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Hillary Clinton will be the only Democratic 2016er debating tonight with a realistic shot of being the party’s presidential nominee. Betting markets give her about a 70 percent chance. But if she does poorly, maybe Joe Biden gets in and gives her a run. Bernie “I’m a democratic socialist, not a capitalist” may pull Clinton to the left. but he’s not going to get the nod.
Yet one wonders what Hillary’s odds would be if voters thought hubby Bill was a lousy president. What if we had a 1990s Clinton Bust rather than Boom? Who knows? Maybe she still would have been a US senator from New York and thus a plausible presidential contender. But without the reflected glory of The Greatest Decade Ever, it’s hard to imagine the notion of second Clinton presidency would be as appealing. Given the importance, then, of the Clinton Boom in the case for Hillary, how should one think about those go-go years? A couple of thoughts:
First, the 1980s and 1990s were part of an economic continuum where supply-side reforms dovetailed with technological change. Economist Michael Mandel:
In a way that few have realized, Reagan’s economic legacy is inextricably interwoven with the Information Revolution that the IBM PC helped kick off. His message of competitive markets, entrepreneurial vigor, and minimal regulation found a willing audience in an era of rapid technological change, where innovation was opening new opportunities seemingly every day. Reagan’s first term saw the creation of such future giants as Sun Microsystems, Compaq Computer, Dell, and Cisco Systems (CSCO) — the greatest entrepreneurial burst of new companies since the early 20th century. … Taken together, the changes Reagan championed in the tax system fostered innovation and entrepreneurialism even as they encouraged the development of venture capital and investment in human capital. And Reagan’s willingness to push for more flexible labor markets and less regulation helped companies react faster to economic changes, including new technologies. As a result, the impact of the policies Reagan set out in the 1980s, which slowly worked their way through the economy, helped lay the groundwork for the Information Revolution of the 1990s.
Second, as the economy roared, income inequality soared. The share of income going to the top 1% rose from 13.2% in Bill Clinton’s first year in office to 21.5% in his final year. But when a rising tide is lifting all boats, the 99% don’t mind as much. As Brookings scholar Rob Shapiro wrote recently about the last two decades of the 20th century: “households of virtually every type experienced large, steady income gains, whether they were headed by men or women, by blacks, whites or Hispanics, or by people with high school diplomas or college degrees.” Maybe a lesson there for today’s Democrats and their “middle out” economic theories.
I also urge you to check out this 1999 analysis by my late AEI colleague John Makin, “The Myth of Clintonomics,” which argues that the Bush I administration really deserves some credit for the Clinton Boom: “the Bush team successfully designed the spending caps–successors to the Gramm-Rudman deficit reduction measures that held down the growth of government spending. The capped low rate of government spending growth in a decade of great wealth-generation made possible the elimination of the budget deficit by 1997 and is set to create a trillion dollars in cumulative surpluses over the first decade of the new millennium.”