Clinton Says Don't Blame Him for the Economic Crisis

[SavageOrangeJug]

Given the sweep and severity of today's global economic crisis, it would seem there's plenty of blame to go around. But Bill Clinton doesn't think any of it should fall on his shoulders.

On Monday morning's Today Show, Ann Curry's interview with the former president - recorded over the weekend outside a Clinton Global Initiative event in Texas - addressed Clinton's inclusion on TIME's list of the "25 People to Blame" for the global economic collapse. "Oh no," he responded, "My question to them is: Do any of them seriously believe if I had been president, and my economic team had been in place the last eight years, that this would be happening today? I think they know the answer to that: No." (See TIME's list of the 25 people to blame for the collapse)

The magazine's story, which apportioned blame widely between such figures as Countrywide co-founder Angelo Mozilo, former Federal Reserve Chairman Alan Greenspan, Lehman Brothers CEO Dick Fuld and President George W. Bush, zeroed in on two specific economic policy decisions made during the Clinton administration. Clinton ushered out the Glass-Steagall Act, which for decades had separated commercial and investment banking, and signed the Commodity Futures Modernization Act - which exempted all derivatives, including the now-notorious credit-default swaps, from federal regulation. His administration also loosened housing rules, which added pressure on banks to lend in low-income neighborhoods.

"None of it was an endorsement of permissive lending and risk-taking," the magazine concluded. "But if you believe deregulation is to blame for our troubles, then Clinton earned a share too."

http://news.yahoo.com/s/time/20090216/us_time/08599187977400

 

[Rasputin_Vol]

You know what, that's all well and good, but I gotta side with the First Black President on this one. Even if those actions did contribute to the housing collapse, the remedy offered by Bush with TARP and the other liberal moves he made over the last 8 years need to be fairly assigned their share of blame, also. I'm just sick of seeing GOP'ers blaming Clinton for everything... that is getting old and that was a decade ago. The fact is that when the GOP had control, they didn't do diddly squat to help the economy, either. And they need to be called on that.
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[volinbham]

I'm certainly not giving Bush or the GOP a pass but all these parties (including Clinton) have a role in where we are. I don't doubt they may have thought they were either doing what was right or something that wouldn't be so bad but they all meddled with the economy to build their success. For BC to wipe his hands and say not me is as galling as if Bush did it.

If BO inherited Bush's mess then Bush inherited Clinton's mess. Let's hope BO handles it better but so far I'm not impressed nor optimistic.

 

[rjd970]

Would anybody here consider Clinton fiscally conservative? If not, why?

This is a serious question, because deficits declined and he had actual surpluses. I am wondering if there is some other criteria that should be considered other than budget surplus/deficits when determining how a president did fiscally.

 

[BigPapaVol]

Would anybody here consider Clinton fiscally conservative? If not, why?

This is a serious question, because deficits declined and he had actual surpluses. I am wondering if there is some other criteria that should be considered other than budget surplus/deficits when determining how a president did fiscally.

because he was absolutely bent on a very liberal spending agenda until he lost Congress as a result of his megaliberal push. He fully believes federalized healthcare to be a must. Gingrich and Co disabused him of that idea as a realistically passable bill. They also shoved welfare reform down his throat. To his credit, he signed it, but public sentiment was against his POV and he was going to get his veto slammed in his face had he tried it.

 

[droski]

Would anybody here consider Clinton fiscally conservative? If not, why?

This is a serious question, because deficits declined and he had actual surpluses. I am wondering if there is some other criteria that should be considered other than budget surplus/deficits when determining how a president did fiscally.

clinton benefited from the greatest artificial surplus of jobs in american history (i.e. the dotcom boom). It's amazing what an artificially and historically low unemployment rate and a booming stock market and the capital gains taxes paid can do to the tax coffers and the budget deficit.

