Krugman Shocker: 1990s Economic Boom 'Had Nothing Much To Do With Bill Clinton'
For years, Democrats and their media minions have maintained that the economic boom of the '90s was caused by the fiscal policies of President Bill Clinton, in particular his 1993 income tax hike.
Appearing on ABC's "This Week" Sunday, New York Times columnist Paul Krugman shockingly said what conservatives have been claiming all along (video follows with transcript and commentary):
PAUL KRUGMAN: I think the model is something like Clinton who, in fact, mostly was just riding on a successful economy that was successful mostly for reasons that had nothing much to do with him. But he was able to, to be a very popular president by presiding over that, by providing competent management on those things you could control. I think that is Obama’s model now. It’s, I’m not sure it will be enough cause this, we’re in much deeper economic than we were in the ’90s, but given the realistic political limits, you can’t expect him to do too much.
Indeed.
As conservatives like myself have been saying for years, despite what the Democratic presidential candidate and his media minions were saying at the time, the early '90s recession ended in the first quarter of 1991 long before most of the nation had ever heard of Bill Clinton.
Counter to the totally incorrect conventional wisdom fostered by dishonest media members across the fruited plain, the Gross Domestic Product grew by 2.7 percent in the second quarter of 1991 followed by 1.7 percent in the third quarter and 1.6 percent in the fourth quarter.
As such, before the first primary in New Hampshire, the economy was already growing.
But that was just the beginning, for the economy was actually starting to boom before Election Day, as the GDP grew by 4.5 percent in the first quarter of 1992, 4.3 percent in the second quarter, 4.2 percent in the third quarter, and 4.3 percent in the fourth quarter.
What this means is the economy had been growing for seven straight quarters by the time Clinton took office, with the previous four quarters experiencing what most economists consider boom-like in terms of GDP.
Now throw in Intel expanding computer chips to a 586 platform, as well as a little invention called the router which allowed us mere mortals to log onto the Internet, and the resulting technological boom provided economic stimulus like nothing most Americans alive at the time had ever witnessed.
Add it all up, and Mr. Krugman was 100 percent right for a change.
Someone pass the smelling salts.
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Then Janet Reno sued Microsoft.
My Cisco, Nokia and Microsoft stock tanked. Heckuva job.
I wasn't invested...
but I do remember... one day Clinton announced he was going to break up Microsoft... the next day the dot com bubble burst. I don't think I have ever seen a talking head make that connection. After all, you can't blame Clinton for the technology stocks going south.
Even a broken clock is right
Even a broken clock is right twice a day.
Krugman still has his agenda
It seems to me that the left can't continue to push their fairy-tale about the 1991 recession being the deepest, darkest time since the Great Depression, and how Bill Clinton's enlightened policies saved us all, without explaining why Obama hasn't been able to perform a similar miracle.
Initially they protrayed Obama as being the inheritor of a terrible situation passed down by Bush. Now, two years into his administration, that argument is not flying with folks other than the most BDS-afflicted among the body politic, so the excuse they're peddling for continued lack of a strong recovery is that Obama is just presiding during very difficult times.
Offering up part of the Clinton legacy lends credibility to that argument. They're now saying that the economy is beyond the control of the President. So it can't be blamed on Obama.
Today's media is the worst example, in my experience at least, of dishonest, hypocritical, agenda-driven media coverage. But I, too, remember the months before the election of 1992, and the coverage by the media then was a close second to today's. The only difference between then and today is that, in 1992, the media at least TRIED to make it look like they were impartial. Now they've given up trying, it appears to me.
Rover
Exactly right.
Stopped/ broken clock. Expect he will go back to being stuck on stupid tomorrow.
The clock is still right WAY more often than Krugman.
He is more like a broken calendar!
We Are The 53%
People Pleaser
He is trying to make up for all his hate written in the NYT"s about how Palin, Beck and Rush caused the AZ shooting.. His words are blank and useless and not many read or listen to whatever he tries to spin. A true has-been
It's Clinton's "Legacy", Paul
Did Paul "Crude" Krugman just throw Bubba under the bus?
Of course Ferret-face can't
Of course Ferret-face can't credit arch conservative Bill Clinton. Karl Marx deserves the cedit.
Another liberal voice .. on Clinton's economic ride
CEPR's progressive economist has said as much as well. In addition to being on record in supporting the obvious fact that the major reason for the disappearance of the "Clinton" era budget surpluses was the crash of the dot.com bubble in March of 2000, Baker also sees the Clinton economic successes as a sort of free ride.
In The High Priests of the Bubble Economy, published in 2008 in "The Guardian," Baker notes:
It is important to separate Clinton-era mythology from the real economic record. In the mythology.. [..]
