The Clinton Legacy
A return to Hooverite economic policies

By Edward S. Herman

Bill Clinton has been getting mixed reviews on his “legacy” in the mainstream media: commonly he is downgraded for regrettable personal defects that made him a poor role model and lowered the esteem of his high office; but he gets good marks for his domestic economic policies that have given us sustained prosperity, high marks for his foreign economic policies that have advanced “free trade,” and a fairly high grade for his other foreign policies. The only point on which I agree with this assessment is the first, although it is the least important and, of course, was used by the right wing to attack and weaken him by outrageous methods and for the wrong reasons.


A first important component of the Clinton legacy is his contribution to moving the political spectrum to the right. As soon as he hit office Clinton abandoned any serious populist agenda and policies that would “put people first” in favor of catering to the bond market and business generally.
His strategy over his eight years was to preempt Republican positions on the social and military budgets, deficit reduction, welfare, crime, capital punishment, the drug war, trade, and foreign policy. This helped him keep business funds flowing his way, and it kept an important segment of the corporate media, along with many liberals and pundits, on his side, but it weakened the support of the abandoned “people.” This was important in helping the Gingrich Republicans win in 1994, and it set the stage for Bush in 2000. So we can even say that the Republican victories, with their attendant further shifts toward regressive economic and social policies, were part of the Clinton legacy.

It has been noted that the large number of black males excluded from voting in the 2000 presidential election by imprisonment or former felon status made a significant difference in the election outcome, arguably a blowback effect of Clinton’s hardline policies on crime and the drug war.
Less noted is the fact that Nader might not have run at all if the Clinton policies had not represented a comprehensive sell-out of populist principles. That sell-out has been institutionalized, as Democratic National Council officials, policy-analysts, and policy-makers, several of whom have publicly criticized Gore for his brief and unconvincing foray into populist rhetoric during the campaign, are now firmly in charge of the Party and quite ready to accept the coup d’etat president and do business with him.

Economic Policies and Principles

Clinton’s record on economic policy was not entirely bad: his tax changes of 1993 reduced by a third or more the regressiveness brought about by the Reagan-era changes; he belatedly got the minimum wage increased, although not enough to offset the real decline since 1979; and his revamped National Labor Relations Board became a pro-labor institution that made a difference in many cases of union-management conflict (see Tom Robbins, “Unfriendly Relations: Bush Supporters Take Aim at Pro-Labor Board,” Village Voice, January 24-30, 2001).
Some give him credit for the long prosperity and expansion during his term, but that resulted from the Fed allowing unemployment to fall, the investment surge based on New Economy technology and development, and the spending based on the stock market bubble. Clinton had little to do with this, and the boom had its down side: it was associated with increased inequality, with only modest real wage increases that came late in the boom, and it was based in part on a bubble already deflating and likely to sag further in the near future.

But a more durable part of the Clinton legacy was his—and Gore’s—return to Hooverite economics.
Great stress was laid on deficit and debt reduction and, in the end, Clinton and Gore were both dedicated to reducing the national debt to zero. In what most economists view as lunatic fiscal policy, the Hoover formula early in the Great Depression (initially also believed in but gradually abandoned by Franklin D. Roosevelt) was cutting back government expenditures to balance the budget. Such cuts are deflationary, and both theory and empirical evidence tell us that the resultant lower interest rates are not likely to offset the deflationary effect of the fiscal action.
But Clinton-Gore regularly preached the Hooverite truth, and during the recent campaign “Mr. Gore says he’ll pursue debt reduction even if the economy slows, ‘just as a corporation has to cut expenses if revenues fall off,’ adding that a recession should be viewed as an opportunity to push cuts further” (NYT, February 8, 2000).

Closely related to this Hooverite principle is that of “reinventing government” and privatizing where possible.
Gore was even in charge of a body explicitly charged with the task of shrinking government, and the Clinton administration pursued this with enthusiasm. Perhaps their most important legacy in this regard was in transferring government control of the Internet to the private sector and assuring that the new communications technologies and media would be reserved for private use.

So, instead of using any prospective surpluses to rebuild the weakened safety net and neglected public infrastructure, Clinton pushed for debt reduction on the dual Hooverite principles that government deficits and public debt are bad and should be reduced whenever possible, and that government is bad and should be kept to minimum size, except for the military establishment, police, and drug war fighters.
This is a legacy that George W. Bush will find congenial and build on.

