White House insiders have said for years that Bill Clinton has been desperately seeking a legacy for his administration – other than having been impeached and having disgraced himself and his office. At long last, he has at least two of them.
The first of these is the coming recession, his first gift to the incoming administration of George W. Bush. Like the invasion of Somalia that Dubya’s father had handed Clinton upon taking office, this is surely going to cause some heartburn for the new president, even if it provides a strong rationale to pass the tax cuts on which he campaigned.
Clinton’s second legacy will be soaring prices for oil and electricity. All during his presidency, he and his underlings conducted what amounted to a jihad against energy producers, along with owners of other natural resources. A soft economy in Asia mitigated some of the inevitable price increases, but reality finally came to bite Clinton and company this year with a vengeance. It will be up to Bush to follow more sound policies, although the same groups that supported Clinton’s anti-energy policies will hog the media spotlight if the new president follows economically-sound policies.
The coming recession, which I addressed in my recent article, “Fall of the Dot Coms,” is an especially bitter legacy for Clinton, who managed to bamboozle much of the country into thinking his administration was responsible for good economic times. In fact, what was believed to be a permanent plateau of prosperity (the “New Economy” at work) was nothing more than the classic boom of the Austrian Business Cycle Theory. Easy money from the Federal Reserve System created massive malinvestments, especially in the high technology sector, which are in the process of being liquidated.
The White House is so desperate to convince Americans that it has given us permanent prosperity that it is blaming the economic downturn on Dubya himself. Yes, he says that, Bush is already “talking down the economy,” in the words of Clinton’s economic advisors. Granted, this would be a most incredible feat, as the mere words of the incoming President of the United States could somehow trigger massive downturn in securities prices and an increase in unemployment. This is Clintonesque spin at its very worst, and it is one feature of the current White House that few of us outside the journalism profession will miss.
One of the main reasons that Clinton’s approval numbers remained high during the Lewinsky saga and impeachment was that the economy was doing well. People believed that the man was capable of working economic miracles, and even Wall Street chimed in, showering praise upon Alan Greenspan and former Secretary of the Treasury Robert Rubin.
While Greenspan’s role in the economy is well known, less is known about Rubin. I am not aware of Rubin having done anything spectacular to give us prosperity, as his job consisted of collecting taxes and sending ATF agents out to attack those who might not approve of the government. Neither of those two things have contributed to general prosperity, but I always stand to be educated. (Oh, yes, the Bureau of Printing and Engraving prints money under the direction of the Department of the Treasury, so that must be how Rubin created prosperity.)
In truth, the Clinton Administration has done nothing in particular to help the economy. Under Clinton’s urging, Congress has increased taxes, pushed up the minimum wage, and intervened into private industry.
Clinton’s Department of Justice relentlessly pursued baseless antitrust charges against Microsoft and managed to help trigger a drop in the NASDAQ stock index, as high technology firms discovered that the long reach of the government hits them as well. Clinton also lustily participated in the demonization of the tobacco and pharmaceutical industries, which further increased the power of government against private producers.
However, this administration saved its “best” for last, as Clinton and his underling, the newly unemployed Al Gore, decided to “save the environment.” After locking up vast acreage of government-owned lands to prevent logging, mineral extraction, and drilling for oil and natural gas, Clinton and his allies declared they were shocked, shocked that housing and fuel prices began to climb steeply. Of course, they blamed the producers of these goods and heartily attacked them at every turn.
Thomas Sowell in a column written 20 years ago said that whenever liberals turn on electric lights, enjoy fuel-powered heat on a cold day, or build a new house, well, “that just happens.” However, if they see that part of a forest has been cut down or coal mining leaves a hole in the ground, they become outraged, notes Sowell.
His words are truly applicable to Clinton and his hired hands. This administration time and again has demonized and restrained productive people and then has claimed to be surprised when their policies bear their natural fruit.
In the end, Clinton leaves an important legacy. He has managed to prove once again that if we want the blessings of a free market economy, we must allow the free market to work, which also means protecting private- property rights. In as much as Clinton did those things, the economy has worked well.
However, when he strayed from that path--as he often did--he and the rest of us have discovered that the market will always have the final word. Encouragement of economic growth through excessive increases in the money supply has brought an inevitable recession, and slowly strangling the nation’s energy sector has given us record high fuel prices. His legacy leaves us with an important lesson--if only we are willing to learn from it.
