Dean Baker on Bill Clinton's economic "advice" for the country

[marmar]

Published on Sunday, November 6, 2011 by Beat the Press
Bill Clinton, the Person Who Set the Economy on Its Bubble Driven Path, Has Economic Advice for the Country

by Dean Baker


The Post reports on a new book by President Clinton which offers economic advice to the country. While the book notes in passing that Clinton's policies contributed to the economic crisis by deregulating Wall Street, it failed to point out that Clinton's policies were actually central to the disaster the economy is now facing.

Clinton promoted both the growth of the stock bubble and the over-valuation of the dollar. The latter came about when his administration organized the "saving" of East Asia following its financial crisis in 1997. The harsh terms of the bailout required the countries of the region to run huge trade surpluses in order to meet their payments. This meant raising the value of the dollar against their own currencies.

Other developing countries wanted to avoid ever being in this situation so they too began to accumulate reserves at a huge pace after 1997 by keeping down the value of their own currencies against the dollar. This led to the huge run-up in the dollar and therefore the large trade deficit that we saw in the last decade and continue to see today. ...........(more)

The complete piece is at: http://www.commondreams.org/view/2011/11/06-2

[theoldman]

1. This is a bunch of political BS.

The stock market bubble as a result of Dot Com companies did not result in large unemployment.
The dollar value is based on credit. When a country has good credit its currency goes up. Our credit is now in the toilet so the value of the dollar is down.

[Hawkowl]

3. Your sir, are completely full of it.

Currencies values are not determined by some imaginary free market. They are directly determined by central banks. The central banks control the money supply, thus inflation. Too much money, too few goods, and the money is deposited in financial instruments, i.e; stocks, real estate bonds, and commodity contracts.

Clinton erased the line between the banks and brokerage houses which meant speculators now have direct access to the free money of the central bank. FREE MONEY! Money created out of nothing is pumped directly into financial instruments and shows up as high priced food and energy.

[rhett o rick]

4. When the dot.com bubble burst many lost their savings in the stock market. Clinton

took political advantage of the bubble.

[girl gone mad]

5. The value of our currency is not based on credit.

All one has to do to disprove your thesis is to analyze the Yen. Decades of ratings downgrades had absolutely no negative effect on the strength of the Yen vs. more "creditworthy" currencies.

[dkf]

2. Dean Baker is upset at Clinton for encouraging other countries to build surpluses?

[girl gone mad]

6. Come on, use your brain..

you are just scratching the surface.

[Douglas Carpenter]

7. that is the truth. Clinton was more reactionary than Reagan in many respects at least in term of wha...

was actually implemented.

Another tidbit fro Clinton's book:

Clinton also suggests, obliquely, that Obama’s criticism of Wall Street has been too harsh and counterproductive.

http://www.washingtonpost.com/politics/bill-clinton-has-advice-and-some-criticism-for-president-obama-in-new-book/2011/11/03/gIQA1xhLmM_story.html?hpid=z2

[Major Nikon]

8. I normally like what Dean Baker has to say, but this makes little sense

His whole premise seems to be that since Clinton set up a domino on one side of the room, he deserves the blame because the domino on the other side of the room fell. It's a very weak argument.