Wednesday, February 6, 2008

Is the Obama Campaign saying the 1993 Tax Increase and Health Care Proposals Were Bad Politics?

Greg Sargent notes:

In what may be Obama's most direct and aggressive criticism of Bill Clinton's presidency yet, the Obama campaign dropped a new mailer just before Super Tuesday that blasts "the Clintons" for wreaking massive losses on the Democratic party throughout the 1990s.


The Republicans did win a majority in Congress during the 1994 elections. From a policy perspective, what to make of this mailer?



As I recall, the Clinton Administration was pushing a couple of policy in 1993. One was a tax increase to end the Reagan-Bush41 policy of Spend&Spend and Borrow&Borrow. The other was the ill fated health care reforms. If Senator Obama is now saying he does not have the courage to end Bush43’s fiscal irresponsibility, then why should we want him as President? And it strikes me that health care reform will be a high priority for our party during the 2008 election.

But maybe the Senator does have the courage to push for both fiscal responsibility and health care reform. If so, I would suggest that Senator Obama apologize for this mailer. Let me also echo a concern that Kevin Drum shared:

So what does this tell us? Nothing except that this was a really, really close race.
The good news: Exciting! The bad news: Contrary to the storyline the talking heads have been feeding us, this hasn't really been a very nasty race. But it might turn into one now. Fasten your seat belts.


My plea to both candidates is that they try really hard to avoid what Kevin fears here (and this plea extends to the spouses even the ones who used to President).


10 comments:

Anonymous said...

Hallelujah! Obama is running like somebody who wants to be president. Killing the self-satisfying, destructive myth of the 1993 tax increases would be a great service to the Democratic party.

I am surprised at you progrowthliberal, that you believe this crap about the 93 tax increases being good. In fact they were the start of an avalanche of Republican office switches and defeat of marginal Dem officeholders so that by the end of the 90s, the Dems had lost seats at every level of state and local government.

ProGrowthLiberal said...

wellbasically??? Are you saying we should allowed the Federal debt to grow faster than GDP? I find this to be an unbelievable stance unless one wants the US government to eventually go bankrupt.

Anonymous said...

As I recall, we keep hearing about the Clintons amazing political skills, and their ability to stick to their guns and stick it to Republicans. But the 90s saw the whole country move right, to the point where George Bush could be elected and Tom Delay important. Isn't that Obama's point?

rosserjb@jmu.edu said...

Well, Obama is for rolling back the Bush tax cuts, which means he is for going back to the Clinton tax regime.

Regarding health care I see two major problems with how it was done back in 1993. One was the secrecy surrounding the deliberation process. The other was the high level of complicatedness of the proposal when it finally emerged. The latter may be inevitable in any serious health proposal. I do suspect that Hillary has learned her lesson on that one, at least to some degree.

Bruce Webb said...

People can and will haggle endlessly over cause and effect and credit or blame but on a first order correlation Clinton increased taxes, cooperated (in many people's eyes over-cooperated) with Republicans on domestic spending and deficits turned to surpluses. Productivity and GDP both increased which suggests there were no fundamental flight away from investment by people who had top rates increased.

Contra-wise Bush initiated a couple of rounds of taxes and the first order effects were productivity and GDP numbers that went over the cliff.

In the nature of things it is impossible to disentangle all causes from all effects in a global economy but recent history shows clearly that an economic policy that includes a tax increase does not automatically trail an economic policy that includes tax cuts. In retrospect Phil Gramm was talking out his hat.

It makes empiric sense to repeat the Clinton tax experiment and see if we get the same results, the opposition to this is purely ideological and theoretical, the number series just don't support the tax cut mantra.

Why Obama is trying to personalize this by demonizing the 90's and by resurrecting Harry and Louise in his flier is a little mystifying to me. Which is why this amateur is not going to fall in line with some of my professional economist friends and be a camp follower of Economists for Edwards/Obama. I don't like Obama's tactics, I don't like Obama's team, to the extent that I can see the outlines of his actual economic policy I don't like that either.

Clinton is not likely to be the Second Coming of FDR, on the other hand she is pretty likely to be the Second Coming of Clinton. Which on balance and certainly from an economic point of view not exactly a bad thing.

Anonymous said...

Obama isn't saying anything about the tax cuts. He's pointing out the obvious: While the 90's were good for the Clintons, they were fairly bad for the Republican party. Clinton didn't have the party spend money on efforts to cultivate new candidates, most of their appointees treated government as a patronage machine, and they spent half their time engaging in political battles with their natural allies. This causes a lot of disunity, and almost certainly caused 1+% of the party to leave altogether and join the greens. In a tight electorate, that 1% was enough to send us into the wilderness for a decade.

Thats why a lot of people blame Bill Clinton for the sad state of the party from the mid 92-06.

Anonymous said...

2006, Obama endorsed Lieberman who now supports McCain.
Clintons are DLCers, so is Edwards. Obama might be but had his name removed from the DLC/New Democrats Directory sometime after mid-2003.

Vote? Not this time.

Anonymous said...

I understand the 93 increases as an effort to demonstrate that the US government was going to balance the budget and therefore not go into bankruptcy, and therefore the banks would lower interest rates and that would improve growth.

We can throw numbers back and forth, for instance it is incontrovertible that interest rates did not go down.

But I would rather talk about two insidious effects of the 93 increases.

1. Noble losership. Democrats believe that Clinton was right, George HW was right to not read his own lips, and both were punished by a short-sighted electorate. Any political party in power that plays this way will soon be out of power.

2. Banks R Us. Democrats got into bed with banks and the ultrarich.

3. Lust for the Fed. Democrats allied themselves with Greenspan (a Republican) and carried him around like a shield. They used his maestro-hood as a stick to beat Republicans with. The Fed chairman became emperor of the economy to a truly scary extent. The result: Greenspan raised rates four time to kill employment. Bernanke his successor has to show that his dick was as big as Alan's, so he raised rates four times as well.

60% of subprime foreclosures were caused by the borrowers losing jobs! (by ARM rate resets -- 2%!) Oil and food prices are at record levels from monetary inflation. But where are the Democratic leaning economists? Where are the candidates?

Nowhere because they have to love the Fed. It has become a religion, a pledge to the supremacy of the people in the financial world who have the money to play the buys and sells from Fed interest rate machinations.

Democrats are for the little man, the working man? Not hardly.

Anonymous said...

So basically we come back to recognizing that effective politics
is a basic, close to home phenomenon. We can't get an effective Executive Branch if we don't have an effective ie, inclined towards the needs of the majority of the electorate, legislative branch. We need to start chosing Senators that understand that heir time in the Senate is dependent upon satisfying the needs of the workers, the common men and women. That goes doubly well for the House.

Of course that means having a more intelligent electorate in regards to their own economic and social needs. The majority of voters seem
to be swayed by emotion rather than personal need. One could say
that they are confouding their economic needs with their
emotional distractions. The entire mess screams out for effective leadership. We don't have it. We have clones to choose from. They reflect the interests of economic power. When we change our way of choosing we'll have representatives in the legislature who have a different set of values.
The Executive Branch will follow suit.

Anonymous said...

"The majority of voters seem
to be swayed by emotion rather than personal need."

... the basic orientation of the Democratic economic approach is contradictory. Most of the Democratic voters are from the lower to middle class, but the mercantilism of the party primarily benefits the moneyed interests.