The Eight Year Itch

I see a lot of folks mocking this grandiose claim from Bill Clinton:

Folks, it's always a mistake to bet against America. It was tough in 1968, and we came back. It was tough in 1992 and we wound up with the eight best years we've had in modern history.

Is that really such a crazy thing to say? I doubt that eight out of the best eight years ever happened during Bill Clinton's term in office. Indeed, one cause of the GOP sweep in 1994 was lingering bad macroeconomic conditions and growth was slowing in the second half of 2000. But there was a solid 5+ year peacetime boom in there with few precedents, and American living standards really did reach a peak in 1998-2000 that was higher than anything in our earlier history and that we've yet to regain. If you'd been president then, you'd be bragging, too.

Comments

Is that really such a crazy thing to say?

That we came back after 1968? Not if you're a Nixon supporter.

Posted by Marc | May 5, 2008 1:13 PM

Its all how you define modern history. Post WWI and you have arguments. Post Vietnam (ie past 40 years or so)and hard to argue about it.

Posted by Rob | May 5, 2008 1:14 PM

The notion that 1992 was "tough", by any American historical standard, or even by post WWII standards, is simply silly.

Posted by Will Allen | May 5, 2008 1:15 PM

Bubbles are exhilarating. The late 90s were fun; the hangover, not so much. The hangover medicine was another bubble, this time in real estate. That was fun too, for those who cashed in at the top. Again, the hangover: not so much. Still good times if you are in the agricultural or commodity businesses though. I never thought I saw some crazy stuff in the 90s, but I never thought I'd see company that makes a component of fertilizer trade for more than 100x earnings.

Posted by Fred | May 5, 2008 1:23 PM

This is exactly why my blue collar union family members in Philadelphia voted for Hillary. They want the 90s back and think that putting Bill in and around the White House will do the trick.

Posted by jimmy | May 5, 2008 1:24 PM

This is exactly why my blue collar union family members in Philadelphia voted for Hillary. They want the 90s back and think that putting Bill in and around the White House will do the trick.

Posted by jimmy | May 5, 2008 1:24 PM

Is that really such a crazy thing to say?

Not really. It's a bit of a stretch, but I expect any president would make similar claims about his term.

But there was a solid 5+ year peacetime boom in there

"Peacetime" excluding Somalia, Haiti, Bosnia, Kosovo, missile strikes in Sudan and Iraq, Waco, Oklahoma City, USS Cole, etc., but peace is a relative concept these days, so okay.

American living standards really did reach a peak in 1998-2000 that was higher than anything in our earlier history and that we've yet to regain

Would love to see data indicating this is true. Everyone points to average real household income, which has been essentially stagnant over the last ten years, but this ignores (a) average household size decreasing, (b) lower taxes, (c) improvement in product and service quality that improve quality of life but are not captured by traditional inflation measures, and (d) rising personal income levels.

I think the strongest claim you can make about "American living standards" in Clinton's favor is that they are no longer improving as they were during the Clinton administration, but have flattened out.

Posted by right | May 5, 2008 1:26 PM

Is that really such a crazy thing to say?

Not really. It's a bit of a stretch, but I expect any president would make similar claims about his term.

But there was a solid 5+ year peacetime boom in there

"Peacetime" excluding Somalia, Haiti, Bosnia, Kosovo, missile strikes in Sudan and Iraq, Waco, Oklahoma City, USS Cole, etc., but peace is a relative concept these days, so okay.

American living standards really did reach a peak in 1998-2000 that was higher than anything in our earlier history and that we've yet to regain

Would love to see data indicating this is true. Everyone points to average real household income, which has been essentially stagnant over the last ten years, but this ignores (a) average household size decreasing, (b) lower taxes, (c) improvement in product and service quality that improve quality of life but are not captured by traditional inflation measures, and (d) rising personal income levels.

I think the strongest claim you can make about "American living standards" in Clinton's favor is that they are no longer improving as they were during the Clinton administration, but have flattened out.

Posted by right | May 5, 2008 1:26 PM

It would have been a great time to bet against America back in December 2000 or even better May 2003. Short sellers thank G. W. Bush and his enablers.

