from the Congress Action newsletter
by: Kim Weissman
October 22, 2000
To hear Bill Clinton and Al Gore tell it, when they took office America was in shambles. Now, after nearly eight years of their administration, we are approaching nirvana. How did we get here?
Here is Bill Clinton explaining, in his valedictory speech at the Democrat convention in Los Angeles, what made America in the year 2000 so great: "We have doubled funding for Head Start, and provided after-school and mentoring to more than a million more young people"; "the biggest expansion of college aid since the GI bill 50 years ago"; "Democrats also insisted on support for good parenting"; "HOPE Scholarship and life-long learning tax credits"; "the Family and Medical Leave Act"; "more than 100,000 new community police officers, a ban on assault weapons and the Brady law"; "We've extended the life of the Medicare trust fund"; "We provided health coverage under the Children's Health Insurance Program"; "our environment is cleaner. We've set aside more land in the lower 48 states than any administration since Teddy Roosevelt"; "We found ways to mend, not end, affirmative action. We've given America the most diverse administration in history"; "we created AmeriCorps".
What made America great — revisionist history according to Bill Clinton — was failed and phony big government programs. One wonders how America managed to even survive its first 217 years before Big Government Bill came along. And the message we are getting from Al Gore is that the nation cannot survive another four years unless he is elected president to "give us" continued prosperity and budget surpluses. That's not only ridiculous, it's insulting.
Every time Clinton or Gore boast about economic prosperity and budget surpluses, the nearest person with any common sense, or any knowledge of history, economics, or the way our government works, should turn to those braggarts and say, "I'm glad you appreciate the hard work done by private entrepreneurs unburdened by confiscatory tax rates and regulatory excess, and the work done by the republican congress, over your opposition."
Under our Constitution the congress, not the president, spends the taxpayer's money. It was democrat congresses that spent this country into near bankruptcy during the 1980's. It was republican congresses since 1994 that reigned in the rate of growth of irresponsible democrat spending. Recall that Item Number One of the republicans' much maligned Contract with America was to force a balanced budget through a Constitutional amendment, which Clinton adamantly opposed. It was tax cuts — not the 1993 Clinton-democrat congress tax increase — that stimulated the economic boom about which Clinton and Gore like to boast, along the way increasing tax revenue paid into the treasury for the democrats to spend.
Oh, and about the economy. One indicator of the economy is the performance of the stock market. And yes, the stock market has, by every indicator, performed magnificently. From January, 1993 when Clinton-Gore took office, until January, 2000 — 7 full years — the Dow Jones Industrial Average (DJIA) rose from 3310.00 to 10,940.50, a total of 230.5%. That's a compounded average annual return of 18.6%. The NASDAQ (OTC) market index — most of the robust, high technology growth companies that are America's future — has done even better, rising from 696.34 to 3940.35, a total of 465.9%; a compounded average annual return of 28.1%. With his typically arrogant, condescending "I'll take care of you because you are too stupid to take care of yourself" attitude, Al Gore tells us not to rock the boat, not to change the administration that "gave us" such a robust stock market. But Clinton and Gore "gave us" nothing.
Beginning-to-end comparisons of anything, particularly of the ups and downs of the stock market, can be extremely deceptive, because such simplistic comparisons ignore what went on during the time between the beginning and the end. In fact, the stock market's performance was downright pathetic under Clinton-Gore and the democrat congress' economic policies, and the markets only delivered those large returns after the republican congress took office in January, 1995. In the first two years of the Clinton/Gore administration, with a democrat Congress and pursuing anti-growth democrat economic policies, the DJIA rose from 3310.00 to 3843.90. That's an anemic 7.76% compounded annual return. The OTC was even worse: rising from 696.34 to 755.20, a pathetic 4.14% compounded annual return.
In the first two years after the republicans gained control of the Congress, the DJIA rose from 3843.90 to 6813.10. That's a 33.1% average annual return. The OTC performance was even better: rising from 755.20 to 1379.85, a 35.2% average annual return. In the second two year period of the republican controlled Congress, the DJIA rose another 37.36%, from 6813.10 to 9358.80, an average annual return of 17.2%. And in the second two year period of the republican controlled Congress, the OTC rose 81.61%, from 1379.85 to 2505.89, an average annual return of 34.8%.
To summarize: the average annual stock market return (compounded annual rate of increase):
Dow Jones Industrial Average: under Clinton/Gore: 7.8%; under the republican controlled Congress: 25%.
NASDAQ (OTC): under Clinton/Gore: 4.1%; under the republican controlled Congress: 35%.
