Obama’s Reelection and Clinton’s Legacy

Mitt Romney recently kicked off his campaign for the presidency by claiming that President Obama could no longer blame Bush for the economy.  That Obama has now had enough time for his policies to have an impact and that the weak recovery is a reflection of Obama’s poor leadership.  The Japanese have a proverb that says focusing on whom to blame results in nothing getting solved, but fixing the problem makes whom to blame irrelevant.  

Politicians often fall into the trap of the blame game, undermining their ability to actually solve problems.  However, when you’re dealing with an economy going in the wrong direction, it is very important to understand how things begin falling apart if you’re going to have any hope of putting things back together.  Blame to identify what needs to be fixed is much different from blame for political gain.  If politicians continue viewing history in a manner that serves their political agenda, our economy will not recover.

Many believe that the Clinton era was a time of sound economic policy due to the balanced budgets and overall economic growth.  Since Congress was controlled from 1994 to 2006 by Republicans, they too have an interest in preserving the illusion of the wisdom of their policies.  Politicians should not get credit for opening the spigots for short term gain, so that in the long term the taps would run dry.  They mortgaged our future by deregulating our financial industry, which caused the banking crisis of 2008, and making trade agreements that effectively de-industrialized America.

Other elements that helped boost the economy were one time historical events.  The tech boom was great for the economy during this time, but not something politicians should take credit for.  Since both parties have essentially lived off the fat of the land to make the numbers look good for their short term political gain, you will not hear an honest accounting for the current mess that they made.  That’s what has prevented the Obama administration from getting at the structural roots of our economic malaise.

Amazingly, Democrats look to the leader who oversaw these events as an economic guru, Bill Clinton.  Considering the ego, reflected by his numerous affairs, it is doubtful he will ever acknowledge the failings of his administration.  He would rather encourage the myth of his success, further entrenching the structural damage of his policies, than help America rebound by admitting to his failures.  That while on the surface those years look good, if you dig deeper you’ll understand they were devastating for America’s future.  The ramifications will continue to dog subsequent administrations until Clinton comes clean.  When George W. Bush became President, he simply maintained the status quo when it came to the economy.  His main failure was passing tax cuts at a time when there were two wars.  However, the beginning and end of his administration were bookended by bubbles popping that were a direct result of Clinton’s policies.  The tech bubble in the beginning, with Worldcom & Enron, were what gave impetus to justify the tax cut to stimulate the already struggling economy.  The property bust of 2008 was so severe because Bush delayed what was inevitable.  He reinforced Clinton’s policies, instead of trying to fix them.  However, how could he when those policies were predicated on the lie of the Clinton, Greenspan, and Republican Congress’s fiscal genius?