Clintonomics
Encyclopedia
Clintonomics refers to the economic
policies of United States President Bill Clinton
during the 1990s. Moreover, although, the term Clintonomics has generally being applied to economic policies supported by his staff, the term may also refer to the economic policies that Bill Clinton
supported during his presidency.
Clinton assumed office at the tail end of a recession
, and the economic theories he utilized and implemented are claimed by his supporters to have eventually led to a strong recovery, though Clinton's opponents deny this.
The strategy was outlined in the following four points:
policies implemented by Ronald Reagan
and George Herbert Walker Bush. Clinton ran on the economic platform of balancing the budget
, lowering inflation
, lowering unemployment
, and continuing the traditionally conservative policies of free trade
. In 1992, Bill Clinton was elected president of the United States of America. During Clinton’s presidency (1993 to 2001), the economic policies he put into place for the U.S. were termed Clintonomics. Five years earlier, before Bill Clinton began his presidency, the stock market dropped significantly. This day was named Black Monday
. Clinton inherited Alan Greenspan
as Chairman of the Federal Reserve.
and Laurence Meyer
.” (A New Democrat, 399) Other appointments to the central bank perpetuated this trend of moderates in other nominations.
The effects of this policy of appointing tight money proponents to the Fed are depicted in the Bureau of Labor statistics figure 1 depicting the consumer price index
change or inflationary rate which determines the amount of money on the market (See Figure 1).
According to the graph the CPI stabilized during the 1990s at a fairly low rate never going above 5 percent during the Clinton presidency. Which some would say is the result of the Presidents appointment of tight money proponents onto the Fed’s board. This strategy may have greatly contributed to the stabilization and lowering of the rate of change in CPI or the rate of inflation. Which lead to a huge growth in the “Dow Jones Industrial Average
from 3255.99 in January 1993 to 11500 in early 2000”( A New Democrat, 399) However it may also have contributed to the expanding of our trade deficit (Exports – Imports) as shown by the graph of percentage change in Economic growth (red line) to balance of trade
(blue line) (See Figure 2).
From 1996 to 2000 a steady growth of the trade deficit from -100 Billion dollars to an all time low at the time of nearly -400 billion in 2000.
President Clinton was relatively hands off in this department only asking to tighten or loosen money three times each in eight years in the White House
(A New Democrat) a possible explanation for this is that the Fed had the same sort of ideas that the president’s council of economic advisers believed in, therefore there was not very much discord. Evidence for this is the fact that most of his requests were made during the beginning of his presidency (A New Democrat) presumably before he got his appointments onto the Board.
according to John Burns and Andrew Taylor’s article A New Democrat are The Telecom Reform Act of February 8 1996, which dispatched the ownership restrictions on radio and television, “agriculture and the pesticides legislation of 1996 and the Food and Drug Administration
overhaul of 1997." (400) which were all signed into law by President Clinton. According to the same article the considerable regulation passed by the congress consisted of the Family and Medical Leave Act of February 5 1993, which made paternity, maternity and medical leave available, The Minimum wage Increase Act of August 20 1996 which raised the minimum wage and let states set it even higher if they wished. Also passed during his tenure the “California desert protection, direct lending of educational financial aid, health insurance portability, and safe drinking water legislation.”(400) Clinton wasn't a clear departure from the previous two administrations of Reagan
and Bush
as there were several deregulation laws introduced into law.
Most notably in 1999, Clinton signed the Financial Services Modernization Act, which allowed banks, insurance companies and investment houses to merge and thus repealing the Glass-Steagall Act
which had been in place since 1932. Some point to this as a partial cause of the financial meltdown of 2008.
of 1993 into law. This act created a 36 percent to 39.6 income tax for high-income individuals in the top 1.2% of wage earners. Businesses were given an income tax rate of 35%. The cap was repealed on Medicare. The taxes were raised 4.3 cents per gallon on transportation fuels and the taxable portion of Social Security benefits were increased. The Taxpayer Relief Act
(1997) reduced some federal taxes. Due to certain phase-in rules, the rate 28% was lowered to 20% in the top capital gains. The bracket that was 15% fell to 10%. In 1980, a tax credit was put into place based on the number of individuals under the age of 17 in a household. In 1998, it was $400 per child. In 1999, it was raised to $500. High-income families had this Act phased out. This Act took out from taxation profits on the sale of a house of up to $500,000 for individuals who are married, and $250,000 for single individuals. Educational savings and retirement funds were given tax relief. Some of the expiring tax provisions were extended for selected businesses. Since 1998, an exemption could be taken out for those family farms and small businesses that qualified for it. In 1999, the correction of inflation on the $10,000 annual gift tax exclusion was accomplished. By the year 2006, the $600,000 estate tax exemption had risen to $1 million dollars.