Posted by wren | May 5, 2008 1:27 PM

Yes, this is actually crazy. I'm 26, but I'm not stupid enough to think 'the best years of in my lifetime' actually means 'the best years in modern history'. The best years will almost certainly ALWAYS be the powst WW2 years when our GDP made up almost half the world's GDP, when most Americans at least got a shot to go to college if they wanted to, and when good jobs were plentiful for everyone.

The 90's don't even kind of compare to that. If Matt wasn't, to paraphrase petey's term, a trust fund baby (I think he's out of touch, not truly scummy), he would likely realize that MOST of the gains of the 90's were gobbled up by the top 20-30%.

Posted by Soullite | May 5, 2008 1:27 PM

It's a mockable claim because Bill Clinton is trying to promote the candidacy of the pessimist in the race. Obama's the one saying we can fundamentally change the country, whereas Hillary's the one betting against us. (That we can't overcome racial or social divisions, for instance.)

Posted by David B. | May 5, 2008 1:28 PM

Yes, this is actually crazy. I'm 26, but I'm not stupid enough to think 'the best years of in my lifetime' actually means 'the best years in modern history'. The best years will almost certainly ALWAYS be the powst WW2 years when our GDP made up almost half the world's GDP, when most Americans at least got a shot to go to college if they wanted to, and when good jobs were plentiful for everyone.

The 90's don't even kind of compare to that. If Matt wasn't, to paraphrase petey's term, a trust fund baby (I think he's out of touch, not truly scummy), he would likely realize that MOST of the gains of the 90's were gobbled up by the top 20-30%.

Posted by Soullite | May 5, 2008 1:31 PM

We "come back" because the system repeatedly cuts a deal with the dissatisfied classes - you buy in, we'll give you two cars and a TV in every room. Hell, that same offer even worked in China, regardless of who reaps the true benefits.

Posted by Aaron | May 5, 2008 1:36 PM

I think historians could argue the merits of this highly mockable statement back and forth. I also think this is the crap that

1. really reveals why Bill hates Obama so much (threat to legacy, whereas HRC is just an addendum to his legacy).

2. one just ought not to say because of the monumental arrogance it projects.

The guy has really shown the ugly in this campaign.

Posted by Arabella | May 5, 2008 1:36 PM

Being President isn't like being host of a party. "Remember all of that fun we had?". The 90s were good economically but the opportunity costs of Bill Clinton's tepid triangulating were massive. I can't think of a single lasting positive accomplishment of the Clinton administration outside the Earned Income Tax Credit. That's the fruit of the best 8 years in modern history? Please.

Reagan had a far greater positive lasting impact on modern times if only because he allowed Gorbachev to show himself and all Russians to be more like us then different. GHWB and Clinton pissed away that legacy with their narrow self interested politics and now were almost back at square one with the Russian oligarchs.

We shot a lot of rubber bands at the ceiling during an uneventful 8 year study hall during the Clinton adminstration. We cracked jokes, we flirted with the new girl in town, we snuck some smokes in the hallway. What we didn't do is study.

Posted by joejoejoe | May 5, 2008 1:41 PM

simply silly

Job growth during GHWB's term was the weakest since Hoover. So, by 1992 there was considerable pain. (A record eclipsed by GHWB's charming son.)

Posted by Jeffrey Davis | May 5, 2008 1:42 PM

Into whose lap did the internet economy fall? Bill Clinton is the luckiest man alive.

Posted by doug | May 5, 2008 1:43 PM

Soullite, yes, people frequently do not grasp what a competitive advantage U.S. labor and management had after the rest of the world's industrial base had been destroyed, but if the median wage household of 1998 or 2008 were told to adopt the living standards of the median wage household from that era, they would call for a violent revolution.

Posted by Will Allen | May 5, 2008 1:49 PM

We "come back" because the system repeatedly cuts a deal with the dissatisfied classes - you buy in, we'll give you two cars and a TV in every room. Hell, that same offer even worked in China, regardless of who reap the true benefits.

Posted by Aaron | May 5, 2008 1:49 PM

We should certainly give Bill credit for single-handedly starting the internet boom and the following years of prosperity...

Posted by Michael S | May 5, 2008 1:56 PM

Eisenhower suffered through a pretty rough recession just after his second inauguration. If "modern" = post-WWII, I'm pretty sure that the Clinton years were clearly the best for Americans. Balancing the budget and the EITC are legitimate Good Things.

