Bill Clinton was the 42nd President of the United States of America. He served from the year 1993 to 2001 1 . Democrats have long argued that Bill Clinton is the best President that the United States of America has seen since Dwight Eisenhower and John F. Kennedy. During his tenure, the United States witnessed a decade-long period of economic growth and prosperity. Jobs increased in number as the budget deficit decreased in size. This is the longest continuous stretch of economic growth that the United States of America has ever experienced. Under his suite of policies sometimes branded Clintonomics, he was able to create more than 20 Million new jobs, which saw unemployment dropping to just under 4%, another record.
Under Clinton’s New Economy, he sought to move away from the socio-economic policies of the earlier Reagan and Bush Presidencies 2 . It was this move that saw for the first time ever, America experiencing a budget surplus of almost 130 Billion dollars, from an earlier budget deficit of 290 Billion dollars. These policies were enacted on his first budget, where the highest earning individuals and companies were made the most heavily taxed. He also cut government spending and adopted a lean government structure. A reduction in government borrowing freed up capital resources that were then pumped into the private sector 3 . Additionally, it was during Bill Clinton’s presidency that the Social Welfare program was abolished.
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Bill Clinton pushed for the ratification and implementation of the North American Free Trade Agreement (NAFTA), earlier spearheaded by George Bush Senior’s Administration. This piece of regulation aimed to establish a trading block comprised of the United States of America, Mexico and Canada. The NAFTA treaty, as it was called, aimed to eliminate taxes, tariffs and trade restrictions between the borders of the three nations. The treaty took a long time to get ratified because of strong opposition from the American Congress and Labour and Trade Unions.
The main concern was the fear of a loss of jobs to lower-wage economies like Mexico. Bill Clinton however incorporated extra clauses into the treaty, which allayed the fears held by Congress and American Trade and Labour Unions. Ratification of NAFTA resulted in the world’s largest free trade bloc by population with an estimated population of approximately 400 Million citizens.
In summary, the main tenets of Clinton’s economic policies were Free Trade, Financial Deregulation and Forcing the Poor Working Class into the Labour Market to earn a paycheck as opposed to staying at home to wait for a welfare check. This saw an overall extended period of economic prosperity and millions of families lifted above the poverty line.
New Democrats and the DLC
New Democrats under Bill Clinton were a band of Democratic Party members who espoused a more centrist view to economic and social issues. They characterized themselves as fiscally conservative but socially liberal. The New Democrats movement was mainly seen as a reaction to the landslide victories of Republican candidates in the three recent Presidential elections. Under the New Democrats movement, the traditional Democratic Party witnessed a major shift in support from rural to urban areas, minority demographics and socially liberal groups.
In the year 1990, Bill Clinton became chairman of the DLC, The Democratic Leadership Council. The DLC was an organization founded in 1985 that aimed to lure back conservative middle-class voters who had drifted from the Democratic Party to the Republican Party. It aimed to do this through proposing and implementing ideas that addressed the concerns causing this voting bloc to depart from the Democratic Party. The Democratic Leadership Council was however dissolved in 2011.
Under Bill Clinton, the New Democrats were more receptive to policies that tended towards deregulation of the economy as a whole. This included the Financial Services and Banking Sector, Agriculture, Energy and Telecommunications Sectors. They were more open to the concept of deregulation than their stauncher Democratic Party counterparts. A big selling point that the New Democrats stood under was the commitment to an overall improvement of the economy.
Neoliberal Policies and Globalization
From a local perspective, the first evidence of a neoliberal approach to big government was the push by Bill Clinton to ratify the NAFTA treaty. This would open up trade borders between the United States of America, Mexico and Canada 4 . American factories could set up shop in Mexico, which was a developing nation at the time. In exchange, Mexican immigrants could come into America in search of jobs and make a living.
In the short and medium term, American workers were denied jobs since there were cheaper labor options that manufacturing companies could explore abroad. More positively, however, skilled and unskilled immigrants alike, from all over the world, came to the United States in America in search of a living. They came in droves, to be absorbed into the booming American economy. This resulted in a further expansion of the American economy, with an influx of extra forces of labor.
