One of the more interesting and regrettable ideological developments over the past eight or so years has been the Democratic Party’s repudiation of Bill Clinton’s economic policies (a repudiation, fortunately for Clinton, that does not require rejecting the Big Dog himself, nor renouncing credit for his economic successes).
What form does the Clintonomics-purging take in our current political context? In complaints that President Barack Obama’s economic policies are being guided by Clinton deficit-scold holdovers who do not sufficiently understand that deficits don’t matter right now. Here’s Jim Tankersley, writing in The Washington Post:
[Clinton Treasury Secretary Robert] Rubin espoused an economic philosophy that would dominate Democratic policy circles through the Great Recession: one that favored opening global markets, deregulating Wall Street and limiting federal budget deficits. [...]
For all its success in the 1990s, much of Rubin’s philosophy took a beating in the following decade. The financial crisis spurred a move back to stricter rules on Wall Street institutions and financial products such as derivatives, which Rubin had advised Clinton against regulating. The disappearance of millions of manufacturing jobs in the face of technological change and foreign competition cast the downsides of free trade in a harsher light. [...]
But the Rubinesque focus on the deficit, if anything, is stronger in the Obama administration than it was in Clinton’s. Even before his first inauguration, while the economy was in a job-shedding, recessionary free fall, Obama’s advisers were discussing an eventual pivot to deficit reduction. Now, by tapping Lew as Timothy Geithner’s successor at Treasury, the president is signaling clearly that budget negotiations with congressional Republicans will dominate economic policymaking in his second term.
Tankersley’s canned history of the last two decades omits a crucial word: spending. (Except for this sentence: “Protecting federal spending on education and innovation is an attempt to keep the middle class from slipping even further, but it’s nowhere near the fundamental overhaul in skills training that many economists believe is necessary….”) Federal spending, in fact, has doubled since Bill Clinton left office. At least some of the economic thinkers who Tankersley disagrees with believe that jacking up government spending produces the very economic sluggishness he aims to combat, and that cutting spending would spur growth.
Read More at reason.org . By Matt Welch.
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