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Clinton’s Stimulus Failed in the Senate; Obama’s in Practice

August 19, 2011 by B. Daniel Blatt

You know how Democrats was nostalgic about the Clinton years when, they claim, the Arkansas Democrat’s economic policies lifted us out of a lingering recession and the charismatic Southerner single-handedly balanced the budget.  There are a number of problems with this narrative, the first being that the recession ended before Clinton took office.  He was just lucky that it appeared to linger through the 1992 campaign.

Now, to be sure, I do give the Democrat credit for learning from his mistakes and his party’s setbacks at the ballot box.  After the 1994 elections, he pivoted to the center and worked with congressional Republicans to enact real reforms and balance the budget.  Indeed, the unemployment rate in November 1992 was 7.4%, down from its peak of 7.8% in June of that year.

There’s another thing to bear in mind when talking about Bill Clinton’s economic policies.  Senate Republicans blocked his “stimulus”. From the April 22, 1993 New York Times:

Senate Republicans killed President Clinton’s economic stimulus program today, maintaining their filibuster until Democrats surrendered and agreed to limit the bill to $4 billion for extended unemployment benefits.

Mr. Clinton’s first serious legislative defeat was marked by complaints from Democrats in the Senate and the White House. But Bob Dole, the Senate minority leader, was satisfied that the Republicans had shown that they deserved to be taken seriously. He avoided gloating, and promised occasional cooperation with the President.

A brief, harsh outburst from Senator Robert C. Byrd, the West Virginia Democrat who heads the Senate Appropriations Committee, served as the eulogy for Mr. Clinton’s original $19.5 billion measure, which was proposed in February.

Emphasis added.  $19.5 billion dollars ($31.4 billion in today’s dollars), chump change to the guy who has Clinton’s old job.  Does look like Bob Dole actually did some good while in the Senate.  Had Republicans succeeded in filibustering the Illinois Democrat’s stimulus plan, we might have seen a less anemic recovery.

Do hope the president recalls that Clinton’s success may well have derived, in part, from his failure to pass his “stimulus.”

Filed Under: American History, Economy, Real Reform

Comments

  1. TGC says

    August 19, 2011 at 4:36 am - August 19, 2011

    No, they’re hoping they can raise taxes like/in excess of what Clinton did. The problem, though, is that we don’t have the tech bubble which resulted in revenues IN SPITE of Clinton’s tax increases.

    And I hope somebody shuts Warren Buffett’s cake hole. He’ll benefit financially from tax increases (i.e. the libs will make this rich guy richer). Seems to me that it’s actually the liberals who want to protect the rich and not the Republicans, as they suggest in their projection whining.

  2. ILoveCapitalism says

    August 19, 2011 at 8:18 am - August 19, 2011

    Dan, thanks for a reminder of that far-away time when the dollar was worth a lot more than it is today, Democrats wouldn’t dare propose a Porkulus higher than $19.5 billion, and Republicans would be sane and smart enough to block even that.

    The 90s economy was troubled, with the Fed (at Clinton’s urging) inflating a bubble-economy to compensate for the drag from such Big Government policies as Clinton did manage to enact. But those troubles were nothing, compared to what we have now. After all, the country was still coming off the Reagan-Volcker policies of the 80s which had made it richer.

  3. ILoveCapitalism says

    August 19, 2011 at 9:15 am - August 19, 2011

    P.S. Anyone who can think, as Krugman and the Neo-Keynesians do, that America’s economy is bad for a lack of “demand” – which means, the American consumer not being greedy enough to consume, and/or there not being enough cheap cash and handout dollars sloshing around after Porkulus, the Wall Street and Government Union bailouts, 2-year unemployment benefits, ZIRP and Quantitative Easing – please raise your hand. Obama could use a supporter.

    Meanwhile, the sane people see that our economic problems are because (1) we have borrowed way too much, and (2) Obama makes it worse, growing government like a cancer that sucks the life from productive people.

  4. V the K says

    August 19, 2011 at 10:06 am - August 19, 2011

    The WSJ Online has a good article refuting Obama’s Unicorn-based Neo-Keynesian economics. Here is a sample.