 

[rjd970]

because he was absolutely bent on a very liberal spending agenda until he lost Congress as a result of his megaliberal push. He fully believes federalized healthcare to be a must. Gingrich and Co disabused him of that idea as a realistically passable bill. They also shoved welfare reform down his throat. To his credit, he signed it, but public sentiment was against his POV and he was going to get his veto slammed in his face had he tried it.

So results don't matter as much as intentions? You must have a glowing fiscal review of Bush.

 

[BigPapaVol]

So results don't matter as much as intentions? You must have a glowing fiscal review of Bush.

You asked about his politics, not the results that he backed into.

He was a tax and spend liberal to the hilt when he took the reigns and it lost him the Dem majority in congress for the first time in about 2,437 years. Go back and look at his first two years. Had congress remained democratic, he would have been a classic liberal democrat. His legacy was dramatically improved by running into a Republican congress. It allowed him to step out of the way as the enormous amount of investment dollars encouraged by Reagan's huge tax cuts came to fruition.

I think Bush was a fiscal disaster and it lost him the faith of the conservative movement.

 

[rjd970]

clinton benefited from the greatest artificial surplus of jobs in american history (i.e. the dotcom boom). It's amazing what an artificially and historically low unemployment rate and a booming stock market and the capital gains taxes paid can to the tax coffers and the budget deficit.

I don't understand, are you saying capital gains taxes are fiscally sound, given they help the budget deficit?

 

[BigPapaVol]

I don't understand, are you saying capital gains taxes are fiscally sound, given they help the budget deficit?

he's saying that the enormous amount of receipts from cap gains made the difference in his budget not overwhelming income. Cap gains are fine by me. Cap gains that discourage investment are absolutely stupid.

 

[rjd970]

You asked about his politics, not the results that he backed into.

He was a tax and spend liberal to the hilt when he took the reigns and it lost him the Dem majority in congress for the first time in about 2,437 years. Go back and look at his first two years. Had congress remained democratic, he would have been a classic liberal democrat. His legacy was dramatically improved by running into a Republican congress. It allowed him to step out of the way as the enormous amount of investment dollars encouraged by Reagan's huge tax cuts came to fruition.

I think Bush was a fiscal disaster and it lost him the faith of the conservative movement.

Actually, I didn't ask about his politics. All I said was given the track record of deficits and surpluses, would you still not consider him a fiscal conservative. I was looking for hard historical budgetary data that should be considered, other than deficits and surpluses.

If intentions and politics should be considered as you suggest, then you would have to admit Bush wasn't all that bad.

And it seems to me that tax and spend looked to turn out better than cut and spend did.

 

[BigPapaVol]

Actually, I didn't ask about his politics. All I said was given the track record of deficits and surpluses, would you still not consider him a fiscal conservative. I was looking for hard historical budgetary data that should be considered, other than deficits and surpluses.

If intentions and politics should be considered as you suggest, then you would have to admit Bush wasn't all that bad.

And it seems to me that tax and spend looked to turn out better than cut and spend did.

he wasn't remotely a fiscal conservative. He simply couldn't implement his policies, so his time was marked by gridlock at best or mildly conservative leaning at worst. That doesn't change that he wanted something different than what transpired. He didn't do what Reagan did in using enormous popular support to overcome an idiotic and dated congressional viewpoint. He took what Congress gave him because he was shockingly crushed in the 94 elections.

 

[BigPapaVol]

And it seems to me that tax and spend looked to turn out better than cut and spend did.

how was tax and spend an advantage? Clinton only minutely raised taxes and Bush lowered them for purposes of overcoming 9/11 and the enormous dot com crash. He kept them there to help offset the impending recession that we are in today.

Tax and spend or borrow and spend mentality would not have changed this current recession one bit. Not one tiny little fraction of a bit. The toxic assets and credit default swaps in the real estate market were a time bomb simply waiting for overblown real estate valuations to come back in line with typical valuation drivers. When that happened, large scale asset devaluation simply creamed the single largest market in the world. That's not something that tax policy would have impacted at all, ever.

