By William K. Black
April 8, 2016 Bloomington, MN
(Crossposted from Huffington Post. Postscript added for NEP)
Remember several weeks ago when Hillary Clinton was complaining that Democrats did not consider her a “progressive?” Bernie Sanders’ big win in Wisconsin ended that tactic and propelled Paul Krugman and Hillary and Bill Clinton to race to the right, inadvertently proving Bernie’s point that they are not progressives on the key issues.
In the last week, Hillary and her surrogates have pivoted hard right and retreated to their long-held positions on the major issues. Indeed, in several cases they have gone even farther to the right than the policies they pushed over a decade ago – even though those policies proved disastrous. They also inadvertently demonstrated the terrible policies that were produced by the Clinton’s vaunted “pragmatism” and compromising with the most extreme Republican demands. That was the story of Clinton’s infamous welfare “reform” – a policy both Clintons championed. Tom Frank details in his new book entitled Listen, Liberal how the Clintons’ “pragmatism” and zeal to work with the worst elements of the Republican Party led to the welfare “reform” bill. Zach Carter has just written the article I was planning to write about that travesty. He entitled it “Nothing Bill Clinton Said To Defend His Welfare Reform Is True.” I encourage you to read it.
By Joe Firestone
Let’s look again at the new populism through the lens provided by Robert Borosage in his recent attempt to tell us what it is about. He says:
The apostles of the new inequality have unrelenting sought to starve the public sector. President Reagan opened the offensive against domestic investments. Perhaps the hinge moment was in the final years of the Clinton administration when the budget went into surplus, and Clinton, the finest public educator of his time, pushed for paying down the national debt rather than making the case for public investment. He left the field open for George W. Bush to give the projected surpluses away in tax cuts skewed to the top end.
The hinge moment wasn’t then. It was when he decided, either early in his first term, or even before he took office, to rely on deficit reduction coupled with low interest rates from Alan Greenspan, on the advice of Robert Rubin and Larry Summers, rather than on deficit spending on human capital investments as advocated by Robert Eisner and Robert Reich. Rubin’s victory in the internal debates within the Administration was well-known at the time (1993), and set the deficit reduction course that played along with the Fed’s bubbles to create the private sector debt-fueled “goldilocks” prosperity, and surpluses of his second term. By the time Clinton faced the choice Borosage refers to, the die had already been cast. It was very unlikely that Clinton would turn away from further Government austerity policy, and turn instead toward investments in infrastructure, public facilities and “human capital.”
Posted in Joe Firestone
Tagged #PCS, Alan Greenspan, bill clinton, CAF, Congressional Progressive Caucus, CPC, goldilocks economy, MMT, modern money theory, platinum coin seigniorage, Robert Borosage, Sector Financial Balances, the Job Guarantee, the new populists, trade deficits, trade surplus