You are browsing the archive for Bill Clinton.

The New Populism Needs to Get This Straight

11:12 am in Uncategorized by letsgetitdone

Let’s look again at the new populism through the lens provided by Robert Borosage in his recent attempt to tell us what it is about. He says:

The apostles of the new inequality have unrelenting sought to starve the public sector. President Reagan opened the offensive against domestic investments. Perhaps the hinge moment was in the final years of the Clinton administration when the budget went into surplus, and Clinton, the finest public educator of his time, pushed for paying down the national debt rather than making the case for public investment. He left the field open for George W. Bush to give the projected surpluses away in tax cuts skewed to the top end.

Pop!Tech 2008 - Juan Enriquez
The hinge moment wasn’t then. It was when he decided, either early in his first term, or even before he took office, to rely on deficit reduction coupled with low interest rates from Alan Greenspan, on the advice of Robert Rubin and Larry Summers, rather than on deficit spending on human capital investments as advocated by Robert Eisner and Robert Reich. Rubin’s victory in the internal debates within the Administration was well-known at the time (1993), and set the deficit reduction course that played along with the Fed’s bubbles to create the private sector debt-fueled “goldilocks” prosperity, and surpluses of his second term. By the time Clinton faced the choice Borosage refers to, the die had already been cast. It was very unlikely that Clinton would turn away from further Government austerity policy, and turn instead toward investments in infrastructure, public facilities and “human capital.” Read the rest of this entry →

We Need A Tax and Spend Party Again

7:46 pm in Uncategorized by letsgetitdone

It’s been nearly 35 years since we’ve had a “tax and spend” political party. During the 1970s, the Democrats gave up fighting the Republicans about the “tax and spend” label, and the Carter Administration tried to escape from that charge by making very serious attempts to balance the budget. During the 1980s, more and more Democrats emphasized their concern for reducing deficits and balancing budgets as a way of distinguishing themselves from the Reagan Administration’s unprecedented peacetime deficits. This didn’t work for them during Reagan’s time, but they finally were able to use the balanced budget old-time religion game to get George Bush to violate his no new taxes pledge, which both contributed to the Bush recession and, as a further consequence, was a big reason why Bill Clinton was elected.

Clinton, of course, embraced the philosophy of deficit neutrality. He relied primarily on credit expansions in the private sector to drive the economy, raised taxes on higher income people, and basked in the glory of unexpected budget surpluses in the last four years of his tenure. Clinton’s surpluses withdrew demand from the private economy, and were the proximate cause, along with the collapse of “the dot com boom,” in creating the recession at the very end of Clinton’s term. During the Bush Administration, the Democrats continued to attack the Republicans for the Bush tax cuts from a deficit neutrality perspective, while preparing to run against them in 2004, 2006, and 2008.

And Barack Obama, even after the crash of 2008, ran on a promise of fiscal responsibility in the White House, while also promising to end “The Great Recession.” Since taking office, he’s shown a reluctance to spend more in a way that isn’t deficit neutral. Yes, the stimulus package was pure deficit spending. But it was about half the size needed to end the recession decisively. And, in addition, the President’s health care reform was limited to $800 Billion over ten years, and the Democrats in Congress worked hard to see that it was scored by CBO as likely to have a surplus over a 10 year period. In addition, the President is trying to end the Bush tax cuts for higher income people; everything else he’s proposing that will cost money is apparently shaped with deficit neutrality in mind, while, finally, his “Catfood Commission” is apparently going to recommend deep cuts in entitlements, along with some tax increases, after the election.

In short, the Democrats haven’t been the “tax and spend” Party for close to 35 years now. And the Republicans have mostly been a “spend and spend” Party, though not, of course, on the social safety net, education, infrastructure, or in areas of other public need, but rather on various wars and the military-industrial complex. So, what’s happened to America without a “tax and spend Party” that will do a lot of Federal deficit spending on domestic needs, while complementing that spending with a progressive taxation system with high marginal tax rates?  . . . Read the rest of this entry →

Obama’s Choice Is Not Faith In the Market vs. Cardigans

9:32 pm in Uncategorized by letsgetitdone

WaPo op eds are getting increasingly irritating with the passage of time. Yesterday, this formerly great American newspaper in free fall ran an article by Matt Welch and Nick Gillespie called “What’s Next Mr. President – Cardigans?” Welch and Gillespie think that Obama’s less than stellar results thus far suggest that he may be reviewing the history of past Democratic administrations to find a “road map” out of his difficulties, and also that “he seems to be skipping the chapter on Bill Clinton and his generally free-market economic policies and instead flipping back to the themes and comportment of Jimmy Carter.” In this way, they begin a transparent framing exercise suggesting that Obama is at a turning point, and that he must stop “running government as a perpetual crisis machine,” and “. . . stop doing harm. Throwing money all over the economy (and especially to sectors that match up with Democratic interests) . . . “ And also that: “. . . there’s no question that Obama’s massively ambitious domestic agenda is at a fork in the road: One route leads to Plains, Ga., and early retirement, the other to Hope, Ark., a second term and the revitalization of the American economy.” And later they say: Read the rest of this entry →