by Joshua Frank
So, how did America’s
poor fare under Bill Clinton’s White House reign? Better than George W.
Bush — at least that seems to be the common belief among Democratic voters
today, especially those lining up behind Madam Hillary. However, the economy
under Clinton in the 1990s may not have been as robust and healthy as
many would like to believe.
As economist Robert Pollin of
the University of Massachusetts at Amherst explains in Contours of Descent: US Economic Fractures and the Landscape of
Global Austerity, Clintonomics was not all it was cracked up to be. “The
distribution of wealth in the US became more skewed than it had at any time in
the previous forty years,” he argues. “No question, an increasing number of US
jobs began to be outsourced at an unprecedented rate as well.”
“Unlike Clinton, Bush is unabashed
in his efforts to mobilize the power of government to serve the wealthy,” he
continues. “But we should be careful not to make too much of such differences
in the public stances of these two figures, as against the outcomes that
prevail during their terms of office … the ratio of wages for the average
worker to the pay of the average CEO rising astronomically from 113-to-1 in
1991 under Bush-1 to 449-to-1 when Clinton left office in 2001.”
Pollin points out that while
Clinton’s tax policy reversed some of the regressive taxation that occurred
under Ronald Reagan, it certainly did not reverse the brunt of it. And, as
Pollin contends, “The fact is that, insofar as the end of the Cold War yielded
any peace dividend under Clinton, it took the form of an overall decrease in
the size of the federal government rather than an increase in federal support
for the programs supposedly cherished by Clinton, such as better education,
improved training, or poverty alleviation.”
Was Clintontime even a
boom-era after all? Pollin doesn’t think so. “Under the full eight years of
Clinton’s presidency, even with the bubble ratcheting up both business
investment and consumption by the rich average real wages remained at a level
10 percent below that of the Nixon-Ford peak period, even though productivity
in the economy was 50 percent higher under Clinton than under Nixon and Ford.
The poverty rate through Clinton’s term was only slightly better than the
dismal performance attained during the Reagan-Bush years.”
Bargaining power for low-wage
workers during the 1990s decreased tremendously as well. Wall Street scion Alan
Greenspan in fact did not want the unemployment rate to drop below 6 percent
because he feared that inflation would skyrocket. Greenspan also did not want
workers to increase their bargaining power, which could possibly benefit their
organizing strength in the work place. The majority of workers during
Clintontime were not happy with their occupations. As Pollin writes, “Wage
gains for average workers during the Clinton boom remained historically weak,
especially in relationship to the ascent of productivity. These facts provide
the basis for the poll findings reported in Business Week at the end of 1999
that substantial majorities of US citizens expressed acute dissatisfaction with
various features of their economic situation.”
Pollin also shows that the
Earned Income Tax Credit (EITC), the most significant economic initiative under
Clinton, more than doubled from $9.3 billion to $26.8 billion during Clinton’s
first two terms. But food stamps “dropped by $8.5 billion reflecting a large
increase in the percentage of households who are not receiving food assistance
even though their income level is low enough for them to qualify. Under the
Clinton Administration, the decline in the number of people receiving food
stamps — 9.8 million — was 17% greater than the decline in the number of people
officially defined as impoverished and was accompanied by a dramatic increase
in the pressure on private soup kitchens and food pantries.
“And while the EITC does
correct some of the failings of the old welfare system, it has created new, and
equally serious, problems. Moving poor and unskilled women from welfare onto
the labor market exerts a downward pressure on wages, and the national minimum
wage itself is too low to allow even a full-time worker to keep just herself
and only one child above the official poverty line.”
Poverty did decline under
Clinton by almost 4 percentage points. Yet, as Pollin explains, in the
prosperity of the 1990s, this small drop back to 1974 levels is reprehensible:
“Per capita GDP in 2000 was 70% higher than it was in 1974, productivity was
61% higher, and the stock market was up 603%.”
Clinton’s presidency did see a
stop in wage decline from 1993 to 1996, however. And in the next three years
wages rose sharply. But “the real wage gains were also, in turn, largely a
result of the stock market bubble. The Clinton economy of the late 1990s, whose
successes were so heavily dependent on the stock market, offers little guidance
as to what such an alternative path to sustained improvements in real wages
might be.
“Moreover, conditions under
Clinton worsened among those officially counted as poor. This is documented
through data on the so called ‘poverty gap,’ which measures the amount of money
needed to bring all poor people exactly up to the official poverty line. The
poverty gap rose from $1,538 to $1,620 from 1993-99 (measured in 2001
dollars).”
Pollin continues, “Because
workers had experienced the ‘heightened sense of job insecurity’ under most of
Clinton’s tenure, when wages did finally start to rise significantly in 1997,
this was from an extremely low base.
Moreover, the injection of
increased spending under Clinton that produced low unemployment came from the
stock market bubble, which, as has now become transparently clear, was
unsustainable. In the 1960s, the catalyst driving the economy to full
employment was government spending on the Vietnam war — that is, a source of
economic stimulus that was also unsustainable and even more undesirable than
the 1990s market bubble.
“The central challenge for an
employment-targeted policy in the US today would therefore be to identify
alternative sources of job expansion that do not require waging war or
destabilizing the financial system. The Bush-2 plan for huge military spending
increases obviously does not qualify any more than the Vietnam War as a
desirable source of job expansion.”
In other words, even though
jobs were plentiful in the 1990s, poverty was widespread and, if fact,
increasing. All this before the effects of NAFTA and welfare reform reared
their ugly heads. But this was all by design. Clinton, et al., knew exactly
what it was they were doing. No question Hillary’s neoliberal agenda will follow suit.
JOSHUA FRANK is managing
editor of CounterPunch. He is author of Left
Out! How Liberals Helped Reelect George W. Bush (Common Courage Press,
2005), and along with Jeffrey St. Clair, the editor of Red
State Rebels: Tales of Grassroots Resistance in the Heartland and Hopeless:
Barack Obama and the Politics of Illusion, both published by AK Press.
He can be reached at brickburner@gmail.com.
You can follow him on Twitter @brickburner.
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