-in-Chief expressed. Finding value and waiting for the market to see it has been a winning approach to investing.

    But the relevancy here is that the partisan spiel by the right-wing media machine so far has been a repeat of the early 90′s call that Clinton’s slight tax hikes to balance the budget would wreck the economy. The economy did great and the deficit was paid down, the GOP was completely wrong.

    The GOP’s more recent rhetoric about “Socialism” and “Ruining America” is coming back to haunt them, again. Investing based on what they say, has been a mistake twice. Luck? Maybe.

    My advice from these two data points: Don’t drink (the Kool-Aid) and invest.

  7. “…as a reminder to investors everywhere: Mixing Politics with market action is a money losing venture…The ones who try to draw political conclusions from markets are deadly to your financial well being. Avoid these people like the capital destroying viral infections they are . . .”-BR, above

    The ‘reminder’, above, alone, is a valuable service.

    Though, this Day, alone, should remind us of the ‘power’ of Politics..

    “…It is now clear that FDR did know the Japanese attack was coming. He knew more than a year in advance of Japanese plans to bomb the United States’ Pacific fleet at Pearl, and he knew more than a week before that the attack would come early Sunday morning. He knew because American naval intelligence had cracked the Japanese naval codes in the early fall of 1940, 15 months before the fateful attack…”

  8. flipspiceland says:

    Those who don’t understand the effects of “Political Economics” haven’t been on campus in a decade.

    Economy and politics are intertwined, regardless of this critic’s blindness to their nexus.

    Boskin is indeed wrong to blame Obama for anything since it is the Committee Chairmen in the Senate who run the country. But for him to deny an umbilical connection between politics and money is ridiculous. He just doesn’t care to understand the complexity of it.

  9. bergsten says:

    “I have been called one of his 14 most strident economic critics.”

    Maybe 14 was all they could find.

  10. Moss says:

    How right u are BR concerning the ideologues and the usually incorrect biases that such partisan rants incubate. Quite frankly it really does not matter what they think or what I think. What matters is determining what everybody else thinks. For example if u believe the rants of those who oppose any sort of action based on climate change and therefore discount the investment opportunities of alternative energy you are basically limiting yourself based on bogus beliefs.

  11. wunsacon says:

    Maybe Boskin is jealous of all the attention paid to Glenn Beck?

  12. Greg0658 says:

    VennData – “back in early March … Obama Says Buy Stocks Now” .. I remember that too .. seems now like an insider stock tip hea

    GB -”changing of the guard caused some investors to sell …” .. light has that effect on some bugs

    MEH – “remind us of the ‘power’ of Politics” ..

    me “Control of the government is the best path to prosperity”

    unless I’m one of these (BR top)”Avoid these people like the capital destroying viral infections they are . . .” I would be remiss in my job (alarmist) .. that the Industrial Global Financially Inter-connected SuperWorld we have created as a species better wakeTFup before it is too late and Disaster Cap’ism is the flavor of the restructure’g … we are not the farmers messin’ in the fields we once were

    I really think a new order is in order .. but that’s IMO

  13. Greg0658 says:

    just heard this 1 liner “Live – from the Financial Capital of the World”
    like thats something to be proud of

  14. JohnDoe says:

    Why is it that when circus clowns like Boskin write an article that is so completely wrong they are not called out on it? Why is it that ridiculous pieces like this are forgotten and he can easily write a new piece advising people on what to do and nobody will remember how wrong he was? Especially in this day and age where previous articles are so readily available via the internet. People like him should be held accountable and a disclaimer should be written a the bottom of his next piece. Simply amazing.

  15. Dennis says:

    At least one person remembered . . .

  16. Whammer says:

    Michael Boskin was my Econ 1 professor in 1976. He was not a knucklehead at that time. But, he got bought……

  17. Onlooker from Troy says:

    Kudlow and his ilk were spouting the same crap on CNBC all the way down. He’s no better than Boskin and is just as dangerous to your investing; as is CNBC at large, of course.

    And yes, it is interesting that in this day and age that it’s still so easy for people to keep getting an audience for their awful advice, when it’s so easy to hold them accountable for their past failures. People are amazingly capable of denial and following their biases to their own detriment.

  18. bsneath says:

    The market sell-off last year had nothing to do with Obama.

    It was because the Central Banks failed to act quickly enough, or maybe better said, they were uncertain how much action they needed to take to offset the massive deleveraging that was going on. Had they begun QE sooner, the market would not have dropped as much.

  19. Adult Franklin411 says:

    I think you guys got this backwards. Tools like Boskin are engaged to allege negative economic causation as political payback for a politician doing something the tool’s masters don’t like. Boskin’s a freelance version of whores like the in-house NAR “economists.”

  20. Patrick Neid says:

    Fourteen strident critics? LOL.

    Only a small handful are critics. The rest are fellow travelers who think he just didn’t do enough intervening and spending. Keynesians the lot.

  21. TK says:

    This is a refreshing blog because BR doesn’t get exercised about politics unless it’s a specific policy. Contrast that with Cramer, who used to call himself a Democrat, but criticizes Obama all the time as a pander to the conservative leanings of many investors. In this respect Cramer is no better than Beck.

  22. [...] Michael Boskin on “The Obama Crash” (December 7th, [...]

  23. [...] how much money their lunatic ravings lost their readers. (The list is long and varied, but the Boskin “Obama Crash” on March 6th is a good place to start; then read anything Don Luskin writes — he is a [...]