The Personal Responsibility and Work Opportunity Act
of 1996 had a “fundamental shift in both methods and goal of the federal cash assistance to the poor.” Temporary Assistance for Needy Families
(TANF), Aid to Families with Dependent Children
(AFDC), the Job Opportunities and Basic Skills Training Program (JOBS) were among the organizations of this act. The spending was $22.6 billion, in 1995. This bill was followed with reduction of unemployment. The federal budget is the combination of both the U.S. taxes and spending. During Clinton’s presidency, these acts had brought the economy out of its deficit and into a surplus.
This has affected the economy in that the balanced budget and even more the surplus increased investor confidence in the economy, leading to an increased amount of investment, especially in the stock market. This change is exemplified by the dramatic increase in the Dow Jones industrial index.
(GDP), inflation rates, and unemployment rates. The first factor we will examine will be the GDP.
As Bruce Bartlett points out in his article Those Were the Days, Bill Clinton inherited from his predecessor, George H. W. Bush, a deficit of 4.7% of GDP. Although the deficit was not a large priority in Clinton’s initial macroeconomic policy, he made its reduction a higher priority later in his term (Burns and Taylor 393). Among many parts of Clinton’s policy to lower the deficit, he allowed for the passing of laws that raised the money in the US Treasury (Burns and Taylor 395). Clinton also, as Bruce Bartlett pointed out in the same article, cut federal spending and also raised taxes on the wealthy to lower the deficit.
The pursuit of low inflation rates was another large aspect to Bill Clinton’s macroeconomic policies. He, unlike most other post-war Democrats, worked to keep the inflation rates low, and succeeded (Burns and Taylor 389). The mean inflation rates of Bill Clinton were at 2.3%, which are low when considering the fact that that is about half of the rates of Republican Presidents (Burns and Taylor 389).
Lower unemployment rates were another large part of Clinton’s macroeconomic policies. Many argue that Clinton cost many Americans jobs because he supported free trade, which some argue caused the U.S. to lose jobs to countries like China
(Burns and Taylor 390). Even if Clinton did cost Americans some jobs because of free trade support, he allowed for more jobs than were lost because the unemployment rate of his presidency, and especially his second term, were the lowest they had been in thirty years (Burns and Taylor 390).
Clinton took the deficit of 4.7% of GDP in 1992 and turned it into a surplus of 2.4% of GDP in 2000 . Federal spending fell to 18.4 percent of GDP. in 2000 from 22.2 percent in 1992 . Although Clinton raised taxes in 1993, he cut them in 1997 .
Clinton also lowered inflation rates down to 2.3% . Democratic presidents had an average of about double that rate, and Republicans had even higher rates (Burns and Taylor 389). This lowering of interest rates contributed greatly to the good economic health exhibited during Clinton’s presidency.
The average unemployment rate of Democratic presidents, excluding Clinton, is currently about 4.3% while the average unemployment rate for Republican presidents is currently at about 6.1% (Burns and Taylor 390). Bill Clinton’s policy achieved a thirty year low in April 2000 with an unemployment rate of 3.9% (Burns and Taylor 390).
A comparison of all post World War II unemployment rates can be observed in Figure 2. Clinton lowered the US unemployment rate significantly throughout his entire presidency, and lowered it much more than other presidents did (Burns and Taylor 391). This low rate reflects the healthy economy of Clinton’s Presidency because, as most economists agree, unemployment rates tend to be low in times of economic growth periods. We can see through a simple correlation that Bill Clinton’s economic policies promoted a healthy economy and, as a result, had lower unemployment rates (See Figure 5).
