Dear Friends,
I am surprised at how often a President is given credit for good economic times during his presidency or blame for bad economic times during his presidency. In fact, the President has little impact on the economy during his time in office. President Obama was certainly not responsible for the large number of job losses during the first part of his first term, nor was he responsible for the increase in employment, as anemic and slow as it was. The recovery and job growth could have been much faster if we had aggressively increased government spending, but President Obama was still talking about preventing larger deficits and the Republicans would certainly have blocked any more aggressive stimulus measures.
George W. Bush bears much of the blame for Great Recession, but Bill Clinton is certainly responsible as well. Bill Clinton is given great credit for the economic boom that occurred during his presidency, but in fact it was policies that he supported that led directly to the Great Recession. It was under his presidency that banks were deregulated with the repeal of Glass-Steagall and that the outsourcing of many manufacturing jobs was encouraged as a result of NAFTA.
Hillary Clinton has suggested that she would use Bill as an advisor particularly on economic issues, pointing to the prosperous economic times during his administration. She also has chosen Alan Blinder as one of her top economics advisors. Last October the Daily Kos ran a piece entitled "Meet Alan Blinder, Hillary Clinton's Economic Advisor (and Wall St. One-Percenter)" (here). After reading the piece, it is easy to understand why Hillary Clinton is against re-instating Glass-Steagall and is against breaking up the biggest banks.
Alan Blinder is described in the first two sentences of the piece as follows:
Hillary Clinton's economic advisor, Alan Blinder, co-founded and is Vice Chair of a super-elite Wall St financial firm, Promontory Interfinancial Network. He is a former Vice Chairman of the US Federal Reserve Bank and chair of Princeton University economics department.The piece goes on to discuss what Promontory Interfinancial Network does. It quotes Reuters
Promontory is proof positive, then, of just how lucrative the revolving-door business can be. The company is full of lavishly-paid former regulators, hiring themselves out at $1,500 an hour to banks desperate for advice on how to navigate Washington’s regulatory thicket. 'the firm acts as an advocate for banks, helping draft letters that challenge crucial rules and discussing reforms with regulators'. Regulators are more likely to trust their former colleagues than they are the banks they’re trying to regulate, and by hiring Promontory, banks can co-opt those former regulators and use them to to effectively work the refs.Among other things, Promontory provides a mechanism that permits wealthy individuals to get government insurance on deposits in excess of the FDIC limit. In October, 2008, some in Congress wanted to insure all deposits without limit which would have destroyed this very lucrative part of Promontory's business. Insuring all deposits would have helped to stabilize the banking industry by protecting individual deposits. The article describes Alan Blinder's actions
Can one financial firm affect US macro-economic policy, to our detriment? You betcha, if it includes someone like Alan Blinder. In October 2008, the depths of the financial crisis, some in Congress wanted to insure all deposits (as did Germany and Ireland) to stabilize the system -- which would have undermined Promontory Interfinancial Network's business. Alan Blinder and Glenn Hubbard opined in the WSJ against this -- without mentioning their financial self-interest for opposing it. That's right, in the midst of the worst financial crisis since the Great Depression, they co-authored a WSJ op-ed advocating a public policy that would benefit them at the expense of the American (and entire world's) financial system, and they failed to disclose their conflict of interest. You can read their op-ed, on the WSJ website.The piece continues
It would be hard to find someone more embedded in Wall Street's revolving doors with regulators/government and legalized corruption than Alan Blinder. ...There will be no real change in our economic system that is rigged in favor of the One-Percenters under a Hillary Clinton administration. It took a strong challenge from Bernie Sanders to get her to tentatively reject TPP and to support an increase in the minimum wage although not to a livable level. While she has skillfully adopted the language of fighting against income and wealth inequality, she refuses to endorse any changes that will actually address the problem. She is an establishment candidate who will do the bidding of the One-Percenters who have funded her campaign as well as the Clinton Foundation and her lifestyle with huge speaking fees.
How deeply in bed with 1% Wall St can the Clintons be? And how blind, ignorant or uncaring can some 'Democrats' be, to tolerate this?
Thanks for reading and please comment,
The Unabashed Liberal
P.S. After I initially published this post, I read Paul Krugman's blog post in The New York Times (here) entitled "Presidents and the Economy". The blog post started out with this paragraph.
After I put up my post comparing private-sector jobs under Obama and Bush, a number of people asked me whether I believe that presidents have a large effect on economic performance. My answer is no — but conservatives believe that they do, which is why this kind of comparison is useful.So you see a Nobel Prize winning economist agrees with me.
