Kevin Hassett Hits Obama: The Notion that What We’re Seeing a Continuation of Recent Trends Is Not Super Defensible

EXCERPT:

HASSETT: "I would assert that, if you look at the collective body of evidence, the notion that what we are seeing right now is just the continuation of recent trends, it’s not super defensible. I know that we're in a political time, and passions are high. One of the things we have to do is what historians will think with a look back at this time. And I can promise you that economic historians will 100 percent accept this fact, that there was an inflection at the election of Donald Trump. They will argue for a long time about why that happened. My final thought for you is this. You should watch out for ex-post theorizing. As an economist, one of the things I most care about is the ex-ante theory, something that happens before, and then let's watch the data and then see if it agrees with the theory. That’s how you test the theory. You might recall that I came back here last fall and I told you that if we had the tax cuts that President Trump advised that we have, that he pursued, if we passed them, then there would be a boom in capital spending this year. In fact, we provided estimates at the time, last fall, that said the capital spending this year would go up about 11 percent because of the tax cuts. So far in the first half of the year, capital spending is up 10% percent. So you don’t have to reach far for a theory of what happened. President Trump deregulated the economy, we talked about how that affects growth, the tax cuts have had exactly the predicted effect on the economy that's brought businesses back to the U.S., factories back to the U.S. and created jobs for ordinary Americans. It's clear, the data, that there's been a tend break, and with that I look forward to taking a few questions."