MATT: But let me ask you this. Just on that issue [the filibuster], which I admire your focus on, do you think that the likelihood of it happening would not be different if it were at the center of a third-party campaign explaining to people that part of why nothing gets done or that we can’t do things that are equal to our challenges is because of X, Y and Z in the rules, and this is one of them? If a candidate emerged and they were talking about this as one of the centerpieces of what had to change for us to be able to address our problems, I would think that that would increase the probability of it changing, if they won on it. Even if they didn’t win, they would change the nature of the entire conversation.That's exactly right.
EZRA: No. You can run out the theory all sorts of ways, but certainly I don’t think Ralph Nader running on campaign finance reform or changing the amount of greed in politics changes it very much. I think it ended up going in the opposite direction. I think third-party candidacies in some ways can be helpful, but can be very, very, very unpredictable, obviously. And I think the actual answer is that I think it would affect the likelihood of this almost zero. I mean, it would be interesting if you had somebody relevant running a third-party campaign based on an attack on the filibuster. I think that would be pretty interesting.
Miller rests a lot of his argument on the Ross Perot campaign of 1992, and that it supposedly was responsible for deficit reduction. Miller was in the Clinton White House, and it's hard to argue against the subjective feelings of participants; I'm sure that to him, and perhaps to many of the Clinton crew, it felt as if Perot forced the issue. The problem is that it's real hard to find supporting evidence. After all, Reagan-era budget politics was dominated by deficit politics (thus Gramm-Rudman, among other things), followed by a major and successful deficit reduction package during the Bush presidency -- a package Perot opposed, just as he opposed the Clinton deficit reduction package in 1993. And histories of the Clinton administration stress the economic logic for deficit reduction (under 1993 circumstances, it would keep interest rates down and therefore spur growth), which presumably would have pushed the economic team in that direction regardless of Perot.
Perot did talk a lot about the deficit, but in my view his contributions to that discussion were almost always counterproductive, and at any rate I'm confident that had Perot never run for president not much would have changed about the Clinton administration's approach on that issue. My general feeling is that while it's possible for third parties to put items on the national agenda that neither party will discuss, it's a highly inefficient way of doing so at best. And as for actually passing things, it's almost never a useful strategy.
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Ah, but did the Perot run convince the GOP that there were people out there that would vote for someone who was bat-shit crazy, if only they promised deficit reduction?
ReplyDeleteIf so, then it brought the GOP to the serious deficit reduction table in the last 6 years of the Clinton Admin, and that's something. Clinton might have liked a balanced budget, and wielded his veto pen to help get one, but the GOP also had a role (even if we're talking about playing a bad role, they might have played a less-bad role--if we take off our partisan blinders, we might even credit the GOP somewhat).
"And histories of the Clinton administration stress the economic logic for deficit reduction (under 1993 circumstances, it would keep interest rates down and therefore spur growth)"
ReplyDeleteIf Rubin thought this was true than your logic on the politics is sound.
However, economically speaking it is not true. Cutting the deficit directly lowers aggregate demand and thus GDP (or GDP growth). Interest rates then fall *because of lower GDP*. Reducing the deficit can be a desirable economic policy when the problem is *too much demand*--that is when the economy is operating beyond its sustainable full employment level and this is sparking high inflation. If you are trying to cure a recession your fiscal policy should be a bigger deficit, 100% of the time.
The "crowding out" effect wherein new Treasury debt competes with private debt and thus bids up the interest rate does not actually occur. It does not occur because the Federal Reserve intervenes to stop it by buying up the Treasury bonds itself. The Federal Reserve can buy or sell as many Treasury bonds as it likes, and therefore it can set short-term interest rates at whatever level it wants. This action completely swamps any effects from budget policy. For proof of this look at the early 2000s recession under Bush: Bush greatly expanded the deficit, while Greenspan pushed interest rates to unprecedented lows using monetary policy.
To sum up: Each and every change in interest rates between 1987 and 2006 was dictated by Alan Greenspan. Clinton's budget policy had nothing to do with it.
Some people make your deficit/interest rate tradeoff argument in political terms: They say Clinton/Rubin made a deal with Greenspan wherein Greenspan would cut rates to stimulate the economy, and in exchange Clinton would cut the deficit and renominate Greenspan. That is plausible.
