The Clinton Bubble

This is one of the few things that really worries me about President Obama. I don't understand it. Some of his choices are about the last choice I'd make. It's as if he isn't prepared to overhaul the system completely, but prop it up, band-aid it to death and reconstitute the old guard in a new outfit.

From the Nation:

Obama's allowing the same Clinton-era policy makers who set us up for financial crisis make economic policy. What happened to the socially conscious guy we voted for?


Now I know that the conventional wisdom among Democrats is that the Clintonistas were wildly successful in running the economy when they had their turn, and that Rubin and his protegés Lawrence Summers and Geithner deserve a lot of the credit. But that view is dead wrong. The seeds of the current economic chaos were planted in those years, in which Wall Street lobbyists were given everything they wanted in the way of radical deregulation, and hence was born the madcap world of credit swaps and other unregulated derivatives.

The result was a Clinton bubble, which saw the rise of a new super-rich class that vastly skewed income distribution in favor of what was termed the "working rich" by Emmanuel Saez, who deservedly just won the top prize for young economists, the American Economic Association's John Bates Clark Medal. Members of the "working rich" are well represented in the top 1 percent of income "earners," who, according to a study by Saez, "captured about half of the overall economic growth over the period 1993-2006." The record is clear that from the first year of the Clinton reign, the new class of super-rich, including many Wall Streeters, benefited as much as the other 99 percent of the nation's population did from the policies that Clinton put in place and George W. Bush accelerated.

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