No. of Recommendations: 11
President Obama, Clinton Prosperity Requires Clinton-Sized Government

"Obama Democrats argue that the President only wants to restore the top rates that reigned during the Clinton presidency, which was a prosperous time. We should say: Absolutely, let’s do it. But in order to achieve a Clinton economy, you also must enact the other Clinton policies critical to the prosperity of those years: They include:

I. A Freer Economy

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II. Clinton-era Federal Spending Levels

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III. A Strong and Stable Dollar"

http://www.forbes.com/sites/steveforbes/2012/11/20/president...

This is an article by Steve Forbes. I agree that this would be a good trade. It's also a trade that Democrats wouldn't never make. Elections have consequences. They won. Those consequences are an expansion of government that they won't give up over their dead bodies and the economic stagnation that goes along with it.
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No. of Recommendations: 7
Actually, I disagree. To get Clinton-era economies back you need to have what Clinton had: An entire new sector of the economy opening up coupled with a massive increase in worker productivity.

It almost didn't matter what the tax rates were in the mid 90s: The dot.com bubble, mass adoption of the PC and the interlinking of internet in the workplace revolutionized a great number of things. Every time some idiot liberal makes the comment, "Let's go back to Clinton era tax rates 'cause the economy was good then" I de-rate their IQ by 30 points.

Look at what DOL had to say in 1996 about adoption of computers:
http://www.dol.gov/oasam/programs/history/reich/reports/grow...

When we switch from aggregate measures of productivity to analyses that use firm level data, a much different picture emerges of the importance of computers for productivity growth. For example, Brynjolfsson and Hitt (1993) find that computers have a large positive impact on the productivity of firms. This finding is also confirmed in new research by Sandra Black and Lisa Lynch.

Black and Lynch find that raising proportion of nonmanagerial workers using computers (in the manufacturing sector) from a third to two-thirds would increase labor productivity by 5.4 percent (see Figure 2).
As mentioned earlier, Black and Lynch find that non-manufacturing firms that provided computer training to their workers have significantly higher productivity than similar competitors.
In spite of the positive impact of computers on labor productivity, Black and Lynch (1995) find that not all employers are equally likely to provide computer training to their employees. For example, establishments with less than 250 employees are much less likely to offer computer training than larger businesses. Businesses with more educated and experienced workers are more likely to offer computer training as are those who use high performance work practices such as Total Quality Management systems or benchmarking.


Look at the sharp spike up in non farm after 1990. Look at the ridiculously high jump in manufacturing during that period:
http://www.bls.gov/lpc/prodybar.htm

...and the current downward trend. Notice that manufacturing productivity growth is half of what it was during the go-go 90s.

liberals think they know everything. I guess outside of math, science, engineering, politics, sports and the weather they do.
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Actually, I disagree. To get Clinton-era economies back you need to have what Clinton had: An entire new sector of the economy opening up coupled with a massive increase in worker productivity.

I don't agree that we can go back to "Clinton prosperity." I just agree that the tax increase would be a good trade for reduced spending, reduced regulation, and a strong dollar, even if a tax increase would offset some of the benefits from the other policy changes.
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Actually, I disagree. To get Clinton-era economies back you need to have what Clinton had: An entire new sector of the economy opening up coupled with a massive increase in worker productivity.

________________________

Can we please also include a massive housing bubble?
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Actually, I disagree. To get Clinton-era economies back you need to have what Clinton had: An entire new sector of the economy opening up coupled with a massive increase in worker productivity.

________________________

Can we please also include a massive housing bubble?


At that time, it wasn't a bubble yet, but home prices did seem to kick into a higher gear starting around 1997.
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At that time, it wasn't a bubble yet, but home prices did seem to kick into a higher gear starting around 1997.
______________________

It was already kind of frothy

I think when we see where prices are after things sort out, we can safely say it was a bubble. The borrowing folks were doing against the equity in their homes was a large part of the problem.

I know the run-up of the value of my home during that period was pretty impressive, so perhaps there is some technical reason why the word bubble is inappropriate, but bubble it was.
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I don't agree that we can go back to "Clinton prosperity." I just agree that the tax increase would be a good trade for reduced spending, reduced regulation, and a strong dollar, even if a tax increase would offset some of the benefits from the other policy changes.

I'd hoped we could hold the line on taxes and reform some programs but voters didn't agree. Okay, fine.

If we're serious about fixing problems, we will raise taxes on most people and cut spending back by a bit. This will do a couple of things. First, there will be a short term GDP impact as the reduction in gov spending and consumption kicks in.

Next, it'll increase the value of the dollar in the short run as other currency buyers in other places have renewed confidence in the dollar as the world's reserve currency.

However, too much of an increase in the dollar would hit exports. That's not good in light of the first effect. So the Fed would no doubt crank the printing presses up even more to protect exports (because the Fed's dual duty is to manage inflation and try to reduce unemployment). I'd like to see a *stable* dollar with a slow rise in value. Shooting it up too far too fast would disrupt too much.

But back to the point. For God's sake, hopefully Congress comes to its senses with regards to reworking taxes to reward investment. That's the real reason companies are sitting on cash piles or just handing it back to investors.
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At that time, it wasn't a bubble yet, but home prices did seem to kick into a higher gear starting around 1997.
______________________

It was already kind of frothy

I think when we see where prices are after things sort out, we can safely say it was a bubble. The borrowing folks were doing against the equity in their homes was a large part of the problem.

I know the run-up of the value of my home during that period was pretty impressive, so perhaps there is some technical reason why the word bubble is inappropriate, but bubble it was.


Maybe so, but your anecdotal evidence is not compelling.

If you go by the price-to-rent ratio, it certainly doesn't seem like a bubble at that point.

http://www.calculatedriskblog.com/2008/09/price-to-rent-rati...
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liberals think they know everything. I guess outside of math, science, engineering, politics, sports and the weather they do.
---------------

You left out economics.

arrete - miffed
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Maybe so, but your anecdotal evidence is not compelling.

If you go by the price-to-rent ratio, it certainly doesn't seem like a bubble at that point.

_________________________________

Well, let's just go with 97 as a jump off point.

that is a full 3 years, if we discount the first 2 years at a minimum which were not remotely successful for CLinton, then it is still the housing bubble that played a large role in Clinton being seen favorably.

The bubble was a big factor of the perception of Clinton, and why folks felt wealthier at the end of his presidency IMO, and thus the percived view of it as abundantly successful
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Can we please also include a massive housing bubble?

At that time, it wasn't a bubble yet, but home prices did seem to kick into a higher gear starting around 1997.


That happened with a vengeance in Silicon Valley. We bought our house in early 1994 and sold it for more than double what we paid at the end of 2000.

--fleg
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