Robert Reich has a piece up on Huffington Post arguing that Obama’s use of Clinton this week to convince Democrats to support his tax scam should be ignored.
During the presser Obama pointed out that Clinton presided over the best economic boom our at least my lifetime. Reich, however, points out,
Clinton’s economy was vastly different from Obama’s. The recession Clinton inherited was relatively small, and caused by the Fed raising interest rates too high to ward off inflation. So it could be reversed by the Fed lowering interest rates — as the Fed did in 1994. By 1995, the so-called “jobless recovery” had morphed into a full-blown jobs recovery. By 1996, at pollster Dick Morris’s urging, Clinton could proclaim to the American people “you’ve never had it so good, and you ain’t seen nothing yet.”
The Great Recession has been far larger, caused not by the Fed raising interest rates but by the bursting of a giant housing bubble. In 2008, the biggest asset of most middle-class people, upon which they borrowed and that they assumed would be their nest eggs for retirement, collapsed. Housing prices continue to fall in most parts of the country. The Fed has lowered interest rates all it can, and unemployment remains sky high.
Bill Clinton presided over an economic boom engineered by Fed chair Alan Greenspan, who felt confident he could drop interest rates far lower than anyone expected without risking inflation. The result was 4 percent unemployment in many parts of America, as well as the best jobs recovery in history.
The price Greenspan exacted from Clinton — and a resurgent Republican congress demanded — was a balanced budget. As a result, Clinton had to give up much of his “investment agenda” in education, infrastructure, and other long-neglected means of building the productivity of average working Americans. The economy enjoyed a huge cyclical recovery.
Those days are over. The Democratic Party can no longer ignore critical investments in the productivity of average workers. Nor can it ignore the increasing concentration of income and wealth at the very top, and the inability of America’s middle and working class to get the economy moving again.
The GOP hasn’t changed their story or their strategy since the 1990s. It’s the fault of big government. That was false then, and it’s false now. The structural problems are now much worse, and the cyclical recovery from the Great Recession pathetically anemic.
If the Democratic Party has stood for anything over the years it is to maintain and restore upward mobility for the majority of working Americans, ensure that the playing field isn’t tilted in the direction of the privileged, and limit the power of the richest among us to entrench themselves and their heirs into a semi-permanent plutocracy.
Continuing the Bush tax cuts of 2001 and 2003, including a sharp cut in the estate tax, violates these core principles. Doing so in the midst of an economic emergency that demands bold measures to rescue America’s vast middle and working class adds further insult. For President Obama and former President Clinton to tell America there’s “no other choice” or that “this is the best we can do” — when Democrats remain putatively in control of the House, Senate, and the presidency — is misleading.
