Former President Bill Clinton spoke to the Democratic National Convention last night, but he failed to share with all those Democrats any of the economic wisdom he learned from his own presidency roughly 30 years ago.
Clinton had a chaotic personal life, and in his first term, he jacked up taxes on individuals and businesses, and his wife Hillary tried to nationalize healthcare, and the voters rebelled.
In the 1994 midterm, voters threw out the Democrats by the droves and elected a Republican House for the first time in 40 years and delivered a landslide GOP victory in the Senate. In other words, they repudiated Mr. Clinton’s high tax and spend policies of his first two years, and then he changed policies big time.
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Following his stinging midterm election defeats, in his 1995 State of the Union message, he changed course, saying: “Let’s change the government — let’s make it smaller, less costly and smarter.” By 1996, he opened his State of the Union message by saying: “The era of big government is over.”
Working with Speaker Newt Gingrich, Clinton forged a whole new pro-growth policy by cutting the capital gains tax and signing the best welfare reform bill in history. Millions of people were taken off the welfare rolls and went back to work and the country prospered.
Investor spirits rose and the Information Age moved into high gear. Clinton oversaw a leaner government, and almost miraculously strong economic growth turned a budget deficit into a surplus.
He was re-elected in 1996, but he continued to work hand-in-glove with the Gingrich Republicans. Now, here’s the tragedy of his speech last night: He talked about none of this.
In fact, I don’t think he even mentioned the economy, even though he was the best economic president since John F. Kennedy’s gold-based tax cutting, and of course, like every other major speaker, Mr. Clinton completely avoided Kamala Harris’ whacky economic speech last Friday.
That $2 trillion spending and price-control disaster that was heavily criticized by conservatives and liberals, including the left-wing Washington Post — it has seemingly been deleted from Democratic memory. As in, no one wants to talk about it. That includes across-the-board tax hikes that will do enormous damage to the economy, which recent job revisions suggest is a lot weaker than originally thought.
The $2 trillion in spending is even bigger than the inflationary spending bills of 2021 and 2022, where she cast the deciding votes in favor. Listening to these Democrats for the last three nights, it seems like Kamala’s major economic speech has fallen into an existential memory hole.
How she’s going to handle it tonight remains to be seen. Perhaps she’ll flip-flop it and say the whole thing was really a rouse when she was much younger seven days ago, but here’s where Bill Clinton should have come into play.
He should have stood up there in front of the convention and said: “Look, I jacked up taxes in 1993, along with my wife attempted a massive tax-and-spend and regulatory takeover of the healthcare system, and unfortunately, my Democratic Party got slaughtered in the midterm election.”
So, in a friendly way, he could say: “I’d like to give you some good advice. Voters are in no mood for big taxes, big spending and big inflation. Let this be a warning. As much as I respect Joe Biden and support Kamala Harris, I’m warning you not to go out on a big government limb that will cost you all three houses in 75 days.”
He could have said: “I learned my lesson the hard way, but I did learn it. And you know what? Sometimes Republicans have better ideas than we do, so I went along with many of them, and I was re-elected handsomely and the country prospered.”
Mr. Clinton did say there should be much more respect among people who disagree, more civil discourse. That’s good, even though he took a couple of cheap shots at Donald Trump, but what was totally missing from his speech was the kind of economic wisdom that he learned so well 30 years ago.
In that important sense, both Mr. Clinton and the Democratic Party missed what could’ve been an enormously important learning moment last night, but they missed it.
This article is adapted from Larry Kudlow’s opening commentary on the Aug. 22, 2024, edition of “Kudlow.”
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