An article today in the Associated Press said that Hillary is running on Bill Clinton’s record – such as his success with the economy.
Wow! Really?
Presiding's got nothing to do with it
We should first acknowledge the "indisputable fact that
In either case, presiding has got nothing to do with it.
Anyone can preside.
A monkey can preside.
Just because he was there, doesn't mean he caused it. Correlation does not prove causation. Only the facts will tell us what really happened.
Background
The price of oil shot way up under Carter and then dropped substantially under Reagan, and it stayed low until global demand began to exceed global supply around 2005.
In 1985 President Reagan and a Democratic Congress passed The Balanced Budget and Emergency Deficit Control Act (GRH), which was supposed to balance the budget by 1991, but the deficit still rose.
In 1990 President Bush and a Democratic Congress raised taxes and passed the Budget Enforcement Act (BEA), which limited discretionary spending and included the “pay-as-you-go rule” (PAYGO). It was supposed to eliminate most of the deficit within five years, but the deficit still rose.
In 1993 President
Deficits did begin to steadily and rapidly decrease.
In 1995 and 1996,
Deficits continued to steadily and rapidly decrease.
In addition to spending cuts from the peace dividend, the dot com boom began providing huge growth in tax revenues for the government.
Deficits continued to steadily and rapidly decrease.
By 1998, President Clinton and a Republican Congress directly violated PAYGO requirements and repealed a significant tax increase that they had just passed. Nevertheless, so great was the increase in tax revenue from the dot com boom, that there were budget surpluses anyway.
Deficits continued to steadily and rapidly decrease.
Then the Clinton.com crash happened in 2000.
In 2002 President Bush and a Republican Congress abandoned the BEA to finance the expensive and pointless war in
The Crash
The following five year graph of the NASDAQ stock market demonstrates that the economic crash had begun months before the November election and that the crash had nearly bottomed out in late April (see red dot on graph) – about ten weeks after Bush took office in January 2001.
If anyone would credit
Clearly, the crash could not have been caused by Bush, and yet every Democrat I talked to in 2001 blamed Bush for the crash. To this day, most Democrats I talk to blame Bush for the crash. To this day, when I point out that Bush inherited a bad economy, most Republicans have that look of epiphany when first realizing something profound. Their years of being misinformed is a testament to the power and bias of the mainstream media.
Perhaps the myth survives because the media and political parties are so technology and business illiterate that they do not understand the dot com boom or the collapse, but that still would not explain how anyone can ignore the fact that the economic crash happened in the final months of the
Democrats usually just ignore this evidence and reply that everyone disagrees with me, but a very few have been honest enough to try to explain that Bill Clinton made excellent economic decisions, that he balanced the budget, that the crash would have happened regardless of who was president at the time, and that Bush made decisions that worsened and prolonged the crash. I then explain why each of these statements is also false (see below), at which point even the more honest Democrats fall back on the standard Democrat tactic of claiming that everyone disagrees with me.
Did Bill Clinton at least make excellent economic decisions?
No. Bill and Hillary try to nationalize health care. That would have been a huge increase in taxes, and a huge blow to the economy. The best thing that can be said about his economic decisions is that he caved to pressure from the universally respected Federal Reserve chairman Alan Greenspan and the new Republican majority in Congress – and thus he did no harm to the economy.
Did Bill Clinton balance the budget?
No. Even elementary school children know that “Congress controls the purse strings” and of course Congress was controlled by Republicans. However, Congress did not balance the budget either.
First, the price of oil shot way up under President Carter and then dropped substantially under Reagan, and it stayed low until global demand began to exceed global supply around 2005. The economy will naturally grow – as long as the government doesn’t mess it up – and it will naturally grow even faster given low energy prices.
Second, the collapse of the
Third, in spite of lower defense spending, overall government spending kept growing under
Only the government profited.
Did Bill Clinton cause the dot com boom or the dot com crash?
Not exactly. I place some blame on
Did George Bush worsen or perpetuate the crash?
