power of progressive economics: the clinton years

8/3/2019 Power of Progressive Economics: The Clinton Years

1/16

1 Center or American Progress | Power o Progressive Economics: The Clinton Years

Power of Progressive Economics:

The Clinton YearsLooking Back at President Clintons Achievements

for What We Can Learn from Them Today

October 28, 2011

Introduction

Presiden Bill Clinons economic sraegy ocused on policies ha invesed in people,

innovaion, and inrasrucureinvesmens ha srenghened communiies and our

middle class. By pairing ha sraegy wih a smar scal approach, his adminisraion

and Congress during his wo erms in oce ransormed a weak economy ino a unda-

menally srong one, urned decis ino surpluses, and creaed he condiions or srong

uure growh. And because he saw he changes globalizaion would bring o he world

economy, his adminisraion began o push or he kind o soluions our counry would

need o prosper in he 21s cenury as well.

Unorunaely, policymakers in he eigh years ha ollowed he Clinon presidencyailed o build on his sraegy, and he Unied Saes posiion o srengh was los.

As a resul, he U.S. economy aces even greaer challenges oday han i aced when

Clinon ook oce.

Unemploymen and growh are sill weak in he wake o he Grea ecession, and echnol-

ogy and globalizaion have wrough deep srucural changes ha policymakers have no

adequaely addressed. Ye many o he sraegies Clinon championed can and should be

used now more han ever, o srenghen he middle class, inves in he uure, and pu he

economy on a rm pah o growh once again. Tis issue brie examines he accomplish-

mens o he Clinon era and highlighs he lessons we can learn or use oday.

A record of accomplishment

In December 1992 Presiden-elec Clinon convened business owners, labor leaders,

and economiss or an economic summi in Litle ock, Arkansas. He would be inaugu-


2/16


raed in Washingon only a monh laer bu he expers who gahered here ha day were

deeply worried abou he challenges he counry aced when hey ook oce. For one,

he unemploymen rae in 1992 was 7.5 percen, up rom 6.9 percen he year beore.

And hough he economy had sared o grow again in 1992 aer conracing in 1991,

prospecs or dramaic economic progress were sill relaively dim. Te Congressional

Budge Oce, or example, expeced unemploymen o remain above 6 percen or a

leas hree more years, and hey oresaw raher pedesrian overall economic growh.Jus a monh beore Clinons inauguraion, Te New York imes ran an aricle wih he

headline, Gloomy Prospecs Seen or Growh Worldwide in 93.1

Tis anemic economic growh was also doing less and less o bene he middle class and

hose sriving o join i bu more o bene he op earners. As hen-Gov. Clinon said

when he announced his run or presiden, he middle class was spending more ime on he

job, less ime wih heir children, and bringing home less money o pay or more healh

care, housing, and educaion. While labor produciviy increased 17 percen in he 1980s,

real average hourly earnings in December 1992 were less han hey were when Presiden

onald eagan ook oce in 1981. A he same ime he cos o healh care was up morehan 20 percen and he cos o housing had risen by 10 percen overall.

Finally, Clinons incoming eam was saring o realize ha hey were inheriing a re-

mendous scal challenge as well. In January 1993 he ederal budge deci or ha year

was expeced o op $300 billion, or 5 percen, o gross domesic produche broad-

es measure o our economyand he Congressional Budge Oce prediced ha he

Unied Saes would add more han $1.8 rillion o he naional deb hrough 1998.

Ye over he nex eigh years, Presiden

Clinon presided over one o he mosimpressive economic urnarounds in

modern hisory. By he end o his erm,

22.7 million new jobs had been creaed,

unemploymen dropped o a 30-year

low, and gross domesic produc grew by

35 percen overall hrough he longes

period o susained growh in U.S. hisory.

