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1993 All Over Again?

Posted by MICHAEL SILVERSTEIN, Wall Street Columnist in At TMV.
Nov 19th, 2009 | Comments

In 1992 Bill Clinton’s campaign was built around the phrase “It’s the economy, stupid.” That’s what voters cared about. Bush One’s failure in that realm was what got Clinton elected.

In 1993 the newly elected President Clinton came into office and focused on health care reform. His efforts there flopped, and the rest of his presidency pretty much flopped as well.

Which brings us to 2008. Candidate Obama largely got elected on Bush Two’s economic bungling. People wanted economic “change,” which was what Obama was peddling in 2008. They didn’t care about GDP growth. They wanted jobs, a secure home, a fairer distribution of national wealth.

Obama got elected and immediately in 2009 focused his presidency on health care reform. The way Clinton did, rather than focusing on improving the economy. Obama has kept Bush Two’s economic policies largely intact, bolstering big banks and Wall Street while unemployment soars, foreclosures soar, and food pantries proliferate and increasingly must feed the working poor as well as the indigent elderly and disabled.

The Clinton years, with all their many missed opportunities, at least generated a short-lived number of federal budget surpluses. The spectacular failure of Obamanomics has not only not bettered most Americans economic well being, it has indebted the country in a truly frightening way. An administration in Washington mesmerized by GDP growth is seemingly oblivious to the fact that growth itself is not important — what is important is how any added wealth is spread among the population. Oh, and by the way, the present GDP “growth” is not even growth at all, it’s simply treating extra money created by government borrowing and printing funneled to banks and Wall Street as if it were actually new assets.

Will we finally get real health care reform in this country? I hope so. I really do. But Mr President, it’s the economy! It’s always the economy! Always! And if the geniuses you’ve surrounded yourself with don’t understood that “the economy” that matters is not an economist GDP economy that benefits a few bozos on Wall Street, they are not just foolish but dangerous. They are also threatening your presidency and your legacy.

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TheMagicalSkyFather

And if and when he does something it will be tagged as the largest communist power grab since the end of WWII. Just sayin that what is needed and what is possible are very different things right now.

PWT

He won't 'do' anything because he can't. Let me rephrase, it's not that Mr. Obama won't do anything about the jobs part of the economy, it's that he can't. To believe that the government can create jobs, is to ignore history. Government has never created one job, despite what was claimed for North Dakota's 99th Congressional District, and never will.

Davebo

Government has never created one job, despite what was claimed

Can't agree here. I personally know a owner of an insulation company that has added several employees as a result of the new tax credit for homeowners adding insulation to their homes.

And I've got to believe the spending from the American Recovery and Reinvestment Act on infrastructure has created a large amount of jobs.

roro80

"and the rest of his presidency pretty much flopped as well"

Um, in what world did the rest of Clinton's presidency flop? Unless you're making some sort of sex joke I'm not understanding, I really don't know where you get this.

Anyway, if Obama and the Dems fail on health care -- who knows at this point? -- and he goes on to do as much as Clinton did, I'll probably be pretty happy with the Obama years.

TheMagicalSkyFather

PWT-Please prove how "Government has never created one job." That is an insanely silly comment that I will assume was possibly typed in error. No matter how you define job creation I will be able to find an example from history unless the definition begins with "Nothing a gov does is good and they never create any jobs" which is not a definition but a rant. Not only can I think of jobs fitting almost any definition that have been created by govs throughout history whether via research or just straight investment I can find those same things in the US. This is akin to the "taxation is theft" bs that is so reminiscent of the lefts "property is theft" of the 70's.

TheMagicalSkyFather

Just an FYI the title has a typo and says 1983 instead of 1993 which from reading the post I assume was what you intended.

vey9

"Government has never created one job." -- Michael Steele.

Must be true.

Here is a post someone made from a different board. I found it while trying to remember who first said the above.

