Art Laffer Blames 2008 Stock Market Crash on Obama ‘Rising in the Polls’
Maybe you were under the belief that the 2007-08 financial crisis and subsequent stock market crash was caused by the subprime mortgage bubble, reckless lending, lax regulation, high default rates, and banks and investment firms collapsing due to risky investment practices. Well, Reagan economic adviser Art Laffer is here to tell you that you’re wrong.
It was all because investors knew Barack Obama was going to get elected.
Appearing on Fox News’ America’s Newsroom on Tuesday morning, the supply-side economist railed against Democratic presidential candidate Sen. Elizabeth Warren’s proposal to cancel student loan debt and eliminate public college tuition. After complaining that she wants to “give everything away free,” Laffer touted President Trump’s economy.
After anchor Bill Hemmer noted that Trump tweeted out earlier in the day that he should be immune to impeachment because he is overseeing a strong economy, Laffer invoked Bill Clinton — who did get impeached — to claim that Clinton’s strong economy in the late 90s led to him being very popular, something he predicts for Trump soon. (Currently, Trump’s aggregate approval rating is 41.4 percent, per FiveThirtyEight.)
“You have a year-and-a-half to go before an election — what do you see down the road?” Hemmer asked.
“So far fine,” the Laffer Curve developer replied. “What I’m going to do is in March of next year, March of 2020, I’m going to really look at the political world very, very carefully.”
He continued: “If you’ll remember, coming into the election in 2008 when Obama started rising in the polls and doing well in the polls, the stock market crashed and the stock market tells you what will be, not what has been. And the stock market looks forward. If they see an Obama coming into office they’ll crash. That’s what led to the Great Recession. I’m going to look at it very carefully in March of 2020 to make sure Trump will get re-elected otherwise I’ll move my portfolio and make it much more risk-free portfolio.”
For the record, the subprime crisis began in April 2007 and the stock market finally crashed in September 2018 after Lehman Brothers and Washington Mutual went bankrupt, the Federal Reserve took over AIG, and Congress initially rejected TARP (they would pass it days later). After his election, Obama would oversee a sustained growth in both the stock market and employment.
Hemmer ended the interview by saying “we’re watching the calendar with you” while co-anchor Sandra Smith added: “Art means business, that’s for sure.”
Watch the clip above, via Fox News.