Bring back the nightmare of peace and prosperity

A few days before Bush was inaugurated in January 2001, The Onion ran one of the greatest satirical pieces of the decade: “Mere days from assuming the presidency and closing the door on eight years of Bill Clinton, president-elect George W. Bush assured the nation in a televised address Tuesday that ‘our long national nightmare of peace and prosperity is finally over.'”

I thought of that piece yesterday when reading about Rudy Giuliani’s latest attack on Hillary Clinton.

In a potential preview of next fall’s presidential contest, Mr. Giuliani, who is seen as the front-runner for the Republican nomination, directly attacked the leading Democratic candidate, Mrs. Clinton, over a speech she gave Tuesday in New Hampshire bemoaning the return of “robber barons” and promising to pursue “shared prosperity” by increasing taxes on Americans making more than $200,000 a year.

“This would be an astounding, staggering tax increase,” Mr. Giuliani told reporters yesterday after a visit to a restaurant on the edge of California’s Silicon Valley. “She wants to go back to the 1990s…. It would hurt our economy. It would hurt this area dramatically. That kind of tax increase would see a decline in your venture capital. It would see a decline in your ability to focus on new technology.” (emphasis added)

Now, I realize that Giuliani is probably still honing his stump speech, and he hasn’t quite figured out a rationale for his presidential campaign, but going after Hillary Clinton for wanting to bring America back to the 1990s isn’t exactly a persuasive pitch. Most of the country would love to go back to the ’90s — I’d even go so far as to suggest it has something to do with Hillary Clinton’s support in the polls.

When it comes to Giuliani’s criticism, there’s actually a more obvious flaw in the former mayor’s thinking. As Steve M. explained very well, telling a bunch of venture capitalists in Silicon Valley that a return to the ’90s would be awful demonstrates an almost comedic confusion: “The 1990s? Er, wasn’t that when everyone with a pulse over the age of 13 was a Silicon Valley venture capitalist, or the recipient of a Valley VC’s money? Is it even humanly possible to have had more high-tech entrepreneurial capitalism than we had in the 1990s?”

I don’t see how.

But Giuliani’s ’90s-bashing seems misplaced regardless of location. It’s spectacularly dumb in Silicon Valley, but I suspect Giuliani would be hard-pressed to find any area, company, or industry (except maybe defense contractors) that would prefer this decade to the last.

Atrios had an interesting post recently about the national sense of malaise.

There have been 3 presidents during my adult life – Bush, Clinton, Bush – a period of optimism bookended by pessimism. At the end of Bush I there was a recession. It wasn’t a very big one but it seemed to be accompanied by growing pessimism about the future. Maybe it was just that I was graduating from college roughly around that time, but there was a sense of diminished opportunity, of diminished options. That changed during the Clinton era, when eventually everything seemed possible. There was something new and wonderful, the internet, and there was the great sense that the future could be bright. Some of this was “irrational exuberance,” but some of it was based in reality. Real wages were going up. Inequality was shrinking and black unemployment was declining. The deficit was gone and thought could be given to some positive and necessary things the government could do. The sense of possibility was back.

And then little George turned it all to shit.

I’m fascinated by this 72% wrong track number. I’d like to understand it more. I’m not sure I have sense of the basic reasons why so many people think things are going to hell. We can all come up with various possibilities, and there won’t be one single answer, but I still think there’s probably a coherent narrative to be teased out. I’m just not sure what it is.

Giuliani is warning people that a return to the ’90s would be dangerous. I don’t think anyone is going to believe him.

CBS News reported last night that Dell will lay off 8000 workers- “10% of its world-wide workforce.” What percentage of its US workforce is that?

  • OT, but did anyone catch Pistons/Cavs last night? I rarely watch NBA but Lebron James may have reached Jo-be status in that game.

    Oh. and Guck Fooliani.

  • Listen, the ’90’s were great, so many people enjoying the excesses that life had to offer.. but that hangover in ’01-’02 hurt a bit.

    Interestingly, there’s probably more private equity folks, VC’s and Investment Bankers employed today than the late ’90’s as buyout’s flourish and markets reach new highs — all enjoying many of the same excesses as the late ’90’s. Perhaps it’s another sign of things to come??

    And Haik, those 8,000 workers have been offset by the throngs of Google and Apple hires in recent years… why focus on just the layoffs???

  • The Onion ran one of the greatest satirical pieces of the decade

    Thanks for the reminder. Forget the astrologers–this is one of the most prophetic pieces I’ve ever read: Gulf War-level conflict, tax cuts, mounting debt, cronyism, even disenfranchisement.

