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Posted on 9/24/2001, 6:14:43 PM by Stand Watch Listen

On Christmas Eve, 2000, the New York Times extolled the great, booming economy they believe emanated from the Clinton administration. In an article entitled "The Wisdom to Let the Good Times Roll" the Times observed that

"Aside from his impeachment, nothing defined Bill Clinton's years in the White House more than prosperity.

Not until the final days of his presidency was there more than a bump in what early this year became the longest economic expansion on record. Jobs were plentiful. Wages rose and poverty fell. Advances in technology reinvigorated some industries and created others.

Even after tumbling this year, the stock market produced substantial gains for the growing ranks of shareholders. The nation's resurgent financial strength complemented its military muscle in projecting American power around the world.

In political terms, Mr. Clinton drew vital succor from the economy. His re-election in 1996, his survival in office after his relationship with a White House intern and whatever authority he enjoyed in his policy clashes with Republicans derived at least in part from the widespread sense that times, for most people, have never been better.

Actually, it's not exactly accurate that there were no "bumps" during the Clinton years. In fact, there were several bumps, especially after he tried to break up Microsoft, the prime engine of the 1990s economic boom. In the summer of 1998, for example, stocks dropped from 9338 in mid-July to 7640.30 by the end of August. That was a drop of 1697.7 points or 18%. This was not even considered a "bump" by the New York Times, an ardent supporter of Bill Clinton in its December 2000 analysis of his administration.

In the summer of 2001, by comparison, over about the same period of time, from the middle of August to September 21, stocks dropped from 10,240.78 to 8,376.21. That was a drop of 1876.47 points or 18%. Most of that drop, 1229.3 or 12% of the 18% drop has taken place since September 11th. And what is the New York Times saying in the present situation about an 18% drop in a six-week period? Is it not even a "bump" in the Bush Administration? Not on your life. We are being told that THIS 18% slide is:

'evidence that the terrorist attacks in New York and Washington have deeply wounded an already weakened economy, Mr. Bush sought to reassure the country without committing himself to specific actions beyond bailing out the airline industry.

His vagueness about how or even whether he would seek to re-energize the faltering economy reflected debates in the White House, Congress and the Federal Reserve about acting quickly or waiting for a clearer picture to emerge from the post- attack chaos."

Do we have a "deeply wounded" economy? Well, certainly the first time ever grounding of all Airliners and the destruction of four of them by terrorists has put a dent in the travel industry. Does that mean that American businesses will keep their salesmen home or send them out by horseback? I don't think so.

Contrary to a war "deeply wounding" our economy, it might be well for the younger generation to learn that it was World War II that brought America out of the depression of the 1930s. It was not Franklin Delano Roosevelt's innumerable alphabet programs that restored the nation's economy.

This time, the economy doesn't really need to be restored. We are going into the war on Terrorism with unemployment of 4.9%. And that was up from 4.5% a few months ago. In 1940 the unemployment rate for men was 13% and for women 15.5%. By 1944 the unemployment for men was 1% and for women it was 1.7%

Obviously this war is not going to be a replay of World War II. However, any war reduces unemployment and put more money in the pockets of workers because of the money spent by the government. That happened in the Korean War and the Vietnam War.

The only thing that is creating the current precipitous drop in the stock market is fear. And, the same major news outlets that completely ignored similar drops in the stock market during the Clinton administration are fanning that fear. Considering the real dangers America is facing, this sort of reporting is nothing short of disgraceful.

In yesterday's Washington Post, Clinton Labor Secretary Robert Reich in an article entitled "How Did Spending Become Our Patriotic Duty?" ridiculed the urging of President bush last Thursday for Americans to continue "participation and confidence in the American economy" dubbing it "market patriotism." He went on to say:

"Right now America still has a lot of productive capacity that's not being used, and that creates a problem of its own. The immediate economic threat isn't that we can't produce enough to meet demands. It's that there may not be nearly enough demand for what we can produce."

From what I'm hearing from military informants, some of that productive capacity needs to quickly be retooled to provide ammunition, guns, parts and perhaps even a few new small bombers. In the eight years of the Clinton administration, the military procurement budget was slashed from $82 billion in 1991 to $47.7 billion in 1997. And, evidently the procurement budgets had more to do with things like sensitivity training than bullets and guns to fight with.

One military contact told me that the newly called up reservists simply will not have enough ammunition or hand weapons to fight. Perhaps it is time to stop trying to sue the gun and ammunition manufacturers and get them to start making equipment to be used by the army.

The reaction of the American people to the terrorist attacks on New York and Washington so far has been admirable. The Boston Globe has a feature called "Acts of Patriotism" where readers are encouraged to share their reports of "the most original or inspiring display of patriotism you've witnessed over the past week." The Globe notes that "Last Tuesday's terrorist attacks have prompted an outpouring of nationalist sentiment on a scale not seen since World War II." There were 29 pages of responses when I wrote this.

Those who believe that terrorism can defeat the American people must be really disappointed at the reaction of the average American. Unfortunately, the reaction of some members of the media, who seem determined to continue a campaign to drum up a recession, is not only far-fetched but not very patriotic. The stock market was over-heated. Yet, it still, even with the shock of terrorists killing over 6000 Americans and destroying a jewel of Capitalism, the World Trade Center, has not reached the lows of 1999 which the New York Times did not think was even a "bump" in the Clinton "booming" economy.

To read the Globe's "Acts of Patriotism" feature: http://www.boston.com/news/packages/underattack/message_boards/patriotism/messages1.shtml

To comment mmostert@originalsources.com

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