    Mr. Carney explained that unemployment insurance “is one of the most direct ways to infuse money into the economy because people who are unemployed and obviously aren’t earning a paycheck are going to spend the money that they get . . . and that creates growth and income for businesses that then lead them to making decisions about jobs—more hiring.”

    That’s a perfect Keynesian answer, and also perfectly nonsensical. What the White House is telling us is that the more unemployed people we can pay for not working, the more people will work. Only someone with a Ph.D. in economics from an elite university would believe this.

    I have two teenage sons. One worked all summer and the other sat on his duff. To stimulate the economy, the White House wants to take more money from the son who works and give it to the one who doesn’t work. I can say with 100% certainty as a parent that in the Moore household this will lead to less work.

  5. V the K says

    August 19, 2011 at 10:09 am - August 19, 2011

    More specific refutations of Hi Cas and Levi’s epic stupidity:

    Economic bimboism is rampant in Washington. The Center for American Progress held a forum earlier this summer arguing that raising the minimum wage would create more jobs. For this to be true, you have to believe that the more it costs a business to hire a worker, the more workers companies will want to hire.

    A few months ago Mr. Obama blamed high unemployment on businesses becoming “more efficient with a lot fewer workers,” and he mentioned ATMs and airport kiosks. The Luddites are back raging against the machine. If Mr. Obama really wants to get to full employment, why not ban farm equipment?

    Or consider the biggest whopper: Mr. Obama’s thoroughly discredited $830 billion stimulus bill. We were promised $1.50 or even up to $3 of economic benefit—the mythical “multiplier”—from every dollar the government spent. There was never any acknowledgment that for the government to spend a dollar, it has to take it from the private economy that is then supposed to create jobs. The multiplier theory only works if you believe there’s a fairy passing out free dollars.

  6. ILoveCapitalism says

    August 19, 2011 at 10:34 am - August 19, 2011

    Unfortunately there is an Uncle Ben passing out free dollars, and that’s where it gets confusing.

    The free dollars that he passes out dilute everyone else’s dollars (think of him as running a counterfeiting machine). They destroys the earnings and capital of the productive and successful people, as surely as if the government raised taxes.

    But it takes a little bit longer. It’s harder to see. For the first few minutes, it even looks like good times as people literally have more money. That enables the neo-Keynesians to pretend they don’t see it. They’re not very intelligent that way. I say their lack of intelligence there is a choice; they do not wish to see it. They *want* to believe that Uncle Ben’s Counterfeiting Machine is the perpetual-motion machine they’ve been seeking, the philosopher’s stone, the true “free lunch”.

  7. ILoveCapitalism says

    August 19, 2011 at 10:44 am - August 19, 2011

    (continued) Hence, their stress on the myth of “the multiplier”. It’s been shown to be extremely problematic, something that probably declines as country gets more indebted, and something that may have been under 1 for Obama’s “stimulus” (i.e., the dollars he spent may have actually cost the economy output and jobs). But neo-Keynesians don’t care. Can’t bother them with mundane crap, like real-world facts and results of their bad policies.

  8. V the K says

    August 19, 2011 at 11:49 am - August 19, 2011

    ILC, the “Keynesian Multiplier” is the perfect liberal economic trick. It can not be measured or quantified with any degree of accuracy; so it can be whatever number a liberal wants to justify spending. It’s like a unicorn, so I suggest that Obama’s economic beliefs be labeled “Unicorn Economics.”

  9. Sean A says

    August 19, 2011 at 2:10 pm - August 19, 2011

    #8: V the K, why can’t liberals approach economics with the same integrity that they’ve shown when the issue is the environment? At least in that arena they stick with SCIENCE. You know…really hot summers are unmistakeable evidence that we face imminent extinction from global climate change, and conversely, bitterly cold winters are unmistakeable evidence that we face imminent extinction from global climate change. Like I said, SCIENCE. Why can’t we all agree on a similarly reasonable (and FINAL) consensus when it comes to economics? So frustrating…

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