Whas more, he growh was broadly

shared and unemploymen plummeed

across he board, including hose groups

or whom he economy never worked

very well. Average hourly wages increased

by 6 percen aer accouning or ina-

ion, and median household income grew

by 14 percen, he highes increase or a

FIGURE 1

Economy added 23 million new jobs under President Clinton,compared to just 2 million under President Bush

Annual change in total nonfarm employment, thousands

-6000

-5000

-4000

-3000

-2000

-1000

0

1000

2000

3000

4000

5000

90

91

92 93 94 95 96 97 98 99 00

01 02

03 04 05 06 07

08 09

Source: Bureau o Labor Statistics


3/16


wo-erm presiden. Te median income o Arican American amilies increased by a

hird and Hispanic amilies saw heir median incomes rise by almos $7,000. Povery

raes dropped o near record lows. And o course he ederal budge wen rom enor-

mous decis o enormous surpluses, wih he ederal governmen on rack o becoming

eecively deb ree by 2009or he rs ime since Andrew Jackson was presiden.

How did Presiden Clinon ake a badly sruggling economy and urn i ino one hahummed along a an average o 4 percen real growh over he enire eigh-year presidency?

I urns ou, policy maters. O course,

many acors beyond a presidens conrol

also shape economic oucomes. Bu bad

economic policy can cause damaging

disorions or hold he economy back, as

Presiden Clinons predecessors experi-

enced. Good policy, in conras, can reduce

economic obsacles, srenghen posiiveeconomic rends, and, mos imporanly,

help lay he groundwork or uure growh

and prosperiy. And undamenally, he

Clinon adminisraion pu our counry on

a sronger and more equiable scal and

economic pah or many years o come.

Specically, he Clinon adminisraion

made good policy decisions ha:

Grew and srenghened he middleclass by rewarding work, modernizing

he social saey ne, and helping

amilies li hemselves ou o povery

Buil he oundaion o a 21s cenury economy hrough robus invesmens in

educaion, science and echnology, and inrasrucure

Encouraged invesmen in Americas communiies, paricularly hose locaed in

inner-ciy and rural areas

Accomplished all o he above while closing he scal gap

aken ogeher, hese policies helped pull he economy ou o he morass o slow growh

and high unemploymen ha Presiden Clinon inheried a he sar o his erm. And his

policies laid he oundaion on which he privae secor and American workers could build

eigh years o unprecedened economic success. Les explore each o hese legacies in urn

FIGURE 2

President Clintons economy grew at an average

annual rate of nearly 4 percent

Real percent change in annual gross domestic product

Source: Bureau o Economic Analysis

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

90

91

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

08 09


4/16


5/16


6/16


Clinons adminisraion, ederal unding or Head Sar oaled $3.3 billion (in con-

san 2000 dollars). Aer wo major reauhorizaions, unding or Head Sar grew o

$5.3 billion in he year 2000.

Te Childrens Healh Insurance Program. In 1997, as par o a budge deal wih con-

gressional epublicans ha cu spending overall, he Clinon adminisraion and heir

allies in Congress creaed he Childrens Healh Insurance Program. CHIP deliveredederal grans o saes o provide healh insurance or children whose amilies were no

poor enough o qualiy or Medicaid bu who could no aord healh insurance on heir

own. By he end o Presiden Clinons second erm, he incredibly successul program

insured approximaely 2.5 million childrena remendous boon o amilies who could

no oherwise aord good care.

Beter nuriional and housing suppor

or low-income amilies. Under Presiden

Clinons wach, Congress noiceably

increased ederal suppor or severalcriical nuriional and housing suppor

programs. Te Special Supplemenal

Nuriion Program or Women, Inans and

Childrencommonly known as WIC

wen rom average annual unding levels

o $2.7 billion in he eigh years beore

Clinon ook oce o $3.9 billion under

his presidency, a 45 percen increase. Te

Food Samp program wen rom an aver-

age o $21.3 billion a year o $24.9 billion,hough spending on Food Samps ell o

dramaically as he economy improved.