(NAFTA), which made it more affordable for manufacturing companies to outsource
jobs to foreign countries and then import their product back to the United States. This policy caused a significant decrease in the amount of unskilled jobs in the United States.
Some liberals and progressives believe that Clinton did not do enough to reverse the trends toward widening income and wealth inequality
that began in the late 1970s and 1980s. The top marginal income tax rate for high-income individuals (the top 1.2% of earners) was 70 percent in 1980, then lowered to 28 percent in 1986 by Reagan; Clinton raised it back to 39.6 percent, but it remained far below pre-Reagan levels. Clinton's administration also afforded no benefit to unionized labor nor did it favor strengthening collective bargaining rights.
Conservative author Bruce Bartlett
, a former member of the Ronald Reagan
and George H.W. Bush administrations, criticized Clinton for not using the budget surplus to restructure the United States' Social Security
program. Bartlett claims that by restructuring Social Security, Clinton would have both benefited the nation as well as his party.
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
policies of United States President Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
during the 1990s. Moreover, although, the term Clintonomics has generally being applied to economic policies supported by his staff, the term may also refer to the economic policies that Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
supported during his presidency.
Strategy
According to American political scientist Jack Godwin, Clintonomics was more than a set of economic, fiscal and monetary policies. It was a governing philosophy with political and economic elements, which routinely appropriated nominally “Republican” and “Democratic” ideas. In general, Clinton’s approach entailed modernizing the federal government, making it more entrepreneurial, and distributing more authority to state and local governments. This meant making the government smaller, more flexible, less wasteful, and better suited for the global era.Clinton assumed office at the tail end of a recession
Late 1980s recession
The recession of the early 1990s describes the period of economic downturn affecting much of the world in the late 1980s and early 1990s.-Causes:...
, and the economic theories he utilized and implemented are claimed by his supporters to have eventually led to a strong recovery, though Clinton's opponents deny this.
The strategy was outlined in the following four points:
- Establishing fiscal discipline and eventually eliminating the budget deficit
- Keeping interest rates low and spurring private-sector investment
- Eliminating protectionist tariffs
- Investing in people through educationEducationEducation in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...
and researchResearchResearch can be defined as the scientific search for knowledge, or as any systematic investigation, to establish novel facts, solve new or existing problems, prove new ideas, or develop new theories, usually using a scientific method...
Historical background
During the 1992 presidential campaign America had undergone twelve years of conservativeAmerican conservatism
Conservatism in the United States has played an important role in American politics since the 1950s. Historian Gregory Schneider identifies several constants in American conservatism: respect for tradition, support of republicanism, preservation of "the rule of law and the Christian religion", and...
policies implemented by Ronald Reagan
Ronald Reagan
Ronald Wilson Reagan was the 40th President of the United States , the 33rd Governor of California and, prior to that, a radio, film and television actor....
and George Herbert Walker Bush. Clinton ran on the economic platform of balancing the budget
Balanced budget
A balanced budget is when there is neither a budget deficit or a budget surplus – when revenues equal expenditure – particularly by a government. More generally, it refers to when there is no deficit, but possibly a surplus...
, lowering inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
, lowering unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
, and continuing the traditionally conservative policies of free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
. In 1992, Bill Clinton was elected president of the United States of America. During Clinton’s presidency (1993 to 2001), the economic policies he put into place for the U.S. were termed Clintonomics. Five years earlier, before Bill Clinton began his presidency, the stock market dropped significantly. This day was named Black Monday
Black Monday (1987)
In finance, Black Monday refers to Monday October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short time. The crash began in Hong Kong and spread west to Europe, hitting the United States after other markets had already declined by a significant margin...
. Clinton inherited Alan Greenspan
Alan Greenspan
Alan Greenspan is an American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006. He currently works as a private advisor and provides consulting for firms through his company, Greenspan Associates LLC...
as Chairman of the Federal Reserve.
Monetary policy
Clinton had the celebrated economist Alan Greenspan as the Chair of the Federal Reserve’s board of governors throughout his presidency; he also appointed two widely considered “moderate advocates of tight money, Alice RivlinAlice Rivlin
Alice Mitchell Rivlin is an economist, a former U.S. Cabinet official, and an expert on the budget. She has served as the Vice Chairman of the Federal Reserve, the Director of the White House Office of Management and Budget, and the first Director of the Congressional Budget Office...
and Laurence Meyer
Laurence Meyer
Laurence Meyer is an economist and was a United States Federal Reserve System governor from June 1996 to January 2002.Meyer received a B.A. from Yale University in 1965 and a Ph.D. in economics from the Massachusetts Institute of Technology in 1970. He then taught at Washington University in St....
