Greenspan is Clinton's unlikely defender

The Toronto Star ^ | September 18, 2007 | David Olive

[presidio9]

Such was the taint of the Lewinsky affair that Al Gore sabotaged his election prospects in 2000 by distancing himself from Bill Clinton and his economic record – one of the most fateful political miscalculations in U.S. history.

Even now, seven years after the Clinton-era fiscal surpluses have given way to successive Bush administration deficits and a bloated national debt, few Democrats have seen fit to defend Clintonomics.

It thus falls to Alan Greenspan, of all people, in his startling memoirs published yesterday, to judge Clinton the best economic manager of the six presidents he served.

Greenspan was Gerald Ford's chair of the Council of Economic Advisors, and later chair of the U.S. Federal Reserve Board for 18 years until his retirement last year.

You read that correctly. This is the Greenspan who was a young acolyte of free-marketeer Ayn Rand, is a self-described "lifetime libertarian Republican," and is the most influential Republican economist of the past generation.

In his autobiography, The Age of Turbulence: Adventures in a New World (Penguin Press), Greenspan, 81, makes clear that his patron Ronald Reagan, who appointed him to head the U.S. central bank board in 1987, was a reckless steward of the nation's finances, eclipsed in economic irresponsibility by current president George W. Bush.

Clinton was in a fiscal bind when he came to power in 1993, and the record deficits of Reagan and George H.W. Bush put him there. "The hard truth was that Reagan had borrowed from Clinton, and Clinton was having to pay it back," Greenspan writes. "I was impressed that he did not seem to be trying to fudge reality to the extent politicians ordinarily do. He was forcing himself to live in the real world."

The 1993 deficit-fighting Clinton budget that kicked off the greatest economic boom in U.S. history, and passed the U.S. House of Representatives without a single G.O.P. vote in favour, was "an act of political courage," says Greenspan, no doubt mindful it wasn't popular with left-wing members of the Democratic Party, either.

Clintonomics, to recap, produced 22 million new jobs (against a 1992 campaign promise of eight million); reduced the federal payroll to Kennedy-era levels; brought about the first narrowing of the income gap between rich and poor since the 1950s; and generated the first surpluses in three decades, totalling $615 billion (U.S.) in Clinton's last four budgets.

Clinton emerges as the hero of Greenspan's 531-page memoir. The Arkansan was a "risk taker" with a "preference for dealing in facts," writes Greenspan of a chief executive he came to regard as a kindred spirit. "We both read books and were curious and thoughtful about the world. ... I never ceased to be surprised by his fascination with economic detail: the effect of Canadian lumber on housing prices and inflation."

Greenspan excoriates Clinton's successor and the spendthrift Republican-controlled Congress of George W. Bush's first six years in office. In the Bush White House, "little value was placed on rigorous economic policy debate or the weighing of long-term consequences," Greenspan writes.

Bushonomics, to recap, has produced six successive budget deficits, totalling $1.7 trillion; a 50 per cent increase in the national debt, to a record $8.5 trillion – an improvement, one supposes, on the tripling of the debt under Reagan; a return to widening income inequality; and anaemic job growth of eight million, largely making up for the "jobless recovery" of Bush's first term.

Of the long-term consequences, Greenspan doesn't dwell on China's status as America's chief creditor, which weakens the U.S. in dealings with Beijing on everything from trade to human rights. He does worry that the resumption of the widening gap between rich and poor at home under Bush could unwind "the cultural ties that bind our society" and ultimately result in "large-scale violence."

[oblomov]

Why “unlikely”? He jettisoned free market economics in the 1970s in favor of the “public private partnership” (aka fascism) that Clinton/Rubin advocated.

[Clock King]

He does worry that the resumption of the widening gap between rich and poor at home under Bush could unwind "the cultural ties that bind our society" and ultimately result in "large-scale violence."

Give me a break! THis is such a cliched statement it no longer means anything. What would be an "appropriate" gap, then? But then, look who Greenspan married...

[Always Right]

It thus falls to Alan Greenspan, of all people, in his startling memoirs published yesterday, to judge Clinton the best economic manager of the six presidents he served.