What Republican's believe:

Iraq had ties with al Queda.
The health care plan is going to euthanize old people.
The health care plan gives free health care to illegal aliens.
Obama has raised taxes. (He actually lowered them, fools. Look it up.)
Obama is a Muslim, Marxist who hates America and white people.
Obama is intentionally destroying the economy.
Bush, who added 6 trillion dollars to our debt, and lied us into an unnecessary war, is a better president than Obama.
Lowering taxes will raise revenues for the government.
The government has never created one job.
Obama went on an overseas "apology tour".
Obama can't speak coherently without a teleprompter.
Obama wants to destroy capitalism.
Scooter Libby was an innocent victim.
Sarah Palin is intelligent and well-informed on the issues.
Rush Limbaugh is an honest man.
Sean Hannity is fair and balanced.
There is no racism in America.
America has the greatest health care system in the world.
All Americans have health care.
The new healthcare plan will destroy health care.

I could go on but I have to get going.

http://kknt960.townhall.com/columnists/AnnCoult...

DLS

"To believe that the government can create jobs, is to ignore history."

Conventional history, that is. (And many aren't ignoring but are incapable of learning from it. [scowl]) But this year's history is something else. Government can create, and especially preserve (though the short-term-bailout-oriented behavior we're seeing everywhere, including here in Michigan) government jobs.

"... the biggest impact was spurring or protecting public-sector or summer jobs -- not private-sector jobs"

http://www.freep.com/article/20091115/NEWS15/31...

jchem

You make a great point roro, considering just a few paragraphs down in the original post is this:

The Clinton years, with all their many missed opportunities, at least generated a short-lived number of federal budget surpluses.

It's hard to believe that this is indicative of a flopping presidency. I'm not sure when the last time our government had a surplus. I would like to think that at some point, someone can put together a plan to get us back to one.

TheMagicalSkyFather

That is actually a pretty great list.

roro80

"Please prove how "Government has never created one job." "

It doesn't need to be proven. It needs to be disproven -- which is so easy to do that it's laughable. Just from my own family:

-Both parents, 1 grandparent, and multiple uncles/aunts/cousins are or were public school teachers
-Husband is currently a finance manager for a start-up wind-power company; his job was created because of stimulus money. It is a private company, and turned its first profit a couple of weeks ago.
-Uncle spent his career as a military officer; spending his retirement consulting for military security.

Stupid, stupid line of argument, as you rightly allude to.

PWT

What you've all described are transfer payments, not jobs - aside from necessary services like, fire, police, military and education. If the government could create jobs, unemployment would be constant as the government should just be able to create the number of jobs required for a given population whenever necessary. The fact that this is not and has never been the case, proves that government can not and does not create jobs, it merely makes transfer payments.

TheMagicalSkyFather

Statements like "government has never created one job" are emotional not rational. Rational arguments is what pulled the Repub party out of the wilderness in the 1970's and emotional arguments is what fueled the Dem's long journey through the wilderness since the 70's. Arguments like this is what will make the republican party lose. The other thing is a constant stream of faux outrage and identity politics which are also things that voters turned their backs on Dems for embracing in the 70's. Of course you can choose to ignore me but no one is paying me to tell you this so you can trust me more than Hannity Beck or Rush at least. Mostly I would just like to respect Repubs again and that is currently nearly impossible. I respect many people that lean right vote republican but left the party but for those still inside they are painted with a very ugly brush and as much as I would like to pity them they are also the party that supports profiling so...

roro80

PWT, this redefinition of "jobs" is pretty funny. If I pay someone to do something, and therefore the person doing the work has a job, how in the world is that not job creation? If I pay someone to hire someone for their business, and the boss would have otherwise been unable to hire that person, I have created that job. Were you under the misconception that a "job" was something like a consumable good or a piece of paper money? Like a hamburger or a field of wheat or a midsized sedan? When you transfer money from one person to another for doing work, that is what we call a "job". That somehow you think otherwise is totally making me giggle.

ETA: not to mention that huge addendum you stuck in the middle: "aside from necessary services like, fire, police, military and education." Somehow the millions of jobs that go to these necessary services don't count? It would be more close to correct to say that, in fact, the government is and has been the number one single creator of jobs in the history of the country.