  • Satirical piece it may have been, but I don’t hear many people laughing now. It’s terrible when satire becomes fact. You don’t expect reductio ad absurdum to become reality, when it’s supposed to be a persuasive logical demonstration of what must be avoided at all costs. Quite an achievement to turn a wonderful dream into an horrendous nightmare in six short years. Satan works in mysterious ways!

  • I always laugh when people talk about tax policy as if they actually can predict what minor tax changes will cause.

    Soon after the biggest tax increase in history in 1982… the economy started to recover.

    Soon after the second biggest tax increase in history in 1990 … the economy started to recover

    Soon after the third biggest tax increase in history in 1994 .. the economy continued to recover

    Then again, after the phased in tax cuts of 1981… the economy tanked

    after the phased in tax cuts of 2001 … the economy tanked.

    What does this prove? Absolutely nothing.

    However, it does give a lot of evidence to show that tax policy is no where near as simple as the ‘publicans would have you believe.

  • why focus on just the layoffs?

    I’m not focusing on the layoffs. I’m focusing on the fact the the US portion of the layoffs is unknown to us and CBS News doesn’t seem to care.

    By the way JRS Jr #3, exactly how many in a ‘throng?’

  • I don’t think anyone is going to believe him.

    You had me right up to that line, CB. One of the breathtaking skills of modern conservatism is rewriting history. A few examples:

    – The Vietnam war, a disaster and national trauma, became “a noble cause.”
    – Jimmy Carter, an instinctual moderate who championed Soviet dissidents, stood up to the USSR in Afghanistan, deregulated numerous industries, and was viciously hated, mocked and challenged by his party’s left wing, became a bleeding-heart liberal.
    – Ronald Reagan, who did nothing for social conservatives, vigorously pursued arms control, and alternated tax cuts with tax increases, became the shining light of conservatism.
    – And, of course, Saddam attacked us on 9/11.

    Giuliani is full of crap, but this crap is going to become conventional wisdom before you know it. Conservatives think that way.

  • JRS writes:

    “Interestingly, there’s probably more private equity folks, VC’s and Investment Bankers employed today than the late ’90’s as buyout’s flourish and markets reach new highs — all enjoying many of the same excesses as the late ’90’s. Perhaps it’s another sign of things to come??”

    Eh? What are you talking about? I had friends who worked in late 1990s Venture Capital and the whole VC tech market went Pfffttt. Some are still looking for VC work while others found themselves working in other sectors of the finance sector. The only M & A work is small potatoes compared to what went on in the late 90s.

    The hot financial sector is in hedge fund management not M & A.

  • Rudy’s delivering a slow pitch right over the plate.

    “Sounds like he wants us to return to the 1890s!” she can say, without deviating from her “robber barons” analogy.

  • Weren’t Bush’s tax cuts supposed to take us to the land of milk and honey? I’m not seeing any indicators from any sector of the economy that things are going to be getting better, in fact, just the opposite. The only economy that has benefit from Bush being in office seems to be China’s.

  • “The only economy that has benefit from Bush being in office seems to be China’s.”

    More distorting facts so just so you folks can bash the right! That is just as bad as Rudy’s comment above!

    Barron’s ran a story last Saturday talking about the negative savings rate and the statistic’s defiencies. The better measure of American’s growing prosperity is Household Net Worth which has flourished since 1958 (with a few temporary pullbacks in the 70’s and early 2000’s) and is now reaching all time highs @ $500k/ US household, up from $300k/household in 1990.

    How is that not a benefit for the US?

    From RealMoney.com on 3/8:
    The Fed’s data indicate that household net worth increased $1.4 trillion to a record $55.6 trillion in the fourth quarter of 2006 compared with the previous quarter. For all of 2006, household net worth increased $3.9 trillion, a hefty gain considering the weakness in the housing market.

    Last quarter’s increase in household net worth was the result of a $250 billion increase in deposits (CDs, checking, money market and the like); a $100 billion increase in direct holdings of corporate equities; a $319 billion increase in holdings of mutual fund shares; and a $608 billion increase in pension fund reserves, which likely reflect increases in stock prices.

    Today’s report also showed that household debt increased at its slowest pace of the current economic expansion, owing to a slowdown in the growth of mortgage debt.

    These data weaken the bear case on the economy and on the outlook for the financial markets, which have obsessed over the health of the consumer, partly because of the subprime story, which is overplayed when viewed in the context of these data.

