Back To Work by Bill Clinton

Agree or disagree with the guy, President Bill Clinton’s usually an interesting guy to hear from. Which led me to pick up a copy of his new book Back To Work: Why We Need Smart Government for a Strong Economy, his treatise on rejuvenating the economy. Put it this way-it’s Clinton at his bombastic best. Bombastic best doesn’t necessarily mean insightful, however.

Clinton wastes no time in laying blame for the current state of the economy: “antigovernment ideology.” According to Clinton, the prosperity of the 1980s, skewed heavily towards the rich thanks to Reagan’s tax cuts, was built on easy credit and deficit spending that came crashing down during George HW Bush’s term. After Clinton’s policies restored the economy, we lost our commitment to “shared prosperity, balanced growth, financial responsibility, and investment in the future.” This was exemplified by the lack of government oversight that left banks overleveraged and the Bush tax cuts. The results: enormous debt, increased income inequality and poverty, and foreclosures.

Clinton is correct in stating that Republicans are big spenders. George W. Bush oversaw a 104% increase in the budget during his 8 years, including a 96% increase in discretionary spending. But even in the area of financial regulations, President Bush increased spending 29% (compared to a 3% cut during Clinton’s years). Despite Clinton’s claims about “antigovernment” ideology driving public policy, the evidence points to rigorous government involvement playing a key role in the economic downturn.

You can argue that it’s not wise to lower government revenues via tax cuts and let spending run amok, despite supply-side claims that increased economic growth will make up for the lower rates. But as Brian Riedl shows, the increased spending during the Bush years had a greater impact than the tax cuts in causing the deficits to return.

Clinton does make a few good points in the book. He endorses competitive bidding over no-bid contracts for government business. He almost sounds Reaganesque when discussing the disincentives of our current corporate tax scheme, arguing for a lower corporate tax rate. At the same time, he endorses taxing the money US corporations repatriate into the US from their foreign affiliates, a tax scheme other wealthy nations have abandoned (with good reason).

For the most part, Clinton endorses increased government involvement to get the economy going, particularly infrastructure spending. Infrastructure is important, but as Veronique de Rugy shows, it is a poor way to “stimulate” the economy like President Obama endorses and President Clinton outlines in his book.

Clinton laid out his solutions already in this Newsweek article during the summer. I’d recommend taking a pass on the book and read the article if you’re interested in Clinton’s solutions. Then do some fact-checking afterwards.

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