The internet bubble was one thing, but real incomes, particularly among the poor, did pretty well throughout his administration, IIRC.

Posted by Elvis Elvisberg | May 5, 2008 2:00 PM

Well, Bill can be forgiven for conflating the 'best years of our country' with 'the best years I had in this country'. It's obviously untrue, but you can see why one might make such a mistake...

Posted by MR Bill | May 5, 2008 2:03 PM

"But there was a solid 5+ year peacetime boom in there with few precedents, and American living standards really did reach a peak in 1998-2000 that was higher than anything in our earlier history and that we've yet to regain."

I think this is overstating how great it was and how fairly the wealth was redistributed.

What did Clinton do? He kept economist Greenspan on who kept interest rates low, even below the supposed "natural" rate of unemployment. (1998 was the year of the Asian financial panic and the collapse of Long Term Capital Management which Krugman wrote about today). He listened to economists Robert Rubin and Greenspan and balanced the budget. He could have balanced it in a worse way, he also could have balanced it in a better, more fair way. Clinton ended welfare as we knew, screwing the poor and weakening the bargaining position of the working poor. He did the Alterntive Minimum tax which was good. I think he squandered the opportunites which were there at the end of the Cold War. Clinton always used the Republicans (who took over Congress in 1994) as an alibi and he didn't stem the growth of the right, he helped it grow which gave us George Bush as President. At least Bush listens to economists and appointed Bernanke, head of the Princeton economics department, to chair the Federal reserve. As Krugman wrote in his column today, I think Bernanke has done a good job so far, and might have staved off a bad finanical panic and downturn.

Posted by Peter K. | May 5, 2008 2:11 PM

The best years will almost certainly ALWAYS be the powst WW2 years when our GDP made up almost half the world's GDP

Soullite, those years weren't really so great for blacks living in the south, we fought a bitter and extremely bloody war in Korea, and we faced the threat of nuclear annihilation. There are factors to be considered besides GDP and median income.

I'm with Bill. The '90s were the bestest ever! They also happened to be my 20s, but it's not like I'm biased or anything.

Posted by brooksfoe | May 5, 2008 2:15 PM

I wish people would stop mentioning Matt's trust funds, or whatever. It would seem his points are either arguable or refutable on merits.

Posted by asl | May 5, 2008 2:19 PM

anent the "internet economy"

There will always be something to cherry pick. It should be noted that after the internet bubble popped in 1999 that Clinton's economy didn't wither and blow away. Despite Republican dire warnings throughout 2000, GWB inherited a booming economy.

The economy under a president who responds to the way things are will always be more responsive than an economy of a president with blinkers and a one-size-fits-all set of options.

Posted by Jeffrey Davis | May 5, 2008 2:23 PM

anent the "internet economy"

There will always be something to cherry pick. It should be noted that after the internet bubble popped in 1999 that Clinton's economy didn't wither and blow away. Despite Republican dire warnings throughout 2000, GWB inherited a booming economy.

The economy under a president who responds to the way things are will always be more responsive than an economy of a president with blinkers and a one-size-fits-all set of options.

Posted by Jeffrey Davis | May 5, 2008 2:28 PM

It should be noted that after the internet bubble popped in 1999 that Clinton's economy didn't wither and blow away. Despite Republican dire warnings throughout 2000, GWB inherited a booming economy.

The Internet bubble was in full swing until March 2000, when Nasdaq began to decline, but the "popping" of the bubble lasted at least through 2001 and was almost certainly the principal cause of the mild recession of 2001.

Posted by right | May 5, 2008 2:31 PM

soullite, are you talking about relative or absolute terms? It's true that in relative terms, American will never be as strong as it was in the 1945-1965 period, but in absolute terms, people were much better off in the '90s than they were in the '50s. Unemployment was lower, wages were higher, purchasing power was much higher. Hell, regular folks, plumbers and teachers and landscapers, vacationed in Europe like it wasn't no thing. And that's not even counting the incredible technological advances that allowed 1990s Americans to have things that the 1950s Americans never dreamed could exist.

Posted by too many steves | May 5, 2008 3:56 PM

This has nothing to do with the topic at hand, but I always thought soullite was older, like in his/her 50's.