.” (A New Democrat, 399) Other appointments to the central bank perpetuated this trend of moderates in other nominations.
The effects of this policy of appointing tight money proponents to the Fed are depicted in the Bureau of Labor statistics figure 1 depicting the consumer price index
Consumer price index
A consumer price index measures changes in the price level of consumer goods and services purchased by households. The CPI, in the United States is defined by the Bureau of Labor Statistics as "a measure of the average change over time in the prices paid by urban consumers for a market basket of...
change or inflationary rate which determines the amount of money on the market (See Figure 1).
According to the graph the CPI stabilized during the 1990s at a fairly low rate never going above 5 percent during the Clinton presidency. Which some would say is the result of the Presidents appointment of tight money proponents onto the Fed’s board. This strategy may have greatly contributed to the stabilization and lowering of the rate of change in CPI or the rate of inflation. Which lead to a huge growth in the “Dow Jones Industrial Average
Dow Jones Industrial Average
The Dow Jones Industrial Average , also called the Industrial Average, the Dow Jones, the Dow 30, or simply the Dow, is a stock market index, and one of several indices created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow...
from 3255.99 in January 1993 to 11500 in early 2000”( A New Democrat, 399) However it may also have contributed to the expanding of our trade deficit (Exports – Imports) as shown by the graph of percentage change in Economic growth (red line) to balance of trade
Balance of trade
The balance of trade is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation's imports and exports...
(blue line) (See Figure 2).
From 1996 to 2000 a steady growth of the trade deficit from -100 Billion dollars to an all time low at the time of nearly -400 billion in 2000.
President Clinton was relatively hands off in this department only asking to tighten or loosen money three times each in eight years in the White House
White House
The White House is the official residence and principal workplace of the president of the United States. Located at 1600 Pennsylvania Avenue NW in Washington, D.C., the house was designed by Irish-born James Hoban, and built between 1792 and 1800 of white-painted Aquia sandstone in the Neoclassical...
(A New Democrat) a possible explanation for this is that the Fed had the same sort of ideas that the president’s council of economic advisers believed in, therefore there was not very much discord. Evidence for this is the fact that most of his requests were made during the beginning of his presidency (A New Democrat) presumably before he got his appointments onto the Board.
Regulatory policy
The only laws that could be considered deregulationDeregulation
Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or...
according to John Burns and Andrew Taylor’s article A New Democrat are The Telecom Reform Act of February 8 1996, which dispatched the ownership restrictions on radio and television, “agriculture and the pesticides legislation of 1996 and the Food and Drug Administration
Food and Drug Administration
The Food and Drug Administration is an agency of the United States Department of Health and Human Services, one of the United States federal executive departments...
overhaul of 1997." (400) which were all signed into law by President Clinton. According to the same article the considerable regulation passed by the congress consisted of the Family and Medical Leave Act of February 5 1993, which made paternity, maternity and medical leave available, The Minimum wage Increase Act of August 20 1996 which raised the minimum wage and let states set it even higher if they wished. Also passed during his tenure the “California desert protection, direct lending of educational financial aid, health insurance portability, and safe drinking water legislation.”(400) Clinton wasn't a clear departure from the previous two administrations of Reagan
Ronald Reagan
Ronald Wilson Reagan was the 40th President of the United States , the 33rd Governor of California and, prior to that, a radio, film and television actor....
and Bush
George H. W. Bush
George Herbert Walker Bush is an American politician who served as the 41st President of the United States . He had previously served as the 43rd Vice President of the United States , a congressman, an ambassador, and Director of Central Intelligence.Bush was born in Milton, Massachusetts, to...
as there were several deregulation laws introduced into law.