TheMagicalSkyFather

Actually the reason they cant do that is because 100% employment creates waves of inflation and that is the only reason. In fact pre-Reagan this is why we had a built in high unemployment rate. As unemployment fell inflation sky rocketed as expected.

As for "transfer" that can be said of anything. For instance if I buy a cell phone plan they are only transferring my business from another provider or from a landline company. They did not "create" anything by your definition they transfered it. This is why I was asking for a definition though because I thought that was your argument which makes some common sense but is not actually real. My come back to that argument is what about R&D investment that creates whole new industries inside and outside of the gov? By your definition those are transfered not real jobs though they are now in the private sector like the entire IT industry. Of course computers are a transfer of payments from office workers accountants and mathematicians but it has not a single thing to do with gov. Basically this is one of those Rand like statements that sound good until you actually look at them and quickly realize that this is a selective way of looking at the world that in the end is non-sensical and hypocritical. Kinda like her hatred for collectives and love of corporations.

vey9

I thought you would like it. Might be longer, but there it is.

vey9

"It doesn't need to be proven. It needs to be disproven -- which is so easy to do that it's laughable."

Even there, you give him too much credit. You do not have the burden to disprove it. Here is how things work -- if you make an assertion, and someone challenges it, you have to prove it. That's a simple thing. After all, why would someone make an assertion they couldn't prove (let's pretend talk radio does exist for a minute)? To do so would to lose anye credibility.

So sad that with the 24/7 news cycle and having to fill time the "rules" I am citing are no longer in effect. But they can still be here at TMV if people want them to be.

DLS

"In fact pre-Reagan this is why we had a built in high unemployment rate. As unemployment fell inflation sky rocketed as expected."

High inflation and unemployment destroyed the Phillips curve in the 1970s. (Before then, little was thought of the notion of a federal goal of full employment; the real world had already made that fantasy.)

vey9

Dude, "transfer payments, not jobs" Jobs ARE transfers of payment. You don't know that? If I have to spend money employing someone to help me do a job, I have transferred payment from me to him. If I could have done it myself, then why employ anyone?

DLS

"[I]n what world did the rest of Clinton's presidency flop?"

More precisely, which one? He was dead, had no respect whatsoever, from 1994-1996. He was doomed; it was GOP stupidity and the Old Guard resisting reform that gave us Bob Dole and Clinton II. Clinton gained what is commonly agreed to be the upper hand on his conservative opponents (especially after failure of the impeachment), even if he retained a poor personal and official reputation afterward. (Part of his improvement in his second term in office was due to concessions to reality after 1994, the Dems' "Third Way" softening of their leftism, flirting with governmental and fiscal reform, earning him enmity on the Left for his betrayal and for acting almost like a Republican if you believe some lefties.)

DLS

"government can not and does not create jobs, it merely makes transfer payments"

Well, private sector jobs -- for Vey and Roro and others who insist on more detail.

The Detroit News story I quoted from and posted a link to provides a current real-world example.

DLS

"If I have to spend money employing someone to help me do a job, I have transferred payment from me to him."

Careful -- that's introducing an equivocation risk.

Actually, PWT was probably referring to private sector jobs, and the Detroit Free Press article I have referred to before shows the effect (or lack of it!) of stimulus measures to date on (private) job growth. (The article quotes Morici, who is always good for a source and as a critic on issues like this, BTW.)

And yes, of course, to the extent people want government (public sector) to replace the private sector, that means the growth of public sector jobs at the expense of private sector jobs, and the creation of new government functions means new government jobs (at some loss of other private jobs, if growth of government constrains the private economy).

vey9

Too many DLS posts, dont you think?

vey9

"Careful -- that's introducing an equivocation risk."

WHAT? Let me clue you in. As an employer. I don't hire ANYBODY that can do ANYTHING I can do or have the time to do. Why should I? As an Employer, it's like hiring a baseball team. This person is good at this and that person is good at that.

