Why Bill Clinton’s Favorable View of Obama’s Tax Deal Should Be Disregarded
We have made it a point in our most recent posts to try to counter the misinformation that has literally “jacked” our current political discourse and further threatens middle class Americans regardless of race or gender. We have seen movements like the Tea Party rise from nowhere and propaganda machines funded and directed by the privileged and powerful, who’s goal is to maintain that power and privilege at cost of the the the vast majority of working class Americans.
Although we firmly support President Obama and respect his decision to compromise with the GOP and extend the Bush tax cuts , we hope that he and his fellow Democrats can remain true to what’s important to the vast majority of working class Americans. Call it what you will, but we have to maintain and restore upward mobility for the majority of working Americans, and ensure that the playing field isn’t tilted in the direction of the privileged.
Here is very interesting article posted by Robert Reich. Robert Reich is Chancellor’s Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His “Marketplace” commentaries can be found on publicradio.com and iTunes.
Why Bill Clinton’s Favorable View of Obama’s Tax Deal Should Be Disregarded
By Robert Reich
Bill Clinton seems the perfect validator for Barack Obama — which is why the President is utilizing the former president for selling his tax deal. After all, the economy boomed when Clinton was president and 22 million net new jobs were created. From a more narrow political perspective — and this is important to Democrats in Washington — Bill Clinton was reelected, even though he lost both houses of Congress in the 1994 midterms.
But the analogy falls apart as soon as you realize Clinton’s economy was vastly different from Obama’s. The recession Clinton inherited was relatively small, and caused by the Fed raising interest rates too high to ward off inflation. So it could be reversed by the Fed lowering interest rates — as the Fed did in 1994. By 1995, the so-called “jobless recovery” had morphed into a full-blown jobs recovery. By 1996, at pollster Dick Morris’s urging, Clinton could proclaim to the American people “you’ve never had it so good, and you ain’t seen nothing yet.”
The Great Recession has been far larger, caused not by the Fed raising interest rates but by the bursting of a giant housing bubble. In 2008, the biggest asset of most middle-class people, upon which they borrowed and that they assumed would be their nest eggs for retirement, collapsed. Housing prices continue to fall in most parts of the country. The Fed has lowered interest rates all it can, and unemployment remains sky high.
Bill Clinton presided over an economic boom engineered by Fed chair Alan Greenspan, who felt confident he could drop interest rates far lower than anyone expected without risking inflation. The result was 4 percent unemployment in many parts of America, as well as the best jobs recovery in history.
The price Greenspan exacted from Clinton — and a resurgent Republican congress demanded — was a balanced budget. As a result, Clinton had to give up much of his “investment agenda” in education, infrastructure, and other long-neglected means of building the productivity of average working Americans. The economy enjoyed a huge cyclical recovery.
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- Aftershock: The Next Economy and America’s Future