And unding or ederal housing assisance

grew rom an average o $20.4 billion a

year in he eigh years beore Presiden

Clinons erm o an average o $29 billion

a year during his presidency.

ogeher, his broad mix o ax relie, wage increases, access o healh and child care, and

proecions or working amilies helped grow and srenghen he middle class.

Bu as millions more Americans enered he middle class and real wages grew,

Presiden Clinon also me his goal o spending less on ax breaks or he wealhy

and deb servicesand giving he middle class more room o spend and grow he

economy insead. And or he rs ime in 30 years, incomes o he botom 20 percen

o he workorce rose nearly as much as he op 20 percen, and he number o people

living in povery acually declined.

FIGURE 5

Poverty rates fell across the board during the 1990s

but began to creep back up under President Bush

Percent of all people, African Americans, Hispanics, and children living in poverty

Source: Current Population Survey,

U.S. Census Bureau

0

5

10

15

20

25

30

35

40

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 1

Overall poverty rate

African American poverty ra

Hispanic poverty rate

Child poverty rate


7/16


Building the foundation of a 21st century economy

I here is one hing ha mos economiss agree is a crucial ingredien or economic

growh, i is invesmen. Across counries, higher overall invesmen levels are srongly

associaed wih aser produciviy growh, higher incomes, and beter sandards o

living.7 No doub, privae invesmen is he main acor in overall invesmen levels bu

public unding has is place as well, especially in some key areas where, i le o isel, heprivae economy would end o underinves. And research shows ha, in cerain cases,

public invesmens can acually help spur addiional privae invesmen as well. One

2003 sudy ound ha each dollar o governmen unding brough in an addiional 70

cens o privae invesmen ha would no have oherwise been made.8

From he sar Presiden Clinon oulined an invesmen sraegy designed o increase

public and privae invesmen in areas criical o our economic uure. For insance, his

rs budge proposal included a $30 billion package o pu people o work building high-

ways and renovaing housing, and creae new job opporuniies or our naions youh.

Bu he real accomplishmens came laer on in he invesmens Clinon championed andCongress made o prepare workers and sudens or a new inormaion economy, o ake

advanage o he echnology revoluion emerging around he world, and o help high-

ech indusries prosper and grow.

Education

Te economic benes o a qualiy educaion sysem are boh obvious and well-

researched. A highly rained, highly skilled workorce resuls in aser produciviy gains,

beter adaps o changing circumsances, and produces more innovaors and enrepre-neurs. One recen sudy suggess ha he Unied Saes would enjoy a $700 billion bene

i saes wih below-average educaional perormance managed o become merely average.9

Presiden Clinon in paricular undersood ha in a globalized world, where America is

compeing wih an increasingly inernaional workorce, we mus inves in Americans

educaion a every level. And over he course o his adminisraion, he ederal govern-

men invesed 10 percen more on average on educaion and workorce raining han i

had over he previous eigh years. During his erm, Congress also passed reorms ha

made higher educaion more aordable and more accessible. Specically, Congress and

he adminisraion agreed o invesmens and reorms ha:

Modernized primary and secondary education. In he eigh years beore Presiden

Clinon ook oce, ederal unding or primary and secondary educaion averaged

$8.5 billion a year, bu over Clinons wo erms ha average rose o $11.1 billion. Tis

subsanial increase in unding was butressed by he Improving Americas Schools

Ac, which reauhorized he Elemenary and Secondary Educaion Ac o improve


8/16


accounabiliy in schools and help low-income sudens succeed, and gave schools

new auhoriy o incorporae echnology ino curricula so ha every suden would be

able o bene rom he echnology revoluion and conribue o is nex wave.

Improved access to college and workforce training. Congress signicanly expanded

ederal suppor or higher educaion under Presiden Clinons wach, increasing

he maximum Pell Gran award and increasing unding levels or suden nancialassisance by 20 percen by he end o his erm. Te 1993 Suden Loan eorm Ac

also inroduced direc ederal suden loans, which resuled in boh lower borrowing

coss or sudens and billions in savings or he ederal governmen. And in 1997, a

Presiden Clinons urging, Congress passed wo ax credis o help deray he coss

o higher educaion: he Hope Scholarship ax credi and he Lieime Learning ax

credi. Tese wo credis ogeher were esimaed o provide benes oaling approxi-

maely $35 billion rom 1998 hrough 2002.