No. The Clinton.com crash would naturally look bad for whoever was unlucky enough to be President after Bill
Then 9-11 happened about eight months after
Of course, later on Bush made the economically stupid decision to go into
- Bush actually improved the economy by cutting taxes on the middle class and investors.
- The war would have a delayed effect on the economy.
- The economy naturally grows as long as the government doesn’t mess it up.
- Alan Greenspan radically lowered interest rates and kept them low in a successful attempt to bring us out of the Clinton.com crash.
Of course, Greenspan’s attempts to counter the Clinton.com crash a caused a housing bubble that burst at about the same time oil prices began to spike, which would naturally look bad for anyone who was unlucky enough to be President after Bill
Why do we care?
Democrats today will often reply to my criticisms of Bill Clinton with the statement, “That was years ago, why do you care?” These same Democrats bash Reagan and even Thomas Jefferson. What a bunch of hypocrites.
Well … Hillary is running for President and citing Bill Clinton’s record, but that is merely the catalyst for this article that makes it interesting to current readers.
The promise of reality is freedom.
Election Update 2/8/2008
We have learned that the
Now I haven’t analyzed the economy in the Bush years as thoroughly, but we know that businesses have been doing great – until last month, which has precipitated the recent spate of Democrats arguing for higher taxes. (I haven’t explained why lower taxes are better for the economy, but doesn’t that seem intuitively obvious?)
Democrats have been all over the news claiming that raising taxes helps the economy because
We have already noted that correlation does not prove causation, and that we need to look at the facts – the reality.
The promise of reality is freedom.
14 comments:
You're an idiot. Next time focus less on Clinton and more on the pay-as-you-go budget processes initiated by the Democrat controlled Congress in 1990. The deficit was eliminated by their action. Republicans began ignoring pay-as-you-go in 1998 when they took back the Congress, and Bush made it worse w/ tax cuts, now we have a total mess.
In spite of the name calling and multiple inaccuracies in the post from March 5th, I consider it to be valuable and further the discussion. I previously did not address the historical legislative efforts such as the pay-as-you-go element of the BEA enacted by the first Bush administration. This promted me to do more research and include a "Background" section in my article. I was not sure at first what my research would yield, and I was prepared to make sweeping changes if necessary.
Just got here by Googling unrelated terms!
"In 1995 and 1996, Clinton gave in to demands by the new Republican Congress (the first in 40 years) to cut spending."
LOL! So full of dishonest it makes my hair hurt!
Who asked for the Deficit Reduction Act of 1993? Who signed it? Who cast the tie breaking vote? Which party opposed it unilaterally? Clinton gave into demands?
(Still laughing) Dude... this is the Internet. Research on this stuff is almost instantaneous. Do us a favor and do some!
I think the former poster is referring to the Omnibus Budget Reconciliation Act of 1993, which was just another huge bill typical of Washington. There is no such thing as the “Deficit Reduction Act of 1993”, which is a spin term used later by Clinton to take credit for lower deficits. ORBA raised taxes and was so unpopular that in spite of a Democratic majority in both houses, it passed by only one vote in both houses. In fact the senate vote was a tie, which was broken by Clinton’s Vice President – Al Gore.
Of course anyone can quickly find out that the vast majority of articles contradict mine – that is my whole point. How can so many articles be so wrong? The one sidedness and ignorance is astounding.
Perhaps the poster did not read my article.
Just the stock market graph alone pretty much says it all, and note that you don’t see that graph elsewhere.
Wow you are so full of crap. I hear these arguments all the time and they are all speculative and backed up by dick. Gotta love the Neo-con agenda. As long as you keep repeating your lies you hope that eventually it will come true.
I'm waiting for the above to make a substantial argument against this. But as I've always seen, the ones who don't believe this can NEVER find or even make up anything other than "you're stupid" or "you're wrong". Leeory is right, he did a very good job with this.
Clinton had nothing to do with the massive productivity gains that resulted from the technology introduced in the 1990s.
