The Clinton Prosperity Revived?

Dynastic politics may be inescapable. Our nation has had its Adamses, Harrisons, Roosevelts, and Bushes. If we include major political families, and not just presidential successions, we would include the Kennedys, the Louisiana Longs, the New York Fishes, the Tafts, the Romneys, and many more. At the beginning of this sad electoral cycle, it looked for a while as if we would have two dynasts competing for the executive office, another Clinton and another Bush. The Bush has been replaced by someone far worse, an emotionally volatile, ignorant, mendacious demagogue. But the Clinton heir is still in the running. As you may guess by my description of her opponent, I consider her the lesser of the evils. One of the main arguments people make in her favor, though, is that she may be able to return the country to the prosperity it enjoyed during her husband’s term. She has encouraged this view, saying that she would put Wild Bill in charge of the economy.

The problem is that it is not at all clear that the prosperity of 90’s had anything to do with President Clinton or his policies.  Instead, Bill Clinton came to office at a favorable time. The first circumstance that contributed to the economic boom of the 90s was the collapse of the Soviet Union and the end of the Cold War. President Reagan may have unintentionally contributed to this by ramping up defense spending, keeping the Soviets in a competitive potlatch that their centralized control economy was unable to sustain. As a consequence, Bill Clinton assumed office at a time when the United States had suddenly become the world’s sole remaining superpower, China had not yet developed its capacities, and radical Islam had yet to threaten the world. The United States enjoyed both the benefits of being the global geopolitical center and the psychological buoyancy of a nation facing an optimistic future.

The United States during the 1990s also moved into a new kind of economy. Ironically, the characteristics of this new economy later became trends of concern after 2008. One aspect of the new economic system was the intensified financialization of the United States. To oversimplify, the U.S. became less of a place where industries produced things and more of a place where investors sought to increase their capital. Hence, the demonstrable rise in importance of the FIRE (finance, insurance, and real estate) sectors and the development of new financial instruments dedicating to investing in investing during the end of the twentieth century and the beginning of the twenty-first.  This shift in the country’s role in the global economy had been in the making long before Bill Clinton’s presidency, since the U.S. reached its apex as a manufacturing center in the 1950s and early 1960s.  The supply-side economics of the Reagan-Bush era probably contributed to America’s intensified role as a global financial center, especially by cutting capital gains taxes. Once again, though, this was largely an unintended consequence of economic policy that was simply consistent with a long-term trend.

Capital must be invested somewhere. Those new financial instruments were ways in which capital could invested in speculation on its own future value. But also capital pumped up one particular area of the FIRE sector, real estate, encouraged partly by a government that wanted to expand home loans, but also by both foreign and American investors seeking high returns. Indeed, mortgages themselves gave rise to new financial instruments as financiers sought to re-package and sell mortgages to speculators.

The abundance of capital, though, also made possible a new industry that was substantially different from the old labor-intensive industries. This was the knowledge-intensive internet industry.  Like real estate, the internet leant itself to speculation on rising future profits and, like real estate, the economic benefits went disproportionately to relatively small numbers of individuals. The Clinton prosperity of the 1990s, in short, was a boom based on financial bubbles, rather than the consequence of presidential savvy.

All of this makes me skeptical of claims that another President Clinton could bring back the good times of the earlier President Clinton. It also makes me skeptical that any president has the power to recover some past economic setting, of the 1990s or early 1960s. At best, governments can respond more or less effectively to their economic environments. They cannot control them, and reality rarely fulfills plans as expected. If this makes me leery of claims that any candidate can direct the future, there is also a positive side to the limited power of presidents. If the celebrity buffoon at the head of the Republican ticket is elected, he certainly will not make America great again by any predetermined definition of greatness, but there is the possibility that the nation could survive and even flourish in spite of him. Of course, I’d rather not take that chance.

The Gospel According to Corey Booker

This is a troubling era in presidential politics. Opinion polls suggest that most Americans not only don’t support either major party candidate, but disapprove of both. For my own part, I find the possibility of a Trump presidency appalling, but I’m also decidedly unenthusiastic about Clinton. The speech at the Democratic National Convention that I found most convincing was that of Michael Bloomberg, whose endorsement of Clinton was essentially a repudiation of Mr. Trump.

Of all the speeches at this convention, though, the one that I disliked most intensely was that of New Jersey Senator Corey Booker. This was not because I thought Booker made a hash of his oration, or that he was rhetorically ineffective. What I disliked was the content, an invocation of political values that I thought were completely contrary to the basic principles of a pluralistic liberal democracy.

“We are not called to be a nation of tolerance,” Senator Booker proclaimed, “We are called to be a nation of love … Tolerance is the wrong way. Tolerance says I’m just going to stomach your right to be different, that if you disappear from the face of the Earth, I’m no better or worse off.”

Now, this is an interesting re-statement of a particular twenty-first century version of American civil religion, but it is clearly inconsistent with the ideal of a nation of free citizens who can pursue their own forms of happiness as long these don’t interfere with the pursuits of others. Tolerance is exactly what a free society is all about. A polity that pretends to dictate our affections for each other is one that does not allow us to choose our own paths or our own associates.

I do believe that tolerance requires that we “stomach” the right of others to be different. And there may be some other people that you and I feel could disappear without making us any better or worse off. Now, I would see every human life as having value, even the lives of people I don’t like very much (including the lives of certain political candidates). But this is a personal conviction, not a mandate from political authority.  I also recognize that any polity is a shared enterprise and requires cooperation. But saying that we need to cooperate with each other in order to meet our shared goals is pretty far from saying that government should be telling us what our feelings and relationships should be.

I’m certainly not opposed to universal love and acceptance as a religious precept, although I would suggest that you are going to find the injunction to love your neighbor as yourself very challenging when you deal with some of your neighbors. But one of the foundations of political tolerance is the idea that the state does not establish religion or religious precepts. Or tell us who we have to love, embrace, or include.