Clinton had the advantage of having an opposing party in power in Congress that pledged to keep spending in check. Too bad those same Congress critters became big spenders when the GOP got control of the White House. The GOP has no one to blame but themselves for taking the party down. Now they need to re-establish themselves as small government types which may be a hard sell.

[Migraine]

The geezer married a jet-setter, a la Barry Goldwater, in his old age, and loved being accepted in their trendy, o-so-caring-and-thoughtful confabs over brie-and-croissants. It’s an aging Jewish conservative metamorphosis that, to me, quite frankly is disgustingly pathetic.

[BlabItGrabIt]

This David Olive has breathed too much ozone, as algore’s minions were outsmarted by the Bush minions in not allowing the 2000 election to be stolen as the 1992 was...

[mtnjimmi]

Bogas bill AKA slick willy, & bill clinton a good fiscal manager? is Allen senile? The congress was and is responsible for the fiscal state of the economy, the president just the figure head.
lets remember that the president only recommends the budget and the congress pass it, very rarely are they remotely the same!

[Jeff Chandler]

those same Congress critters became big spenders when the GOP got control of the White House. The GOP has no one to blame but themselves for taking the party down. Now they need to re-establish themselves as small government types which may be a hard sell.

[presidio9]

I haven’t read Greenspan’s book yet, but I seem to recall that Clinton’s tax-increases and new regulation led us into a recession, which Bush inherited on top of 9/11 and Enron. The only thing that saved us was Bush’s tax cuts. I haven’t read Greenspan’s book yet, but I know that he’s not an idiot. My guess is that, like a lot of liberals, David Olive suffers from selective uptake.

[TexasCajun]

Suffering from Old-timers?

...plus a whole lot of Big Media bias.

[Neoliberalnot]

Seems the republican congress gets no credit for the contract with America as put together and led by Newt Gingrich and followed by Clintons that didn’t have a clue.

[vetsvette]

I don’t much like Greenspan, but I do think it noteworthy that most of these recent articles “quoting” him don’t actually quote anything in context.

Even Greenspan understands that the American economy boomed in the 90’s despite Clinton, as the huge private sector investments in information technology for 30 years prior to his election came to fruition and overwhelmed his best attempts to tax it to death.

[Smedley]

Clinton had the advantage of having an opposing party in power in Congress that pledged to keep spending in check.

This is true in that Clinton had a congress that curtailed his spending. Still, there's NO REASON whatsoever why GWB had to be a spendthrift.

[NKStarr]

Greenspan’s analysis is flawed in two major respects:

1. Reagan’s deficits helped to defeat Soviet Russia and end the cold war. The successes in the 90s, including the spread of global capitalism and the reduction in federal (mostly defense outlays) were predicated on winning the cold war.

2. Clinton’s successes in reducing the deficit occurred because of gridlock produced by divided government (the Republican hold on congress during nearly the entirety of his presidency). That said, Clinton deserves credit for being flexible and governing more moderately after the GOP victory in 1994. He signed welfare reform and capital gains reductions.

[Neoliberalnot]

Greenspam seems to have forgotten the takedown of the World TRADE center, the nations economic heart, the war, and the RAT party controlling congress.

[Paul Ross]

Why unlikely? Look who he married.

Look how he faithfully did whatever Xlinton told him to do. Said whatever he was asked to say.

And look how he suddenly gave his blessing to every deviation from proper economic management and accounting (from redefining the CPI, etc) to to help prop up the Xlinton's superficial economic positives.

And if he didn't like the Bush economics policies (which indeed were rather shaky reeds) ...he should have said so then, rather than simply complaining long after wards about the cocky and stubborn guy's not liking debate. No courage of his convictions.

[Paul Ross]

Still, there's NO REASON whatsoever why GWB had to be a spendthrift.

Bump.

