Essay/Term paper: Bill clinton - redefines democratic-republican

Essay, term paper, research paper:  Economics

Bill Clinton - Redefines Democratic-Republican

In the early 1800's, the United States was but a promising seedling in search of
viable political direction. The initial parties were known as the federalists
and the Democratic-Republicans, the first of which soon diminished and the later
eventually bisected. The result is the two party Democrat and GOP system which
the majority of politicians of current day subscribe. However, many political
and economic analysts find themselves perplexed by an incredible new phenomenon
radiating from the white house - the economic policies of President Bill Clinton.
This dilemma has left many wondering, did we elect a democrat or a republican?
Has Clinton unintentionally begun a campaign to reunite the two rivals? The
telltale signs of Clinton's political ambiguity include reminiscently republican
techniques of reducing the budget, creating jobs, lowered productivity, and
shaping the tax code.

During Clinton's 1992 campaign, balancing the budget was not among the countries
main economic objectives (Miller 4). However, after close scrutiny, the
economic woes of the approaching millennium were projected as "higher then we
thought it would be" (Miller 4). In fact, "in the twelve years before Clinton
took office, the deficit quadrupled in size" (deficit 1). As a result, Clinton
must engage in creative cost cutting techniques to keep the budget under control.
Money afforded to state and local governments for development programs, such as
those which relieve "urban blight," will eventually be cut by two-thirds, a
third more then Gingrich's last congress proposed (Rauch 2). In addition, cuts
to transportation aid will prove fifty percent greater then republican
propositions (Rauch 2). According to Clinton, all of these maneuvers will
result in the lowering of the deficit by $600 billion, or almost one-third by
the year 1998 (progress 1). Economists speculate that these reforms may produce
the desired effect (Rauch 2). However, putting these measures into action may
contradict one of Clinton's main election tenets - to preserve the status quo as
it relates to government programs. The final budget will include one-seventh
for interest on the national debt. A whopping two thirds will go toward
entitlement, one sixth for defense programs and another one-sixth for "non-
defense discretionary spending" (Rauch 2).

Perhaps the most touted aspect of the initial Clinton administration was its
ability to "create" jobs. According to the White House, almost six million jobs
have been created in the past four years, and the unemployment rate in Texas has
dropped from 7.5% to 5.8% (Progress 1). This is a level well below the 6% rate
which many economists regard as full employment. However, there may be a great
deal more then meets the eye when it comes to these "promising" statistics. The
labor force had been predicted to grow at a rate of more than 1.3 percent per
year, however, it has failed to grow by even one percent annually under Clinton
(Reynolds 3). In other words, unemployment has "gone down," by way of
understatement. The number of those counted as actual members of the labor force
has lowered while the number of jobs has moderately increased. It is estimated
that one million men between the ages of twenty-five and fifty-five have left
the labor force as discouraged workers during the four-year span of 1992to 1996
(Reynolds 3). Had these men remained in the force as possible applicants, the
unemployment rate may actually read as high as 8%, as it was during the Reagan
administration (Miller 3). It seems a case of playing with numbers in order to
disguise the truth. Whatever one chooses to call it, Clinton's policies of job
creation place discouraged middle class workers between a rock and a hard place.
Conservative economist Alan Reynolds views it as a technique of "achieving low
unemployment . . . by discouraging millions of people," and remarks that "it is
nothing to brag about" (Reynolds 3).

Productivity growth, "measured as the number of units of output per hour of
work" has grown just 1 percent each year since 1973 (Miller 3). Under usual
circumstances, gradual increases in productivity directly correlate to an
increase in workers' wages. However, the Clinton Administration has seen a
total productivity increase of 2.1% over a four year period, while wages have
declined by .2% (Miller 3). In the next seven years, Clinton's team anticipates
an annual productivity increase of 1.2% (Miller 5). Considering the vast
majority of employment created under this administration is classified as "blue
collar," it may be inferred that wages will continue to fall. Indeed, it seems
Clinton has managed to contradict a fundamental premise of economics. And who
benefits from this lower wage - higher productivity combo? In a word, industry.
Economist Stephen Roach sees it as "a dramatic shift in the distribution of
income away from the agents of productivity, workers, toward the owners of
capital" (Miller 3). The outcome? An era eerily reminiscent of the Reagan era,
where the rich only seem to get richer.

Traditionally, aspiring presidents promise one (or several) things in regard to
taxes during the election, yet deliver an entirely different bag of goods upon
actual inhabitance of the white house. Clinton proved no exception by raising
the marginal tax rates in 1993. At the current time, Clinton is considering a
modified capital gains tax cut, despite the fact that this taxation has made
sizable contributions to the lessening of the deficit (Miller 4). It is a move
that could prove immensely beneficial to the upper percentages of income earners.
Clinton has made moves such as this one in the past, in the form of "an earned
income tax credit which increased the share of loot given to those with incomes
well above the poverty level" (Reynolds 3). These policies, according to Wall
Street Journal columnist Paul Gigot, "have done best by the same people Mr.
Clinton accused Reaganomics of benefitting most - the wealthy."

Thus, the question remains . . . will Clinton's ambiguous policies fair well
when presented to a blatantly republican Congress? It is a fact which remains
to be seen. Robert D. Rieschauer, former head of the congressional budget
office, views Clinton's economic misidentity as a clear-cut case of Gingrich
induced skitzopreniea, noting that "in the world of the campaign, Clinton was
the anti-gingrich . . . in his actual budgets . . . he is Gingrich" (Reynolds
1). It leaves us, as voters, to the task of defining Clinton's party loyalties.