On Social Security, Clinton held the line against the business and right-wing assault and demands for privatization and scaling back, but he did this with damaging intellectual opportunism.
Instead of denying the Social Security crisis as a phony and defending the system for its efficiency and highly beneficial effects, he agreed that there was a severe crisis—“everybody knows that something substantial, really substantial, has to be done to reform the Social Security system”—and offered as his main solution federal debt reduction.
This phony solution to a non-existent problem used Social Security to gain support for Clinton’s Hooverite fiscal policy.

The Medicare crisis, real but less immediately menacing than in mainstream portrayals, rests mainly on the inflation of private medical system costs.
Clinton’s inept medical reform plan got nowhere, but did result in the rapid and not very helpful spread of HMOs. Thus, in his eight years in office he did nothing constructive to deal with the underlying medical cost problem, which would involve serious government intervention via a single payer insurance system and price caps. These were ruled out by his ties to the insurance and medical industries and his ideological commitment to Hooverite principle two: government is bad and must be shrunk. So here also his legacy sets the stage for further attacks on the welfare state by Bush II.

Centralization and Concentration

Another important part of the Clinton legacy is the greater centralization of economic power.
Despite the case carried out against Microsoft and scattered other antitrust actions, under Clinton’s rule we have witnessed a new merger movement of exceptional scope, more far-reaching than the notable movement of the Reagan years. Huge mergers have been permitted in banking, telecommunications, the media, pharmaceuticals, autos, retail trade, airlines, railroads, oil, farming, food, and elsewhere.
This caused Jeffrey Garten, Dean of the Yale School of Management, to warn that our emerging giantism is a serious menace: “Big companies have a disproportionate clout on national legislation,” have become too large to fail, “exert massive pressure on America’s international behavior,” and “already [have a] formidable grip on U.S. trade policy” (Business Week, January 25, 1999).
These structural changes that reinforce corporate and plutocratic power are a legacy burden to ordinary citizens that Bush II will be pleased to advance.

International Economic Policy

In the mainstream media Clinton’s success in getting passage of the North American Free Trade Agreement (NAFTA) and helping put in place the World Trade Organization (WTO) are regarded as perhaps his finest achievement.
It goes without saying that the fact that Clinton did this against the strong objections of a large majority of his voting constituents and Democratic Party legislators was not mentioned in these accolades.

But the media accolades are in close accord with the strenuous media support of NAFTA and the WTO, reflecting the gearing of corporate media perspectives to the demands of the corporate community more broadly. This legislation was not mainly about “trade,” it was about the investment rights of transnational corporations (whose rights took up the great bulk of the NAFTA text); and it enlarged those rights while reducing those of governments to protect their citizens from environmental or other corporate excesses or to pursue a development path other than via market expansion.
It supported corporate globalization without restraint, and was incompatible with democratic rule and majority economic welfare.
This was class legislation, supported by an upper and business class media, and pushed with great energy by Clinton, the corporate community’s agent on the big issues.

The Personal Responsibility Act

A landmark in the Clinton legacy was his signing of the 1996 Personal Responsibility Act, which ended any federal responsibility to poor people and eliminated a basic element of the safety net.
While the welfare system needed reform, Clinton’s was inadequate, savage, and based on an unprincipled person’s calculus of political advantage. It was done in the face of a suppressed internal report that estimated a million poor women and children would be pushed into the streets as a consequence of its enactment.
The legislation was not accompanied by the provision of day care, health care, job training, and job guarantees that would give the act any humane touch, and while the subsequent economic expansion may have reduced the human cost of this vicious legislation, by exactly how much is not clear as followup studies have been made only sporadically, and any reduction in human pain was inadvertent and not planned for by the act’s authors.

Some have argued that a Republican president could not have gotten this act passed—that Democratic opposition would have been too strong. But a Democratic president was able to mobilize enough Democratic votes to carry the day, as in the cases of the NAFTA and WTO legislation.
So Clinton here again set the stage for further Republican moves, in this instance to reduce the safety net and strengthen the “free market” for labor.

Crime Control, Drug War, and Anti-terrorism Legislation

Clinton apologist Anthony Lewis regards civil liberties as Clinton’s “great failure as president,” noting that he “allowed the destruction of federal habeas corpus,...signed the cruel Immigration Act of 1996 into law without a protest...[and] carried on the drug war as its futile savagery became more and more obvious” (“Ave Atque Vale,” NYT, January 20, 2001).

