It seems Bill Clinton is trying to fool us again, this time into believing we owe him our prosperity. In the Democratic convention, he proudly claimed responsibility for the last eight years of unprecedented progress and prosperity in America. The false but widespread belief that politicians, not businessmen, can effect economic growth, left even Republicans such as presidential candidate George W. Bush conceding his point. But do the facts bear Clinton’s claim? Is he really responsible for our prosperity?
While there is no arguing about the amazing economic growth since 1992, the reason for that growth surely lies not with government’s increased spending and regulations, but with businesses’ increased investing and productivity. The private sector is, as even Al Gore recognized in a moment of honest candor, “the engine that drives our economic growth.”
The fact is that despite constant government intervention in the free market, entrepreneurs managed to create unprecedented amounts of goods and services. Instead of letting our most successful businesses freely grow and prosper to the limit of their abilities, our government has waged a war against them with a record-breaking number of antitrust suits and regulations. Such interference could hardly have contributed to economic growth. Nor could the excessive taxation imposed on producers and investors. Moreover, the increase in environmental fines and legislation did nothing but further constrain growth and production.
Clinton proudly claimed responsibility for the sharp drop in unemployment and for the creation of 22 million jobs. Actually, the net number of jobs created was only 12 million — and all of them within the private sector. [Jobs “created” in the public sector are only possible by looting the wealth created by the private sector. — Editor]
Clinton has also claimed credit for increases in wages and personal incomes. But he ignored that these increases were caused by the enormous gains in productivity achieved within the private sector. The Department of Transportation did not increase car production — GM, Ford, and Chrysler did. The Department of Justice did not design new computer software and faster hardware — Microsoft, Intel, Cisco, and a host of other companies did. All the Department of Justice accomplished was to punish Microsoft, MCI, WorldCom, and others for attempting to improve their products.
The economic growth brought about by these companies’ innovations is both admirable and incontestable. Though the labor force increased by only 9%, from 128 million to 140 million, GDP grew an astonishing 60% — from 6.3 trillion to an estimated 10 trillion dollars. This means that overall productivity soared by as much as 45%, part of which was passed on to wages.
Clinton and the Democrats were not the cause of increasing wages — higher productivity in businesses was.
Clinton also boasted about “the highest homeownership in history,” as if he had helped build the houses with his own hands, or had worked to pay for them with his own money. He did neither. In fact, through environmental policies he did as much as he could to stop “urban sprawl.”
Clinton announced that under his leadership America went from “the largest deficits in history to the largest surpluses in history.” Well, not thanks to him: yearly federal spending increased in every year of his administration, growing from $1.4 trillion when he took over to $1.7 trillion now. And he failed to point out that the government’s deficit in his first five years as president, from 1993 to 1997, totaled $750 billion.
Clinton bragged that “the debt is down.” He should know better than that: the US Public Debt grew $1.7 trillion dollars under his watch, from 4 trillion in 1992 to $5.7 trillion in 2000.
Even though Clinton briefly conceded that “the lion’s share of the credit goes to the American people, who do the work,” he did not shy away from taking credit he does not deserve. In a typical “credit grab” he claimed responsibility even for the increase in adoptions and the decrease of teen pregnancy during his term!
The only credit Clinton, or any other government official, may properly take for our past prosperity, could only proceed from the removal of obstacles to savings, production, and trade — that is by tax cuts, and from the protection of individual rights under the rule of objective law. Unfortunately, neither Democrats nor Republicans can claim much credit for any of that.
The wealth created in the eight years of the Clinton administration was produced by none other than the independent efforts of individual American heroes like Bill Gates, and many others, who worked for their own happiness to create and make use of the amazing new technologies we see around us.
Does government have any role in our economy? Yes, government’s role is to protect the foundation of free-competition: individual rights.
If we want America’s progress and prosperity to last, we need a government that leaves us free to do business, allows us to keep our hard-earned money, and protects our inalienable right to life, liberty, and the pursuit our own happiness (profit). If politicians want to take any legitimate credit for prosperity, all they have to do is to protect our rights (instead of violating them) by keeping their hands off the market.
