Was Clinton More Market Friendly Than Bush?
At the Mercatus Center's Neighborhood Effects blog, economist Matt Mitchell compares the major economic policies of President Bill Clinton's two terms to those that came out of President George W. Bush's presidency. He concludes that "comparatively speaking…the policies that emerged when Clinton was in office were significantly more market-friendly than those that have characterized the last twelve years." He lists four major reasons why:
- Clinton stands alone among post-WWII presidents in presiding over a period in which federal spending as a share of the economy actually shrank (going from 21.4 percent in 1995 to 18.2 percent in 2001).
- Clinton negotiated and ushered through Congress the most-significant free trade agreement of my lifetime.
- Clinton signed welfare reform (perhaps reluctantly), signaling the only major retrenchment in the welfare state since LBJ (and that's counting all 8 years of the Reagan presidency).
- Clinton signed the largest reduction in capital gains taxation in U.S. history.
Mitchell goes on to note that the Bush years saw spending rise as a share of GDP, the passage of the Medicare prescription drug law, the imposition of high steel tariffs, and more.
For the most part, I think Mitchell's right. I also think he's right to compate Clinton's relatively small marginal income tax hike with the massive Reagan-era cuts to top marginal rates. Perhaps those hikes were ill advised, but they're best viewed in context. Obviously, it's tough to say exactly how influential the policies he lists were in helping to create the economic boom that happened in the 1990s, but they certainly didn't hurt.