Lewis doesn’t mention specifically or discuss Clinton’s Violent Crime Control and Law Enforcement Act of 1994, which provided massive federal aid to local police and prison construction, helped increase mandatory penalties for drug-related crimes, and added 16 new crimes to be subjected to federal capital punishment along with a “three strikes” provision.
This vicious legislation arguably complemented Clinton’s economic policies and eventual signing of the Personal Responsibility Act and aggressive pursuit of the drug war, which were all going to wreak havoc in the urban ghettoes and require a “law and order” response.
The prison population grew by 129 percent in the Clinton years, passing the 2 million mark in 1999, with blacks comprising 46 percent of those incarcerated as Clinton was preparing to exit office.
But he was alleged to be “disturbed” by this disproportionate rate of black imprisonment, demonstrating his credentials as a friend of black people.

Clinton’s Anti-terrorism Bill of 1995 went even further than his Violent Crime act, sharply limiting the writ of habeas corpus and therefore prisoners’ ability to pursue their rights in federal courts, and making it a federal crime punishable by a ten year prison term to support the lawful activities of any foreign group labelled “terrorist” by the State Department.
This encouraged FBI surveillance of peaceful humanitarian and solidarity groups across the country.
The bill also authorized the Immigration and Naturalization Service to deport immigrants on the basis of undisclosed secret evidence. Clinton also signed the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, perhaps the most anti-immigrant legislation ever enacted, which strips federal courts of review authority over the INS and eliminates “discretionary relief” for a broad range of immigrants.


When Clinton and Gore entered office, one of their first environmental actions was approving an incincerator project in Ohio that Gore had solemnly pledged to block.
In exiting office, Clinton created a series of protected areas that he had not seen fit to do anything about earlier and much of which his successor will find ways to de-protect. In between, the Clinton-Gore performance was badly compromised, with the environmental community coopted and confused by rhetoric and minimal performance.
Notable in this history was Clinton’s July 1996 signing of a bill containing the “salvage” provision that gutted protection of the ancient forests and allowed him “to find a few billion feet of hassle-free timber for noisy constituents out West.”
The Administration claimed it had been “snookered” and Gore said that this was the Administration’s “biggest mistake,” but “Clinton quietly declined to support a bill that would have repealed that ‘mistake’—a bill that subsequently lost by two votes.” (Paul Roberts, “The Federal Chain-Saw Massacre,” Harpers, June 1997).

The Clinton administration also did poorly on clean air rules, on international efforts to control global warming, in regulating the chemical industry, and in handling the new biotechnology.
As regards global warming, Clinton essentially sabotaged the international efforts to do something about the problem at Kyoto and Amsterdam.
On biotechnology, the Clinton-era regulators have been servants of the industry, the New York Times noting recently that when Monsanto wanted regulation in order to calm public fears, it got it; when it wanted self-regulation, it got that; and the only thing not in evidence was regulatory interest in what was best for the general public (Kurt Eichenwald, “Biotechnology Food: From the Lab to a Debacle,” NYT, January 25, 2001).
Bush II will perhaps do worse than Clinton on environmental issues, but the lesser evil was an evil, and a hypocritical one to boot.

Foreign Policy

Clinton’s foreign policy has followed the main lines pursued by his predecessors, serving the transnational companies well and treating the military-industrial complex generously.
It has been somewhat more aggressive in projecting U.S. military power abroad, reflecting in part the post-Soviet ending of containment, the self-confidence stemming from uncontested military superiority and the economic boom, and the Clinton need to prove his credentials as a servant of the powerful.

The result has been policies that have served the powerful, but have violated international law and wreaked human havoc across the globe.
The United States has been a rogue state, virtually unconstrained in throwing its weight around in its version of imperialism that blends the threat and direct use of force with coercive diplomacy, further backed by boycotts, sanctions, and trade and financial discrimination.

