Supply Siders: Right and, Hopefully, Much Richer

The market bottomed one year ago yesterday on March 9, 2009. It's been up 68% since in one of the greatest recoveries in history. This man called it. And this man has been calling it, and, of course, Sir Mustard Seed Himself made the call. If you've followed them, you know that they were right all along, but more importantly, they were early. They called it when no one could see it. Unbelievably great job by them and I hope they are very rich because of it (better revenge than being right). Further, I think the difference between making the right call and the wrong call - the wrong call was "Great Depression II, other shoe to drop, armageddon, etc - was how you saw the financial crisis and the economy. If you saw it as a panic or a "velocity of money" problem, you were probably more inclined to make a "V-shaped recovery call". If you saw it through the lens of classic business cycle theory, you were probably looking for a "U-shaped" recovery. Then there were the armageddonists, the "L-shaped" recovery people, the people who didn't like the "Porkulus" because it wasn't big enough - the Roubinis, Krugmans, Roaches and Stiglitzes of the world. Granted the situation was complicated by a change in political power in Washington that represented a massive change in idealogical trajectory (as we have been finding out; some of our fellow countrymen were duped as to how much of an philosophical leap we were taking in the other direction - these people are commonly referred to as "rubes" around here.) and still is, but in retrospect we can identify real winners and losers. The supply-siders came out big winners, and the Keynesians and the "imbalances" crowd - Rubinomics folks - came out losers. If you were of the former camp, you had a better chance of calling it right and making some nice money. If you were of the latter camp, you likely spent the year predicting more doom and gloom and you missed the recovery. That is not to say that idealogy, or your philosophical approach to the economy, was solely determinative of outcome, it helped to know your financial history - 2008 was more akin to 1907 than to 1929, and if you were perceptive enough to make that key comparison, you had the analytical foundation to call a recovery and put down some markers, which hopefully were big financial bets on that recovery.