To think I am good at everything is stupid.

ProfElwood

I can't say if a government program ever created or destroyed a job, but I can say with certainty that the concept of numbering jobs is bogus. If the money for those jobs comes from taxes, then the population has less to spend, which will hurt those industries that they would have otherwise gotten their money. It's like taking a gallon of water from a large aquarium: you can't say which fish lost the water, but that doesn't mean the water isn't gone. No one can trace losing their job to a particular tax increase, but out-of-sight doesn't mean it didn't happen. Likewise, borrowing the money simply forces tax increases later on, which kills the jobs later on. Inflation steals from everyone who has money, and can't shelter themselves from it (the investment class and those in debt benefit the most). It's hard to say who lost the money, or even how much, but again, it's still happening. The jobs created are easier to pin-point. So it really comes down to how many jobs were killed (good luck figuring that out) compared to how many jobs were created (which is always highly exaggerated, and therefore also hard to pin down).

Like I said a few days ago, it's just a shell game.

pacatrue

It seems that pwt and ProfElwood are thinking of the economy like power generation. One extracts a certain amount of energy from wind, coal, etc., and there is no process in which one generates more energy from that source than was originally there. There is always loss. One can only try to minimize the loss through efficiency. Similarly, I think they are arguing, the government can only take money from the people and give it to someone else as a job, but there will always be loss due to management. Therefore, it would be better if government stayed out of it and the people spent their own money. In that sense, government has not created a job because they have not made the economy grow. Some money was lost by going through the process of government.

I am not an economist and will gladly learn, but I am not sure the above is a fair way to characterize the system. At a minimum, you'd have to make the argument that the loss from government is always indeed more than it would be in private industry. As much waste as there is in government (and there's tons), Dilbert is read by so many for a reason. Large corporations can have bureaucracies as bad as a government and small businesses can be phenomenally run or horribly run. You also would have to argue (going to ProfElwood's comment) that all the government takes in taxes would indeed go into the economy if not taken. However, some money might sit in savings and never get used if left private, but will be used by the government. (I'm not arguing that this is always good, just that you have to account for it.)

Finally, I'm just not sure that simple redistribution through maximally efficient means is the best description of an economic system. One critical concept will be the classic "public good". No company could have built the interstate system yet it is critical to the growth of our economy. The military is another. No company can provide security to a nation of 300 million, but the security it provides again lets our economy grow. Money used for these public goods might in fact create lots of jobs, while money the government takes for something that the private sector could do might not.

TheMagicalSkyFather

I have to basically agree I prefer work programs to welfare but I also believe that public and private sectors should be utterly separated as to not infect one another as they have done here in my opinion on both sides. The real problem is jump starting an economy can benefit from a large focused and short jobs program(a few years) because it keeps things moving teaches skills and gives some frugal workers nest eggs to start their own ventures. I really think this nation needs to embrace some type of work/training program to replace welfare entirely though since we will be in need of constant re-training as different techs emerge and old industries die which is a good deal of our current economic upheaval. Its not the big money decisions part of the equation but it is why people began to take out more and more extravagant debt. In America, life only goes up was sadly what to many believed. I remember intelligent rational people telling me that land prices would always go up and never go down while the bubble was plain as day.

ProfElwood

Actually, the point of my previous post, was to criticize the "xxx jobs created or saved" rhetoric. There's no way to tell how many jobs were hurt or created, because it's all fungible and quite hidden.

I agree that there are a lot of projects, particularly infrastructure projects, that help the economy. There's also a lot of pork and paperwork that help no one. In an ideal government, such projects would weigh the costs and benefits to make sure that people were really getting a "good bang for the buck" before they were started; programs would be reevaluated from time to time to make sure that they were really working, and revised, reformed, replaced or removed if they didn't; and all branches of government would go through periodic reorganizations and audits to keep them efficient and honest.

