It appears a Hillary Clinton presidential campaign would attempt to persuade the public that a Hillary presidency would (a) be Bill’s de facto third term and (b) that Bill’s first two terms were not part of the pro-market turn in US economic policy that began under Ronald Reagan. Because, you know, President Obama says the Reagan presidency marks when America went off course. All Reaganomics did was increase income inequality. Here is Hillary on last night’s Charlie Rose show:
[I]f you look … at two Republican two-term presidents, Ronald Reagan and George W. Bush, and two Democratic two-term presidents, Bill Clinton and now Barack Obama, and if I just were to compare Reagan’s eight years with Bill’s eight years, it’s like night and day in terms of the effects, the number of jobs that were created, the number of people lifted out of poverty — 100 times more when Bill was president. And did policies have something to do with that? I would argue that they did.”
Wait, what? “Night and day” — with Reagan as the “night” and Clinton the “day”? Conservatives tend to look at the 1980s and 1990s as one long, pro-market policy continuum of lower taxes and deregulation. Economists generally call this period “The Great Moderation.” Sure, Bill Clinton raised the top marginal income tax rate — although at 40% it was still lower than the 50% rate instituted by Economic Recovery Tax Act of 1981 — but he also lowered investment taxes and signed NAFTA, which was a different kind of tax cut. (And don’t forget the role of the Gingrich-led Congress in pushing those pro-growth policies, including a balanced budget.) Even the policy mistakes were similar. Banks bailouts and TBTF really started in the 1980s and continued through the Clinton years. I am also sure Hillary would like to forget that Bill signed financial deregulation in 1999.
And guess what, Barack Obama also sees the 1980s and 1990s and 2000s as all part of the same grand policy mistake, as he made crystal clear in his 2011 Osawatomie, Kansas speech. He doesn’t give Bill a pass. Clintonomics was as much a part of the problem, as Obama sees it, as Reaganomics. But Hillary is trying to revise history by arguing that Clintonomics was something completely different and apart.
She is also arguing, astonishingly, that Clintonomics was a success, Reaganomics a failure. Really? Even a cursory examination of the data dispels that claim. Reagan took office after more than a decade of economic tumult and raging inflation. America was supposedly in irreversible decline. But from 1981 through 1988, inflation was tamed. Real GDP growth averaged 3.5%, and employment rose by 18% despite the nasty, Fed-induced recession of 1981-82.
Just as important, the more business-friendly tax and regulatory structure — not to mention the restructuring of Corporate America — set the stage for continued growth in the 1990s. Clinton stood on Reagan’s shoulders. Real GDP growth averaged 3.9% and employment increased by 23% from 1993 through 2000. Given the head of steam Reagan gave the 1990s, plus the fall of the Soviet Union and the Internet boom and declining energy prices, it may have been impossible to mess up that decade. Bill started on third base, and Hillary thinks he hit a triple.
One more thing: Hillary Clinton is apparently going to make a big deal about income inequality. So here is a stat for her. The top 1% US income share in 1992 was 13.5%, according to the World Top Income Data Base. When Bill Clinton left office in 2000, the share had risen to 16.5%. Indeed, high-end inequality rose more during the Clinton presidency, 3.01 percentage points, than during the Bush presidency, 1.4 percentage points
No one tell Elizabeth Warren!