Anatomy of Clintonomics

New Left Review

Volumn , Issue 3, 2000, Pages 17-45

  Pollin, Robert ^a  

^a NONE

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EID: 0034379817     PISSN: 00286060     EISSN: None     Source Type: Journal    
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References (36)

1. I would like to thank Armagan Gezici and Josh Mason for their excellent research assistance and Jerry Epstein and Andrew Glyn for their constructive comments.
2. See Clinton's address on Social Security, 9 February 1998, on the White House website.
3. See Bob Woodward, The Agenda, New York 1994, p. 165.
4. According to Steven Greenhouse and Joseph Kahn of the New York Times, 3 December 1999, Clinton's interview with the Seattle Post-Intelligencer, in which he suggested that the WTO might employ sanctions to enforce core labour rights around the world, 'stunned the delegates, and even his own negotiators'.
5. See the interesting discussion of these issues as they apply to NAFTA by Meheree Larudee 'Integration and Income Distribution under the North American Free Trade Agreement: the Experience in Mexico', in Dean Baker, Gerald Epstein and Robert Pollin, eds, Globalization and Progressive Economic Policy, Cambridge 1998.
6. The ERP for 1998 states that the Administration has 'made significant reform of the existing trade adjustment assistance programme a priority'; in reality, these programmes remain minimal.
7. David Howell, 'Theory-Driven Facts and the Growth in Earnings Inequality', Review of Radical Political Economics, Winter 1999, pp. 54-86.
8. Interview with Moberg by Josh Mason in November 1999.
9. See Robert Pollin and Stephanie Luce, The Living Wage: Building a Fair Economy, New York 1998, for a discussion of the historical trends in the minimum wage.
10. For discussion of the declining use of food stamps, see Sharon Parrott and Stacy Dean, 'Food stamps can help low-income families put food on the table', Centre on Budget and Policy Priorities (website), Washington DC 1999; and Andrew Revkin, 'A plunge in use of food stamps causes concern', New York Times 25 February 99.
11. For discussion of the declining use of food stamps, see Sharon Parrott and Stacy Dean, 'Food stamps can help low-income families put food on the table', Centre on Budget and Policy Priorities (website), Washington DC 1999; and Andrew Revkin, 'A plunge in use of food stamps causes concern', New York Times 25 February 99.
12. For such solutions, see Robert Pollin, 'Financial Structures and Egalitarian Economic Policy', NLR (I) 214, November-December 1995, pp. 36-61.
13. These are unique instruments because they are free of default risk - though still, of course, subject to market risk, especially in an inflationary environment.
14. The Wall Street Journal, for example, announced on the occasion of Clinton's renomination of Greenspan as Chairman of the Federal Reserve: 'The US economy is enjoying its best performance in more than a generation with low unemployment and low inflation. If the current expansion lasts through February, something generally expected, it will surpass the 1960s as the longest period of uninterrupted economic growth in US history': 4 January 2000.
15. The cyclical data are organized on a peak-to-peak basis, through reference dates established by the National Bureau of Economic Research (NBER). I have derived yearly peak dates from the NBER monthly peaks. When the NBER peak month falls between January and September of a given year, that year becomes the cyclical peak year; otherwise it is the following year. In addition, I have merged two sets of cycles into a single cycle - those for 1970-73/1974-79 and 1980-81/1982-90.
16. On a more technical note, revisions in the methods used for measuring inflation and investment have also made the Clinton record look better. For a discussion of the problems and potential biases in the new statistics, see Dean Baker, 'What's New in the Nineties', typescript, Centre for Economic and Policy Analysis, Washington DC 1999.
17. Wynne Godley argues persuasively that these financial patterns in the household sector cannot last. See Seven Unsustainable Processes: Medium-Term Prospects and Policies for the United States and the World, Levy Institute, Annandale 1999.
18. For the historical figures on interest rates, see Robert Pollin and Gary Dymski, 'The Costs and Benefits of Financial Instability: Big Government and the Minsky Paradox', in Dymski and Pollin, eds, New Perspectives in Monetary Macroeconomics, Ann Arbour 1994, pp. 369-402.