 

[rjd970]

how was tax and spend an advantage? Clinton only minutely raised taxes and Bush lowered them for purposes of overcoming 9/11 and the enormous dot com crash. He kept them there to help offset the impending recession that we are in today.

Tax and spend or borrow and spend mentality would not have changed this current recession one bit. Not one tiny little fraction of a bit. The toxic assets and credit default swaps in the real estate market were a time bomb simply waiting for overblown real estate valuations to come back in line with typical valuation drivers. When that happened, large scale asset devaluation simply creamed the single largest market in the world. That's not something that tax policy would have impacted at all, ever.

So are you saying, given the unfortunate situation of inflated assets, Bush's tax cuts didn't get a chance to work, and would have turned out to be enough to pay for his spending?

I am simply saying the tax cuts Bush implemented did not begin to pay for how he spent. Clinton tax policy, did pay for how he spent, and then some.

And everything I hear from the right how tax cuts pay for themselves, and democrats aren't fiscally responsible, simply doesn't make sense when confronted with the data. It certainly doesn't make any sense with your claim that Clinton simply benefited from Reagan. If you want to say that Reagan gets credit for the huge revenue Clinton enjoyed, then whatever. But Clinton's spending was the lowest on record since LBJ:


According to Budget Data:

And not only that, debt to gdp % actually went down under Clinton's presidency.

So other than intentions, how was he not fiscally conservative?

 

[volinbham]

Actually, I didn't ask about his politics. All I said was given the track record of deficits and surpluses, would you still not consider him a fiscal conservative. I was looking for hard historical budgetary data that should be considered, other than deficits and surpluses.

If intentions and politics should be considered as you suggest, then you would have to admit Bush wasn't all that bad.

And it seems to me that tax and spend looked to turn out better than cut and spend did.

I think you've received the answer but here's my take on it.

No way I'd call him a fiscal conservative. Government spending certainly expanded under his administration and as has been pointed out, he would have spent more if he could.

He also benefitted from a lack of major spending events during his term (e.g. major and repeating natural disasters, wars (eventhough some of that is policy choice), etc.)

The surpluses were due in large part to the huge economic expansion that as Droski suggests was highly fueled by the dotcom boom (both the rapid increase in stock values yielding higher tax revenues and the huge increases in productivity that were realized via the Internet and other IT improvements).

To answer your other question, Bush was certainly no fiscal conservative either.

 

[volinbham]

I am simply saying the tax cuts Bush implemented did not begin to pay for how he spent. Clinton tax policy, did pay for how he spent, and then some.

The flaw in this analysis is assigning credit to tax policy for business cycle swings.

More than anything, Clinton was in the right place at the right time to benefit from a rapidly growing (too rapidly it turns out) economy.

 

[rjd970]

I think you've received the answer but here's my take on it.

No way I'd call him a fiscal conservative. Government spending certainly expanded under his administration and as has been pointed out, he would have spent more if he could.

He also benefitted from a lack of major spending events during his term (e.g. major and repeating natural disasters, wars (eventhough some of that is policy choice), etc.)

The surpluses were due in large part to the huge economic expansion that as Droski suggests was highly fueled by the dotcom boom (both the rapid increase in stock values yielding higher tax revenues and the huge increases in productivity that were realized via the Internet and other IT improvements).

To answer your other question, Bush was certainly no fiscal conservative either.

Some questions and points:

What data do you have to suggest that government spending increased under Clinton?

Other than Katrina and 9/11, I would consider everything else a wash with natural disasters. And the wars are policy decision somewhat. Afghanistan was justified retalitory strikes. Iraq was a different story, and was based purely on policy and shoddy intel. Bush is the only president in modern history not to raise taxes in a time of war. The tax cuts certainly didn't pay for themselves, much less two wars. That falls directly on his fiscal policy. Saying Clinton didn't have to deal with those is weak.

