REMEMBER WHEN THEY TOLD US IT’S THE ECONOMY
DOW SOARS PAST 13,000: REMEMBER WHEN
THEY TOLD US IT’S THE ECONOMY, STUPID –
WELL, IT IS, ONLY THEY HAD NOTHING TO
DO WITH IT
by
Ken Eliasberg
Several weeks ago the Dow hit a new high – soaring above 13,000, an event that seemed to attract almost no attention from the mainstream media (MSM). This is understandable since it occurred on George Bush’s watch, and, quite frankly, is almost entirely due to Bush’s efforts – specifically, his tax cuts. This greatly eclipses its high of the ‘90s which occurred on Clinton’s watch, and which Clinton, while of course taking credit for it, had absolutely nothing to do with. On the contrary, he did as much as he could to undermine an economy on steroids as the result of what many have named the tech bubble which (for Clinton’s purposes) conveniently took off in the 4th quarter of 1991 (the end of Bush 39’s reign) and crashed in the 1st quarter of 2001 (the beginning of Bush 41’s reign), resulting in the Dems trying to blame the ensuing recession on “W” – despite the fact that almost every financial pundit was predicting the recession throughout the year 2000.
Let’s pause for a moment to return to the Bill Clinton campaign leading up to his election in 1992. Do you recall one of his cries for change - issued by one of his uglier attack dogs, James Carville - “It’s the Economy, Stupid.” Well, like so much of Clinton’s rhetoric, his assessment of the economy’s condition was a flat out lie. The economy which, it is true, had lagged in the early nineties, had already turned the corner when Carville brought forth this bit of momentous news. Indeed, in the 4th quarter of 1992 – the quarter before Clinton took office - the economy grew by almost 4%, a very respectable growth factor. That didn’t stop Carville, who gives new meaning to the term obnoxious.
And then, no thanks to Bill Clinton and his legions (some of whom, particularly his fiscal people, I respect), the economy took off. What happened? The “tech” bubble (which, at the close of Clinton’s tenure, burst). Clinton had one thing going for him – incredible good luck. The bubble ran throughout his period in office, not as the result of anything – and I repeat anything – he did, but despite his best efforts to destroy it. You may recall that, at the end of the’80s, there were many who were somewhat pessimistic about the U.S.’s role in the coming world economy. Many were predicting that Japan, which had experienced substantial economic growth throughout much of the ‘80s, was going to be the engine that pulled the world’s economic train. But then Japan fell on hard times – the result of a refusal to write off bad debt, thus continuing to carry lots of bad paper. Unlike the U.S. which, during the S&L crisis, bellied up to the bar and wrote off bad debt, Japan, on the other hand, probably as the result of what occasionally influences Asian behavior – face saving – continued to carry bad paper, and their economy went into the doldrums. The U.S. then became the main cog in the technology boom of the ‘90s, some of which was based on smoke and mirrors (resulting in the century-end disasters, e.g. Enron, Worldcom, Global Crossing, etc.). In short, the tech bubble burst (a bubble that neither Clinton nor Bush had anything to do with).
On the contrary, not only did Clinton have nothing to do with the boom of the ‘90s, he did everything he could to run it into the ground. He went after Microsoft (the hub of the tech wheel), cigarette and gun manufacturers (succeeding in making it more difficult to buy a gun than to either get married or buy a house in many jurisdictions - a boon to bad guys, to be sure), and raised taxes (for which he later apologized – you will recall his apology, I’m sure, because Clinton was at his best (and worst) when tearing up over an insincere apology). While taking credit for a balanced budget, he never noted two significant aspects of the balancing act – it was achieved only after a Republican Congress was elected in 1994, and it was achieved to some significant extent only by virtue of substantially diminishing our military capability. In short, Clinton did nothing – I repeat, nothing to create the boom of the ‘90s.
Unlike the current economy, which is very real, the tech bubble had an illusory, or, at the very least, an ephemeral quality. In any event, typical of Clinton and his legions, when it burst, they tried to lay it off on Bush 41. Don’t get me wrong, I am not attaching permanent significance to its current high – markets are cyclical, and we’ll have down periods again. But this economy is strong, substantial, and, unlike that of ‘80s, real. My real concern is the multi-trillion dollar debt that we are running up to cover our entitlement programs, and which the left wants to increase by introducing universal health care.
Something else that’s annoying. Not only does the mainstream media not jump with joy over the buoyant state of the economy, the way they carry on you would think that we were in the middle of a recession, if not a depression. And they have many citizens believing that the economy is not good, although when you make the inquiry, the average respondent is quick to admit that his personal circumstances are quite good. And, yes, we have a subprime problem in the lending area, but most of the pundits regard this as a minor speed bump that is not apt to have legs. But the common denominator here – common that is to the mainstream media and the Democrat Party – is that good news is either no news or, worse yet, bad news if it happens on George Bush’s watch.
For an interesting discussion of the comparison between the Bush and Clinton economies, I strongly recommend a column by Alan Reynolds in Townhall.com, entitled Comparing Bush and Clinton Eoncomies, April 12, 2007. While the column is excellent and, in my opinion, strongly makes the case for Bush, it does so by comparing various indices, e.g. job creation, unemployment, etc. – but it does not tell you what either president did to boost the situation. And, to me it is quite clear, Bush’s tax cuts are directly responsible for our current prosperity. The Clinton economy boomed despite Clinton, not because of him. Here, as in almost all other areas, Clinton was all hat and no cattle.