Science and technology

When Clinon ook oce here were only 50 sies on he World Wide Web. By 2000

here were more han 50 million, and inormaion echnology accouned or a ull hird

o U.S. economic growh. Presiden Clinon credied his exponenial growh o he

early invesmens he U.S. made in he Inerne, and during his erm Congress and his

adminisraion direced similar invesmens oward oher criical, innovaive echnolo-

gies and indusries.10 Some o hese invesmens included:

Federal funding for scientific research. Under Presiden Clinon Congress increased

unding or he Naional Science Foundaion by more han 30 percen, boosing uni-versiy-based research and invesmens o rain he nex generaion o scieniss and

engineers, and he annual budge or he Deparmen o Energys Oce o Science

nearly doubled o $2.8 billion.

Strong support for the National Institutes of Health. In he eigh years beore Clinon

ook oce, he Naional Insiues o Healh spen an average o $9 billion a year, bu

under Presiden Clinon Congress boosed NIH unding by 40 percen o average

$12.7 billion annually. By 2000 ederal NIH unding had surpassed $15 billion a year,

a 50 percen increase over NIH spending when he rs ook oce, and he highes

level o research unding ever spen on research on healh and disease.

Mapping the human genome. Presiden Clinon srongly suppored geneic research

in he public and privae secor alike. Aer scieniss compleed he sequencing o

he human genome in 2000wha Clinon called one of the most important,

most wondrous maps ever produced by humankindhe presiden renewed

he Unied Saes commimen o scienic research. And he laid ou a vision or


9/16


uure scienic progress, osered by public-privae compeiion, cooperaion, and a

greaer serv ice o he common good.

Infrastructure

oads and bridges, airpors and seapors, highways and canals are all criical pars o acounrys inrasrucure. Wihou hem, goods and services canno move ecienly, rais-

ing coss or consumers and dramaically limiing he poenial or growh. Te Clinon

adminisraion recognized his and sough o increase invesmens in hese areas. In

1992 ederal spending on ransporaion inrasrucure oaled $40.9 billion, in inaion-

adjused 2000 dollars. By he year 2000, he las year o Presiden Clinons erm, ha

oal was up 15 percen o nearly $47 billion.

Bu Clinon-era invesmens in inrasrucure wen beyond boosing unding or

highway repair and airpor upgrades. Under Presiden Clinon Congress and he

adminisraion recognized early on ha building a modern inormaion and echnologyinrasrucure was going o be jus as imporan as improving radiional inrasrucure

elemens. Some key invesmens in his emerging area included:

Community technology centers.As he Inerne revoluion began, i quickly became

clear ha a digial divide was opening up beween hose who had access o he

emerging echnologies and hose who did no. o help close some o ha divide, he

Clinon adminisraion ripled unding or Communiy echnology Ceners, which

were locaed in urban and rural neighborhoods ha had litle or no Inerne access.

Te ceners provided boh access and raining.

Expanded educational technology. In 1994 he ederal governmen spen jus $27

million on educaional echnology. By 2000 Congress had increased ha inves-

men 28 imes over o $769 million. As par o he elecommunicaions Ac o 1996,

Clinon also won he inclusion o E-ae, which subsidized Inerne access or

schools and libraries.

Cerainly, Presiden Clinons invesmens ook place alongside hose o he privae

secor. Bu here can be no doub ha his policy decisions helped expand access o he

Inerne and helped lay he oundaions or he modern neworks we now enjoy. In

1994, or example, only one in hree public schools had Inerne access in any orm. By

1999 ully 95 percen o public schools boased Inerne access.