So are you saying results don't matter either, Clinton simply enjoyed the fruits of Reaganomics and an artificial dot com boom?

 

[volinbham]

Some questions and points:

What data do you have to suggest that government spending increased under Clinton?

Other than Katrina and 9/11, I would consider everything else a wash with natural disasters. And the wars are policy decision somewhat. Afghanistan was justified retalitory strikes. Iraq was a different story, and was based purely on policy and shoddy intel. Bush is the only president in modern history not to raise taxes in a time of war. The tax cuts certainly didn't pay for themselves, much less two wars. That falls directly on his fiscal policy. Saying Clinton didn't have to deal with those is weak.

So are you saying results don't matter either, Clinton simply enjoyed the fruits of Reaganomics and an artificial dot com boom?

I'll dig up the spending increases.

Look at hurricane history - clearly the last 8 years had a more frequent, serious hurricanes than were experienced from 92-2000. But Bush was a big and shameless spender.

I'm not saying results don't matter but you have to look at reasons for the results:

1. The Republican Congress under Gingrich and Dole were fiscally conservative to the max. Read some history on budget battles between Clinton and Congress. They forced him to reduce his spending plans on a regular basis. Compare that to the D congress we have now or the R under other leadership - they had no problem encouraging larger budgets.

2. I'm not crediting Reagonomics - the point I'm making is that the timing of the business cycle had more to do with Clinton's results than Clinton's policies did. This is particularly true if you try to attribute his results to his tax policy. If you can show me any reasonable analysis showing how his tax policy lead to the rapid economic expansion of the late 90s I'll listen. Otherwise, I stand by my assertion that it is a false premise to claim Clinton was a fiscal conservative simply because deficits reduced under his administration.

The dotcom wasn't artificial in anyway. It was an economic shock though that was not the result of Clinton tax or fiscal policy.

 

[volinbham]

CBO has data for the annual federal outlays of every year. Under Clinton (like just about everyone else), the number goes up every year.

 

[rjd970]

I was actually thinking about this on the way home from work....and I think you all have a point.

Looking back at the data, there is a huge difference between spending and revenue under Clinton. He spent way less than what he took in and I think the credit there falls directly with the repub congress. On the other hand, it was completely different under Bush...he spent way more than he took in. Fiscal policy plays a part in that, and the ability to get that policy passed is huge. 9/11, natural disasters, and wars play a part in it as well, but it can be mitigated, at least in part, by sound fiscal policy. I simply don't agree that with the natural disasters and two wars under Bush he should have been cutting taxes the way he did.

That being said, if the anlaysis shows anything it shows that one party holding both the presidency and a majority in congress is bad. From a revenue/spending perspective, the Bush presidency with a repub congress was disasterous, and likewise, we are seeing the beginnings of a disaster with an Obama presidency and a dem congress. Looking at how congress voted, no way the stimulus bill gets passed in its current form with a repub congress.

Things looked pretty good under Clinton and that is due in large part because, like you said, he had a repub congress to hold him in check. I can see Bush's presidency looking a lot better with a dem congress for the majority of the time.

The rest (Reaganomics, dot com bubbles, toxic assets, wars, natural disasters, etc...) definitely play a part, but could have (and should have) been minimized with sound policy that isn't too far left or right. Maybe the founding fathers really knew what they were talking about with that checks and balance stuff.

 

[volinbham]

I was actually thinking about this on the way home from work....and I think you all have a point.

Looking back at the data, there is a huge difference between spending and revenue under Clinton. He spent way less than what he took in and I think the credit there falls directly with the repub congress. On the other hand, it was completely different under Bush...he spent way more than he took in. Fiscal policy plays a part in that, and the ability to get that policy passed is huge. 9/11, natural disasters, and wars play a part in it as well, but it can be mitigated, at least in part, by sound fiscal policy. I simply don't agree that with the natural disasters and two wars under Bush he should have been cutting taxes the way he did.