The Bush experience shows that the combination of a GOP president with a GOP Congress--that is, Republicans free to pursue their preferred agenda--doesn't necessarily lead to smaller deficits. Based on the Clinton experience, I would suggest that the ideal combination for deficit reduction is (1) a Democratic president and (2) a Republican Congress out to undermine him any way it can.
ReplyDeletePerot DID help Clinton get elected, but not in the "he stole Bush's votes" sense.
ReplyDeleteHe helped Clinton get elected because he changed the focus of the campaign.
Until Perot became a major player, the Bush people were only too happy to talk exclusively about "bimbo eruptions" and Gennifer Flowers.
Perot was only interested in talking about the economy, and he had enough credibility that both sides were forced to make that the major focal point of their campaigns, where Clinton's ideas came off better than Bush's.
Matt's argument also rests heavily on the notion that third party candidates are important partly because they change the debate. While this is true I think that it is only true insofar as any candidate running for president has the capacity to change the debate, only this often happens in primaries. Perot's focus on deficit reduction likely would have framed the debate were he a GOP challenger rather than a 3rd party rogue. John Edwards has been very successful in moving the Democrats towards talk of income inequality etc.
ReplyDeleteRaider,
ReplyDeleteSorry, but that's not accurate. 1. Perot did talk about the economy, but he spent a lot of time on negative attacks -- on Bush for any number of things, many of them personal (and quite a few of them absolutely nuts) and on Clinton for, well, being from Arkansas. Since he didn't much propose any actual plans for the economy, but basically said that one didn't need plans when one had common sense, it didn't actually leave much to talk about, if it was up to him.
Bush continued to attack Clinton on various stuff, all basically stand-ins for saying you couldn't trust the guy; that's the natural incumbent strategy in a time of recession. And it wasn't going to work, and Clinton was going to talk about the economy nonstop, and given Bush's unpopularity and the then-ending recession it didn't take Perot to get the press interested.
Jonathan: Exactly. Bush just attacked Clinton, and would have been only too happy to go on and on about "Family Values" and Gennifer Flowers, except Perot forced the debate back to the economy, where Clinton had the upper hand.
ReplyDeleteBush Sr. was such a cipher, though. I remember a widely-run campaign ad had him saying "Here's what I'm for," and I remember thinking how pathetic it was that this guy had been the VP for eight years and President for another four, and he still had to go on TV and say "Here's what I'm for." We should already have known.
Jonathan, thanks for this post. The entire transcript is worth reading. It's one of the most polite shreddings I've seen lately. Klein absolutely eviscerated (figuratively speaking) Miller and his argument.
ReplyDeleteSo much so that by the end I almost felt sorry for Miller. Not unlike when the Boston Celtics defeated the Houston Rockets for their 16th NBA title in 1986. In addition to winning the series, the Celtics (and the crowd at the Boston Garden) effectively ended Ralph Sampson's career after Sampson went after Celtic guard Jerry Sichting.
If so, then it brought the GOP to the serious deficit reduction table in the last 6 years of the Clinton Admin, and that's something. Clinton might have liked a balanced budget, and wielded his veto pen to help get one, but the GOP also had a role (even if we're talking about playing a bad role, they might have played a less-bad role--if we take off our partisan blinders, we might even credit the GOP somewhat).
ReplyDeleteThis is such an ahistorical account that it's almost laughable. Bill Clinton may not have been an Obama/Pelosi spender, but he did author HillaryCare, and he did shut down the government so that he could spend even MORE money, not less, as we know.
As a percentage of GDP, George H.W. Bush and George Mitchell jacked spending, which had been on the decline in the last few years of Reagan's term. Clinton/Mitchell attempted to salvage as much of that spending level as they could, and even made a run at a massive increase in entitlement spending in HillaryCare, but the handwriting was on the wall, and 1994 brought on real spending restraint, from the Clinton/Mitchell preferred levels of +21% of GDP to the end of Clinton term level of less than 18% of GDP.
It wasn't the Left that brought on that spending restraint, let's make no mistake. Mitchell wasn't Pelosi, but he wasn't Tom Coburn, either. And Clinton certainly wasn't. New Democrat, yes, but the contemporary Blue Dogs voted for all of Obama's stuff, too.
Was the gadfly Perot a part of that backlash against the H.W. Bush and Mitchell spending increases? Yes, he was a part of the grumbling, and he certainly helped expose Bush, which helped Clinton. But 1994 was the rubber meeting the road in our body politic. And a bit of supply side economics growing the economy didn't hurt either. Today's Left might take a lesson.