5 People Who Guessed Wrong on the Economy
A year after the fall of Lehman Brothers and the economic collapse, The Daily Beast calls out five big names who misread the nation’s financial health—and the one who actually had it right.
McCain: The Fundamentals of the Economy Are Strong
Talk about a flip-flop. On Black Monday, September 15, 2008, following the surprise bankruptcy of Lehman Brothers and the sale of Merrill Lynch, then-presidential candidate John McCain gave a speech on the country’s financial situation, in which he said the “fundamentals of our economy are strong.” One day later, it had turned into a “ total crisis.” In the words of Barack Obama: “Senator—what economy are you talking about?”
Don’t Worry, Jim Cramer Says "Bear Stearns Is Fine!"
Loud-mouthed Jim Cramer, host of CNBC’s Mad Money, probably wishes he could go back in time to March 11, 2008, and take back four words: “Bear Stearns is fine.” Less than a week later, the investment house went under. And several months later, this clip was still haunting him as part of a full-scale mashed-up assault on the network and his credibility by The Daily Show’s Jon Stewart.
Phil Gramm Laughs Off "Mental Recession"
Sen. John McCain guessed wrong, big time, but look where he got his information: In a July 2008 interview with The Washington Times, his top economic adviser Phil Gramm, who was also chairman of the Senate Banking Committee from 1995 to 2000, called America a “nation of whiners” and accused the media of exaggerating their economic problems. “You’ve heard of mental depression,” he said. “This is a mental recession.” This is the guy who could have been Treasury secretary one day.
Alan Greenspan: I Was Wrong…Kind Of
On October 23, 2008, former Federal Reserve Chairman Alan Greenspan acknowledged to a congressional committee that he was “partially” wrong about the economy. He said he would never have guessed that his opposition to strict regulations would help contribute to the economic collapse the week before, saying “those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.”
James Glassman’s Dow Prediction Off by a Few Zeros…
It’s hard to backpedal on your prediction when it’s forever immortalized in print. James Glassman’s 1999 book, Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market, declared that the stocks on the index were undervalued and that it would rise to new heights—to 36,000 points—in the years to come. In short, he was wrong, but only a few decimal places. Here’s Ralph Nader taking Glassman and his book to task.
Peter Schiff: The One Who Got It Right
Not everyone was wrong. Peter Schiff, economist, author, and president of the Connecticut-based brokerage firm Euro Pacific Capital, became a star by accurately predicting the subprime-mortgage crisis, the housing bubble, and the economic collapse of 2008 in a series of TV appearances years before. If only we had actually listened to “ Dr. Doom.”