  • Haik — I would classify this as a throng:

    From the NYT 1/3/07: Google has doubled the number of employees in each of the last three years. Even though the company now has about 10,000 employees, Mr. Bock says he sees no reason the company will not double again in size this year. That would increase the number of hires to about 200 a week.

    Let me now if you need me to calc how many weeks it will take Google’s hires to overcome the Dell layoffs — hint, it’s not that many!

  • But wait! This is just the tip of the iceberg.

    The Clintons ignored bin Laden (along with heaps of self-praising of his “role” on 9/11, and ignoring the fact that bin Laden is still on the loose).

    The Clintons tried to socialize healthcare.

    The Clintons weakened the military (oh sure, one can argue that the Clinton administration simply stuck to the post-Cold War military structure that Bush I and then-Secretary of Defense Cheney laid out, but that’s water under the bridge).

  • “I’m fascinated by this 72% wrong track number. I’d like to understand it more.” — Atrios

    My sense is that it’s almost meaningless. Some in that number are pissed that we’ve been in Iraq too long. Others are pissed because they think we should plan to be in Iraq indefinitely. Some are pissed because there isn’t enough religion in public life; others that there’s too much. About all I can attribute to “wrong track” measures is that 72% indicates a lack of optimism to offset the pessimism.

  • “Is it even humanly possible to have had more high-tech entrepreneurial capitalism than we had in the 1990s?”Steve M.

    “there’s probably more private equity folks, VC’s and Investment Bankers employed today than the late ’90’s”JRS Jr.

    This statement may or may not be true, I haven’t seen any supporting reports, it seems we should believe it just because JRS Jr. says it’s true. Even if it is true, the original post was refering specifically to Silicon Valley VCs and not private equity and Investment Bankers.

    “Danny, the VC’s have gone to private equity… Read this:”JRS Jr.

    Not sure how my name got pulled into this thread, but since I noticed it there, I figured I’d chime in.

    I followed the link the the article and read it. It seems to be about some large private equity firms engaging in 1980’s style leveraged buyouts. This has very little (if anything) to do with Silicon Valley venture capital and entrepreneurial capitalism, nor does the article give any indication that there are “more private equity folks, VC’s and Investment Bankers employed today”. This stood out for me:

    “If all this seems familiar, it should. If you remember Barbarians at the Gate, Gordon Gekko and the leveraged-buyout craze of the 1980s, you’ve seen the prequel to this story. LBOs are back, only they’ve rebranded themselves private equity and are vowing a happier ending. Even many of the actors are the same, including the big players in the ’80s such as Carlyle Group, Texas Pacific and KKR.”

    “Critics say private equity firms are up to the same old tricks and are taking short-term profits without regard for the long-term outlook for the companies they buy.

    “Private equity firms have repeatedly extracted cash from companies knowing there was a significant risk they will later run out of funds and be unable to raise more,” says Gary Diamond, a restructuring adviser for Berger Epstein & Garber.”

    This is the opposite of my understanding of entrepreneurial capitalism and venture capital, inject cash into companies expecting them to use those funds for innovation and growth for long term gains.

  • 2Manchu,

    Although perhaps the intonation is off a bit, I think I hear a bit of sarcasm in your voice as you make those statements. It almost seems as though you don’t seriously believe these things you quote. 😉

  • Another prophetic parody was the one on Saturday Night Live where Bush was hiding behind the desk and the whole place was blown to shit and he looked, much as he does today, like he’d just like to go back to cutting brush. As I remember it, he says it’s been a tough couple of years… and someone says it’s been a couple of months…. I thought about that through the summer of 2001 and especially post-9/11 along with the tarot card the Tower.

  • Since Household Net Worth includes your home, it would be expected that HNW would go up during a housing boom/bubble.
    Hell, if you had invested $300,000 (the 1990 HNW) at 3.5% for 15 years you would now have $502,604 – a pretty crappy return; but JRS jr seems to think that it’s great that HNW is only just now reaching $500,000/household. Just goes to show you what lousy investors the Right-wing make.

  • As I tell my students, when you talk about wealth you need to try to report mean, median, and mode. I don’t doubt there is more household wealth (Boston’s Big Dig major contractor destroyed 3 great houses to build his McMansion on Wychmere Harbor) but I don’t think the distribution is functional or fair.

  • Best satirical pieces of the decade? How about in all history? It turns out that Pulitzer-worthy article was more accurate about the Bush years than any “real” articles that followed for the next 6.5 years, including today.

  • I’m fascinated by this 72% wrong track number. I’d like to understand it more.

