Conservatives at National Review endorse Clintonomics, sort of

It was only a matter of time before this happened. When Bill Clinton was president, his economic policies were condemned by conservatives as the worst ideas in the history of bad ideas.

When Clinton’s 1993 budget was being considered — a budget that raised taxes on the wealthy and cut government spending — Republicans guaranteed that it was a recipe for disaster. Clinton’s budget would increase the deficit, we were told. We’d suffer through a terrible recession, they promised. Unemployment would skyrocket, they predicted. Not a single Republican in the House or Senate voted for Clinton’s budget; they were so certain his policies would fail.

Of course, none of the GOP’s predictions actually happened. On the contrary, the economy grew during the Clinton years at an unprecedented rate. It was the longest and most robust economy on record. Unemployment dropped to record lows, the deficits disappeared and became the largest surpluses in American history. The stock market soared to record highs and U.S. experienced the strongest private-sector job growth since before WWII.

In other words, everything Republicans said about Clintonomics was wrong.

So here we are a few years later. Bush has brought a radically different economic policy to the federal government with a whole new set of predictions and promises. Unfortunately for everyone, the administration’s guarantees of new jobs, robust growth, reduced debt, and low unemployment have been wrong again.

Yet conservatives continue to believe that tax cuts are the answer to every economic situation. Strong economy? We need tax cuts to keep the economy moving. Weak economy? Tax cuts will turn things around. Huge surplus? That means taxes are too high and we need to return money to the people. Huge deficits? Tax cuts will grow the economy, create jobs, and make the deficit disappear.

I’ve often wondered how conservatives reconcile Clinton’s success after raising taxes with their worldview on tax cuts = nirvana.

As blogger extraordinaire Matthew Yglesias discovered, National Review, a conservative political magazine, can explain everything. Yes, National Review argues, Clinton’s policies were effective, but it’s because Clinton cut taxes.

That’s right, seven years after Bob Dole castigated Clinton for the “largest tax increase in the history of the world,” the conservatives at National Review are holding Clinton out as an example of a “major” historical tax cutter.

“We have had four presidents in the past four decades of American history who signed major tax cuts: Kennedy, Reagan, Clinton, and Bush,” National Review explains. “Although these men also raised some taxes, they stand out in history for their large tax cuts.”

What’s the basis for the rhetorical slight-of-hand? The one part of Clinton’s presidency that conservatives approved of was his trade policies. Clinton championed NAFTA and convinced his fellow Democrats to pass it in Congress, which drew praise even in conservative circles. In fact, as National Review implies, conservatives actually view NAFTA as a tax cut.

As the magazine reports, “In the three years following the Kennedy tax cut of 1964, unemployment fell by 32.14 percent; and in the three years that followed the Reagan tax cut (which took effect in 1982), unemployment fell by 15.12 percent. When Clinton signed the NAFTA agreement, a tariff-rate cut, unemployment fell by 23.29 percent.”

Did you catch that one? Kennedy cut income taxes, Reagan cut income taxes, Clinton “signed…a tariff-rate cut.” For that, he gets included in the pantheon of presidents who “stand out in history” for “large tax cuts.”

There are two problems I find with this (actually, there’s more than two, but I’m restraining myself). One, this is a sad effort by conservatives to twist their own economic model. If tax cuts create jobs, as they believe, and Clinton signed the largest tax increase in the history of the world, Clintonomics should have failed. It didn’t.

NAFTA or no NAFTA, Clinton’s economic policies bear no resemblance to the reckless approach adopted by the Bush administration and endorsed by the editors of magazines like National Review. The fact that they’d include Clinton with Reagan and Bush as tax cutters is both laugh-out-loud funny and a terrible insult to Clinton and his record of success.

Second, if National Review really wants to move the goal posts and conclude that lower trade tariffs are key to economic growth and job creation, shouldn’t they be condemning the Bush administration? After all, Bush has imposed higher tariffs on steel and textiles, despite the free trade orthodoxy of the GOP and his campaign promises to the contrary.

In his 1999 “autobiography,” which is in quotes because he didn’t write or read it, Bush said, “I do not support import fees.” In announcing his presidential candidacy in June 1999, Bush said, “I’ll work to end tariffs and break down barriers everywhere, entirely, so the whole world trades in freedom.”

Despite these policies articulated before the election, Bush implemented sharp increases in tariffs — some as high as 30 percent — in March 2002.

All together now — more broken promises.

So to review, Clinton raised taxes on the wealthy, conservatives whined, and the economy soared. Bush cut taxes on the wealthy, conservatives cheered, and the economy tanked. Clinton supported free trade, cut tariffs, signed NAFTA, and conservatives hated him. Bush misled voters about his support for free trade, raised tariffs, and conservatives love him.