In his speech on Tuesday night, President Obama explained that our current economic difficulties resulted when “regulations were gutted for the sake of a quick profit at the expense of a healthy market.” Most likely he’s trying to paint his predecessor as the gutter, even though President Bush spent a significant amount of energy pushing Fannie and Freddie oversight initiatives to no avail (thanks to Messrs. Frank and Dodd in Congress). Really, if one looks, Obama’s idea of the nefarious deregulatory regime was President Clinton’s, along with his aide Larry Summers who served as Treasury Secretary.
The Clinton administration succeeded in its attempt to deregulate the banking industry with the Gramm-Leach-Bliley Financial Services Modernization Act of 1999. Repealing Glass-Steagall, it opened up competition among banks, securities firms and insurance companies. Despite Mr. Obama’s overtones, it was a good bill; one simply can’t imagine the difficulty Bank of America would have had acquiring Merrill Lynch without it. The larger point is that, in light of the troubling start to our current President’s term and the content of his speech on Tuesday, conservatives’ hopes for the better aspects of the last Democratic president’s record to shine through over the next four to eight years have already started to dim.
As fascinating as it is to say this, I was always something of a Bill Clinton fan. He pushed free trade, NATO expansion, welfare reform and (a lot of the time) smaller government. He was possibly better on trade than either Bush, and while Clinton gets far too much credit for the economic prosperity of the decade (“I don’t know if I can give the private sector THAT much credit…maybe I could give them half that?”), free trade played an important part. As easy as it’s been for media types to throw around Depression-related bilge to strike a chord, we need only look at the facts to determine that closing up international trade links during a recession can only hurt our medium and long-term recovery prospects.
NATO expansion is not much of an issue anymore, but it represented the more responsible aspects of Clinton’s foreign policy. Perhaps Mr. Obama can carve out his own niche by following through on Central European missile defense. Clinton’s welfare reform was the most significant and successful social policy reform of a generation. Affecting incentives the wrong way this time around when dealing with the struggling housing market would be an enormous step back. And whether or not Mr. Clinton truly believed in it, it’s remarkable to think of a Democrat simply telling us that limited government, as a matter of philosophy, is a respectable answer.
One of our readers and former high school classmates argued throughout the campaign season that Obama’s anti-trade, big government rhetoric was mere posturing. Excuse me if we were uncomfortable with the idea of relying upon a candidate’s dishonesty for our economic salvation. The same goes for Iraq, security and comprehensive tax policy. If Bill Clinton was a moderate who sometimes talked like a liberal, I’m afraid that Obama and his advisors are liberals talking like moderates. And then sometimes, like on Tuesday, Obama talks like a liberal. That’s okay if it’s a lie, as long as the markets don’t react too poorly to diminished future expectations.
Given the recent stimulus bill and the mortgage cram down legislation working its way through Congress, how soon can we realistically expect those things we actually liked about the Clinton years to make their way back into the Democratic fold?
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