That being said, if the anlaysis shows anything it shows that one party holding both the presidency and a majority in congress is bad. From a revenue/spending perspective, the Bush presidency with a repub congress was disasterous, and likewise, we are seeing the beginnings of a disaster with an Obama presidency and a dem congress. Looking at how congress voted, no way the stimulus bill gets passed in its current form with a repub congress.

Things looked pretty good under Clinton and that is due in large part because, like you said, he had a repub congress to hold him in check. I can see Bush's presidency looking a lot better with a dem congress for the majority of the time.

The rest (Reaganomics, dot com bubbles, toxic assets, wars, natural disasters, etc...) definitely play a part, but could have (and should have) been minimized with sound policy that isn't too far left or right. Maybe the founding fathers really knew what they were talking about with that checks and balance stuff.

Given that Congress are the spenders - I'd rather have a fiscally responsible R congress and D pres than vice versa. The post Newt R congress clearly lost it's way on fiscal responsibility.

Government action is always a lagging indicator on the economy. I'd like to see someone (anyone) experiment with a very hands off, low spending increase approach and see what happens. By the time the govt steps in, the actions are likely to exaggerate the next business cycle swing.

As nutty as he comes across sometimes, Ron Paul has the right idea here - our attempts to meddle with economy often cause more problems than they solve.

There is a natural tendency for govt to try to fix a down swing but they never seem to try to slow down the up swing - you can't moderate an economy this way.

 

[rjd970]

As nutty as he comes across sometimes, Ron Paul has the right idea here - our attempts to meddle with economy often cause more problems than they solve.

There is a natural tendency for govt to try to fix a down swing but they never seem to try to slow down the up swing - you can't moderate an economy this way.

I agree that often this is the case, but not always. Some interjection is needed now and then, it is just our lawmakers take it too far.

And I think that limited (very limited and focused) regulation can aid in moderating an upswing, being good for the economy. Zero regulation can be extremely disasterous (see the neo-Friedman experiment in Chile during the late 60's and 70's).

 

[volinbham]

I agree that often this is the case, but not always. Some interjection is needed now and then, it is just our lawmakers take it too far.

And I think that limited (very limited and focused) regulation can aid in moderating an upswing, being good for the economy. Zero regulation can be extremely disasterous (see the neo-Friedman experiment in Chile during the late 60's and 70's).

I'm not advocating zero regulation in any sense.


I am saying that government is all too willing to use fiscal and monetary policy when the economy is trending downward but highly reluctant when it is trending upwards. If government intervention is useful for steering the economy why not use it for the ups and downs? Simple, it's not politically popular to slow down growth.

At best we see some tinkering with monetary policy when things are heating up. If spending encourages growth shouldn't we reduce spending when the rate of growth is too high?

 

[rjd970]

I'm not advocating zero regulation in any sense.


I am saying that government is all too willing to use fiscal and monetary policy when the economy is trending downward but highly reluctant when it is trending upwards. If government intervention is useful for steering the economy why not use it for the ups and downs? Simple, it's not politically popular to slow down growth.

At best we see some tinkering with monetary policy when things are heating up. If spending encourages growth shouldn't we reduce spending when the rate of growth is too high?

I think we agree.

I agree that monetary policy is abused more when things are bad and we don't see equal use of it when things are good.

And spending should only be done within our means and in a responsible manner no matter the growth, IMO.

 

[BigPapaVol]

I think we agree.

I agree that monetary policy is abused more when things are bad and we don't see equal use of it when things are good.

And spending should only be done within our means and in a responsible manner no matter the growth, IMO.

I think when things are good we see quite a bit of fed inflation fighting via interest rate hikes. Unfortunately, the impact of those is often much later as the impacts to capital expenditures happen later. In this latest round of hikes from Greenspan, I don't think he realized the number of subprime and ARM loans that he was going to crater. Unfortunately, the prevalence of that style note made the inflation fighting game at the Fed even tougher going forward.
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