Jewish World Review August 23, 2000 /22 Menachem-Av, 5760
http://www.jewishworldreview.com -- THERE IS a world inside a political convention and a world outside. And the line can be as sharp as the concertina wire strung around the parking lots next to the Staples Center during the Democrats' national convention -- lest the other world intrude.
Inside the great stadium and make-believe palace, all is peace and prosperity. Outside, whole neighborhoods were in a state of siege.
Neither is the whole reality. Any more than either party's economic history captures what has happened in the American economy, which now seems to hover somewhere between ideal and even better.
It's all our doing, the Democrats contend. They measure progress from Bill Clinton's inauguration as president, when the world began, and find everything new and improved: Employment and home ownership up, inflation and interest rates down, government deficits replaced by government surpluses, family incomes higher and taxes lower. An economic Nirvana -- all put in place since January 20, 1993.
The Republican counter-myth starts a decade earlier. It compares the economic flowering of the Reagan Years with poor Jimmy Carter's stewardship, when unemployment was above 7 percent, inflation 13 percent, interest rates even higher, and we were all supposed to put up with it as the inevitable price of a government big enough to take care of us -- when it was really ruining us.
With the Reagan Revolution came not just lower taxes, but a simpler tax code, less cumbersome regulation and therefore more competition. Freer trade meant the beginning of what we now call globalization, which produced much of the capital that really created the Internet -- and the whole information economy.
In that longer perspective, the Bush recession -- or correction or dip or whatever euphemism Republican spinners prefer -- was just a blip on the screen before the Reagan Recovery recovered.
Look at it that way, and (ital)Voila!(unital) Bill Clinton becomes Ronald Reagan's accidental heir. Which is all as neat as it is debatable.
But this much can be asserted without the aid of smoke and mirrors:
(1) The best-kept secret of recent American economic history, certainly in the ideological bubble that was the Staples Center for four statistic-studded days this month, is that the economic recovery Bill Clinton says is his (and probably even thinks is his) had already ended before he took his oath of office in 1993. Economic growth was rebounding in the last year of the Bush administration -- and at a healthy rate. The Reagan Recovery had paused, not ended.
(2) It wasn't just the domestic policies of the Reagan administration that laid the foundation for today's prosperity. More important was that administration's ending the Cold War and, incidentally, the Soviet Union.
That historic turning point gave the whole country, not to say the whole world, a peace dividend we're still enjoying.
And as usual when danger is past, we've gone back to neglecting the basic cause of that victory: the armed forces of the United States, whose strength continues to erode.
(3) The United States, you may have noticed, also has a Congress. The selective economic history Bill Clinton presented at Los Angeles -- it could have been called "Me and My Economic Miracle'' -- left out a whole branch of government.
The president was so intent on his own legacy that he made no reference to either (a) the fat, happy, spoiled and spendthrift Democratic Congresses that over the course of their 40 years in unbridled power ran up those "Reagan'' deficits, or (b) the Republican Congresses whose contract with America/Balance the budget!/End deficits!/Lower taxes!/Cut the welfare rolls! Bill Clinton fulfilled.
The Democrats begin their official history with Bill Clinton's election in 1992. But in retrospect, the watershed event of American political history this past decade may not have been the presidential race of 1992, but the election of a Republican Congress in 1994.
As soon as that new Congress was sworn in, a shaken president discovered that "the era of big government is over.'' Remember? (He seems to have forgotten it since.) Bill Clinton may not be a great economist, but he's about the best political analyst ever to occupy the White House. He reflects the election returns with uncanny precision.
This is a debate to welcome: Which party is responsible for prosperity? What a nice change from
the years when both parties were arguing over who was responsible for stagflation, a term that
already sounds obscure. Let's hope it stays that