Strengthening and empowering communities

While convenional wisdom holds ha here is a rade-o beween equaliy and economic

growh, Presiden Clinon began o see ha growh and equaliy can in ac go hand in


10/16


hand. A growing body o research suppors ha view oday. In paricular, Universiy

o Souhern Caliornia proessor Manuel Pasor, analyzing he growh o 74 U.S.

meropolian regions in he 1980s, ound ha greaer equaliy wihin regions corresponds

wih sronger regional economic growh.11 And a laer sudy by Pasor and proessor Chris

Benner a he Universiy o Caliornia, Davis, ound ha concenraed povery, income

inequaliy, and racial segregaion drags down growh in older indusrial ciieswhere

growh is mos neededar more han i does o ciies wih sronger markes.12

When Presiden Clinon spoke abou hree values, he spoke abou he imporance o com-

muniy, alongside opporuniy or all and responsibiliy rom all. And Presiden Clinon

believed a naion ha lives as a communiy mus value all is communiies. Over he

course o his adminisraion, he promoed bold new programs o help American commu-

niies hriveparicularly hose locaed

in inner-ciy and poor rural areasand o

give residens o hose ciies he resources

hey needed o sar a business, give back

o heir communiy, or eel sae on hesrees. Tose programs included:

A stronger Community Reinvestment

Act. Under Presiden Clinons direc-

ion, lenders covered under he

Communiy einvesmen Ac sepped

up heir eors remendously: From

1993 o 1999, banks and hris subjec

o CR made $800 billion in susain-

able home morgage, small-business,and communiy developmen loans o

low- and moderae-income borrowers

and communiies.

New Markets and Empowerment

Zones. In 2001 Congress passed he

New Markes and Communiy enewal iniiaive, which invesed $25 billion in new

incenives or growh in low-income communiies o creae nine new Empowermen

Zones, bringing he oal creaed under Clinon o 40; increased he low-income hous-

ing ax credi o build an addiional 700,000 unis o aordable housing; creaed he

New Markes ax Credi, which encouraged venure capial rms o suppor small-

business sarups and rural developmen; and creaed 40 enewal Communiies wih

argeed, pro-growh ax benes o spur robus ouside invesmen.

Community Development Banks. Clinon called or a naionwide nework o com-

muniy developmen banks during his presidenial campaign and creaed he reasury

FIGURE 6

The national crime rate fell dramatically under President Clinton

and continued to fall, albeit more slowly, under President Bush

Violent crimes reported per 100,000 people

Source: Federal Bureau o Investigation

0

100

200

300

400

500

600

700

800

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 0


11/16


Deparmens Communiy Developmen Financial Insiuions Fund o make ha

vision a realiy. By 2000 he CDFI Fund had issued $436 million in oal grans, loans,

equiy invesmens, and echnical assisance o local nancial insiuions, banks, and

hrisincreasing heir communiy developmen aciviies by upward o $2.4 billion.

Expanded national service. In 1993 Presiden Clinon promoed and Congress passed

legislaion creaing AmeriCorps, a communiy service program ha gave youngpeople an opporuniy o serve heir communiies and earn money or college or skills

raining. In jus ve years AmeriCorps enrolled nearly 200,000 young people, more

han in he 40-year hisory o he Peace Corps.

Making Americas communities safer. Congress and he Clinon adminisraion ound

room o inves in oher programs ha made lie beter or all Americans as well. In

2000 he Clinon adminisraion me is commimen o helping communiies pu

100,000 new cops on he sree ahead o schedule and under budge, conribuing o

he sharpes drop in crime he Unied Saes has ever known. President Clinton also

advocated and secured the passage of the Brady Bill in 1993, which kept morethan half a million felons, fugitives, and domestic abusers from buying guns.

And Congress passed the Assault Weapons Ban in 1994 with the support of

every law enforcement organization in the country.

