September 18, 2007
David Olive

Such was the taint of the Lewinsky affair that Al Gore sabotaged his election prospects in 2000 by distancing himself from Bill Clinton and his economic record one of the most fateful political miscalculations in U.S. history.
Even now, seven years after the Clinton-era fiscal surpluses have given way to successive Bush administration deficits and a bloated national debt, few Democrats have seen fit to defend Clintonomics.
It thus falls to Alan Greenspan, of all people, in his startling memoirs published yesterday, to judge Clinton the best economic manager of the six presidents he served.
Greenspan was Gerald Ford's chair of the Council of Economic Advisors, and later chair of the U.S. Federal Reserve Board for 18 years until his retirement last year.
You read that correctly. This is the Greenspan who was a young acolyte of free-marketeer Ayn Rand, is a self-described "lifetime libertarian Republican," and is the most influential Republican economist of the past generation.
In his autobiography, The Age of Turbulence: Adventures in a New World (Penguin Press), Greenspan, 81, makes clear that his patron Ronald Reagan, who appointed him to head the U.S. central bank board in 1987, was a reckless steward of the nation's finances, eclipsed in economic irresponsibility by current president George W. Bush.

Clinton was in a fiscal bind when he came to power in 1993, and the record deficits of Reagan and George H.W. Bush put him there. "The hard truth was that Reagan had borrowed from Clinton, and Clinton was having to pay it back," Greenspan writes. "I was impressed that he did not seem to be trying to fudge reality to the extent politicians ordinarily do. He was forcing himself to live in the real world."
The 1993 deficit-fighting Clinton budget that kicked off the greatest economic boom in U.S. history, and passed the U.S. House of Representatives without a single G.O.P. vote in favour, was "an act of political courage," says Greenspan, no doubt mindful it wasn't popular with left-wing members of the Democratic Party, either.
Clintonomics, to recap, produced 22 million new jobs (against a 1992 campaign promise of eight million); reduced the federal payroll to Kennedy-era levels; brought about the first narrowing of the income gap between rich and poor since the 1950s; and generated the first surpluses in three decades, totalling $615 billion (U.S.) in Clinton's last four budgets.
Clinton emerges as the hero of Greenspan's 531-page memoir. The Arkansan was a "risk taker" with a "preference for dealing in facts," writes Greenspan of a chief executive he came to regard as a kindred spirit. "We both read books and were curious and thoughtful about the world. ... I never ceased to be surprised by his fascination with economic detail: the effect of Canadian lumber on housing prices and inflation."
Greenspan excoriates Clinton's successor and the spendthrift Republican-controlled Congress of George W. Bush's first six years in office. In the Bush White House, "little value was placed on rigorous economic policy debate or the weighing of long-term consequences," Greenspan writes.
Bushonomics, to recap, has produced six successive budget deficits, totalling $1.7 trillion; a 50 per cent increase in the national debt, to a record $8.5 trillion an improvement, one supposes, on the tripling of the debt under Reagan; a return to widening income inequality; and anaemic job growth of eight million, largely making up for the "jobless recovery" of Bush's first term.
Of the long-term consequences, Greenspan doesn't dwell on China's status as America's chief creditor, which weakens the U.S. in dealings with Beijing on everything from trade to human rights. He does worry that the resumption of the widening gap between rich and poor at home under Bush could unwind "the cultural ties that bind our society" and ultimately result in "large-scale violence."