Asked May 4 by
to name a single economist who supports her proposed gas tax holiday,
responded, “I’m not going to put my lot in with economists,” as if “economist” were a four-letter word. Economists may have had the last laugh, since voters in Indiana were largely unconvinced by her plan. Clinton had a point, though, not about the gas tax but about the undue influence of a certain brand of mainstream economists who dominate prestigious universities–and who also dominated much of
It was these mainstream economists who wholeheartedly supported NAFTA with as few restrictions as possible. They insisted that cutting the budget deficit was the nation’s highest economic priority, even as the government generated enormous budget surpluses by the late 1990s. Instead of investing those surpluses in transportation, education or healthcare, Clinton passed them on to
George W. Bush
to scatter among the rich. Following the hardy advice of mainstream economists, Clinton fully deregulated the financial industry. We got Enron and today’s credit crisis partly as a result. His mainstream economists encouraged the flow of hot capital internationally, contributing mightily to the late-’90s international financial crises.
Hillary Clinton may well be a critic of some of these economic policies now, but she also apparently thinks the economists she knows–the ones who had her husband’s ear–represent the totality of solid and relevant economic thought. In fact, many good economists have different views on trade and fiscal policies and cannot get a hearing. Mainstream economists and public policy analysts have produced very good research on the financial payoff from government investment in infrastructure and pre-K education. Some respected mainstream and many progressive economists have shown that high taxes and big government are not impediments to prosperity and may often contribute to it through sensible and needed social programs. Many economists have made intelligent, well-documented cases for the return of financial regulation. But these arguments go mostly unheeded.
In terms of integrity and capability, however, Bill Clinton’s mainstream economists towered over Ronald Reagan’s advisers, who had but one thing to say: cut taxes. That’s what’s distressing about Hillary Clinton’s remarks. She actually sided with Reagan’s heirs, like former Congressman
, who holds a PhD in economics and who ridicules the intellectual abilities of those who disagree with the notion that tax cuts always lead to more growth. The mainstreamers, we should remember, made their contributions, chiefly beating back the nonsense proffered by Reagan’s supply-side tax cutters.
But don’t get too optimistic. The Democrats’ persistent focus on government spending and the evils of budget deficits is damaging to the nation and to their own capacity to deliver what they promise voters. It would have been refreshing if Hillary Clinton had taken on these central economic precepts. The lesson is not to discard economists. It is to fight bad economics with better economics. Congress, Senator Clinton and Senator
have to reach out for a broader set of views. They are there for the taking. JEFF MADRICK