Precisely correct. But he was on a mission from the get-go ("Big Govt. Conservatism"="Compassionate Conservatism" [SIC]) for a Methodist Legacy, from what I can see:

From Amnesty, to World Government with his Law of the Sea Treaty (to help fund the UN with our taxes and without our approval) and Open Borders Amnesty irrespective of the attacks of terrorists, and the collossal giveaways here (Drugs) and (NEA, Homeland Insecurity, and Earmark Boondoggles...and now Universal health care)to even more collossal give-aways abroad...with $50 billion for African Aids, still more to the Tsunami relief, and Pakistani Earthquakes, and then there are the hugely imbalanced give-away trade deals with betray our middle class and domestic industry to Globalist accomplices of foreign adversaries.

[RobbyS]

And the dot-com bubble?

[RobbyS]

Bush is no more of a spendthrift than Reagan. The difference is that Reagan spent money on a miliary build up toput pressure on the USSR and Bush has had to wage a war. But each let Congress go its way. But I do fault Bush for domestic iniatives, such as social security reform, instead of concentrating on the war. Lincoln basically let Congress do what it wished on domestic matters while he spent 100% of his attention on the war.

[Sig Sauer P220]

As opposed to Satan, which is the Klinton’s likely defender.

[Paradox]

Clinton had the advantage of having an opposing party in power in Congress that pledged to keep spending in check.

You got it. With the Republicans to keep him in check, Clinton, overall, ended up governing like a moderate Republican. Heck, we was more conservative in many ways than Nixon.

On the other hand, alot of things went hunky-dory for Clinton, because under his watch, nothing really happened. It was the "end of history", until history came crawling back to bite us in the butt..

[Always Right]

Yep, there is something to be said for a do-nothing Congress.

[hermgem]

“Bushonomics has produced 6 consecutive budget deficits.”
To set David Olive straight:
Clinton left a recession right as he left office.
To stick Bush with Clinton’s (left-behind) year of 2001 is a not so subtle pass along.
This economic year of 2001 is Clinton’s.
To compare beginning with end:
Clinton inherited an economy growing at 3.5% from Bush senior.
On top of it, 9/11 was planned and arranged during the nineties under Clinton’s watchful eyes and would have thrown this country into steep decline if not for G.W. Bush’s courageous tax cuts.
Clinton’s economic record is one of an economic bubble.
“Clinton- bubble” is the precise description since his bubble did what all bubbles do: bust and blow up.

[vigilence]

Let’s see...Reagan was outspending the Soviet Union on defense as did Bush 1, the Soviets fell, the peace dividend was used to reduce the debt because of the ‘94 Contract with America (Clinton kicking and screaming all the way... remember after signing welfare reform he said he’d “fix” it next year). And let’s not forget his failed try to socialize medicine in this country after turning it over to HRC. If he had his way the whole amount would have gone for that. And, he chose not to fight the terrorists, treating them as outlaws and lawbreakers instead of extremist enemies. Someone needs to tell Greenspan to stick to what he knows best...economics.

[edsheppa]

Greenspan is being irrationally exuberant about the Clinton years.

[Starfisher]

Given the popular notion that Hillary Klingon will be the next President - won’t she need a Chairman of the Federal Reserve? Whooa - I just had a thought; What about Greenspan as the next FR Chairman!

[Tribune7]

Bill Clinton did two very important things for the success of this nation.

He got a Republican Congress elected in 1994.

And he shut up the feminists.

[kellynla]

“unlikely?”
Bravo Sierra!

Bush the First said “If I had known he would raise interest rates, I woudn’t have reappointed him.”

Kermit the Frog Greenspam was partially responsible for Bush the First not being reelected.

And now Kermit has revealed to the world in his book what a Benedict Arnold he was and is...Too bad the son didn’t learn from the father.

All I want to know is how much money Andrea Mitchell made off the Stock Market while hubby was Chairman of the Fed?
“Honey, are you gonna raise or lower interest rates today?”

[kellynla]

And let us all not forget that Greenspam took a booming economy in 1987 with historically low interest rates and within two years put us in double digit interest rates and a recession while claiming to curb a nonexistent coming “inflation”!!!
With “friends” like him, who needs enemies. Too bad Kermit didn’t stick with the saxophone. LOL
The Clintons must have Kermit & Mitchell on their Christmas card list for life.

[RightWingConspirator]

And Slick also presided over the dot com bust. I know, I saw a $25K mutual fund investment turn into $12K in mid-February 2000.