In fact, the tax incentives for investing in R&D, being able to writeoff capital equipment used to create high-tech products, and the explosion in software development in the late 1980s and throughout the 1990s was the main reason for the economic growth during the Clinton years. And the tax policies that gave preferences for high-tech investment were developed during the Reagan years.
In all, the author is right -- Clinton presided, but did not positively impact the economy of the 1990s. He inherited the peace dividend, the technology, and the productivity gains that resulted from previous administrations, namely Republican administrations.
I know this is coming in really late, but I ran across this article while searching for something else so that would suggest it's still alive, and people are still being misled.
Under Bill Clinton's economy the US added 22 million jobs, and I believe that we had GDP growth of 6% in five quarters (G.W. only had a single 6% quarter).
GDP growth under Clinton ranks the Clinton economy fourth of the nine presidents since World War 2. ALL of the three above him were also under Democrat administrations.
The only Republican president with a stronger economy than a Democrat since WW II was Reagan and he was fifth followed closely by Jimmy Carter.
I don't know exactly why Democrats "preside" over better economies, but it seems more than just an unlikely coincidence that they invariably do. In fact a Republican president has NEVER left office with unemployment under 5%.
Also the president is the one who proposes the budget to congress. Congress does approve it, but generally they only make relatively minor changes. They don't exactly "hold the purse strings". Reagan's proposed budgets varied less than 2% from those passed by the Democrat congress.
I have never heard a single person, Democrat or Republican, blame G.W. Bush for the NASDAQ crash. Everyone knew it was going to happen, just like everyone knew the housing bubble would burst. While I do agree that Clinton left office with a recession it was fairly minor, as in it is nothing of the scale of the Reagan Recession of late 1982, or the one G.W. Bush left office in the middle of.
Even while the NASDAQ was normalizing itself the S&P and the top 100 were still raging full speed ahead. Not really the things economic crashes are made of.
Sam says: I don't know exactly why Democrats "preside" over better economies ...
So how do you know you are right? Is it just because of the high level statistics you cited?
I appreciate your comment about the statistics of Democratic vs. Republican administrations, but they are really high level statistics and thus tell us little about cause and effect.
Rather than using such statistics, which are easily fudged, I explain why the actual cause and effect under the Clinton administration does not support the Myth of the Clinton Economy, and I make the more minor point that the facts do not support the rampant Bush bashing on the economy that occurred just months after Bush took office.
Again, I will point out that I am not a Bush fan. I just have an allergic reaction to media bias, conformity, etc.
Leeroy I appreciate the tone of your reply, but I am afraid that I do have to disagree with you.
First of all federal spending in each year of Clinton's presidency rose. In other words the federal government, wether it's the legislative or executive branch who's responsible, never succeeded in "cutting" spending in the 90's.
Second Clinton's defense budget dropped exactly 1% of GDP from George H. Bush's last term in office. It was not really a drastic cut in spending.
Third high level statistics are not easily fudged as you say. They are from the department of labor and department of commerce figures. Sure they are government numbers, but they are from the time when the federal government was dominated by republicans. They are, for whatever reason, a historical fact. You do offer an explanation as to why the economy performed as it did and I applaud your efforts, but personally I believe that your explanation is oversimplified and on at least two points that I mentioned above somewhat inaccurate. The NASDAQ crash does not reflect the economy as a whole as the S&P 500, and the Dow continued to provide outstanding returns, and unemployment never rose above 4.5%.
The mainstream media has had no influence on my economic perceptions. I like to go to the source documents for my research, and that's where I get my "high level" statistics.You are correct that I do not include details as to why the U.S. Economy performs so much better under democratic administrations. But it is a fact that it has, and the pattern can't be dismissed as mere bad luck on the part of the republicans.
There will always be conjecture as to the underlying reasons. Personally I believe that the U.S. Economy is far too complex to be explained away in a short analysis. At this point I am satisfied with analyzing the end results until the pattern is broken.
