So Bill Clinton, according to Thursday's New York Times, says "he's been fighting income inequality since his earliest years in Arkansas politics." How does that square with your memory of the president who enacted the draconian '90s welfare reform with Newt Gingrich, who overrode labor opposition to trade treaties, who helped deregulate Wall Street and the financial industry? And who, as Bob Woodward so famously reported, knew at the time: "I hope you're all aware we're all Eisenhower Republicans. We stand for lower deficits and free trade and the bond market. Isn't that great?"
It’s actually worse than that. Alan Greenspan, who Clinton twice reappointed to chair the Federal Reserve Board, used to joke back in 2007 that “Bill Clinton was the best Republican president we’ve had in a while.” That’s coming from a man who worked for some real Republicans — and who was also one of the greatest culprits in the housing bubble and the financial crisis, because he just didn’t feel like using his power to regulate the way mortgages were done.
But that complete and utter assuredness that we shouldn’t really regulate financial institutions was the prevailing sentiment of the Clinton years. That’s what it was all about. The Nasdaq was soaring and the world supposedly looked to us to see how an economy should be run. And Clinton’s team used to be proud of what they had done, the whole transition from manufacturing to “a post-industrial economy.” What a triumph. Larry Summers, one of his Treasury secretaries, gloated in 1999 about this, then went on to talk about how awesome it was to have “a venture capital sector in which entrepreneurs may raise their first $100 million before buying their first suits.” It was a “new macro-economic paradigm.” Gee whiz.
The funny thing is, Clinton is right that he came on the scene “fighting income inequality.” That really is how he got elected in 1992 — he campaigned as the guy who would do something about the ruination of the middle class and the soulless high-end swaggering of the Reagan era. But you’d think he wouldn’t want us to remember that now, since all those problems grew so much worse.
It feels like some history might be in order here. Clinton ran as the candidate of the Democratic Leadership Council, whose goal was to push the Democrats to the center after the defeats of Walter Mondale and Michael Dukakis, to embrace business and the markets, to step actively away from the word "liberal." Howard Dean called them the "Republican wing of the Democratic Party." So is the new spin, apparently, that the DLC was simply progressivism of the 1990s?
What the DLC was most famous for, after its relentless pushing to make the Democrats into the other conservative party, was that they would say absolutely anything to advance themselves as the leadership faction of the party. In truth both Mondale and Dukakis were perfect DLC candidates in almost every way, but of course the DLC had to distance itself from them because they lost, and the DLC knows that you only get ahead in Washington by being identified as a winner. So, if progressives are winning these days, then hell yeah, the DLC were the real progressives back in the 1990s. Why not? They would undoubtedly turn out to be the real socialists, too, if “socialism” was what the kids were going for nowadays.
The grand historical significance of the Clinton administration, and of the DLC to a lesser degree, is that they are what cemented the neoliberal era. It’s that air of complete, ironclad consensus about matters economic. That sense that, there is only one way to run an economy and we know what it is. So you can have Ronald Reagan and Margaret Thatcher making the big turn toward laissez-faire, but it’s not really “neoliberalism” until the other party capitulates, until you have the famous handshake between Bill Clinton and Newt Gingrich, and until you have Clinton announcing “the era of big government is over.” In the 1990s they called this the “Washington Consensus,” but today we hip and cognizant people know to call it “neoliberalism."
Is this simply a reframing of the Clinton legacy in advance of a potential Hillary Clinton run, and an effort to head off a challenge from the Elizabeth Warren wing of the party? To argue that the Clintons were down with Thomas Piketty all along?
I think that’s almost certainly right. But the way Bill Clinton has done it, it sounds quite mad, just completely contrary to what everyone knows was happening back then. I think Hillary will have to address the legacy of her husband’s presidency at some point, but hopefully in a more sane way than this.
I think it’s also cognitive dissonance on Bill’s part. I’ve never met the man, but he seems like a well-meaning person to me. The Piketty book has scared a lot of people, and maybe he himself can’t believe that he played a part in this terrible story. He was elected as the savior of the middle class in 1992; is it possible that he was in fact its gravedigger?
How should we think of the economy under Clinton? There were millions of jobs created. Median family income improved. But he had some help from the tech bubble, and decisions made on his watch about financial regulations and also the housing market contributed to crises in the next decade.
Give the man his due. There was a tax increase on the rich in the first Clinton administration. Wages grew in the second Clinton administration, and that was a very good thing. It happened because unemployment was so low, however, not because unions had made a comeback or anything. Clinton also expanded the earned income tax credit, which is probably what he thinks of when he wants to recall what a friend he was to working people.
But the overall feeling of the era was one of complete, unreserved adoration for Wall Street and money and the heroic boss. This was the age of CNBC’s “CEO Wealth Meter,” the years when the Nasdaq soared to 5,000, when you had all those investment books coming out — the Beardstown Ladies, "Dow 36,000" — when you could follow the adventures of those awesome “day traders,” when you had “Who Wants to Marry a Multi-Millionaire,” surely one of the most pungent moments in the long and reeking history of trash culture. Of course Clinton deregulated the banks — they were making us all rich!
This kind of celebrationism was objectionable when Reagan was president, but under Clinton — this jolly man of the people — it looked different somehow. Those CEOs were just regular folks, working to make all of us richer, via our lovable pal the stock market! That’s what Clinton’s cultural function was — to make all this seem human. I called it “market populism.”
Of course it turned out to be a bubble, and it ended in disaster. As did the housing boom, which got its start in the late '90s, and as will the next bubble to come down the pike. Neoliberalism may be heaven on earth for the people on top, but for the rest of us it means insecurity and lifelong debt and a constant struggle to hang on to what our parents took for granted. Nice going, Bill.