Posted by Kolohe | May 5, 2008 3:58 PM

I think joe makes the best point: if it was the best times ever, where are the gains from those times?

Happening to be president during the internet boom was terribly lucky, but, unlike Gore, Clinton didn't have a record of pushing the legislation that created the internet. If Gore had followed him, maybe we'd look at that time differently. Internationally, again, comparative world peace and the situation with Russia wasn't due to any Bill-brilliance, but to fortuitous timing. He might have found a way to screw it up, sure. But he didn't find a way to make the good economic and international times continue, because they weren't his fault in the first place.

If health core reform had happened, things might look different. But for lasting benefits traceable to Bill, not traceable to Steve Jobs or Bill Gates or Warren Buffet, not much.

Posted by Deborah | May 5, 2008 4:05 PM

"It was tough in 1992." Yeah, after the US emerged victorious in the Cold War, the USSR crumbled, the reunification of Germany and the transition of Eastern European nations under Bush handled skillfully...There's more to history than the vicissitudes of the US economy. And furthermore, what did Clinton do to create that amazing boom? Balanced the budget? Yeah, and the end of the Cold War and major Defense cuts certainly helped with that. Other than that, he pretty much "stayed the course" that Bush and Reagan set out for him. His major accomplishments were NAFTA and welfare reform (a Republican idea). So what are you aiming for here, are you a closet Republican?

Posted by Lord Pimsley | May 5, 2008 4:24 PM

Soulite

Dude, google something called "segregation."

And if you think more people could go to college after WW-2 than now you're equally delusional. (Yes, I realize not that long ago you were taking notes in class on the "GI Bill", but, man, you missed a lot of big picture stuff. The number of men who got to go to college was considerably less than . . . and, oh yeah, when you look at women and minorities it was a fucking sliver.). Thus that stuff about "most Americans getting a shot at college" back in the post-war era but not now is just dumbass ignorant whining.

One tough thing progressives have to deal with is dumbass children. (See Ackerman, Spencer.). Grow up.

Posted by Not nostaglic for the era of segregation | May 5, 2008 4:26 PM

Credit where credit is due, but if you want to take credit for the good, you can't selectively forget the bad. And I'm not interested in living through investigation after investigation again.

Posted by CJ | May 5, 2008 4:32 PM

I don't think the eight best years of modern history would be consecutive.

Posted by Lord Growing | May 5, 2008 4:41 PM

It is a really stupid thing for President Clinton to say. if there is one thing--as you have noted--that is going to get people to doubt the good times under president Clinton it is going to be President Clinton banging on about it.

Even if somebody else said it I think it would still ring very hollow.

Posted by Chris Dornan | May 5, 2008 4:52 PM

"And I'm not interested in living through investigation after investigation again."

Precious, truly precious.

Posted by Andruw | May 5, 2008 6:46 PM

California Governor Grey Davis got booted for corruption. He signed agreements with energy companies, insuring that utility bills would at least triple. You couldn't go from one end of town to the other, because the traffic lights didn't work. At first the power "brown outs" were blamed on PCs and cell phones. The infrastructure failed. Businesses pulled up stakes and left the state. Corruption was rampant. Under Bill Clinton the powers that be enforced political correctness instead of the law. For white collar criminals those truly were eight great years.

Hillary Clinton tries to deny the rotten job she’s done as a New York Senator, but Hillary defers to the voter on the topic of Reverend Wright. That’s because when Hillary & Bill Clinton founded their own college (in a sanctuary city, she calls an “empowerment zone”), they also combed through 40,000 résumés, all to the left of the Rev. Wright. The faculty sets the tone at any university, and the Clinton’s crème de la crème of the hard-left insured that theirs would be a blatant testimony to radical anti-Americanism and the politics of racial hatred. You say you’ve heard of tenured radicals – but never the University of Bill Clinton? Imagine what a couple of Clintons could do with a state university. Toss in a corrupt Vermont Lt. Governor and a few Middle Eastern flight students. Prepare to be amazed, your education is about to begin: http://theseedsof9-11.com

Posted by Peggy McGilligan | May 5, 2008 7:22 PM

When did Jordan ever claim he was the greatest or that the bulls 6 championships were the greatest run in modern history? He didnt, hid work product speaks for itself....

