Monday, April 20, 2015

Dear Hillary, Please act like Bill (Mostly)

What follows is my last column from the April 17, 2015 Orlando Sentinel.

Now that President-in-waiting Hillary Clinton has made it official I would like to take the opportunity to offer some sound economic advice which, if heeded, will help restore our nation’s economic health to the level last scene when Mr. Clinton was the President.

First, Mrs. Clinton should look at what her husband did in the area of international trade and finance.  Like any brilliant politician Bill told his core voters what they wanted to hear while he was seeking the nomination and election, then ignored his supporters and did the smart thing.  This took two forms.  First, his actions on the North American Free Trade Agreement.   While running for office he said he would only support NAFTA if certain environmental and labor guidelines were met.  This made the environmentalist and labor union wing of the Democratic Party breathe a sigh of relief.  Then, after he was elected, he ratified NAFTA as it was negotiated by the previous Bush Administration without adding the stipulations he said he would.  The result?  The American, Mexican and Canadian economies all grew as trade barriers fell.  Sure, there were job losses in areas where Americans could not compete but the offsetting increases in the demand for our products created far more jobs and income.

Then, Mr. Clinton took to the skies, flying to countries all over the globe seeking to open new markets for America’s biggest resource – cash.  In nation after nation he brilliantly opened up access to foreign capital markets for American investors looking to earn profits in emerging markets and former Communist enclaves.   This led to hundreds of billions of dollars in cash flowing through international markets and a booming American economy.

In the area of taxes and government spending Mr. Clinton learned from the mistakes of his first two years by turning into the Democratic version of Ronald Reagan in his last six years.

Look it up.  From the 1994 Congressional midterm elections when the Democrats were pounded by the “Contract with America” Republicans until he left office we saw large cuts in capital gains taxes, the effective elimination of capital gains taxes on the sale of homes, the creation tax-saving investment accounts like the Roth IRA and of course welfare-reform legislation in 1996 that helped bring the number of people on welfare from 12. 2 million to 4.5 million.  Of course, he had vetoed two welfare reform bills before finally giving in, and he cannot take all of the credit for the tax policies he enacted, but the message is clear.

If Mrs. Clinton wants to end the economic catastrophe (see the budget, welfare rolls, labor force participation rates) of the Obama – and even much of the Bush years – she needs to follow her husband’s blue print.

Clearly, she will have to out liberal Elizabeth Warren and pretend to really care about income inequality, the $15 minimum wage, regulations of industry and more.  But it is one thing to stir up skeptical Democrats with visions of eight more years of Obama Socialism.  It is another to show genuine economic sense and leadership.  This is what her husband figured out and it is why many economists – including Ronald Reagan loving Libertarians like me – would gladly vote for Hillary if she would extend a wink and a nod in our direction to let us know that her campaign hyperbole will be replace with economic sanity once she moves back into the White House.