I also have a problem with the savings comment, which traces back to my Economics 101 course in college. Old fashioned economics said that savings were supposed to go into banks, which would loan them to people and businesses which would buy the equipment needed to expand or to improve their efficiency. That Econ class basically said that savings were little pools of dead water in a flowing economy and the government could stimulate the economy by sucking the water out of the pools through taxation, and force it back into the stream. Since I always assumed that savings led to investments (and I still believe that it does), that was just a way of sacrificing investments in new buildings and machinery, in order to make the economy look better. In other words, it's simply another way to borrow from future growth, to make the economy look bigger today.

ProfElwood

I also wish that welfare programs treated poverty like a curable disease, instead of a terminal illness. Job training, counseling, interpersonal skills, and personal finance education would be good starts.

My own father once tried to get a rent-to-own man to help him find people for a money management course his church was sponsoring. The owner politely refused, explaining quite frankly that his business depended on these people's inability to manage their money. Check advance chains are the lowest form of business that I can imagine. The debt problem is huge, but is still being pushed as if it were a normal, positive way of life. I can see how the financiers love it, since there's really no product, small overhead, and unbelievable returns. Sears, for instance, makes more money off of credit card interest than it does off of merchandise profit. It's no wonder that every store bugs you to get their credit card, and prices all larger merchandise as $xxx/month along with, and often without, the real price.

What bugs me about the real estate bubble are the laws that intentionally created it, and are being slowly restored. There have always been small bubbles, like the tech bubble, throughout history. But the real estate bubble was purposely created using government funding, which allowed it to get larger than anyone could handle. Just another example of bipartisan insanity.

roro80

Hey vey9 -- Agreed. In my defense, I think it's less that I'm giving credit than I'm just lazy. It's much easier to disprove such a statement than it is to try to watch people like DLS and PWT "prove" a clearly incorrect statement. Unfortunately, the logic doesn't seem to have penetrated them. I love how they're saying "well...ok, it creates public jobs but not private jobs" -- quite a concession in and of itself from the original "government has never created a single job" -- after I listed among my examples a private-sector job held by my husband and created by the government. Oh well, some people just don't get logic.

roro80

Hey pacatrue --

Your comment made me think of this Lewis Black segment. It's got strong language, but if that's not offensive to you, I think you'll find it quite funny, and quite in line with what you're saying.

http://www.youtube.com/watch?v=V6eh9R8F260

DLS

"to try to watch people like DLS and PWT 'prove' a clearly incorrect statement"

It's certainly easy when you're making up out of thin air what you're seeing, or posting.

roro80

"making up"? Meaning I'm lying about the people in my family whose jobs were created by the government? Eh, it's all real, but hey, if it makes you feel better to think that I don't have a family composed of (among other things) teachers, military officers, and a hubby who works for a wind power company, suit yourself. Basing your argument on the possibility that I'm lying might not be the most solid ground if you're trying to convince anyone besides yourself though.

If that's not what you're talking about, please let me know what it is that I'm "making up".

DLS

"Meaning I'm lying about the people in my family whose jobs were created by the government?"

I made it clear that the real distinction is being made between government and private sector jobs when "jobs" is mentioned. Oh, and I have already posted material about how government jobs are created as government functions are expanded (or when the public replaces the private sector). [sigh]

But you prefer to ignore what is, and remain with what you wish, or what you choose to believe about people as well as things.

How much GD remedial ed -- enough -- I don't need to revert to trying to teach Two plus Two are Four...

roro80

"I made it clear that the real distinction is being made between government and private sector jobs when "jobs" is mentioned."

And I made it clear that some of the jobs being created by the stimulus are private sector. [distraught frown-y face]

"I have already posted material about how government jobs are created as government functions are expanded "

I'm not arguing that government expansion doesn't create government jobs; I'm arguing that government jobs still count as "jobs". [grumpy mournful moan]

"How much GD remedial ed"

I graduated in the top 1% of my class, but hey, keep calling me stupid if you'd like. Maybe your favorite game of ad hominem will actually become a valid method of political argument some day. I'll not hold my breath.

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