In 1992 billy got elected health care, yet his family net worth was 80k, today it's almost 800 million and HRC is trying to get elected promising health care...please enlighten us with your definiton of great?

Posted by bubba bs | May 5, 2008 7:28 PM

After an 8 year hiatus, anti-Clinton loonies are riper than ever. Wow.

Posted by Jeffrey Davis | May 5, 2008 7:43 PM

I was poor then and I'm poor now.

Matt is just angling for an Yglesias Award nom. from Sullivan.

Posted by dgj | May 5, 2008 7:51 PM

I know this much. When I was a kid in the 70's my parents both had UAW jobs. They weren't even skilled trade things, my father had apprenticed as a tool and die guy but after he came back from Vietnam after two tours as a Marine crew chief on a Huey spraying Agent Orange his skin would suddenly peel off when it came in contact with solvents so he was a sandblaster making $20/hour. I don't know even know what my mother was doing at the same place was making but it was union and had overtime and we had a house that doesn't look a goddamn thing like something you could buy today with two unskilled laborers heading up a household.

The 80's were a dystopian nightmare. I found out what powdered milk tasted like after the company changed hands four or five times until it turned out the pension fund was looted, the insurance fund was looted, and they were bankrupt and you are screwed and unemployed.

During the late 80's and early 90's my mother managed to work fifty hours a week as an entry lever inspecter at an aerospace firm and attend thirty hours of college eventually working her way up to a vice-presidency in quality. That's personally admirable (maybe), but it's a story in talent, massive hard work, and persistance that doesn't have much to do with good times in the 90's.

The real kicker is that we had the same damn house with a corporate VP in the 90's as we had in '79 with two union unskilled earners and I don't remember the lifestyle changing that much and I know they didn't sock anything away because the end chapter is they have a computer consulting firm that just keeps it's head above water.

I'm doing better a bit personally now than the 90's. Sometimes when I get raises they outpace health insurance. That's about it.

Posted by Ed Marshall | May 5, 2008 10:02 PM

If I were an ex president, I'd try to keep a little dignity. But I'd have tried to keep some dignity while president too.

Posted by aleks | May 6, 2008 5:14 AM

Not nostalgic,

yes, there are more people in college now, but a BA or BS is now the basic entrance for most to a middle class lifestyle, and most acquire it at considerable expense. In the 50's/60's, the entrance was a high-school diploma, and it was free. Yes, many fewer woman were educated, but middle-class woman could expect to be supported, and men were capable of supporting them. When you compare our era to the previous ones, you have to look at the cost as well as the benefits.

Look at a contemporary household. Remove the woman from the workplace, and place her in the kitchen. Give her 2 or 3 children, the first by the age of 20 or so. Keep the man working no more than 40 hours a week. What does your standard of living look like now? Since the 70's, we have made adjustments to a declining standard of living (that were also partly cultural and ideological changes, but were economic adjustments nonetheless). Largely, we have sacrificed leisure, and I, for one, would trade much for leisure. I prefer woman in the workplace too, but having them there on 1950's terms would mean I and her could work 20 hours a week each. I would call that a better standard of living than I can claim now.

On segration, you have a point, but that's not enough of the population to shift the median.

Posted by Martin Bento | May 6, 2008 11:20 AM

Oh, NN, and if you want a more academic version of what I'm saying, here's one:

http://economistsview.typepad.com/economistsview/2008/04/the-coming-coll.html

And Warren takes as her baseline the dreaded 70's. Of course, she's comparing to "now", but most of what she says is long term and applies to the 90's too.

Posted by Martin Bento | May 6, 2008 11:32 AM

Oh, NN, and if you want a more academic version of what I'm saying, here's one:

http://economistsview.typepad.com/economistsview/2008/04/the-coming-coll.html

And Warren takes as her baseline the dreaded 70's. Of course, she's comparing to "now", but most of what she says is long term and applies to the 90's too.

Posted by Martin Bento | May 6, 2008 11:35 AM

Oh, NN, and if you want a more academic version of what I'm saying, here's one:

http://economistsview.typepad.com/economistsview/2008/04/the-coming-coll.html

And Warren takes as her baseline the dreaded 70's. Of course, she's comparing to "now", but most of what she says is long term and applies to the 90's too.

Posted by Martin Bento | May 6, 2008 11:37 AM