President Obama, apparently having emptied his bag of economic tricks with the stimulus package and now bereft of ideas for what to try next, is soliciting advice from former President Bill Clinton who, according to the above-linked article:
… presided over the 1990s economic boom …
and was the last president to turn a budget surplus since Richard Nixon had a miniscule surplus ($3 billion) in 1969. Never mind the fact that a chimp could have done the same thing in the late ’90s, in light of the stock market bubble, the dot com bubble and the explosion in PC, internet and cell phone technology and manufacturing (all of which has since been out-sourced to China and others). Clinton was too busy enjoying a fine cigar with his intern to have even known what was going on.
So what’s Clinton likely to advise Obama to do? Provide more stimulus money for alternative energy? Give more tax breaks to industry? Implement more free trade deals? Yeah, granting China MFN (most-favored-nation) status worked out real well, didn’t it, Bill?
What’s worrisome here is that this is a thinly-veiled admission by the Obama administration that their economic strategy, having run its course, leaves the economy heading back into a slump, and they’ve got nothing left. The stimulus halted the slide temporarily, but stimulated nothing. Now we’re back in the same boat.
No, actually, it’s worse. At least before the financial melt-down, we had a housing bubble and easy credit to make us think things were OK. Now we don’t even have that. Nothing’s been done about our broken trade policy. No manufacturing jobs have come back home and global trade imbalances are returning to their pre-crisis levels. And deficit spending is about as popular as a turd in a punch bowl.
I’m sure we’ll soon see a shake-up in Obama’s economic team. Summers and Romer will probably be replaced by a couple of other ivy-league economists serving up the same platitudes about economic growth and free trade. Not that it will make any difference.
I suppose we should be thankful for one thing: if Clinton weren’t here, Obama would have to turn to Jimmy Carter for advice.