The reality was quite different. There was nothing resembling an investment boom until the dot-com bubble at the end of the decade funneled vast sums of capital into crazy internet schemes. There was a surge in productivity growth beginning in 1995, but this preceded any substantial upturn in investment. Clinton had the good fortune to be sitting in the White House at the point where the economy finally enjoyed the long-predicted dividend from the information technology revolution.
Rather than investment driving growth during the Clinton boom, the main source of demand growth was consumption. Consumption soared during the Clinton years because the stock market bubble created $10tn of wealth. Stockholders consumed based on their bubble wealth, pushing the saving rate to record lows, and the consumption share of GDP to a record high. [..]
Rather than handing George Bush a booming economy, Clinton handed over an economy that was propelled by an unsustainable stock bubble and distorted by a hugely over-valued dollar.
Apparently however, by 2008, Baker had forgotten that the "unsustainable stock bubble," became "unsustainable" in March of 2000 - long before George Bush received the nomination of his party for the 2000 presidential election.
(;~/ gary
For even more fun, check out The Legacy of the Clinton Bubble, in fall 2008 issue of "Dissent Magazine:"
Chickens Come Home to Roost - HISTORY SHOULD deal harshly with Bill Clinton.
The conservatives know it. The liberals know it. The national MSM censored the truth - the facts - from the people.
Not to mention a Republican
Not to mention a Republican controlled Congress where spending increases were being trimmed back to allow tax receipts to catch up with expendatures. The effect of that slow down in growth meant billions of dollars the Treasury did not have to raise annually. The result was a flood of money looking for a place to park other than government securities. IMO, the Dot com bubble and general stock market valuations were in part fueled by some of this money.
Clinton DID NOT balance the budget, a Republican Controlled Congress did over his objections. Being the sleazeball Clinton is, he took credit for the consequences of Congress ignoring his priorities.
The moral of the story is when government isn't wasting money to the point it is competing with corporate investors there is plenty of money to fuel an economic expansion. When liberals are busy redistributing wealth then nothing is left to create jobs because they spent it on their pals.
don't forget housing
the boom that really got going in the late '90s helped Clinton during the Monica scandal, though that same boom that continued into 2006 was probably key to Bush #43 being a 2-term president
This isn;t about a bus, this is about a ship.
Had Papa Bush not succumbed to his liberal side, the side that had him so at odds with Reagan from time to time duirng that Presidency, Clinton would never have been elected.
Saddam Hussien would never have remained in power and there wouldhave been no 2003 invasion of Iraq. I will go so far as to say that 9-11 wouldn't have taken place. So many people do not understand, to this day, how integral Iraq was in the rise of Osama Bin Laden, Ayman al Zawahiri and international Islamic terrorism itself. But I digress.
When it comes down to it, Clinton rode the wave Reagan policy created and Republican control of the Congress nurtured. As we all witness what happens when Democrats control the money, both taxation and spending, the old standby talking points just don't hold water -no matter how fast their journOlist buddies try to pour it.
Me thinks Krugman has had a light bulb come on. Me thinks a moment of insight has happened. Krugman got SERVED by this thing called the internet over the Tucson murders and he has realized that his lies are easily exposed in ways never before possible. Hence the call to "tone it down".
Democrats, leftists, progressives, communists, socialists, whatever you want to call them, know full well that the jig is up. Chrissy has been up to this "move to the center" for a while now. I offer that Krugman just joined him - the rats are jumping ship.
And Krugman's punishment for telling the truth (for once)?
Now Krugman will have a bullseye target painted on his forehead, and be in the crosshairs of liberal bloggers everywhere.
__________
“Didn't win the Medal of Honor? Didn't even serve? Then lie about it. We'll support you." — 9th Circuit Court
Someone ought to explain what REALLY happened in 90's
This is a good analysis of the "Comeback Kid" lucking into it as far as the economy is concerned. However, remember that Bush had raised taxes, then Clinton raised taxes. In fact, at the end of 1998, Clinton had raised personal income taxes from roughly 6% GDP to almost 10% GDP (http://www.slideshare.net/PGPF/2010-05-18-final-version-latest-compressed slide 48). Why didn't this choke off the boom a long time before it did?
Dennis Prager
Remember -
Presidents don't raise taxes because they are not empowered to do so. Congress does because the Constitution assigns that responsibility to the Legislature.
Blind squirrel. Acorn.
I seem to recall Bill Clinton once saying that maybe they raised taxes just a little too much.
When it comes to taxes, there is no such thing as a "too little" increase.
Any increase at all is too much.
-Dave
Vote for the American in November
Krugman tosses a bone ...
I agree with others who say Krugman is tossing the right a bone after his irresponsible commentary on the Tucson shootings.
I also remember the media reporting during the campaign in 1991-92.
A daily barrage of bad economic news, talking down the economy much like in 2008, and editorial comment whenever news seemed to brighten.
