Clinton has tried to establish credit for his administration

for the extended period of economic growth that marked his tenure 

of office. However, that period of prosperity was neither the 

kind of dynamic growth that it was touted as being -- as, for 

example, in comparison with that of the Reagan years -- nor did

what growth took place have very much to do with his policies.

Quite the contrary is actually the case. Such claims, of course,

make solid political sense, to the extent that they can be sold

to the citizenry. But interest in policy analysis must look to

the reality behind the rhetoric to rest on solid foundation. That

expansion was not as unwavering as it has been supposed, either.

     The 'recovery' from the Bush recession grew out of several 

factors and was well on its way even before the election of 1992.

There is an impact out of every slowdown which economists 

frequently refer to as pent up demand and which serves as a 
stimulus to economic recovery in time. And given the 
comparatively low interest rates of the period, this was an 
especially influential factor in the recovery. However, it was 
one complicated by the huge tax increase enacted by one vote in 
the first year of Clinton's first term. It was also stymied in 
subsequent time by the heavy burden of increased regulation out 
of the Clinton administration and its heavy handed tax increases 
on 'wealth.' The Clinton people have in fact tried to have it 
both ways, insisting that their policies have been responsible 
for the economic growth and yet insisting that the slow rate of 
growth was actually preferrable and even necessary. 

     Still another reason for the slow growth rate of 1993 thru 
1997 has been the adverse impact of the tremendous reduction in 
the military budget. The administration has also sought to take 
credit for another reason for the continued rate of growth -- 
what they like to refer to as the information highway. This has 
not only been conducive to a great deal of business activity -- 
something the tax hounds of the White House salivate on seeing --

but it has also brought into the picture the beginnings of a new

wealth mechanism of 'personal' or 'private' currency, which has 
contributed mightily to the money supply (measures of which have 
become ever less reliable due to their lack of consideration of 
such currencies). It is a money form that yet is in its infancy.

Further contribution of the diminishing deficit and the lessening 
of the phenomenon of crowding out have fed the recovery.

     Counter-active initiatives of the current administration 
have included the impulse at serruptitious means of revenue 
enhancement. Among the most important of these is probably

the increase in 1997 of the minimum wage, but so, too, has been 
been the late 1997 executive action to undermine welfare reform 
by directing that wages paid to those brought into wage earning 
as an alternative to welfare popularly termed workfare must be in 
accordance with union scale, ala Davis-Bacon. In fact, this 
measure, if allowed to become effectual, would mean huge cost 
increases in the state costs of workfare, and commensurate 
reduction of the impact of the reforms. Clinton only signed the 
welfare reform package when it became politically impossible for 
him to resist it, and he did so with clear pronouncement of his 
aim of 'repairing' it subsequently (something he has attempted to 

accomplish via executive fiat, having regulations issued in 

September 1997 requiring that Davis-Bacon apply to workfare, 

making it necessary for union scale to be paid to many workfare

recipients, virtually pricing it out of existence if such 

regulation is permitted to stand). 

     Another tax increase that has alluded most perceptions has 

been the pursuit of tobacco by Clinton. Agreements are being 

cemented by which tobacco companies settle litigation against 

them with huge payments to the government. The cost of these is 

going to be borne by tobacco consumers who have to pay the higher

prices which will inevitably result in addition to the higher 
overt sin taxes which have been imposed.

     In actuality, the Clinton 'boom' period has been marked by 

statistical slowdowns that would have been labeled a recession 
had they appeared under Bush. In 1995, we experienced alternating 
quarters of growth and actual constriction of the economy. The 

least that can be said of the Clinton 'recovery' is that it has 


been sluggish and spotty. The most positive measure that Clinton 
has undertaken might be said to be the reappointment of Alan 
Greenspan with his resultant continued pumping up of the money 
supply (this has been mediated tremendously however by his 
appointment of Fed Board members such as Alice Rivlin). Whatever 
his liabilities have been as Fed Chair, he has played a vital 
role in the money supply expansion that has helped fuel the 
economy.

     Because of these items, we have been witnessing another 
peculiarity in 1997. The trade deficit has all but disappeared, 
although it is only a temporary aberration. The trade deficit 
picture has regularly tracked in an inverse relationship to 
prosperity. When we have a booming economy, the deficit has 
grown, and it has shrunk during downturns. That is, of course,

a lawful process. But in 1997, while we supposedly have a period 
of economic expansion, the trade deficit has acutally slimmed 
down.

     And so the analysis which explains the economic downturn of 
1991 can also explain the subsequent recovery. Quite soon it is 
going to be called the longest period of economic growth in our 
history, surpassing even that of the Reagan years. In reality, it 

will not be anything of the sort, although given the current 
ethic of the media, it unquestionably will receive play as such, 
just as they have followed the party line on deficit reduction, 
which would not have occured at all had Clinton's policies been 
initiated.

     




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