Most notably in 1999, Clinton signed the Financial Services Modernization Act, which allowed banks, insurance companies and investment houses to merge and thus repealing the Glass-Steagall Act
Glass-Steagall Act
The Banking Act of 1933, , was a law that established the Federal Deposit Insurance Corporation in the United States and introduced banking reforms, some of which were designed to control speculation. It is most commonly known as the Glass–Steagall Act, after its legislative sponsors, Senator...
which had been in place since 1932. Some point to this as a partial cause of the financial meltdown of 2008.
Fiscal policy
Clinton signed the Omnibus Budget Reconciliation ActOmnibus Budget Reconciliation Act of 1993
The Omnibus Budget Reconciliation Act of 1993 was federal law that was enacted by the 103rd United States Congress and signed into law by President Bill Clinton. It has also been referred to, unofficially, as the Deficit Reduction Act of 1993...
of 1993 into law. This act created a 36 percent to 39.6 income tax for high-income individuals in the top 1.2% of wage earners. Businesses were given an income tax rate of 35%. The cap was repealed on Medicare. The taxes were raised 4.3 cents per gallon on transportation fuels and the taxable portion of Social Security benefits were increased. The Taxpayer Relief Act
Taxpayer Relief Act of 1997
The Taxpayer Relief Act of 1997 reduced several federal taxes in the United States.Subject to certain phase-in rules, the top capital gains rate fell from 28% to 20%. The 15% bracket was lowered to 10%....
(1997) reduced some federal taxes. Due to certain phase-in rules, the rate 28% was lowered to 20% in the top capital gains. The bracket that was 15% fell to 10%. In 1980, a tax credit was put into place based on the number of individuals under the age of 17 in a household. In 1998, it was $400 per child. In 1999, it was raised to $500. High-income families had this Act phased out. This Act took out from taxation profits on the sale of a house of up to $500,000 for individuals who are married, and $250,000 for single individuals. Educational savings and retirement funds were given tax relief. Some of the expiring tax provisions were extended for selected businesses. Since 1998, an exemption could be taken out for those family farms and small businesses that qualified for it. In 1999, the correction of inflation on the $10,000 annual gift tax exclusion was accomplished. By the year 2006, the $600,000 estate tax exemption had risen to $1 million dollars.
The Personal Responsibility and Work Opportunity Act
Personal Responsibility and Work Opportunity Act
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 is a United States federal law considered to be a fundamental shift in both the method and goal of federal cash assistance to the poor. The bill added a workforce development component to welfare legislation, encouraging...
of 1996 had a “fundamental shift in both methods and goal of the federal cash assistance to the poor.” Temporary Assistance for Needy Families
Temporary Assistance for Needy Families
Temporary Assistance for Needy Families is one of the United States of America's federal assistance programs. It began on July 2, 1997, and succeeded the Aid to Families with Dependent Children program, providing cash assistance to indigent American families with dependent children through the...
(TANF), Aid to Families with Dependent Children
Aid to Families with Dependent Children
Aid to Families with Dependent Children was a federal assistance program in effect from 1935 to 1996, which was administered by the United States Department of Health and Human Services...
(AFDC), the Job Opportunities and Basic Skills Training Program (JOBS) were among the organizations of this act. The spending was $22.6 billion, in 1995. This bill was followed with reduction of unemployment. The federal budget is the combination of both the U.S. taxes and spending. During Clinton’s presidency, these acts had brought the economy out of its deficit and into a surplus.
This has affected the economy in that the balanced budget and even more the surplus increased investor confidence in the economy, leading to an increased amount of investment, especially in the stock market. This change is exemplified by the dramatic increase in the Dow Jones industrial index.
Macroeconomic policies
Bill Clinton’s macroeconomic policies of his presidency can best be looked at through three main categories: gross domestic productGross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
(GDP), inflation rates, and unemployment rates. The first factor we will examine will be the GDP.
As Bruce Bartlett points out in his article Those Were the Days, Bill Clinton inherited from his predecessor, George H. W. Bush, a deficit of 4.7% of GDP. Although the deficit was not a large priority in Clinton’s initial macroeconomic policy, he made its reduction a higher priority later in his term (Burns and Taylor 393). Among many parts of Clinton’s policy to lower the deficit, he allowed for the passing of laws that raised the money in the US Treasury (Burns and Taylor 395). Clinton also, as Bruce Bartlett pointed out in the same article, cut federal spending and also raised taxes on the wealthy to lower the deficit.
