Robert Reich Wrongly Claims Bill Clinton Inherited a Recession
The staggering ignorance and/or blatant dishonesty of liberal economic commentators never ceases to amaze me.
Consider the following item from former Clinton labor secretary Robert Reich published at the Huffington Post moments ago (picture courtesy Life magazine):
The recession Clinton inherited was relatively small, and caused by the Fed raising interest rates too high to ward off inflation.
The recession Clinton inherited? What recession?
According to the National Bureau of Economic Research - the group charged with determining the official start and end dates for such things - the early '90s recession ending in March 1991. As the Commerce Department's Bureau of Economic Analysis website indicates, the gross domestic product grew by 2.7 percent in the 2nd quarter of that year, followed by gains of 1.7 and 1.6 percent in the remaining quarters.
And that's when things really started cooking, for the first quarter of 1992 saw a GDP rise of 4.5 percent followed by 4.3, 4.2, and 4.3 percent in the subsequent quarters.
As such, when Clinton took office, quite contrary to what his former labor secretary might think, the economy was booming.
Now, in fairness, despite this GDP expansion, unemployment continued to rise throughout much of 1992 not peaking until June of that year. But this was by no means out of the ordinary as companies normally take their time in adding to payrolls once business begins to improve.
Regardless, calling what Clinton inherited a recession is either the height of ignorance or blatant dishonesty.
Of course, it's really not surprising to see this from someone affiliated with that administration, as Clinton continued to tell voters the economy was in a recession right up until Election Day.
His view of things conveniently changed though when it was announced three weeks later that the GDP in the third quarter had grown by an unexpected 4.2 percent, and he announced that the middle-class tax cuts he had campaigned on were no longer necessary.
But there was more to Reich's trickery:
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. [...]
But the economy's underlying structure remained as it had been before, including stagnant wages for most Americans. Within a few years the middle and working class was treating their homes as ATMs, borrowing trillions of dollars in order to maintain their standard of living, and at the same time demand enough goods and services to keep almost everyone in jobs.
Interesting how Reich completely ignored the impact of an unprecedented technological boom and a stock market bubble on both the economy and employment.
Yes, Greenspan's easy money policy played a huge role in the growth we saw during the tail end of the '90s, but as we've seen in the past several years, there's more to an expanding economy than low interest rates.
What Clinton supporters all seem to ignore is that much like the somewhat fallacious nature of the economic expansion under George W. Bush, the '90s was also an asset-bubble based boom that was unsustainable.
This not only padded the payroll numbers, but also the tax receipts.
As such, the constant congratulations media give to the 42nd president for his booming economy and unified budget surpluses should be tempered with the qualifier of the unsustainable nature of both.
If Intel wouldn't have figured out how to go from a 486 to a 586 platform in its computer chips, and routers hadn't been invented to enable average people to access the internet - both things having nothing to do with Clinton or Nobel Laureate Al Gore for that matter! - the '90s recovery would have looked far different as would the Clinton legacy.
An accurate assessment of that decade seems essential not just from a media standpoint, but also an economic policy one.
As we muddle through our third straight jobless recovery, we should be honest with what happened to get us out of the previous two if we want a prayer of getting out of this one.
As I asked NewsBusters and Fox Forum readers almost two years ago, can we grow our economy without a bubble?
As we are now almost a year and a half into this "expansion" with unemployment still at a staggering 9.8 percent, that question seems just as important today as it was on January 10, 2009.
- Noel Sheppard's blog
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Comments
If we opened access to our
Submitted by MidAmerica on Sat, 12/11/2010 - 7:32pm.
If we opened access to our natural supplies of oil, gas and coal our economy would boom as the steady supply and the keeping of billions (trillions) of dollars inside this country would create a climate that would encourage manufacturers to create new jobs here in the US.
Noel,
Submitted by Dave. on Sat, 12/11/2010 - 7:44pm.
According to the dems, there is always a recession underway when there is a repub in the White House?
The numbers don't matter.
-Dave
Vote for the American in November
NS.. on the streets, for the D's is common think
Submitted by Gary Hall on Sat, 12/11/2010 - 7:33pm.
Reagan created the double dip recession by cutting taxes in the early 80's (Oh, and I might mention that the USSR invaded Afghanistan, and Saddam invaded Iran - prior to Reagan as well); Clinton inherited a recession and then thru tax increases created the great era [Enron era] of peace and prosperity [most deadly decade since WW II]; and then George W Bush came in and crashed the dot.com bubble creating a recession.
What books you reading Noel?
(;~> gary
You're kidding, right?
Submitted by davehm on Sat, 12/11/2010 - 8:58pm.