Fiscal discipline that asked the wealthy to pay their fair share

When he Clinon adminisraion ook oce in January 1993, he ederal budge deci

or ha year was expeced o op $300 billion, or 5 percen, o GDP. Te Congressional

Budge Oce projeced ha he budge would remain deeply in he red or he ore-seeable uure, calling he oulook grim.13 Budge analyss rom across he poliical

specrum believed he counry was headed or a deb crisis. And years o big ederal

decis had sapped invesor condence and orced ineres raes up or everybody.

Several monhs prior, in February 1992, consumer condence had hi is lowes level

since 1974.

Presiden Clinon recognized ha in order o ensure Americas long-erm growh and

compeiiveness, he rs had o se he counry on a sronger and more susainable

scal pah. As Presiden Clinon said in his rs address o a join session o Congress,

he more we spend paying o he deb, he less ax dollars we have o inves in jobs

and educaion and he uure o his counry. So in addiion o he robus invesmens

his adminisraion promoed in people, in echnology, and in communiies, hey also

worked wih Congress o close he scal gap and make room or he invesmens he

economy needed in order o grow.

Te Omnibus Budge econciliaion Ac o 1993 made signican cus in spending,

balanced over he course o ve years. Jus as imporan, Presiden Clinon insised


12/16


ha deci reducion be accomplished such ha he burden was borne airly. Tas

why Clinons 1993 budge, passed over he vocierous opposiion o congressional

epublicans, included revenue enhancemens ocused almos exclusively on hose who

beneed mos rom Presiden eagans ax reducions 12 years earlierlarge corpora-

ions and Americas mos afuen earners. Tese included:

An increase in he op ordinary income ax rae rom 31 percen o 39.6 percenepealing he cap on earnings subjec o he Medicare payroll ax Increasing he corporae income ax

rae or pros above $10 millioneducing he deducibiliy o business

meals and enerainmen expenses

As a resul, he CBO projeced a he ime

ha he Omnibus Budge econciliaion

Ac would raise $240 billion in addiional

revenue over he subsequen ve yearsand would reduce spending by $191 bil-

lion over he same period. Bu because so

many o OBRs revenue provisions were

argeed a he wealhy, as he economy

grew and incomes grew even aser, hose

same provisions generaed even more

revenue han was originally expeced. By

1998 he ederal governmen enjoyed

is rs budge surplus in nearly hree

decadeson is way o our sraigh yearsin he black. In he seven years ollowing

OBRs passage, business invesmen

grew a a rae o 10.2 percen, compared

o he growh raes o only 2.8 percen and 2.7 percen in he seven-year periods ollow-

ing he passage o Presiden eagans 1981 ax cu and Presiden George W. Bushs 2001

ax cu, respecively.

By urning he ederal budge around, Presiden Clinon accomplished hree criical

hings. Firs, he reduced ederal borrowing as he economy improved, allowing ha

capial o ow o more producive uses and giving he privae secor a needed boos.

Second, he allayed he ears o an impending deb crisis, aking ha issue o he able.

And hird, he scal improvemen allowed he governmen o ocus on he oher eco-

nomic maters lised aboveinvesing in he uure, growing he middle class, miiga-

ing povery, and srenghening Americas communiies.

FIGURE 7

President Clinton inherited a massive deficit and turned it into

a record surplus, which disappeared under President Bush

Federal revenue and spending as a share of gross domestic product

Source: Ofce o Management and Budget

0

5

10

15

20

25

30

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 1

Federal revenue

Federal spending


13/16


Keeping America competitive in a newly interconnected world

Te Clinon adminisraion also ook seps o prepare he Unied Saes or he global

economy o he uure. Presiden Clinon spoke rankly abou he challenges globaliza-

ion posed o workers and he economy, arguing ha naions around he world could

no dam up he ides o globalizaion nor ell heir people o sink or swim on heir own.

Insead, he oered a clear vision or how America could hrive in he emerging globaleconomy, boh under his wach and long aer his adminisraion had come o a close.

