The Real Clinton Economic Record
Hint: It’s not what he claims.
By Michael Catanzaro, reporter for The Evans-Novak Political Report
s his presidency comes to a close, Bill Clinton is desperately groping for a legacy that overshadows impeachment. It seems that he wants credit for the thing that rendered impeachment irrelevant in the public mind: the economy.
Clinton enthusiastically assumes full responsibility for the longest economic expansion in American history, as he demonstrated in his expansive speech at the Democratic Convention in August. And his lame-duck aides never shrink from reinforcing this bunk.
Jake Siewert, Clinton's lame-duck press secretary, and a former aide at the National Economic Council, assiduously spun the myth of the Clinton economic record on Monday at a White House press briefing.
Siewert scoffed at Dick Cheney's observation on Meet the Press that America may be "on the heels of a recession." "We understand that Mr. Cheney has a lot of hands-on experience in big-time economic downturns," Siewert said over the din of guffaws from the White House press corps. "But I don't think that makes him qualified to assess the current state of our economy."
Siewert categorically dismissed Cheney's comments, notwithstanding credible evidence that the economy is slowing (Alan Greenspan warned as much in a speech delivered yesterday). Then, with characteristic Clintonian arrogance, he said Clinton eliminated the deficit, created the surplus, spurred high growth and productivity rates, and reversed the Reagan-Bush-Cheney decline.
Siewert's petulant spinning is another example of the fiction that bumbling Republicans screwed up the economy, and Bill Clinton's brilliance and foresight turned it around. It was a mantra of the 1992 Clinton-Gore campaign, when the Clintonites falsely labeled the economy in 1992 as the worst "since the Great Depression" (that, admittedly, was probably the handiwork of Gore).
In fact, the economy was on an upward path, after a very mild recession, 18 months prior to Bill Clinton's election. Siewert should consult Clinton's Office of Management and Budget (OMB) and its June 1999 mid-session review, in which it conceded that the "economic expansion…began in April 1991."
Or he could go to the National Bureau of Economic Research (NBER), the most respected monitor of the business cycle, which flatly reports that the eight-month recession (wow! some Depression!) under President George Bush "ended in March 1991." According to an NBER spokeswoman, the "truth is that the seeds for the recovery were sown during the Bush era."
During the briefing, Siewert boasted that "growth has averaged 4 percent throughout this administration." But that's only half the story.
According to the Economic Report of the President submitted to Congress this past February, Gross Domestic Product (GDP) began rising annually at a steady 4% clip after the Republicans defeated Clinton's health-care initiative; took over Congress in 1994; and passed tax cuts and welfare reform. Prior to that, GDP growth stagnated far below the 4%-plus-rate the economy has averaged from 1996 to 1999.
Moreover, Siewert ignored just how lucky Clinton is. It was Reagan's legacy that handed him the essential foundation for booming growth. Reagan's supply-side tax cuts reduced top marginal tax rates from 70% to 28%. Siewert also apparently forgot that Reagan's tax cuts ushered in 92 straight months of economic growth (from November 1982 to July 1990) without a recession.
The Joint Economic Committee estimates that without Reagan's tax cuts, taxpayers would be paying 55% more in federal taxes this year, or an increase of $871 billion.
Reagan helped reverse a stagflating economy even after having inherited double-digit inflation and interest rates — 13.5% and 20%, respectively — from Carter's last year in office. Under Reagan, they plunged two-thirds, while unemployment fell 20%.
And Siewert should know that the economy prospered largely because Clinton's lame-brained economic policies were stymied by the Republican Congress. June O'Neil, the director of the Congressional Budget Office from 1995 to 1999, noted that the economy's success stems from the "absence of legislation that meddled with the economy or that had major long-run spending consequences for the budget."
Remember health care? Clinton wanted to socialize one-seventh of the American economy. As The Economist put it in 1993, "Not since Franklin Roosevelt's War Production Board has it been suggested that so large a part of the American economy should suddenly be placed under government control."
Siewert criticized Cheney on Monday for handing over a deficit of $290 billion in 1992. Yet it was the Clinton health plan, defeated by Republicans and a band of moderate Democrats, that, according to the CBO, would have increased the deficit by at least $200 billion over a decade. So much for a balanced budget (which the Republicans forced Clinton to accept in 1997).
Or how about Gore's 1970's era energy tax, totaling $72.8 billion, on coal, oil, natural gas, and nuclear power? That was too much even for Democrats, who scuttled it 1993 in favor of a 4.3 cent tax on gasoline.
Having stopped these potentially disastrous Clintonista interventions, Republicans helped risk-takers and investors spawn a technological revolution that boosted productivity, restrained inflation, and spurred economic growth.
History may give Clinton the credit he seeks for America's economic success. But the history of the facts — things, of course, that never get in Clinton's way — shows he doesn't deserve it. |
