The Real Clinton Economic Legacy

"America went into recession long before the terrorist attacks of September 11th. ... The new figures suggest ... that the economy grew more slowly in ... 2000 than was previously thought: GDP rose by 3.8% (compared with last year's estimate of 4.1% and an initial figure of 5%)." ("Unwelcome Numbers," The Economist, 8/3/02)

According to the Council of Economic Advisors, "it was widely recognized that the economy was weak coming into 2001."

- The NASDAQ peaked on March 10, 2000; The S&P 500 peaked on March 24, 2000; The Dow Jones peaked on January 14, 2000; Manufacturing employment started falling in August 2000; Industrial production started falling in July 2000; and Manufacturing trade and sales started falling in April 2000. (Council Of Economic Advisors, Talking Points, 9/20/02)

Congress' Joint Economic Committee Says Signs Of Economic Slowdown Were Apparent In Mid 2000. "By mid-year 2000 ... signs of an economic slowdown began to proliferate; it became apparent that an economic slowdown was underway. A number of key economic and financial indicators provided evidence of such slower growth and suggested that future growth could weaken. A brief summary of important elements of this evidence, for example, would include the following:

- Real GDP slowed from a robust 5.6 percent annualized growth rate in the second quarter of 2000 to 2.2 percent and 1.0 percent in the third and fourth quarters, respectively, before rebounding modestly to 1.2% in the first quarter of 2001.

- Key components of GDP such as real consumption expenditures slowed after mid-year as real income growth moderated, stock market values fell, employment gains lessened, and consumer confidence stalled and then deteriorated. Movements in retail sales generally corroborated these developments.

- Gross private investment also contributed significantly to this general slowdown with most key investment categories registering actual declines by the fourth quarter and advances of non-defense capital goods (ex-aircraft and parts) orders falling sharply after mid-year (on a year-over-year basis).

- The index of leading indicators trended down after January 2000.

- Employment advances slowed dramatically after mid-year. Gains in total non-farm payrolls, for example, averaged about 256,000 per month for the 2 1/2 years prior to mid-year 2000 and 44,000 per month after mid-year 2000. The average workweek also decreased after mid-year.

- The manufacturing sector also has weakened significantly since mid-year 2000. Industrial production, capacity utilization, the Natural Association of Purchasing Managers index, as well as manufacturing employment and workweek have all registered significant declines since mid-year 2000.

- Financial equity markets began to deteriorate about mid-year 2000 as well.

"It would be nice for us veterans of the Clinton Administration if we could simply blame mismanagement by President George W. Bush's economic team for this seemingly sudden turnaround in the economy, which coincided so closely with its taking charge. But ... the economy was slipping into recession even before Bush took office, and the corporate scandals that are rocking America began much earlier." (Joseph Stiglitz, "The Roaring Nineties," The Atlantic Monthly, 10/02)

Stiglitz noted that during the Clinton Administration "the groundwork for some of the problems we are now experiencing was being laid. Accounting standards slipped; deregulation was taken further than it should have been; and corporate greed was pandered to ...." (Joseph Stiglitz, "The Roaring Nineties," The Atlantic Monthly, 10/02)

"Hidden in the morass of statistics, there is proof that the Clinton administration grossly overestimated the strength of the economy leading up to the 2000 election. Did the federal government join Enron and WorldCom in cooking the books? ... Most startling, the Commerce Department in 2000 showed the economy on an upswing through most of the election year, while in fact it was declining." (Robert Novak, Op-Ed, "Sunny Clinton Forecast Leaves Cloud Over Bush," Chicago Sun-Times, 8/8/02)

"A plunge in investment that began in the last half of 2000, along with the declines in equity markets, was an important force in the recession." (Council Of Economic Advisers, "Strengthening America's Economy: The President's Jobs And Growth Proposals," 1/7/03)

Originally posted by WarLord
After hearing Republicans going off on how the economic upswing that started in the early 90's was created by the policies of the first George I....and how awful it was the Clinton should benefit......

Hey..........your boy's in charge.

Quit bitching about when and where and fix it.

Won't argue the facts then, eh? The fact is that the upswing DID begin because of Bush I's fiscal policies, and yet Clinton did get to take credit for it... but that's the way the American people see things - the person in office always gets to take credit for what's going on, regardless of whether or not it's good or bad.

If Gore were in office, he'd be facing the same economy. My point was merely to state that the economic downturn was not and cannot be tied to Bush's fiscal policy. In fact, if anything his tax cuts were well timed to help somewhat offset the financial impact of 9/11, Enron, and Worldcom.

Yeah, that's what the President's proposed budget is MEANT to do... the one that the Demogogues refuse to pass for their complete lack of economic reasoning and bogus figures... The House okay'ed the plan today... we'll see what happens next.

Originally posted by WarLord
No, what is the point? It's as factual a statement as saying the fiscal policies Carter and his Fed chief carried out created the rising economy that Reagan exploited.

Very true... which eventually led to the recession in the early 90's... Doesn't it amaze you that people don't know this stuff? I mean, the main man in office can only do so much to affect the economy, and our economy isn't the lightning fast mechanism people think it is... It's eerily natural in it's cycles of growth and retraction...

Originally posted by WarLord
But, the practically stated goal of government since the Great Depression is to attempt to ameliorate these cycles. So, who have we been conditioned to look to now when the economy starts to struggle?

The last president who really had any ability to directly affect the economy was Nixon. He could still freeze wages and prices due to legislation passed during WW II that was never repealed. It was repealed shortly thereafter.

There's no way to ameliorate these cycles entirely, I don't think. I haven't seen any economist ever purport to know of a way to completely avert any downturn - expansion cannot forever be sustained, it goes against the very laws of nature.

And so, we are conditioned as a society to look only at the current leadership. And, both parties are immutably guilty of smacking the other side up when things start spiraling - being an educated individual, I always take whatever is said with a grain of salt.

Nixon kicked ass... except for that minor lapse in judgment... Otherwise, he had the complete package (except physical attractiveness, which seems to be of increasing importance to the American voting public) hahaha...

I don't blame or credit Clinton. I don't blame or credit Bush. They all share responsibility in the direction our economy and policies take, along with Congress and corporate America and the American people. Of course, it seems almost as though your initial point was to discredit Clinton, only to be followed by your statement that no one man should ever be held accountable for the situation which occurs.

Of course, then there's the fact that real issues should be addressed with the financial people such as Greenspan or Reubens. People who actually know what's up.

The one thing I do know is that -- as much as I'd rather have seen anybody be president/vice-president over Bush/Cheney -- I shuddered daily at the thought of having Lieberman step upward on the power ladder. Not nearly enough was discussed of his connections to the congressional allowance/encouragement of such accounting practices as Worldcom and Enron were guilty of. Granted, not nearly enough was made of the links between Bush and Enron or Cheney and Halliburton, either. It's all a farce the media decides to spin us.