Both former President Bill Clinton and President Barack Obama are center left in the political spectrum.
Two obvious differences are that Clinton came from a Governor’s office, one that is primarily administrative and executive, whereas Obama came from the US Senate which is legislative; and Clinton came to the Presidency just as the internet boom began, whereas Obama won the Presidency during the worst financial collapse since the Great Depression.
The real comparison is more striking, however. Clinton came to office just as a tremendous economic engine started to hit on all cylinders. He was lucky. He enjoyed the benefit of a tremendously positive “Black Swan:” A surprising and powerful fortunate event that lifted all economic boats pretty much around the world.
Obama came to office when the country’s economic engine nearly stalled out completely. Bad luck in extremis. He inherited the first result of a powerfully negative “Black Swan,” that’s been marshalling its forces for more than 30 years.
That said, both men’s approach to problem solving derives primarily from the political center. Both men supported health care reform aimed at insuring more Americans. Clinton failed. Obama succeeded after a long, divisive battle. Opponents labeled Obama as a socialist, someone from the political extreme. Yet a major goal of Obama’s with the reform, possibly THE major goal, was to control out of control medical costs. That’s a conservative goal. He wanted to reduce the rate of government spending on health care. But he also wanted to insure more Americans, considered a liberal goal.
As a legislator, particularly one from the US Senate, Obama desires compromise, the mother’s milk of legislation. He wants bi-partisan legislation. It’s what he understands best. But this impulse ran straight into a headwall called the Great Recession and an ideological divide that began under President Reagan in the early 1980s. This is the negative “Black Swan” bedeviling Obama and the nation.
That divide is best explained as one where many Americans believe the government is totally ineffective and cannot actually improve economic vitality. The more it tries, this ideology goes, the worse things get. Reagan famously said “Government isn’t the solution. It’s the problem.”
This attitude is relatively new in American history. The academic economic thought it relies upon (loosely attributed to economist Milton Friedman and dubbed the “Chicago School”) is relatively new, as well. Previously, Americans believed their government could be an engine for progress and often supported large government programs aimed at boosting the private economy.
So Obama takes office as one of the most spectacular failures in the private economy begins it’s economic damage. And he does so at a time when many, if not most, Americans believe the government can’t help anyway. Unforseen events are suddenly descending on America. There is a negative Black Swan at work here.
Give Obama credit for soldiering on despite the storm he is trying to help the American economy sail through. He inherited a total economic mess when his opposition, informed by the Chicago school, firmly believes that the government can’t help. That the private markets two years ago pretty much left the field of battle and decamped somewhere on the plains of Long Island haven’t shaken this crowd’s belief of ascendent private markets in the slightest.
Further complicating Obama’s challenge is that the dynamics of this Black Swan have been at work in other industries besides finance. Despite the Chicago School’s academic constructs, private industry appears to depend very much on the government.
Oligopolies have developed in most of the country’s vital industries as a result of this, not just in finance, but in energy, health care and agriculture too. The paradox is that the “government can’t do anything to improve the private economy,” attitude is obviously not shared by the private economy itself.
The political ideology derived from the Chicago School and crystalized by Reagan recommended a laissez faire government. Less regulation, not more. Less government goal setting, not more. Flat tax rates instead of progressive ones. Stay away from private enterprise, this ideology demands. Unfettered private industry will provide.
The result. Oligopolies built up as the American public embraced the new ideology, ignoring previously understood truths about the importance of governance. Rather than distancing government from private industry, this ideology led straight to the capture of governance by industry winners. Oligopolies always capture the government to insure their dominance. They don’t encourage competition, they destroy it with the help of a captive government.
Income inequality built up to unheard of levels in America. It wasn’t “trickle down” economics, it was a steady river of money going “trickle up” the economic income ladder.
Serious problems such as the country’s addiction to foreign petroleum were not addressed. Now Obama must make the effort. But it’s hard to solve an obvious problem when so many corporations are making good money the way things are. Industrial agriculture has systematically destroyed America’s previously diverse, and thus more stable, farming system. It has been replaced by the manufacturing model of concentration and production. Like Ford said “You can have any color model T. As long as it’s black:” Today you can have any food you prefer, as long as it’s corn.
Still Obama does not directly attack these oligopolic industries for what they are: non competitive industries whose profits derive primarily from government tax and subsidy support. Unlike Franklin Delano Roosevelt, president during the Great Depression, Obama cannot call upon a public’s belief in the important role of government because that sense has been greatly diminished and compromised.
Clinton, frankly, had none of this to face. A new innovation that positively affected the entire economy (a positive Black Swan event no one really saw coming) swept through his entire time as President, only collapsing after he left office. This boom masked the corrosive attitudes that were at work, unseen from the public eyes–the negative Black Swan that had been building up since Reagan brought the Chicago School economic philosophy into dominance.
That Black Swan resulted in our financial recession. And it will result in a number of other disasters (try food and energy) in the relatively near future.
Clinton and Obama. Other than their centrist approach to problem solving, have about zero in common. Clinton enjoyed a positive Black Swan. Obama fights a negative one.