Re: Clinton/Gore's economic track-record

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Date: Wed Oct 11 2000 - 07:48:15 PDT

> Again, my point is that the Executive branch has very little control over

> the economy, and, except in rare cases (Roosevelt, Nixon), does not affect

> it much.

I've stayed out of this and come into it only reluctantly, because I don't
want to be seen, for professional reasons, as endorsing a political party,
but let's get some facts right.

The executive branch has a lot of influence on the economy.

First, it has a fair amount of influence on currency strength, and Rubin did
a brilliant job protecting the dollar and making it strong--which is very
good for American companies

Second, the executive branch has a lot to do with investor confdence in
markets. Just watch what happens when that confidence disappears, vide Brazil
a couple of years ago. Again, Rubin and Clinton did that
brilliantly--including by reappointing Greenspan. Remember, they had the
option to putting someone in at the Fed who was not as deft or as stubborn as
Greenspan. Thus they worked via monetary policy to stem inflation.

Third, the executive branch has a lot of influence on inflation through
fiscal policy, i.e. thourgh the influence of the budget. Again, Clinton and
Gore and Rubin worked well on that. a. Gore did his bit with "Reinventing
Government," his baby, which (whatever else you may think) has reduced the
overall US government payroll, releasing both money and human capital to the
private sector. b. In addition, few seem to remember Clinton's post-election,
pre-inauguration summit in Little Rock, to which he invited a lot of brainy
people. He came out of it saying ":the deficit is much worse than we thought
and we will have to scale back our spending ideas," much to the dismay of
many in his party. The bond market rallied, Labor Secretary Robert Reich was
furious, interest rates went down--that decision, a very tough one, was
absolutely central to the length and strength of the boom. c. In general
while revenues went up and surpluses soared, Clinton did a good job of
resisting the temptation to blow it all in either spending or tax cuts,
focussing on deficiit elimination and now debt reduction, which has helped
keep the dolalr high and interest rates low; this has been Greenspan's
recommendation--but Clinton could have chosen not to follow it.

4. The executive branch can make wise or foolish decisions about regulation
and innovation. Few would dispute, for example, the conclusion Nixon and
Carter tended to overregulate--Nixon was particularly bad on regulation, and
that's a surprse to people who see history only through a partisan lens.
Clinton would pass Dr. Hypocrates's test on regualtion--he's done no harm.
Nor has his administration mucked around with innovation too much. History
will probably record that prosecuting Mirsosoft will have increased
innovation , as breaking up monoplies always does. Compared to the EU, the US
has done a good job of avoiding unncessary standards setting. (Granted, we've
screwed up with HDTV, but that started pre-Clinton). As far as the Net is
concerned, the government did the right thing: staying out--encouraging the
privatization of the NSF net (remember Steve Wolff?) and letting the private
sector build the infrastructure. You'll remember that when Clinton was
elected there was talk about a Natioanl Information Instractucture, a n
electronic superhighway, and alol that, which would have required billions
and billions in federal expenditure. Wisely, they avoided that temptation.
Decisons like tax-free electronic commerce, etc. have also encouraged

5. Clinton held the line on NAFTA, working with the GOP and overcoming a lot
of labor stupidity in his own party. Ditto on the Uruguay Round. I'm not sure
Gore has the nads to face down the silly anti-trade group in his party;
Clinton did--he made a big show of listening sincerely, then went ahead and
made the right decison--and deserves credit for it.

No, the executive branch can't wave a magic wand and say "grow! prosper!"
What it can do is help create the conditions under which growth and
prosperity can occur; or it can fuck things up but good. Clinton did the
former and avoided the latter. It's churlish to deny him that: Some credit's
due him.


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