For example, whenever employment rose, the media always qualified the statistics by telling viewers it was seasonal, that students were returning to school, or that they were lower paying job.
A big difference from the current media who rarely mention upticks as being the result of temporary government jobs, who fail to remind viewers/readers that the increase in the private sector is puny, that job losses outpace job creation.
Who joyously pushed the narrative of "job growth" when temporary Census workers were added but excused the rise in unemployment by saying it was exaggerated and mainly caused by those same temporary workers they happily counted before.
Which is why it is so exhausting having discussions with liberals. They revise history and facts to suit their purposes at any given moment, and thereby contradict themselves over and over.
It was Reaganomics
The economy was going nowhere until decades of Democratic control of Congress was lost in '94. Limited government growth and interference in the economy made growth possible, unemployment around 4% (previously assumed impossible outside of wartime) and finally even a reduction of the deficit.
Now that we've been driven closer to a European Socialist state, we can't realistically expect better than 10% unemployment and 2% growth, just like what is typical in Europe. It will be a long time before we see a time like the latter half of the '90s again.
Stockpiling Excuses, Displaying Hypocrisy
"I’m not sure it will be enough cause this, we’re in much deeper economic than we were in the ’90s, but given the realistic political limits, you can’t expect him to do too much."
I see that Krugman is stockpiling excuses for Obama. In this case it's the "the President can't actually do much" excuse. Too bad that Krugman never allowed Bush the use of that excuse. I DO remember Paul's use of "jobless recovery" condemnations of Bush back in 2003-2004.
"The Bush I recession was followed by a long stretch of pretty poor job performance, although actually a lot better than we’ve seen with the Bush II recession. And this time now, here we are more than two-and-a-half years after the official end of the recession, and we’re still well below, of course, pre-Bush employment.
But more to the point, we’re well below any reasonable projection of how many jobs the economy should have generated by now. It’s pretty miserable."
That was Paul in an interview with Buzzflash back in August 2004. Do you remember that, Paul?
So, Bush's "jobless recovery" was "pretty miserable" because, due of the lack of job creation didn't match what Paul expected, "[t]hat’s a testament to ineffectual policies," but, now, under Obama, a worse situation of a lack of job creation is being excused with "you can't expect him to do too much." Can you say "hypocrisy," Paul? Sure you can because you know exactly what it means. After all, you display it every time you speak.
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Krugman
Krugman = Carmen Ghia http://www.aveleyman.com/ActorCredit.aspx?ActorID=30667
"Don't let the bastards grind you down."
Subject change
Just like Shuster did on Cnn's Reliable Sources, Krugman has attempted to change the subject being discussed. Seems like it worked.
Krugmann Lowering Expectations
I think that the only reason Krugmann would stray out of his realm of being consistently wrong is to lower expectations of Obama's performance. He knows that the economy has been severely attacked by big government liberal and socialistic type policies and will take a longer time to heal. He's just making excuses ahead of time. On the other hand, if the economy and jobs miraculously improve, he will do a turn about and praise Obama for a wonderful job. He will point out that the recovery was all due to Obama's spectacular leadership.
I wouldn't get too excited about Krugmann's sudden attack of lucidity, it will pass soon enogh. He will lapse back into the trance of Keynesian indoctrination.
I think you hit the nail on
I think you hit the nail on the head with that.
Everything to Kruggie is a 'Theoretical Model'
It is hilarious to watch Paul Kruggie. He's a haughty communist media hack who incubated his whole life in 'Academe.' He knows nothing about the way things DO work; he only knows how (in his Leftist, biased brain) they SHOULD work. It's all theories to him, this 'Keynesian Thought' drum he bangs endlessly. Kruggie has been dripping rabies for the past two years because he knows that his 'theories,' given the opportunity to 'work' under unfettered Lib control, have failed miserably. Nothing good has come out of 'income redistribution.' Indeed, I haven't seen Kruggie knock on my door offering to 'redistribute' some of his income to me. He won't knock on ANYONE'S door; he's too busy trying to be the 'millionaire or billionaire' that he outwardly seeks to demonize.
Liberal economic philosophy...
Liberal economic philosophy fails. Look at Krugman's or Christina Romers'. They almost always sound good in the classroom but when allowed to see the light of day? Not so much. Everytime I've read Marx I am amazed at what he so brilliantly lays out but his philosophy has been adopted and tried again and again and it fails. It always fails and no matter what tweeks are made and promises made to do it better this time it just fails. Christina Romer's entire acedemic and teaching career was based on spending our way out of deep recessions and when she was in a postition to do just that with Obama's full support she failed and now is again preaching this nonsense economics to juveniles in Berkeley. It just doesn't work -- it may sound right but it just doesn't work and people still listen to Krugman, Romer and their Keynsian breathren.