In some third world countries and developing nations however, this resulted in a massive migration of skilled and unskilled labor away from these countries. This resulted in what was termed ‘brain drain’, which may have deprived theses developing nations of much needed labor and expertise 5 . American companies were able to establish foreign-based manufacturing plants and factories, lowering their operating costs and raising their profits and revenue. This revenue was almost always remitted back into the American economy in form of corporate taxes.
Enron and Economic Deregulation
Market Deregulation was one of the promises through which Bill Clinton won the 1992 presidential elections. By the middle of the boom of the 1990s, the economy was expanding. Stock prices were at an all-time high and globalization was happening at full scale. Bill Clinton’s economic policy model of deregulation and free trade seemed to be working. This basically meant moving away from Big Government policies to a model more focused on small businesses and individuals 6 .
Although many people now fault the mass deregulation of key industries, they were a masterstroke of political and economic expediency at the moment of their implementation. Critics say that the permissive lending environment created thus, might have led to the global housing bubble of the 2000s and the banking and financial crisis of 2008. In the financial services sector, the Bill Clinton Administration passed laws that required banks to extend lending to lower-tier members of society. This included the lower middle class and outright poor, without due consideration of their credit scores and their ability to pay back these loans.
In the short run, this was very helpful to these households as they were able to participate in the economy and participate in productive work. In the long run, however, depending on who you ask, this piece of deregulation may or may not have resulted in the banking and financial services crisis of later years.
In the housing sector, similar laws were passed that required that banks and other players in the housing industry to provide cheap financial options for the construction of cheap housing to service the lower middle class and satiate a looming housing crisis that may have been caused by the increased immigration from foreign nations. Among the regulatory requirements was the financing of cheap mortgages.
The effects of this were cheap housing for all in the short term and a housing crisis in the long-term. Deregulation in the Telecommunications Industrial complex was mainly a good thing that spurred the growth and development of global communication and internet behemoths. This was good for the American and global economy in general. It spurred innovation and technological growth on a global scale. It could be argued however, that the deregulation of the telecommunications sector, in tandem with the deregulation of the banking and financial services sector, led to the dot com bubble of the 2000s.
Finally, the deregulation of international trade regulations led to an increase in exportation volumes of American goods and services abroad. The United States of America was able to export goods, services and expertise to foreign nations. Examples of this are Microsoft and McDonald’s, which were able to extend their global footprint and showcase the American spirit of innovation and industry. In return, the United States of America gained access to a new pool of skilled and unskilled labour from the influx of new immigrants from various parts of the world.
In conclusion, conservatives have argued, however, that this laissez faire approach to running multiple sectors of the economy was risky and unsustainable. This perspective was vindicated by the Enron scandal of the 90s. Enron was an energy company which benefited from congressional regulation that allowed exemption from laws regulating the price of electricity and natural gas. The scandal was characterised by a runaway floutin of basic accounting principles to portray non-existent profits in the company. The main sectors affected by financial scandal during the Bill Clinton Presidency had been subjects of deregulation. These were; Energy, Telecommunications and Financial Services, especially Stock Trading.
Works cited
Foner, Eric, and John A. Garraty, Eds. The reader's companion to American history . HMH, 2014.
Zinn, Howard. A people's history of the United States: 1492-present . Routledge, 2015.
Stone, O. "The untold history of the United States/Oliver Stone and Peter Kuznick; per. s angl." А. Orzhitskogo, V. Polyakova. M., Kolibri (2015).
1 Zinn, Howard. A people's history of the United States: 1492-present . Routledge, 2015
2 Foner, Eric, and John A. Garraty, Eds. The reader's companion to American history . HMH, 2014
3 Stone, O. "The untold history of the United States/Oliver Stone and Peter Kuznick; per. s angl." А. Orzhitskogo, V. Polyakova. M., Kolibri (2015)
4 Zinn, Howard. A people's history of the United States: 1492-present . Routledge, 2015
5 Foner, Eric, and John A. Garraty, eds. The reader's companion to American history . HMH, 2014
6 Zinn, Howard. A people's history of the United States: 1492-present . Routledge, 2015.