Sam says: “high level statistics are not easily fudged”
It’s called lying with statistics, and it’s why you can’t expect to convince any mature and thoughtful person by merely making a simple claim.
For example, do your numbers include the lag effect where the economy of the first one or more years of each presidency are the responsibility of the previous President and Congress? Do they consider major events beyond the control of the government? Do they account for how active a President or Congress were in actually trying to impact the economy? Do they consider who controlled Congress? Do they consider inflation, interest rates, and deficits? Do they consider which President and Congress originally passed the laws that are to blame for today’s good and bad impacts on the economy? Do they consider the amount of borrowing by consumers, business, and government? Do they consider the actions of the Federal Reserve?
For every question, there is an answer that is … simple … obvious … and wrong.
Perhaps the reality is that Democrats mess up the economy, and then the people are feeling pessimistic and elect a Republican to spend the next four years fixing it. Could it be that people then tend to elect Democrats when they feel optimistic again?
Why should we believe your quoted numbers? Let’s check them.
You are factually mistaken by a large margin when you say that although the NASDAQ crashed at the end of the Clinton administration, “the Dow continued to provide outstanding returns”. The reality is that the DOW was 11,722 just days before Clinton left office and fell to 7,528 over the next 33 months. You could have looked this up yourself on the Internet instead of just reporting someone else’s claims. Whoever you quoted has you look foolish.
These are rookie mistakes. Why should we even bother to check your other facts given this sloppiness?
"These are rookie mistakes. Why should we even bother to check your other facts given this sloppiness?"
Are you serious? Really?
"The reality is that the DOW was 11,722 just days before Clinton left office and fell to 7,528 over the next 33 months."
No sir that is definitely not reality. Honesty you are a blogger, you could have looked this up yourself. The Dow did not close at or above 11,722 until 2006, much less "days before Clinton left office". The Dow wasn't above 11,000 anytime that could reasonably be considered just days before he left office. 33 months after Clinton left office,in October 2004 the Dow was nearly 10,000 vice 7,528. Additionally the Dow did not close that low until early January 2009. Whoever you quoted makes you look foolish.
I will admit an error. The returns on the dow after 2000 were not outstanding. Relative to the NASDAQ, which lost nearly 60% of it's value between 2000-2001 The Dow's value was relatively stable retaining 90% of it's value. The Dow,upon Clinton's exodus was a roller coaster ride that hit a negative peak around September 2002, then rebounded sharply. It should be noted that the invasion of Iraq would seem to be the impetus of the downward trend, however short lived. In March 2002 the market was trending upward peaking at 10,403.94 then precipitously declining over the next six months hitting the negative peak of 7,591.93 in September. At that point the market sharply rebounded and by January 2003 it had returned to it's pre G.W. Bush levels. In contrast the NASDAQ has never recovered and even peaked above 60% of it's former value. I suppose I was speaking relatively without realizing it. You, on the other hand seemed to be quite specifically wrong.
These are rookie mistakes. Why should we even bother to check your other facts given this sloppiness?
Seriously that was gibberish up there. The Iraq invasion was in March 2003 not 2002 therefore the conclusions that I drew that the fall in March 2002 being triggered by the invasion of Iraq are wrong. I stand by everything else in the previous post.
The lesson I have learned is not to fire off a reply you can't retract when angry.
But your Dow numbers ARE wrong, and it was the work of an amateur. That doesn't make me less wrong.
“The Dow did not close at or above 11,722 until 2006.”
Really?
The Dow closed at 11,722 on 2/14/2000 – six years earlier.
The Dow closed at 7,528 on 10/4/2002 – 33 months later.
That is a 33 month 36% slide that began in the last year of the Clinton administration. I encourage everyone to never just take my word for it. Go to http://www.djaverages.com and see for yourself.
Hmm… I did hastily say that the 11,722 peak was the in the last days of the Clinton administration rather than in the last year, but either way, the peak and a large decline started at the end of the Clinton administration.
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