The GOP's next nightmare: Clintonomics

Once impeachment dies, the right faces an even bigger challenge from Clinton's radical proposals to change economic policy

Topics: Bill Clinton, U.S. Senate, Newt Gingrich, State of the Union,

Sooner rather than later — but eventually, in any case — attention will shift from the impeachment coup against President Clinton to the controversial plans he articulated in his State of the Union address. Treated as political theater by most commentators, the president’s speech in fact enumerated a series of radical changes in economic policy that are anathema to the Republicans seeking to oust him.

Assuming they fail in that effort, the Republicans will have to face a popular president who may actually be strengthened rather than weakened by the partisan process of impeachment. And the Republican majority in both houses of Congress, focused on their own dimming prospects for reelection in 2000, may find themselves under tremendous pressure to move on Clinton’s progressive proposals for revamping Social Security, raising the minimum wage and establishing “universal savings accounts” as a supplemental pension scheme.

With the exception of his deplorable plan to spend billions on the destabilizing Star Wars boondoggle, Clinton’s address represented the most direct challenge to the conventional wisdom (or, more accurately, the conventional idiocy) of conservatism in many years. Experience has taught him — and by now should have taught the rest of us — that the canned conservative nostrums about taxation, growth and regulation are thoroughly discredited.
Clinton’s call for government-sponsored investment of Social Security funds in the stock market, a clear rejection of his old slogan regarding the demise of “big government,” stunned those on the right who have been scheming for years to “privatize” the retirement system and profit from billions annually in commissions.

His demand for a substantial, dollar-an-hour hike in the minimum wage must have reminded the Republicans of their painful humiliation in 1996 — when he and the Democrats fought for and won a similar increase, over the protest of conservatives who believe the minimum wage should be abolished.
And the same ideologues already have denounced his “USA” proposal, which would encourage savings by distributing a portion of future budget surpluses to the working poor, as potentially the greatest redistribution of wealth in American history.

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Listen carefully over the next few months and you will hear the voices of Sen. Phil Gramm and Rep. John Kasich, leading economic spokesmen for the GOP, warning of catastrophe if the president achieves any of his economic objectives.

Of course, those same urgent warnings have been uttered before, with boring regularity, whenever Clinton dared to indulge the progressive wing of his coalition. Even a relatively minor initiative such as the Family and Medical Leave Act, Clinton’s first successful legislation, was expected to impose an insupportable burden on businesses small and large; yet family leave has been so easily accommodated that his new proposal to extend it raised barely a peep of protest. The minimum wage increase of 1996 was supposed to ruin the labor market and lead to massive increases in unemployment, especially among the young and the poor. But somehow we are now enjoying the lowest unemployment rate in almost four decades, disposing of one of the hoariest myths of the conservative creed.

Facing his senatorial jury as he spoke, Clinton wisely refrained from gloating over past struggles with the Republicans about economic policy. Yet he could have done so with considerable justification. Having survived into his second term, he is now enjoying the fruits of the 1993 tax increase, which cost him dearly when it passed and probably lost Congress for the Democrats in 1994. Anticipating the reaction to his new programs, Clinton might have pointed out (but didn’t) that the frightening forecasts of his opponents back then were not exactly prescient.

They fought fiercely against Clinton’s first budget, which only got through the Senate when Vice President Al Gore cast a tie-breaking yes vote. That budget’s tax hike, falling mainly on the rich, was seen by Republicans as a repudiation of Reaganomics and the enormous deficits that bogus doctrine had created.

In those early days of the Clinton administration, the leading conservative spokesman on Capitol Hill was a loud Georgian named Newt Gingrich. Remember him? Maybe — but you probably don’t remember what he said about the president’s economic plan in August 1993: “The tax increase will kill jobs and lead to a recession, and the recession will force people off of work and onto unemployment and will actually increase the deficit.”

How soon would these awful consequences arrive? “I believe this will lead to a recession next year,” Gingrich said, but abandoned caution a few weeks later. “Stay tuned for the next 60 days,” he opined. “I think we’re frankly now living on borrowed time.” Now the former speaker has plenty of time on his own to rethink these views.

Gingrich was hardly alone in his angry orations about what he and other Republicans incorrectly called “the largest tax increase in American history.” Practically every conservative in Congress popped up to echo their great leader’s warning. “A recipe for economic disaster,” squawked Phil Crane of Illinois. “It is going to lead to a Clintastrophy, an economic Clintastrophy,” quipped Indiana’s Dan Burton.

It’s no surprise when flaky reactionaries like Burton and Crane parrot stupid prophecies, but after five or six years of strong expansion and deficit reduction, the deep-thinking savants who now head the relevant House and Senate committees sound just as dumb.

Back on April 1, 1993, Sen. Pete Domenici of New Mexico, distinguished chairman of the Senate Finance Committee, displayed little wit and less wisdom when he said, “April Fool, America. This Clinton budget plan will not create jobs, will not grow the economy, and will not reduce the deficit.”

His Texas colleague Gramm, moving up this year to chair the Senate Banking Committee, was even more voluble and equally mistaken. “We are buying a one-way ticket to a recession,” he claimed in August 1993. More than five years later, we still haven’t gotten there. “I want to predict here tonight,” Gramm said then, “that if we adopt this bill the American economy is going to get weaker and not stronger, the deficit four years from today will be higher than it is today and not lower … When all is said and done, people will pay more taxes, the economy will create fewer jobs, the government will spend more money, and the American people will be worse off.”

Another outspoken opponent was Kasich, the youthful Ohioan now preparing to run for president. But if he still recalls what he said in ’93, he may have to switch parties first. “This plan will not work,” he proclaimed in a CNN interview. “If it was to work, then I’d have to become a Democrat and believe that more taxes and bigger government is the answer.”

Well, that depends on the question, congressman. But when we consider Social Security, income inequality and other pressing problems of the new economy, it will pay to remember how consistently wrong the right has been for the last decade or so.

The era of Reaganomics is dead, and President Clinton killed it.

Joe Conason is the editor in chief of NationalMemo.com. To find out more about Joe Conason, visit the Creators Syndicate website at www.creators.com.

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