William Galston, a long-time Democrat, was Bill Clinton’s deputy assistant for domestic policy. He wrote a recent column for The Wall Street Journal on the performance of the economy during Bill Clinton’s eight years in office. Galston claims that Clinton accomplished almost everything.
Annual real growth of gross domestic product It averaged a “robust 3.8%.” Inflation? A “restrained … 2.6%.” Payrolls increased nearly 236,000 a month, “the fastest on record for a two-term presidency.” Unemployment “fell from 7.3% in January 1993 to 3.8% in April 2000 before rising slightly to 4.2%” at the end of his second term. Adjusted for inflation, “real median household income rose by 13.9%.”
“What about the poor?” Galston asks, and then exults: “The poverty rate declined during the Clinton administration by nearly one-quarter, from 15.1% to 11.3%, near its historic low. And it declined even faster among minorities.”
It is hard to argue with Galston’s statistics. Hillary Clinton pledged to place her husband in charge when she ran for the presidency in 2016. This was because Democrats and most Americans understood that the economy was flourishing while he was in office. This columnist acknowledged that point in The Washington Times. But voters, I cautioned, “need to be constantly reminded” that the prosperity materialized because Bill Clinton capitulated to Republicans who had politically pressured him into accepting policies that drove Ronald Reagan’s successful presidency.
Clinton’s first two years in office, Galston fails to tell his readers, ended in an electoral disaster for the Democrats. Determined to go on a high-tax, big-spend binge after winning the Oval Office in 1992, Clinton narrowly won a major income tax increase in the Democratic-controlled Congress. But congressional Republicans blocked his other important initiatives, including a big-spending “stimulus” program, a major energy tax, and Hillary Clinton’s national health care plan.
When 1994 rolled around and with Newt Gingrich leading the Republican off-year election charge from the House with his Reaganized “Contract With America” proposal, the GOP swept both houses of Congress for the first time in 40 years.
The result: Bill Clinton did a policy somersault worthy to be called Flying Wallendas. He quickly abandoned many of his first-term proposals, including his wife’s health care plan, informing us that “the era of big government is over.” He now favored balanced budgets and apologized for having “raised [taxes] too much.” With the Republicans calling the shots, he enacted significant tax breaks for business and the middle class, including a 30% cut in the capital gains tax for individuals.
He also signed into law welfare legislation, which included popular requirements for work that Reagan had placed in his welfare reform law while he was governor. Clinton even used Reagan’s rhetoric to sell the bill he signed.
The measure proved stunningly successful, reducing caseloads by 50% and cutting child poverty in half. Robert Rector, The Heritage Foundation’s welfare expert, wrote much of the 1996 bill that Clinton eventually approved. Galston says that overall, the nation was clearly enjoying its own good fortune.
But let me put up numbers included in the 2016 column, just as glowing as Galston’s, but somewhat different in emphasis.
The unemployment rate had dropped to 4% by the end of Clinton’s presidency, the lowest level in more than 30 years. Hispanics and blacks were now less than half as likely to be jobless, at 7% and 5% respectively. Between 1998 and 2000, the stock market more than doubled. It was a miracle. We began paying off the national debt in colossal chunks—in no small part due to the nearly $1 trillion that was cut from the military because Reagan had won the Cold War.
Democrats don’t want to admit it, but the truth is Reagan’s conservative policies dominated the two decades that began with his victory over President Jimmy Carter in 1980.
Reagan’s first two terms produced substantially lower tax rates for individuals and corporations, domestic (nondefense) spending restraint and deregulation, which resulted in the end of those gas lines that had so plagued Carter’s presidency.
Reagan’s first executive order eliminated the price controls Carter clamped on oil and natural gas, which proved a disaster since, as Gingrich noted, “It limited us to buying gasoline every other day depending on the last number of our license plates. From scarcity of gasoline to abundance in six months—this was one of Reagan’s first evident accomplishments.” And the accomplishments kept coming.
Reagan’s first two terms produced lower tax rates for individuals and corporations, domestic (non-military) spending restraint and deregulation, a jobs growth explosion, and a major boom period that went 92 months without a recession (November 1982 to July 1990). This was the longest sustained period of peacetime economic growth in U.S history.
Warren Brookes, a great economist, noted that the Gipper had seen a decline in the percentage of low-income families. These people were moving up on the wage ladder and securing major tax relief via higher deductibles, and a tripling in the earned income credit. Brookes noted that six million of America’s poorest workers were removed from the income tax rolls, which was praised by even anti-Republican Liberals. The most notable gains were made by black families.
Reagan did something even more extraordinary, which had a profound economic impact and monetary impact. Reagan brought down the Soviet Empire without having to drag this country into war.
He won this remarkable victory by revitalizing our economy and rebuilding our military. He squeezed Russia economically, placed deadly missiles into Europe that threatened Moscow itself, and armed the Afghans with Stinger missiles—forcing the Russians out of the country they had so brutally invaded.
Mikhail Gorbachev was eager to end hostilities against the U.S. when Reagan refused to surrender the Strategic Defense Initiative at Reykjavik in Iceland in 1986. He realized that his country could not compete militarily or economically with America, and therefore decided to end the Cold War. (Gorbachev knew Reagan’s reliance on supply-side economics and his major military strategy, both so harshly mocked by the Democrats, were working all too well in putting his country on the defensive.)
Democrats love to claim credit for the positive events of the last 20 years of the 20th Century. But since his election in 1980, Reagan furnished this country with the conservative policies that dramatically reversed Clinton’s disastrous first two years of liberal governance. He also made Clinton’s presidency far more comfortable with his canny strategy that compelled Gorbachev to surrender the Evil Empire.
Reagan, in short, was key to Clinton’s success, an indisputable fact the Clintonites can’t yet bring themselves to acknowledge.
Originally published by Newsmax
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