Bush was an economic disaster, but he had some help from Clinton

Dean Baker at Talking Points Memo (found via Naked Capitalism, who provides an excellent summary of the article but does not add her own comments) makes an underargued point: That Clinton’s budget surplus did not have to do with some phenomenal fiscal management or austerity which was torn asunder by George W. Bush’s incompetence.  I attempted to make this point in a previous post, relying on an eye-opening New York Times graphic and have long argued that the Clinton surplus relied on blowing bubbles that had to burst and happened to burst in Bush’s eight years.

Certainly Bush did absolutely nothing to help, but had he merely continued Clinton’s policies, the economy would have declined or perhaps collapsed regardless unless he managed to find new bubbles to blow to offset the bursting off the tech and real estate bubbles that began under Clinton (which appears to be the ideal solution judging by some of the bailout plans that have been floated and the approaching-zero-percent interest rates, but there is no evidence that I can see of any new bubbles having been blown so far).

So yes, Clinton was better for the economy than Bush, probably.  But his success was artificial and we’re paying for it (as well as Bush’s incompetence and corruption) now.  This is important to keep in mind, as Dean Baker makes clear, now that Obama has won the election and Clinton’s politics may be returning to the fore.

… and the cow goes moo