Firs, Clinon saw ha he global economy was only as srong as he sum o he skills,

he ideas, and he educaion o millions o individuals around he world. Tas why in

his bridge o he 21s cenury speech, Clinon pu educaion rs. Te single mos

criical hing we can do is o give every single American who wans i he chance o go

o college, he said, bu we mus demand excellence a every level o educaion. He

insised ha sudens learn he basics hey need or he nex cenury, ha every suden

should be able o read by he hird grade, and ha every library and classroom should be

conneced o he inerne by he ime he le oce.

Second, Presiden Clinon advocaed or robus invesmen in science and he ech-

nologies ha would provide he oundaion or he uure economy. Clinon unveiled a

Naional Nanoechnology Iniiaive in his nal budge ha would have invesed nearly

$500 million in nanoechnology research, unlocking he poenial or new scienic dis-

coveries ha advance our manuacuring, healh care, environmen, and naional securiy

goals. His nal budge also requesed a $2.8 billion increase in he 21s Cenury esearch

Fund o inves in biomedical research, inormaion echnology, and clean energy. As

Clinon old sudens a he Caliornia Insiue o echnology in 2000, American echnol-

ogy leadership was cenral o he srong growh he counry enjoyed under his adminisra-ionand robus uure leadership would be needed or he Unied Saes o coninue o

bene rom all he advanages ha leadership conerred in he uure.

Tird, Presiden Clinon coninued o press or open markes while laying ou a vision

o how rade could beter bene everyone. He argued ha increased rade would boos

U.S. expors, make cheaper goods available o American consumers, and spur innova-

ion around he worldparicularly in he inormaion economy he el was so impor-

an. Bu Presiden Clinon also made clear ha he inernaional communiy had a

undamenal responsibiliy o make sure ha open rade acually lied living sandards

and proeced worker and human righs.

Finally, Clinon made i clear hain an age o insan global communicaions and emerg-

ing economies, he Unied Saes had o engage he global economybu no by surren-

dering o a race o he botom, easing environmenal regulaions and allowing wages o

all. aher han bringing America down, Clinon mainained ha i was imporan o help

he global economy li up oher naions and make lie beter or hem and beter or us.


14/16


o ha end, he advocaed or srong saey nes ha empower he poores people and

make sure ha everyone can weaher increasingly global economic sorms. He ried o

provide or he workers who may be displaced by globalizaion boh by beeng up our

expor promoion aciviies and by increasing unding or raining displaced workers.

He signed an execuive order requiring careul environmenal review o major rade

agreemens and urged global cooperaion o help every naion develop along a cleaner

pah. And he emphasized he imporance o helping workers everywhere eel he dig-niy o work, he respec o basic righs in he workplace, and he abiliy o help shape

heir own economic uure.

Conclusionlooking forward

No presiden deserves oal blame or oal credi or he economic oucomes ha

arise under his wach. Bu undoubedly Presiden Clinons policies helped spur he

economy ou o he doldrums by ocusing on he middle class and by making argeedpublic invesmens. He removed poenial obsacles by puting he ederal budge

ono a susainable pah ha evenually resuled in surpluses, and by adroily resolving

inernaional economic crises ha hreaened o derail U.S. progress. And he laid he

oundaion or coninued growh by invesing in inrasrucure and educaion, and by

proecing he saey ne, bringing millions ou o povery and ino he workorce. Tese

are successul sraegies ha could and should be repeaed.

Ye during he los decade ha ollowed in he rs decade o he 21s cenury, many o

hese lessons were orgoten. Moreover, we los a golden opporuniy o build Americas

uure rom srengh o srengh. aher han coninuing o inves in people and innova-ion o prepare our economy or he looming challenges o globalizaion and echnology,

he Bush adminisraions policies:

Fueled a housing and nance bubbleBesowed hundreds o billions o dollars in ax cus on he wealhyPu he burden o scal imbalance on uure generaionsFocused on he needs o he wealhy while neglecing he sagnan economic orunes

o he vas majoriy o AmericansDivered billions o dollars o ghing wo oreign wars when we could have invesed

ha money here in America

Te consequences o ha dangerous experimen are clear, and he missed opporuniies

canno be regained.