19. Robert Gordon, 'The Time-Varying NAIRU and its Implications for Economic Policy', Journal of Economic Perspectives, 1997, 11:1, pp. 11-32.
20. Douglas Staiger, James Stock and Mark Watson, 'The NAIRU, Unemployment and Monetary Policy', Journal of Economic Perspectives, 1997, 11:1, pp. 33-50.
21. 'The Time-Varying NAIRU', p. 30.
22. Cara Lown and Robert Rich, 'Is there an Inflation Puzzle?' Federal Reserve Bank of New York Economic Policy Review, December 1997, pp. 51-69.
23. See Business Week 27 December 1999.
24. Greenspan's testimony can be found on the Federal Reserve site at www.bog. frb.fed.us.boarddocs/hh/1997/July/testimony.htm
25. 'What's New in the Nineties'.
26. For example, Marcello Estevão and Saul Lach of the Federal Reserve argue that official figures for the manufacturing sector should be deflated by 0.5 percent once the outsourcing of employment to temporary help agencies is taken into account. See 'Measuring Temporary Labour Outsourcing in US Manufacturing', NBER Working Paper 7421, October 1999. James Medoff of Harvard and his associate Andrew Harless suggest that activities related to the Y2K transition also greatly inflated recent productivity figures. In a similar vein, Robert Gordon of Northwestern contends that since 1995 virtually all increases in productivity have occurred in the manufacturing of computer hardware. He claims that 'there has been no productivity acceleration in the 99 per cent of the economy located outside' this sector. For a summary of these views, see James Grant 'Wired Office, Same Workers', New York Times, 1 May 2000, p. A 27.
27. For example, Marcello Estevão and Saul Lach of the Federal Reserve argue that official figures for the manufacturing sector should be deflated by 0.5 percent once the outsourcing of employment to temporary help agencies is taken into account. See 'Measuring Temporary Labour Outsourcing in US Manufacturing', NBER Working Paper 7421, October 1999. James Medoff of Harvard and his associate Andrew Harless suggest that activities related to the Y2K transition also greatly inflated recent productivity figures. In a similar vein, Robert Gordon of Northwestern contends that since 1995 virtually all increases in productivity have occurred in the manufacturing of computer hardware. He claims that 'there has been no productivity acceleration in the 99 per cent of the economy located outside' this sector. For a summary of these views, see James Grant 'Wired Office, Same Workers', New York Times, 1 May 2000, p. A 27.
28. 'The United States', Monthly Review, July 1999, p. 129.
29. See especially Charles Kindleberger, Manias, Crashes and Panics: A History of Financial Crisis, New York 1977.
30. See Lawrence Mishel, Jared Bernstein and John Schmitt, The State of Working America 1998-1999, Ithaca 1999.
31. Recent business-book titles giving graphic expression of this state of mind include Dow 36,000 by James Glassman and Kevin Hassert; Dow 40,000: Strategies for Profiting from the Greatest Bull Market in History by David Elias, and, not to be outdone, Dow 100,000: Fact or Fiction by Charles Kadlec and Ralph Acampora.
32. Recent business-book titles giving graphic expression of this state of mind include Dow 36,000 by James Glassman and Kevin Hassert; Dow 40,000: Strategies for Profiting from the Greatest Bull Market in History by David Elias, and, not to be outdone, Dow 100,000: Fact or Fiction by Charles Kadlec and Ralph Acampora.
33. Robert Rubin, of course, was an unequivocal champion of financial deregulation while at the Treasury. Current Treasury Secretary Lawrence Summers is no less fervent a promoter of deregulation, even though as an academic economist he once showed apprehension of its dangers: see Lawrence and Victoria Summers, 'When financial markets work too well: a cautious case for a securities transaction tax', Journal of Financial Services Research, 1989, no. 3, pp. 261-86.
34. See Jane D'Arista, 'International Capital Flows and the US Capital Account', Capital Flows Monitor, 6 December 1999.
35. 'International Capital Flows', p. 2.
36. In saying 'probably', as opposed to 'certainly', I am acknowledging the countervailing possibility that worsening conditions in overseas markets might have driven foreign investment in the US upwards. But it is still difficult to imagine that a full-scale bankruptcy of Long-Term Capital Management would not have burst the bubble of 'irrational exuberance' in America.