Hillary Clinton would hardly be the Democratic Party's prohibitive presidential favorite if most Americans thought her hubby a failure. They don't, of course, thanks to the booming, bubbly 1990s economy. Jobs, wages, and stock prices all went up, way up. A recent Gallup survey found Bill Clinton with a sky-high 69 percent approval rating. And when Hillary Clinton finally announces her White House run, she will no doubt offer a brief economic history lesson on the wonder-working power of Clintonomics.
And that's the problem. While Clinton and most other Americans fondly recall the '90s, partisan progressives are less nostalgic. Sure, they like that a Democratic president won re-election for the first time since FDR. But they also see the '90s as a time when the pro-market, pro-Wall Street "neoliberal" consensus captured their party. Count the party's top Democrat, Barack Obama, among the cynics. He has criticized American economic performance from Ronald Reagan to George W. Bush as one where tax cuts and deregulation failed to reproduce the "shared prosperity" of the 1950s and 1960s. Here is Obama back in 2011:
There is a certain crowd in Washington who, for the last few decades, have said, let's respond to this economic challenge with the same old tune. "The market will take care of everything," they tell us. If we just cut more regulations and cut more taxes — especially for the wealthy — our economy will grow stronger… But here's the problem: It doesn't work. It has never worked… In the last few decades, the average income of the top 1 percent has gone up by more than 250 percent to $1.2 million per year… And if the trend of rising inequality over the last few decades continues, it's estimated that a child born today will only have a one-in-three chance of making it to the middle class — 33 percent… And yet, over the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk. [Obama]
Note that Obama gave the Clinton years no special dispensation or favor, despite the era's gaudy economic stats of 4 percent growth with 4 percent unemployment. The Clinton years got lumped in with Reagan and the two Bushes. The same is true of a recent Wall Street Journal op-ed from White House economist Jason Furman, who explained that the recent economic upturn is "not enough to make up for decades of subpar gains for middle-class families."
In the progressive mind, Bill Clinton quickly ejected his "putting people first" spending agenda in favor of the Alan Greenspan-approved "bond market strategy" that focused on boosting growth by cutting the deficit. (During the Obama era, Republicans adopted the strategy and renamed it "cut to grow.") "I hope you're all aware we're all Eisenhower Republicans," Clinton fumed, as recounted in Bob Woodward's The Agenda: Inside the Clinton White House. Not long after, Clinton's economic council was praising the much-hated — well, at least by progressives — Reagan tax cuts: "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth." Eventually, Clinton declared that the "era of big government is over." Not a red-letter day in Liberal Land.
Bill Clinton did raise top labor income tax rates, but he also cut them for investment taxes. And while median wages rose, so did inequality. From 1993 through 2000, the share of market income going to the top 1 percent rose to 16.5 percent from 12.8 percent, continuing a trend begun in the Reagan years. Perhaps the biggest black mark from a progressive perspective was Clinton's signing of the bill that deregulated Wall Street. Some critics, such as Elizabeth Warren, blame that law for at least contributing to the financial crisis and subsequent recession.
Democrats surely hope the Obama presidency spurs a long-term, leftward shift for America, much as the Reagan presidency nudged the country rightward for a generation. Obama's speeches certainly suggest the need for a more expansive safety net and more wealth redistribution to cope with an economy where inequality has soared and upward mobility has stalled. Scandinavia-lite, maybe. And when Republicans protest, Democrats will continue to argue that a more market-friendly alternative won't work and has "never worked." But it has. Just ask the likely Democratic presidential nominee.