As these policies have served the “national interest” the media have been kind to Clinton, as they were to his predecessors.
More interesting is how the liberals have found the Clinton policies creditable, despite the fact that a powerful case can be made that he is a first class war criminal (see “Clinton Is The World’s Leading Active War Criminal,” Z Magazine, December 1999).
Anthony Lewis’s account of the Clinton legacy gives him points for North Ireland, the Middle East, and Kosovo, and mentions no negatives. Robert Kuttner and Paul Starr have also found little to quarrel with in Clinton foreign policy in the American Prospect.
None of these folks mention his Administration’s pushing the expansion of NATO up to Russia’s borders, his refusal to go along with the international consensus banning land mines, or his unwillingness to support an international tribunal not under thoroughgoing U.S. control while happy to use one in Yugoslavia that is U.S.-dominated.
His failure to pay this country’s UN dues, his contemptuous and opportunistic treatment of the UN, including the bypassing of the UN and violation of UN Charter rules in the war against Yugoslavia, doesn’t seem to trouble them at all.

They also ignore Colombia, where Clinton has been pouring money into an army and related paramilitaries that have killed many more civilians and created many more refugees than Milosevic did in Kosovo before the NATO bombing.
This policy is a rerun of earlier U.S. support of regimes of murder in Guatemala and El Salvador (among many others). The Salvador analogy is especially striking as liberals in the 1980s required Reagan’s certification of human rights progress as a condition for funding a murderous government, which Reagan always provided (and the Democrats never challenged).
The liberals followed the same course in 2000, agreeing to Clinton’s “Plan Colombia,” but with human rights certification required. Following Reagan in his cavalier treatment of human rights, and unreported in the mainstream media, less than 48 hours before his exit from office Clinton’s State Department announced a reinterpretation of the law that allowed the funding of Colombia’s army and paramilitaries to go forward without certification that human rights conditions were being met.

The previously mentioned liberals also don’t discuss Turkey, where a military-dominated government has engaged in an ethnic cleansing of Kurds in the 1990s that makes Milosevic’s efforts in pre-bombing Kosovo look modest by comparison. But Clinton supported these ethnic cleansers with massive aid and diplomatic support throughout his term, so eye aversion is again the order of the day.

Lewis and others also fail to mention Iraq, where under the harsh Clinton-Blair sanctions policy more than a million Iraqis, including hundreds of thousands of children, have succumbed to disease and starvation.
This is the closest thing to “genocide” that has been going on over the past decade, but if Madeleine Albright says 500,000 children deaths in Iraq have been “worth it,” that’s enough for Lewis, Kuttner, and Starr, as well as the mainstream media.

Robert Kuttner mentions the Russia policy as a failure, but Lewis and Starr don’t and the mainstream media give it modest and distorted attention.
Russia’s is a social catastrophe of major proportions, with millions of casualties, and Clinton’s embrace of Yeltsin and support of a completely unsuitable set of policies that shattered the country was beyond irresponsibility, it was criminal.

Clinton’s policy on the Middle East was to give Israel carte blanche, allowing it to create new “facts on the ground” in Jerusalem and the West Bank, and to bully and buy off Arafat while giving the ethnically cleansed Palestinians nothing.
A monstrous policy bound to fail, but Lewis finds it “courageous,” and Kuttner, Starr, and the mainstream media give Clinton credit for trying.

Clinton is lauded for his humanitarian effort in Kosovo.
Lewis, Kuttner and Starr, and the mainstream commentators take this as a matter of course. The fact that NATO deliberately “raised the bar” to permit bombing, eschewing any kind of real negotiations, doesn’t interest them at all. Nor does the fact that it was the bombing that turned a crisis into a disaster; nor the fact that NATO eventually turned to deliberately bombing civilian facilities in Serbia; nor the fact under NATO’s occupation there has been a really massive and ecumenical ethnic cleansing.
The U.S.-sponsored NATO operation was criminal aggression, criminal in methods, and disastrous in results.

None of the three liberals even mention East Timor, where the numbers killed even before the August 30, 1999 referendum exceeded that of Kosovo Albanians killed by the Serbs prior to the NATO bombing. Clinton knew the killings were going on in East Timor long before August 30, but didn’t lift a finger to call off his friends. He only did that, under international pressure, after the Indonesians had destroyed 85 percent of the country.
This was a war crime by tacit collusion with the criminals, even if it falls outside the orbit of concern of the liberals and mainstream media.

Clinton’s legacy is disastrous.
Bush will have trouble surpassing Clinton’s record of devastation and war criminality abroad.
At home we can expect Bush to build on the Clinton performance, but the groundwork was well laid.

Published in Z Magazine

Edward S. Herman is Professor Emeritus at the Wharton School, University of Pennsylvania.

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