That Hillary Clinton has—–unaccountably——stood by her man for 40 years is her particular foible. But now she wants 320 million Americans to stand by him, too, by electing her President so she can make Bill the nation’s economic czar:
During a speech in Kentucky Sunday she referred to “my husband, who I will put in charge of revitalizing the economy ’cause he knows what he’s doing.”
Actually, he doesn’t.
Herein follows a two-part essay on why Bill and Hillary Clinton had precious little to do with the vaunted prosperity of the 1990s, and why another twofer would be exceedingly bad for the nation.
In truth, it was the doing of Alan Greenspan, and not in a good way.
In fact, the roaring tech era prosperity was but an old fashioned crack-up boom. That is, a simulacrum of prosperity that was an artifact of monetary inflation and financial speculation. It was not merely unsustainable; it was guaranteed to boomerang against the future, and it has in spades.
In fact, the Greenspan Boom was the very fount of the financial toxins which have plagued this century. To wit, the housing and credit implosions after 2007, the stock market meltdown and the collapse of the Wall Street gambling houses in 2008-2009, the disabled, stall-speed main street economy since the crisis, the unspeakable windfalls to the 1% enabled by NIRP and QE and the desperation in the flyover zone of America that begat Donald Trump—-all had their roots in the 1990s monetary perfidies of Easy Al.
None of the Cool-Aid drinking “economists” of Wall Street or Washington are capable of exposing the Clinton Prosperity myth, even if they were politically inclined. That’s because they are linear-thinking paint-by-the-numbers practitioners of one or another form of the Keynesian gospel.
Accordingly, they think policy intervention—-especially central banking stimulus——-makes a permanent difference. That is, it causes economic growth, living standards, and wealth to be higher than otherwise, and that it accomplishes this in substantial part by taking the kinks out of the business cycle, thereby countermanding market capitalism’s purported tendency toward underperformance, recessionary slumps and worse.
To be sure, why would economists think otherwise? Even rain dancers invariably believe in their own magic and efficacy.
But a fair reading of the last 25 years suggests there has been no magic at all. In fact, the massive monetary intrusion initiated by Greenspan after Black Monday in October 1987 has not flattened the business cycle but has supplanted it with the booms and busts of Bubble Finance. It has thereby functioned to distort, deform and displace economic activity, not expand it, and to massively falsify financial prices and inflate asset values, not permanently elevate economic wealth.
Accordingly, what is proffered by primitive Keynesian linear-think as evidence of the Clinton era’s economic success is actually it’s very opposite. In fact, average real GDP growth of 3.8%per year between Q4 1992 and Q4 2000 is exactly the reason why growth has drastically decelerated to 1.2%per annum during the last eight years.
Greenspan’s purported monetary magic actually stole from the future—-and massively so—in order to pump-up the 1990s. So doing, it left the future deeply and permanently impaired. The good middle-class jobs that have gone missing, stagnant real household incomes, bloated transfer payment rolls and debilitating public and private debt are its legacy.
At the heart of the matter is the debt explosion touched off by the Greenspan Fed, and especially after the so-called bond vigilantes revolt of 1994. From then on, money markets became ultra easy and credit way too cheap.