by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The most enduring and destructive superstition about American politics is that the president is “in charge of” the economy, and so it was no surprise to hear Hillary Rodham Clinton yesterday say that she’d put her husband “in charge of revitalizing the economy.” As my colleague Charles C. W. Cooke points out, this is an example of “talismanic” thinking, that what makes the world go ’round is having the tribal chieftain do that voodoo that he does so well.
There are some obvious problems with this line of thinking, the main one being that it is complete and utter undiluted poppycock.
It is true that the U.S. economy performed to general satisfaction during Bill Clinton’s presidency. But most of the big economic news of the 1990s had little or nothing to do with Bill Clinton, with government policies that were uniquely or mainly the work of Bill Clinton, or with the day-to-day management of public resources by the Clinton administration.
The Clinton-era boom was in no small part a continuation of the Reagan-era boom, which was, like the performance of the economy under previous and subsequent presidents, only partly a product of the president’s economic philosophy and policies. Two of the great economic-policy successes of the Reagan era — the taming of inflation and the bundle of reforms generally described as “deregulation” — were rooted in Carter-era policies. Ronald Reagan knew enough to understand that enduring the recession engineered by Paul Volcker and the Fed was necessary to wring inflation out of the economy, but he wasn’t terribly happy about it, and neither were voters: Reagan’s approval ratings were at 41 percent at the end of 1982, and his unpopularity cost Republicans a couple seats in the House. At the beginning of 1983, Reagan’s job-approval number was down to 35 percent. But in May of 1980, inflation had been 14.4 percent; in May of 1986, it was 1.5 percent, and Reagan’s approval number roughly doubled.
Was taming inflation Reagan’s doing? Volcker’s doing? Do we give Carter credit for choosing Volcker, or do we penalize him, knowing that he hadn’t wanted to do so but was pressured into it? Robert J. Samuelson and Paul Krugman have argued that out at some length, and the answer is inconclusive.