Bu going orward we can learn lessons rom wha economiss Alan Blinder and Jane

Yellin called he Fabulous Decade o he Clinon adminisraion o avoid reliving he


15/16


los one. Despie he ac ha boh Presidens Clinon and Obama inheried challenging

economic circumsances rom heir predecessors, he siuaion oday is ar rom analogous

o he one in he early 1990s. oday we are acing he prospec o a long, hard climb ou

rom, by ar, he wors economic crisis in 70 years. In he ourh quarer o 2008, he quar-

er beore Presiden Obama ook oce, he economy conraced a an annualized rae o

nearly 9 percen. Ta was he second-sharpes quarerly conracion on record, ollowed

in he rs quarer o 2009 by he ourh-sharpes conracion. In he wors quarer duringhe recession o he early 1990s, he economy shrank by 3.5 percen.

Neverheless, as we do our bes o emerge rom he long shadow cas by he bursing

o he housing bubble and he subsequen nancial meldown, we would do well o

consider Clinons record o success. Now, as hen, we ace an economy working or oo

ew o us, and he op 1 percen no shouldering heir share o he burdens o pay or he

misakes o our pas or o inves in our uure. Now, as hen, our ederal governmen has

a role o play o lay he oundaions or uure growh and prosperiy so ha he privae

secor can do wha America does besinnovae and lead. And now, as hen, he middle

class has been under assaul and mus be srenghened.


16/16

Endnotes

1 Steven Greenhouse, Gloomy Prospects Seen or GrowthWorldwide in 93, The New York Times, December 21, 1992.

2 Torsten Persson and Guido Tabellini, Is Inequality Harmulor Growth?, American Economic Review 84 (3) (1994):600621.

3 Jared Bernstein and John Schmitt, Making Work Pay: TheImpact o the 1996-97 Minimum Wage Increase (Washing-

ton: Economic Policy Institute, 1998).

4 Lauren J. Asher and Donna R. Lenho, Family and MedicalLeave: Making Time or Family is Everyones Business, TheFuture o Children 11 (1) (2001): 115121.

5 Congressional Budget Ofce, The Economic and BudgetOutlook: An Update (1997).

6 Carmen DeNavas-Walt, Bernadette D. Proctor, and Jessica C.Smith, Income, Poverty, and Health Insurance Coverage inthe United States: 2009 (Department o Labor, 2010).

7 See, or example: Adam Hersh and Christian E. Weller, Mea-suring Future U.S. Competitiveness: U.S. Productivity andInnovation Snapshot, Center or American Progress, Febru-ary 9, 2011; N. Gregory Mankiw, David Romer, and David N.Weil, A Contribution to the Empirics o Economic Growth,Quarterly Journal o Economics 107 (2) (1992): 407437.

8 Dominique Guellec and Bruno Van Pottelsberghe de laPotterie, The Impact o Public R&D Expenditure on BusinessR&D, Economics o Innovation and New Technology 12 (3):225243.

9 Mckinsey & Company, The Economic Impact o theAchievement Gap in Americas Schools (2009).

10 Public investments in research and development pay

enormous dividends. See, or example: Paul M. Romer, In-creasing Returns and Long-Run Growth, Journal o PoliticalEconomy 94 (5) (1986): 10021037; Charles Jones and JohnWilliams, Measuring the Social Return to R&D, QuarterlyJournal o Economics 113 (1998): 11191135.

11 Manuel Pastor and others, Regions That Work: How Citiesand Suburbs Can Grow Together (Minneapolis: University oMinnesota Press, 2000).

12 Manuel Pastor and Chris Benner, Been Down So Long:Weak-Market Cities and Regional Equity. In Richard M. Mc-Gahey and Jennier S. Vey, eds., Retooling or Growth (NewYork: American Assembly and Columbia University, 2008).

13 Congressional Budget Ofce, The Economic and BudgetOutlook: Fiscal Years 1994-1998 (1993).

power of progressive economics: the clinton years

Documents