Whitewater Falls

Whitewater is more than a scandal. It's Clintonomics in action.

Virginia Postrel from the May 1994 issue

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But the Whitewater affair isn't just a scandal. The Clintons aren't just sanctimonious hypocrites. And Eleanor Clift's Deliverance defense--"We're looking at a difference in cultural business mores between Arkansas and Washington"--doesn't just insult small, Southern states. It misses the whole point.

The Clintons' Arkansas and the Clintons' Washington are, in fact, much the same. Whitewater reveals the way the Clintons as policy makers, not just personal profit-seekers, see business and politics and the relation between the two. The administration's economic policy represents the very combination of regulation and subsidies, the mingling of the public and the private, that creates Whitewater-style cronyism.

"This is a pro-business administration," Chief of Staff Mack McLarty recently told The Washington Post. Business and government used to be enemies, he said. "That's not the case any more: We're all in this together."

That doesn't mean, of course, that the Clinton administration will keep its hands off business matters. Rather, it favors businesses that might favor Clinton--selling airplanes with a presidential phone call to King Fahd and U.S. loans to the Saudis, for instance--and punishes businesses that cross its policies. Witness Hillary's tirades against the pharmaceutical and insurance industries.

In the Clintons' America, profiting from politically encouraged legal retainers and loans you don't have to repay is OK; profiting from creating and selling life-saving drugs is evil. What matters is whose side you're on.

"We're not looking at Central America. We're looking at the United States," said Michael Barone in response to Clift's Deliverance defense on Crossfire. "They weren't the governor of Nicaragua. They were the governor of a state in the United States."

But Central American-style mercantilism, with its privileges for the well-connected few and oppressive regulation for the masses, is what Clintonomics is all about. It's what makes Bill Clinton a "New Democrat," rather than an old-fashioned business basher. Whitewater isn't an isolated scandal. It's policy.