You're kidding, right?
yes, davehm - I was kidding.
Submitted by Gary Hall on Sat, 12/11/2010 - 11:58pm.
.. absolutely. Point I'm making, however, is that what I said, is generally what is believed by the well-read left side of the isle, and what is being taught (mostly thru omission - and then suggestion) to our students in the liberal public HS and University system.
(;~/ gary
You are wrong.I was around at
Submitted by johnsonl on Sat, 12/11/2010 - 9:54pm.
You are wrong.I was around at that time, working and going to college. clinton rode the economy that Bush created.
Clinton rode the economic
Submitted by GregE on Sat, 12/11/2010 - 10:14pm.
Clinton rode the economic bullrush into the information age. No tax increase was going to stop that freight train. The boom was coming, in spite of any liberal attempt to squash it.
About that economic bullrush...
Submitted by Jer on Sun, 12/12/2010 - 1:08am.
The colossally misguided predictions that Clinton's Deficit Reduction plan would not just slow the train but completely derail it were what the Republicans peddled straight into Congressional majorities in '94.
Jer
Unlike 2010---
Submitted by matthewdean on Sun, 12/12/2010 - 1:15am.
when the Dems derailed their own choo-choo.
MD
Democrats have been pushing
Submitted by motherbelt on Sat, 12/11/2010 - 8:47pm.
Democrats have been pushing that canard since...what...1993? '94??
Why would they stop now?
Hey MB
Submitted by jdlybrand on Sat, 12/11/2010 - 9:07pm.
Canard? Is Bristol's ghost writer writing your material? ;-)
"What a revoltin' development this is!"
Chester Riley
Maybe she is
Submitted by Boudin on Sat, 12/11/2010 - 9:11pm.
Bristol's ghost writer, : )
MB vs Olbermann
Submitted by jdlybrand on Sat, 12/11/2010 - 9:25pm.
Poor Keith wouldn't have a snowball's chance in hell!
"What a revoltin' development this is!"
Chester Riley
Why, thank you, kind sir...
Submitted by motherbelt on Sat, 12/11/2010 - 9:39pm.
and I stole your Chester A Riley quote in another thread....gave you an anonymous HT 'cause I couldn't remember whose it was!
PS: I'm in the dark on the Bristol thing...what's that about?
Olbermann
Submitted by jdlybrand on Sat, 12/11/2010 - 9:51pm.
I think he disparaged Palin on a show and in response she mentioned 'canard' in either a twitter or facebook comment, and someone else accused her of having a ghost writer because she could not have possibly been bright enough to use a great big two syllable word like canard. But then, I could be wrong. It's happened before. :-)
"What a revoltin' development this is!"
Chester Riley
Hey Robert.................
Submitted by djwolf12 on Sat, 12/11/2010 - 8:50pm.
The Midget Commune for idiot socialists called. They said you forgot your shoe lifts and penis pump back at the ranch.
Claims of inheriting a
Submitted by Edhenry on Sat, 12/11/2010 - 9:25pm.
Claims of inheriting a recession, even of "mild" in 92 is incorrect, by all economic measures.
Reagan inerited a country paralyzed by stagflation. By keeping Volker, short rates were increased until long term inflation was wrung out (causing short term pain), taxes were then cut to free up capital and the country finally took off, creating the greatest era of prosperity and hope since, well since before the loser of all losers, Jimma.
Then Reagan won the cold war, freeing millions of people from the shackles of centralized power (see democrat party).
Clinton was saved by the 1994 republican landslide. Greespan was free to lower rates, knowing the budget reconciliation act of 1990 (signed by B 41, which under phony claims of a recession, cost him the 92 election) prevented gubment from overspending.
The dot come bubble was no different than every other bubble (tupils, auto industry in early 1900s, real estate in florida in 1920s and all over in the 2008) Assets became overvalued, based on unrealistic forward expectations of a market that would eventually sort itself.
Now for the first time we have debt we cannot afford, to pay for unecessary gubment employees, risking the US and at the least, unfairly loading the next generation with debt.
Will we survive this gubment and the incompetent press? The smart money is on the sidelines, literally.
Reich probably gets his facts
Submitted by Dan Diego on Sat, 12/11/2010 - 9:49pm.
Reich probably gets his facts from public school textbooks.The Democrat Lies about the Economy are too many to count.
Submitted by acaiguana on Sun, 12/12/2010 - 7:34am.
The biggest is that Clinton presided and handed over to GWB a huge surplus which he squandered.
This is easily disproven, but never honestly referenced by the MSM.