The pursuit of low inflation rates was another large aspect to Bill Clinton’s macroeconomic policies. He, unlike most other post-war Democrats, worked to keep the inflation rates low, and succeeded (Burns and Taylor 389). The mean inflation rates of Bill Clinton were at 2.3%, which are low when considering the fact that that is about half of the rates of Republican Presidents (Burns and Taylor 389).
Lower unemployment rates were another large part of Clinton’s macroeconomic policies. Many argue that Clinton cost many Americans jobs because he supported free trade, which some argue caused the U.S. to lose jobs to countries like China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
(Burns and Taylor 390). Even if Clinton did cost Americans some jobs because of free trade support, he allowed for more jobs than were lost because the unemployment rate of his presidency, and especially his second term, were the lowest they had been in thirty years (Burns and Taylor 390).
Macroeconomic effects
The easiest way to look at the macroeconomic effects of Clinton’s presidency is to look at three main points: gross domestic product (GDP), inflation rates, and unemployment rates.Clinton took the deficit of 4.7% of GDP in 1992 and turned it into a surplus of 2.4% of GDP in 2000 . Federal spending fell to 18.4 percent of GDP. in 2000 from 22.2 percent in 1992 . Although Clinton raised taxes in 1993, he cut them in 1997 .
Clinton also lowered inflation rates down to 2.3% . Democratic presidents had an average of about double that rate, and Republicans had even higher rates (Burns and Taylor 389). This lowering of interest rates contributed greatly to the good economic health exhibited during Clinton’s presidency.
The average unemployment rate of Democratic presidents, excluding Clinton, is currently about 4.3% while the average unemployment rate for Republican presidents is currently at about 6.1% (Burns and Taylor 390). Bill Clinton’s policy achieved a thirty year low in April 2000 with an unemployment rate of 3.9% (Burns and Taylor 390).
A comparison of all post World War II unemployment rates can be observed in Figure 2. Clinton lowered the US unemployment rate significantly throughout his entire presidency, and lowered it much more than other presidents did (Burns and Taylor 391). This low rate reflects the healthy economy of Clinton’s Presidency because, as most economists agree, unemployment rates tend to be low in times of economic growth periods. We can see through a simple correlation that Bill Clinton’s economic policies promoted a healthy economy and, as a result, had lower unemployment rates (See Figure 5).
Criticisms
Clinton has been heavily criticized for overseeing the creation of the North American Free Trade AgreementNorth American Free Trade Agreement
The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement...
(NAFTA), which made it more affordable for manufacturing companies to outsource
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
jobs to foreign countries and then import their product back to the United States. This policy caused a significant decrease in the amount of unskilled jobs in the United States.
Some liberals and progressives believe that Clinton did not do enough to reverse the trends toward widening income and wealth inequality
Economic inequality
Economic inequality comprises all disparities in the distribution of economic assets and income. The term typically refers to inequality among individuals and groups within a society, but can also refer to inequality among countries. The issue of economic inequality is related to the ideas of...
that began in the late 1970s and 1980s. The top marginal income tax rate for high-income individuals (the top 1.2% of earners) was 70 percent in 1980, then lowered to 28 percent in 1986 by Reagan; Clinton raised it back to 39.6 percent, but it remained far below pre-Reagan levels. Clinton's administration also afforded no benefit to unionized labor nor did it favor strengthening collective bargaining rights.
Conservative author Bruce Bartlett
Bruce Bartlett
Bruce Bartlett is an American historian who turned to writing about supply-side economics. He was a domestic policy adviser to President Ronald Reagan and was a Treasury official under President George H.W. Bush....
, a former member of the Ronald Reagan
Ronald Reagan
Ronald Wilson Reagan was the 40th President of the United States , the 33rd Governor of California and, prior to that, a radio, film and television actor....
and George H.W. Bush administrations, criticized Clinton for not using the budget surplus to restructure the United States' Social Security
Social Security (United States)
In the United States, Social Security refers to the federal Old-Age, Survivors, and Disability Insurance program.The original Social Security Act and the current version of the Act, as amended encompass several social welfare and social insurance programs...
program. Bartlett claims that by restructuring Social Security, Clinton would have both benefited the nation as well as his party.