It's understandable that Al Gore has called the plan to allow people to invest part of their Social Security payments in the stock market a "risky scheme". Because like most leftists, he simply doesn't understand the workings of free markets. He doesn't understand that our economy is where it is today in spite of, not because of, his policies, every one of which is designed to strangle private business with more regulations. Under democrat economic policies, with democrats controlling the White House and Congress, stock market returns averaged well below historic norms.
"What-ifs" are always problematic, but if the republicans had not won the Congress, a person investing $1000 in a stock market index fund mirroring the DJIA when Clinton/Gore took office, would have had a total of $1691.73 at the end of 1999 if democrats had remained in control of Congress. In contrast, because the republicans did gain control of the Congress, that person actually had, at the end of 1999, a total of $4130.20. The difference between democrat and republican economic policies actually made the average person wealthier by $2438.47 for every $1000 invested. And that's just the stock market, all other democrat economic and social policies being the same.
What other democrat economic and social policies?
Those who are concerned about not "rocking the boat" might consider the consequences of some of those democrat policies, ideas that have the stock markets so spooked even now, anticipating the possibility that Gore might win and actually implement what he has threatened. According to several market analysts, the recent market declines can be blamed on investor fears that Gore may win the presidency and bring a democrat congress with him, enabling him to enact into law many of the risky anti-business schemes he espouses.
Another factor roiling the markets now is the high cost of energy and our growing dependence on foreign oil. Both of those conditions are a direct result of the Clinton-Gore energy policy, which is not an energy policy at all, but is rather a radical environmental policy, driven by radical environmentalist Al Gore, who thinks we should derive all of our power from windmills and solar cells (both totally incapable of supplying anywhere near the amounts of energy our economy uses); Gore, who wants to force all of us out of private vehicles and into mass transit; Gore, who thinks we should all be living in high-rise Soviet-style apartment blocks in the nearest city so as not to create suburbs that mar the landscape for his enviro-friends with "urban sprawl".
Even now the Environmental Protection Agency is giving your money to private companies to implement "voluntary" incentives to get people out of their cars and onto alternate means of transportation — such as giving their employees bus passes, bicycles and roller skates. That's right, bicycles and roller skates. Gore apparently likes what he sees of communist China and Vietnam, with thousands of peasants (that's us) clogging the streets with bicycles, while party big-shots (Gore) ride around in limousines. If Gore is elected and gets a democrat congress, with the totalitarian left's fondness for using government power to force people to behave as the left thinks they should, how long will it be before those "voluntary" incentives turn into mandates? Do you want to be required — that's the issue, because it will no longer be a matter of choice, but will quickly become a government mandate — to commute to work on roller skates or a bicycle? That's what Gore wants.
How much worse will the economy be if Al Gore's massively costly and economically destructive (and totally useless and unnecessary) Kyoto Climate Change Treaty ever becomes law. We whine and complain (the American public — led by Clinton-Gore's own spoiled rotten baby boom generation — has raised whining and complaining to an art form) about paying nearly $2 a gallon for gasoline. If Gore gets his way and Kyoto becomes law, we will long for the days when we paid only $2 a gallon, and millions of people will be thrown out of work. Particularly hard hit by Gore's policies will be auto workers, who by voting for Gore will, in essence, vote themselves out of jobs.
And the economic and human costs of the Kyoto Treaty don't begin to take into account the loss of U.S. sovereignty and individual liberty entailed by the micromanagement of our society by unelected and unaccountable global bureaucrats. Just imagine how much worse our health care system would be if HillaryCare (or any of the democrat-sponsored variants) became law. The pharmaceutical industry has been hit in the present stock market turmoil because of Gore's constant demagoguery of drug companies, and the fear of government imposed price controls that, beyond harming their profitability, would utterly destroy research and development, and actually threaten peoples lives.
One bright spot in the market sell-off over the last few months has been the biotechnology sector. Gore's Luddite friends would demand that he kill that industry outright, with their scientifically baseless fear-mongering about "franken-foods" and "killer genes". How many people will die unnecessarily because of the end of research into promising genetic therapies? Some people propose to vote for Gore to preserve economic prosperity. Gore himself has said that "…prosperity itself is on the ballot'', and he's absolutely right about that. But his solution — elect him — is completely, dangerously wrong.
Electing Al Gore to preserve economic prosperity would be like putting Bonnie and Clyde in charge of bank security.
The above article is the property of Kim Weissman, and is reprinted with his permission.
Taxes & "The Money"
23 oct 2000