    I’ll take a stab at it . . at least from my gut, anyway.

    Politicians who distort their opponent’s position with provable lies to win an election, then lie about what they said. PR types that stand up and deny what was said on a video clip (and do it with a straight face).

    Telling us that politics (and life) is not about right and wrong, but about winning at any cost.

    Religious leaders who espouse a belief in God and the Bible, then support those who violate the principles contained therein, ignoring statements by (or ‘forgiving’) those that have common POLITICAL beliefs with themselves while condemning those on the other side of the table.

    Ignoring contradictory statements made by their ideoligical ‘friends’ in the past regarding an issue and NOT treating it as the hypocricy that it is.

    Acting as though they believe in a righteous God but do not believe that he will hold them accountable for their statements, beliefs, and actions toward their fellow man.

    Telling us that supporting the country means sending others to die in our stead, without asking that any of us make a sacrifice commensurate with the seriousness of the ideal.

    Failure to act fiscally responsible, then telling us that it doesn’t matter (which, incidentally, goes against EVERYTHING our ancestors taught us).

    Yeah, I can see how it could be seen as on the wrong track. And in plain English, that is what it means from MY perspective.

  • “MEEE?? Being sarcastic??? Noooo…..”

    My standard line with students:

    “Sarcasm. No, I don’t use sarcasm. It takes a keen and penetrating intellect just to recognize sarcasm.”

    Makes their little heads explode.

  • There’s another laughable element to Giuliani’s comments, I think. I mean, isn’t one of his claims to fame (beyond being the Mayor of 9/11) that he brought law, order, and prosperity to liberal, anarchic NYC? And when was this? Why, exactly, would he encourage people to forget the decade when he was mayor?

    I guess I shouldn’t burn too much brainpower asking for consistency from him.

  • According to the U.S.Census Bureau:

    Median U.S. Household Income measured in constant 2005 dollars:

    Under Reagan/Bush I (1981-1992): +5% over 12 years
    Under Clinton (1993-2000): +13.9% in 8 years
    Under Bush II (2001 to 2005): -2.6 percent in 5 years

    Modern conservatuve stewardship of the economy: bad for most of us, most of the time.

  • Senator Hillary Clinton’s voting record on budget, spending, and tax issues can be found at: Senator Hillary Clinton’s Voting Record

    Senator Hillary Clinton’s history of speeches on taxes can be found at: Senator Hillary Clinton’s Record of Speeches

    Senator Hillary Clinton’s ratings from special interest groups on budget, spending, and tax issues can be found at: Senator Hillary Clinton’s Interest Group Ratings

    Mayor Rudolph Guiliani’s history of speeches on taxes can be found at: Mayor Rudolph Guiliani’s Record of Speeches

    For more information on Senator Hillary Clinton’s or Mayor Rudolph Guiliani’s positions on budget, spending, and tax issues please visit Project Vote Smart or call our hotline at 1-888-VOTE-SMART.

  • TOTAL PRIVATE SECTOR EMPLOYMENT
    SEASONALLY ADJUSTED
    (IN THOUSANDS)

    REAGAN + BUSH I
    JAN 1981 74671
    DEC 1992 90540
    NET == + 15869

    BUSH II
    JAN 2001 111636
    MAR 2007 115426
    NET +3790

    TOTAL RAYGUN, BUSH I AND BUSH II == +19659

    CLINTON!!!

    JAN 1993 90824
    DEC 2000 111643

    NET == + 20819

    SOURCE:SOURCE: http://www.bls.gov/ces/home.htm#data

  • Hey, I want to go back to the 90’s too-to warn people about Bush and Al-Queda!

    Lets see, peace, prosperity, balanced budgets, America having a good standing in the world. THAT’s what the GOP is apparently running against. And teen pregnancy took a dive in the 90’s too. Beyond irony.

  • Under American capitalism, a small minority of exploiters appropriates the surplus created by labor, leaving just enough for the actual producers to survive. The exploiters dispose of the surplus to meet their private interests, regardless of larger societal needs.

    Entrepreneurs in more innovative nations derive efficiency from increasing productivity, not from cutting the wages of workers or increasing the taxes of workers. Their advanced industries thrive, while others die. Progressive businesses prosper while others fail. But their economies remain competitive, as the system itself ensures everyone has enough to live on.

    Corporate “efficiency”, “risk management”, and “shareholder value” at the immeasurable expense of American workers is not merely bad business or sheer cowardice. It is hopefully the death of capitalism, overall.

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