Some guys have all the luck

By Robert Meyer

A common gripe posted in editorial columns, is that we have had a bad economy under president Bush's tenure, and again long for the prosperous days of Bill Clinton. Employment was high, people had money, and we were paying off the national debt with an economy producing budget surpluses. Well, that's how the serendipity goes, anyway.

When legendary quarterback Bart Starr coached the Green Bay Packers, he made an interesting observation in defense of his own quarterback, who had a rough afternoon. Starr said that sometimes a quarterback gets too much credit for his team's success, and too much blame when the team executes poorly. Such is the nature of the economic dichotomy in the respective administrations of Bill Clinton and George W. Bush.

If it was Clinton's policies that made the difference, then we should be duplicating whatever Clinton did. But that's the problem, whenever I find a Democrat who raves about the Clinton economic miracle, I am never able to get them to divulge what policies created this revenue generating juggernaut. I suspect they don't really know.

The first two years of the Clinton administration hardly produced a surging economy and thriving stock market. Ironically, Clinton got a shot in the arm with the Republican rout of 1994, when conservatives took over the House of Representatives. Had Clinton been able to get his "Hillarycare," the socialized medical care plan enacted, all the budget surpluses of later years would likely never have materialized. The red ink from socialized medicine never would have seen the light of day, had such a program been adopted.

The conservative revolution lead by Newt Gingrich and his Contract With America, forced Clinton to govern toward the middle in terms of his fiscal policy. Clinton simply commandeered conservative ideas and presented them as his own. Ronald Reagan eluded to this in one of his last public speeches in Washington D.C. in 1994. Ultimately seven of the ten planks of the contract were legislated and pressed into law. Clinton was forced to sign the welfare reform bill, which he had already vetoed twice before, in order to insure reelection in 1996. His political bane turned into his fiscal boon.

Yet many forget the economic liabilities that should be credited to Clinton. There was never the middle class tax cut which he promised. Had Clinton signed the tax bill that was passed by both houses of congress late in his administration, we might have made it to the threshold of 9-11 with a stronger economy.

The Clinton administration also raised the limit on taxable Social Security from 50% to 85%. I find few who know about that. How ironic that Democrats seem to own Social Security as an issue, yet they insist on it functioning as a pyramid scheme, while progressively robbing the working class to fund it, and two-time recipients to a large degree.

But what about the balanced budgets, or even surpluses, you say? Yes, we did have balanced federal budgets, but that discipline never spilled over into the consumer sector. Less disposable income due to higher taxation, means more borrowing to maintain that American dream. An article from U.S. News and World Report entitled Drowning in Debt, from the March 19, 2001 issue, chronicled these consumer woes. By January of 2001, before Bush's inauguration, consumer debt topped the $1.5 billion mark, its highest level ever. This is the ultimate robbing of Peter to pay off Paul. Can you put a lien on a stealth fighter or foreclose on the White house? No. However, they can foreclose on your house. Why do we put so much emphasis on collective government debt, but so little on individual consumer debt? While the federal debt numbers may have been improving, aggregate debt was soaring.

Three primary factors contributed to the most recent recession. The tech bubble burst in March of 2000, precipitated by the position of the Clinton Justice Dept. took against Microsoft Corp. Next, the Federal Reserve began tightening the money supply, via 11 rate hikes, culminating in the late spring of 2000. Finally, the nature of the cyclical economy caused fiscal policies to lose their resistance against inevitable gravity. A slow-down was thus baked into the cake. Clinton's veto of a middle-class tax cut was the frosting.

By the time Bush and Cheney were settling into leadership, in December of 2000, both warned of dark storm clouds on the economic horizon. Alan Greenspan agreed, and began lowering interest rates after the first of the year. At that point, Democrats chided Bush for "talking the economy down." Of course, two months later, lay-offs and falling revenues were attributed to Bush policies, even though he had to play with Clinton's last budget until the following October.

Bush's tax cut strategy was the right card to play. Since the rich pay most of the income tax(check IRS figures), the only way to produce a macroeconomic effect capable of lifting struggling economy, was to allow the wealthy to keep more of their own money.

Right now we are experiencing the hottest economy in two decades. The Democrats are still able to play the emotion card, because employment is always a lagging indicator in an upturn. We hear that there is prosperity on Wall street, but not on Main street.

I wonder if Bush ever stares at the new portrait of Clinton in the White house and thinks, "some guys have all the luck."

© Robert Meyer