I believe we tend to see each presidential term in an isolation that is distorting. Economic factors have long histories. Clinton benefited greatly by Reagan tax cuts (and junk bond financing) that built the economy of the 90’s, the resolution of the S&L crisis just before him at a huge cost to the previous administration, and the demise of the cold war that allowed a huge cut in defense spending ( the source of much of his surplus). Clinton deserves credit for cutting capital gains tax rates that increased government revenues, and holding down welfare spending growth, and the resolution of currency crisis in Asia. He was also fortunate to have a term that was relatively free of involvement in expensive foreign wars (Bosnia and Somalia were relatively small, limited actions). I think Clinton regrets not having a ‘defining moment,’ but his genius may have been in avoiding such defining moments to extent that a man can control the history thrust upon him.

Bush came into office at the end of a stock market meltdown, widespread corporate corruption (Enron and WorldComm), the vapid paranoia of Y2K, the record disaster of Katrina, not to mention 9/11. Considering this, the economy had done rather well until very recently. Unemployment is lower now than during most of the Clinton administration. But the dollar is down 20% and Bush is facing the reality that he so far has only delayed. He has certainly had his ‘defining moment’, and it has not defined him well.

Jeff Jacoby’s article acknowledges that many of our problems have roots well before the administration that faces it. The sub prime mess is an example of a crisis created by government well intentioned legislation. Ironically, both the sub prime mess and the S&L mess 15 years ago have roots in the Carter Administration.

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