The tax cut was an accomplishment, free trade authority may turn into an accomplishment but hasn't yet, but you have to balance those with the negatives: the steel tariffs, farm subsidies, a vast rise in federal spending, the extension of unemployment compensation which keeps people out of the labor force. Clinton did about as much for the economy as Bush, with several positive steps like NAFTA, telecom license auctions, welfare reform, and spending restraint (albeit military-driven) offsetting his tax hike.



I think a C is about right.

pj:



That's absolutely right, except that Clinton deserves at least an A.

If you want to measure against political reality, rather than against economic theory, then OK, I'll give Bush an A- -- the Senate Democrats wanted to deny him any victories, so getting the tax cuts through was a triumph and the most he could hope for; I mark him down only for not presenting an agenda, which deprived him of negotiating leverage and leaves him poorly placed to do more in coming years. On this scale Clinton gets a B- because he could have done much more with the Republican congress, e.g. accepted his own bipartisan Breaux commission's Medicare reforms. But he could have done worse too. For a Democrat his economic policies weren't bad, at least while Dick Morris was advising him. In fact, Bush the first (grade: D) did do much worse. His worst move, the tax increases betraying his pledge combined with even bigger spending increases producing large deficits even though he had sold them as a deficit reduction measure, ended his political career as well as damaging the economy.

pj:



Agreed on the Elder, with one caveat, however it was done, the way in which the S&L crisis was handled without deep-sixing the economy for years and the equally impressive transition from Cold War economy to information/service economy did occur on his watch and he deserves great credit for not mucking either up.

Gotta disagree there. The approach to the S&L crisis adopted in the second Reagan term and the Bush Elder term was inefficient and costly. The total capital deficit of troubled S&L's was $100 billion, compared to a $2 trillion annual federal budget -- pretty small change, and never a threat to the overall economy -- and they spent $100 billion of taxpayer money resolving it. All they had to do was merge the FSLIC and FDIC, so that enough capital was there to close S&L's, and then put in a sliding scale of deposit insurance fees so that undercapitalized S&L's would have an incentive to raise capital. Then they could have thrown $20 billion into the FDIC to compensate the banks for taking in the S&L's. That would have solved the whole thing more cheaply.



I don't think the Bush administration did anything special to comfort the transition of defense to civil employment -- the Clinton administration faced the same problems. It was handled by the people and corporations themselves, in the marketplace.

This focus on an agenda is inherently liberal. Liberals want their presidents to accomplish all sorts of things to make life better for all Americans. Conservatives just want to limit the damage that's done. I leave it to you to decide which is a more realistic view of government.

pj:



so, hold on, Clinton gets credit for two trade agreements that Reagan and Bush basically negotiated and for the post-Cold War economy, that he had nothing to do with. But Bush the elder gets no credit for anything that happened on his watch? That seems a tad rough.



All you have to do is look at how Japan has handled its bank failures to see why Bush I deserves credit for not screwing the pooch.

David:



That's 1928 think. There's much damage to be undone. Conservatism is the radicalism of the 21st Century.

Orrin - Clinton got NAFTA through Congress, which is the hard part. Negotiating is easy. Bush would have a hard time breaking the Democratic Senate filibister. It's like Nixon going to China . . . don't we give Nixon credit for that?



I never gave Clinton credit for the post-Cold-War economy. I gave him credit for a few specific acts. Basically, he was a wash for the economy, the good balanced the bad (tax increase).



The fact that Japan can wreck its economy through corruption and cronyism doesn't mean I should relax my grading standards for Bush. On a scale of 0 to 100, Japan may deserve a 20, but Bush Elder deserves a 55, that's a D.

pj:



What nation has EVEr handled a banking crisis so smoothly? And I think you'll find Newt Gingrich passed NAFTA. Clinton couldn't even get a majority of House Democrats (did he?).

No, Clinton didn't get very many Democrats -- that shows why NAFTA would have been impossibly hard for a Republican president.



As for the banking crisis, it was in a small corner of the banking industry, it never caused a credit crunch, and the only question was who was gonna bear the losses and how big the losses were gonna be. They were made much bigger than they should have been by delay and inappropriate regulatory responses. The crisis developed in the late '70's when deposit rates were price-controlled but inflation rates were high, leading to big losses among the S&L's (their long-term mortgages meant they couldn't re-price their loans, so they were more vulnerable than banks). By the early '80's many S&L's had no capital left, at which point their market value was near zero. Regulators did nothing. So canny real estate developers bought small but failing S&L's for pocket change, brought in huge deposits from out of state at high deposit rates, loaned the money to themselves and friends who then defaulted, or just stole it, and then finally the regulators in the late eighties and early nineties had to take these things over when they had huge losses. One of those fraudulent S&L's, Madison, gave a fortune in deposit money to the Clintons; others used deposit money to bribe Jim Wright's Congress into blocking resolution efforts. Now the problem was created in the Carter administration and worsened in the Reagan administration (which did deregulate so that the problem couldn't happen again), but Bush the Elder's contribution to the whole affair was merely to rubber-stamp a solution that had been on the drawing boards for years. His contribution was merely to replace a President already suffering from Alzheimer's with, in his second term, an incompetent Treasury/economic staff; and to have the good fortune that corrupt House Speaker Jim Wright was forced to step down in early 1989. I think at that point the resolution was easy and anyone would have done just what Bush did.