Bush and Clinton Differ in Vision of Economic Problems

September 27, 1992|By LEE GOMES

The best way to predict how President Bush or Gov. Bil Clinton would shape America's long-term economic future is to look at their different interpretations of what happened to the economy in the 1980s.

It's in their role as historians, rather than economists, that the sharp differences between the two men are seen most clearly -- differences often obscured by the "chicken in every pot" rhetoric that typically marks political campaigns.

Mr. Bush, if only because he was Ronald Reagan's vice president for eight years, sees the economic course that Mr. Reagan charted as a fundamentally wise one that banished the plagues of high inflation, high interest rates and meddlesome government of the 1970s and unleashed the greatest peacetime economic expansion in U.S. history.

While the country now is troubled by a stubborn downturn and some larger structural challenges -- both part of the inevitable cycles of business -- the U.S. economy, in Mr. Bush's view, remains not only healthy at its base but also the world's strongest. Any problems, he says, can be corrected with such remedies as lower taxes and freer trade.

For Mr. Clinton, however, much of the Reagan approach is the problem rather than the solution, since he argues that the past 12 years have been a disaster. During the 1980s, Mr. Clinton says, the country turned away from the government spending that the United States has always undertaken to guarantee future prosperity, such as in education or research.

Instead, Mr. Clinton says, resources were squandered on tax breaks for the rich. As a result, U.S. jobs went overseas, U.S. industry became less competitive, the standard of living for most Americans declined, and the country became saddled with a huge deficit.

Those profoundly divergent views show the different approaches the two men would emphasize when dealing with the long-term economic challenges facing the country. These are the problems that will persist even after the economy eases out of the current dip, which, if history is any guide, it supposedly will.

Studying those overall emphases, rather than actual proposals, is important because many of the candidates' specific plans, such as for an advanced high-tech communications system, are identical.

In looking at the long-term economy, there is plenty for the candidates to worry about.

For example, for the first time in many generations, the United States faces global economic competitors that are every bit as tough as it is. Much of this competition, such as from Japan and Europe, is the result of potent government-industry partnerships that are far more direct than the traditionally hands-off arrangements that have existed between government and business in this country.

A major consequence is that the U.S. global market share in many leading industries, from cars to electronics, has declined since 1980, while the trade deficit has exploded.

At the same time, U.S. industry is becoming increasingly internationalized, which boosts sales for U.S. companies but also means that those companies move jobs overseas.

In approaching long-term issues, both presidential candidates start in the political center: They fundamentally believe in the traditional U.S. economic system, helped along by appropriate levels of spending by the federal government.

But from there, it gets a little complicated.

Mr. Bush -- more or less -- moves to the right by being disinclined to see much role for government in business and by having abundant faith that the market forces solve social problems. At the same time, he has put forward many proposals that are normally associated with Democrats, such as an aggressive federal job-training program.

And while Mr. Clinton -- more or less -- goes to the left in his suspicion that business prosperity automatically transfers into overall social good, his policies are so infused with ideas for helping business that, at times, he seems to be running for president of the Chamber of Commerce.

"It's murkier than usual this year," said Christina D. Romer, a professor of economic history at the University of California-Berkeley. "That's because both candidates are stressing the supply side of the equation and are talking about increasing productivity.

"But Bush wants to do it mainly with tax cuts, while Clinton says the government needs to be more involved with spending on education and infrastructure. And Bush has a faith that everyone benefits when businesses have profits, while Clinton seems to think you have to twist business's arm into sharing things."

One way of illuminating the long-term economic courses of the candidates is to look at their economic advisers.

Mr. Bush has had a shifting circle of advisers during his presidency, and at various times, different political philosophies seemed to have had the most access to the Oval Office.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.