Bill Clinton will be remembered by many slogans, none of them uplifting. "I didn't inhale" already is bound for Bartlett's. "Legally accurate" shows promise. "I apologize," alas, is not on the list.
The most remarkable of the president's mantras, however, was "It's the economy, stupid!" This was the theme of his successful campaign against then-President George Bush in 1992.
Bush did not worry too much about the economy in that race because he thought, correctly by the way, that the mild slump of the previous two years had ended and that the economy was poised for sustained growth. Besides, he knew that some things are more important than the upticks and downticks of the business cycle — qualities like presidential character, service to country, and honor.
Clinton's slogan implicitly denied all that, and now that the stock market has proved it can zoom down, way down, as well as up, we should remember just what it was that Clinton was selling when so many voters were buying.
In reality, to the Clintonites, "It's the economy, stupid!" meant that managing the economy was the most important task of the federal government. Many Americans still believe this. But it is not true.
The government's first and most urgent task is protecting national security. Its ultimate and highest task is to enable us to live as a free people under the Constitution. Keeping the economy chugging along is an important means to both of these ends, but it is not a substitute for either.
The Clinton team took both of these comprehensive goals for granted.
Domestically, Clinton affirmed that government's highest purpose was redistributing prosperity and achieving social justice. This task required that the federal government manage the national economy aggressively, continuously, and permanently, though somehow unobtrusively.
Until the New Deal, American presidents did not have the fiscal tools or the presumption to try to micromanage the economy. Before 1932, the government through its general policies (tariffs, regulation of interstate commerce, coining money) would give a broad direction to economic affairs, to be sure, but it was not responsible for specific outcomes and certainly was not in charge of business prosperity. Government's job was to defend the Constitution and protect our rights, not to impose a half-hearted version of equality of results.
The first president to proclaim the new task of government was Franklin Delano Roosevelt, who in effect invented the slogan, "It's the economy, stupid!" Clinton added nothing to FDR's basic argument, though he modulated some of Roosevelt's economic prescriptions (toward "neo-Keynesianism," as some of his advisers called it).
If the government was going to add new classes of social and economic rights to the American social compact — Social Security and unemployment benefits, in FDR's case and health care in Clinton's — then the government had to ensure that the economy would produce enough revenue to sustain the new programs. Hence, the welfare state needed the so-called "managed economy" in order to fund entitlements.
Exactly how to supervise a modern economy was a big problem, but Keynesian economics came to FDR's rescue, providing new levers by which to stimulate "aggregate demand" and keep industry humming.
That was the theory, at least. It died an inglorious death amid the stagflation of the 1970s. But the body still has not been buried. Ever hear one of former Labor Secretary Robert Reich's speeches?
Of course, to the Clinton gang "It's the economy, stupid!" had another meaning as well. The "stupid!" part implied that anyone who had not penetrated the constitutional mumbo-jumbo and discovered that, at the bottom, government was about robbing Peter to pay Paul and that democracy was about seeking material well-being, well, such a naïf did not know the first thing about politics or America.
Even worse, the hope among at least some Clinton insiders was that once Americans got this message, they would forgive the administration anything so long as it could claim credit for a surging economy.
The plan may have worked perhaps too well. For if the stock market keeps sinking, Clinton may suddenly find the American people in an unforgiving mood, no matter how many times he tries to apologize. After all, this potential scandal is not about sex; it's about the economy, stupid.