"Verifying this is as simple as accessing the U.S. Treasury (see note about this link below) website where the national debt is updated daily and a history of the debt since January 1993 can be obtained. Considering the government's fiscal year ends on the last day of September each year, and considering Clinton's budget proposal in 1993 took effect in October 1993 and concluded September 1994 (FY1994), here's the national debt at the end of each year of Clinton Budgets:
FiscalYear Year
Ending National Debt Deficit FY1993 09/30/1993 $4.411488 trillion FY1994 09/30/1994 $4.692749 trillion $281.26 billion FY1995 09/29/1995 $4.973982 trillion $281.23 billion FY1996 09/30/1996 $5.224810 trillion $250.83 billion FY1997 09/30/1997 $5.413146 trillion $188.34 billion FY1998 09/30/1998 $5.526193 trillion $113.05 billion FY1999 09/30/1999 $5.656270 trillion $130.08 billion FY2000 09/29/2000 $5.674178 trillion $17.91 billion FY2001 09/28/2001 $5.807463 trillion $133.29 billion
As can clearly be seen, in no year did the national debt go down, nor did Clinton leave President Bush with a surplus that Bush subsequently turned into a deficit. Yes, the deficit was almost eliminated in FY2000 (ending in September 2000 with a deficit of "only" $17.9 billion), but it never reached zero--let alone a positive surplus number. And Clinton's last budget proposal for FY2001, which ended in September 2001, generated a $133.29 billion deficit. The growing deficits started in the year of the last Clinton budget, not in the first year of the Bush administration." (emphasis mine)
The blatant disregard for the truth is rife with examples; but this one is a good baseline. For the first two years of Bush's Presidency, Democrats controlled the Senate and the Republicans controlled the House.
The idea that Clinton ruled over a 'Golden Era' of the economy due to his brilliance and Bush did not requires willful suspension of belief of the facts.
Clinton had the Technology Bubble which chose the cusp of his Presidency to burst; Bush had Enron; Tech Bubble; 9/11 attacks; a war in Afghanistan and Iraq (supported by Democrats although they like to pretend they were 'lied' to by Bush - and the French and the English and the Germans...etc) and yet hold Bush up to be a petty and stupid man who was only trying to please his daddy.
I am so sick of all these lies and yet they continue. "Keep your own Doctor" should be engraved on the forehead of each Liberal as they spew forth their Class Warfare divisive and hate filled propaganda against the Rich which as far as my research can tell are about the only folks paying any taxes out there. The middle class gets hit hard after they start to be successful and I am not disparaging their tax rates.
Americans are over taxed and over regulated. The Democrats were so intent on getting their grubby little hands on the funds released by the expiration of the current tax rates they spent all the money over the past two years.
Now it looks like that idea was kinda stupid and is failing.
Good.
I'm glad to see them with their hand up to the elbow in the Cookie jar and Big Momma (the American Public) has caught them out.
Now if the MSM would finally quit cheerleading these Marxist Idiots and start reporting the accurate facts ala Joe Friday; we'd all be better off.
ACA
...
Quoted from: 'Acaiguana notes from the Underground' (Soon to be at theaters near you)
Acaiguana
Submitted by MacWell on Sun, 12/12/2010 - 1:04pm.
Excellent post my friend and you win a cigar. I've been arguing that same point with the liberal die hards that I debate and for the life of them, they can't even understand their own eyes or math skills. The other great lie that gets my blood boiling is that tax cuts cost the government? huh? how the hell does the government think it is (ENTITLED) to my money, even prior to me receiving it? Come on, you can tell me, this is a Twilight Zone thing...right?
MacWell, you hit it - great.
Submitted by acaiguana on Mon, 12/13/2010 - 9:31pm.
MacWell, they don't have any math skills.. They count on (pun intended) the rest of the High School Graduates not having any either.
ACA
...
Quoted from: 'Acaiguana notes from the Underground' (Soon to be at theaters near you)
We the people
Submitted by MacWell on Sun, 12/12/2010 - 1:15pm.
MUST sometimes throw off the chains of tyranny and elect new people, people who have a proven tract record of LOVING America. People who will put their lives on the line for their country and countrymen. Statesmen, who will represent us with honor. It's up to us folks, we will only get the government we deserve. We the people have the power, we can vote the bums out. We the people must NEVER again allow ourselves to fall asleep. We MUST stay diligent and study every new candidate. We MUST elect people with character and morals, someone who's proven him/herself with their votes. Do they reflect our views? or their own?
Bill Clinton: Obama's new
Submitted by Beukeboom on Mon, 12/13/2010 - 10:55am.
Bill Clinton: Obama's new President Czar