Urbin Report

Friday, March 28, 2008

Deconstructing the '90s Clinton Boom

By way of US News & World report, shining the light of reality on the last line of defense for Clintonites:

1) Clinton was dealt a great hand. The economy was entering its eighth quarter of expansion, oil was cheap (around $11 a barrel), inflation was low, there was greater certainty about the global economy because of the end of the Cold War, "and, of course, a tremendous set of new productivity-enhancing technologies involving information technologies and the World Wide Web burst on the scene." Talk about starting on third base.

2) The economy did OK during Clinton's first term. But it wasn't spectacular. From 1993 through 1996, real gross domestic product grew at an average annual rate of 3.2 percent, employment rose by 11.6 million jobs, average hourly wages grew by 0.8 percent, and market capitalization rose by 78 percent in real terms.

3) But then the economy really kicked into gear. In 1997, Congress passed and Clinton signed (despite initial opposition) a modest capital-gains-tax cut, one that would be worth about $30 billion in today's dollars after four years. This was not Reagan 2.0. Yet from 1997 through 2000, a period when the expansion should have shown its age, real GDP growth averaged 4.2 percent a year, 11.5 million more jobs were created, and real wages grew 6.5 percent. Oh, and the stock market doubled.


Read the whole thing.

Much of the so-called "Clinton Economy" can be explained by the second half of this quote by Dennis Miller: "Bill and Hillary possess that rare blend of grade A Machiavellian caginess combined with the luck of a two-time Powerball winner"