May 22, 2016
David Shribman wants to tell us how to “save Clintonism.” In doing so he seriously misrepresents the issues at hand.
He tells readers:
“The 42nd president left the White House with high approval ratings after serving during years of economic growth. Many liberals felt bruised, even betrayed — there were some high-profile repudiations of the president, especially when he signed a welfare overhaul in 1996 that set time limits on benefits. But no one doubted that he had given new life to the party when he left office in 2001.”
Of course, Clinton left the White House as the stock bubble that had fueled the prosperity of his second term was in the process of collapsing. It led to a recession that began less than two months after he left office. From the perspective of working people this was the worst recession of the post-World War II era until the Great Recession. The economy did not get back the jobs lost until January of 2005.
Shribman’s treatment of this period would be comparable to a situation where George W. Bush left office at the end of 2007 and describing his departure as being a period of prosperity. Of course by the end of 2007, the seeds of the crash had already been planted just as was the case with the recession of 2001.
Clinton also left a large and rapidly rising trade deficit. The United States has only been able to fill the demand lost as a result of this trade deficit with asset bubbles: first the stock bubble in the 1990s and then the housing bubble in the last decade.
Shribman later comments:
“Mr. Clinton was an ardent supporter of international trade agreements and regarded the North American Free Trade Agreement, known as Nafta, as one of the signature achievements of his two terms. In signing the pact at a 1993 ceremony he called it ‘a force for social progress as well as economic growth.’
“But both Mr. Sanders and Mr. Trump assert that free trade has destroyed American jobs.”
Of course, the trade deals signed by President Clinton were not about “free trade.” They largely left in place the barriers that protect doctors, lawyers, and other highly educated professionals from foreign competition. As a result, the pay for these professions, most notably doctors, has continued to rise and led to higher health care costs and lower real wages for the rest of the workforce.
These deals also put in place longer and stronger patent and copyright protection. These protectionist barriers raise the price of a wide range of products, most importantly prescription drugs. This lowers living standards and is a drag on economic growth.
President Clinton liked to call his pacts “free trade” deals because that helps sell them, especially among media types. However, it is not an accurate description of his trade deals.
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