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A Fabulous Failure: the Clinton presidency and how it transformed US capitalism

A fatal tendency to bend to the will of corporate and financial giants defined Clinton’s terms in the White House

A Fabulous Failure: The Clinton Presidency and the Transformation of American Capitalism
Author: Judith Stein and Nelson Lichtenstein
ISBN-13: 978-0691245508
Publisher: Princeton University Press
Guideline Price: £35

Shortly before Christmas 1992, about 300 of America’s esteemed political and economic thinkers gathered at Little Rock for a transition summit to revitalise and rebuild the economy. Bill Clinton, the country’s new president, held court through sessions that could last 10 hours. He was interested, informed and, post Carter-Reagan-Bush, shockingly young. Even Republicans swooned: ‘It’s fun to watch the pros play again,” said one former Reagan adviser on domestic policy.

Meaningful reform – in health insurance, welfare, the preservation of jobs and factories, halting Wall Street’s gallop – all seemed tangible. Under Clinton the Democratic Party could “renew allegiance of blue collar voters to the party of Roosevelt, Truman, Kennedy and Johnson”.

This is the wistful premise of a dazzling account of a presidential reign viewed through the prism of the economy and policy-making that sometimes reads like an indictment of the hallucinatory economic joys of Clinton’s two terms in office, from 1992-2000. The book’s title is a subtle inversion of what Alan Blitzer and Janet Yellen had termed The Fabulous Decade, a celebratory term to mark the years when the American economy roared into life. The end of the Cold War and the dawn of new technology opened new trade challenges and possibilities, with Japan, with China.

Over 500 pages academics Nelson Lichenstein and Judith Stein, who passed away in 2017 before this project was completed, conduct a thorough and forensic analysis of how the Clinton administration ceded ideology for pragmatism. The authors rigorously examine the records on pillar issues of social reform, the finance industry, globalisation and the decline of dependable American jobs. They focus solely on Clinton’s motivations as a public figure. The national fixation with his personal life – “the summer in American when the nausea returned, when the joking didn’t stop” as Philip Roth captured the feel of 1998 – remains off the page.


Clinton himself, always a slippery proposition, is presented against the specific backdrop of his Arkansas locale, which in 1973, as he returned from Yale and set out to test his dragon ambition, was one of the poorest states in the country, struggling to shake off Twain’s label of “Arkansaw lunkheads”.

Clinton emerged as an appealing candidate at the very time when African-Americans began to vote in record numbers and, age 32, he became the youngest chief executive of any state in almost a century. He lost the governorship in 1980 after a gamble on motor tax misfired but succeeded again in 1984, 1986 and 1990.

The first section of the book is a minute analysis of Clinton’s Arkansas apprenticeship, chronicling, for instance, his move to save 90 jobs at a garment factory in Brinkley in 1984. The decade had seen the closure of hundreds of similar factories across the country as major supply chains like Wal-Mart (a huge player in Arkansas) began to buy in from abroad. Clinton enjoyed initial success in persuading Wal-Mart to buy from the Brinkley factory and promoted the idea as “buy American”. But when the factory workers tried to unionise they met with absolute resistance from Walmart. On this Clinton refused to intervene. The episode revealed his political opportunism and the fatal tendency to bend to the will of the corporate and financial giants that came to define his terms in the White House.

And his rise invites the readers to consider a significant aspect of the entire Clinton story – luck. In autumn of 1991 George Bush faced three threats: the recession, his reneging on his big promise (”Read my lips: No more taxes”) and the fact that his domestic agenda was threadbare. Against that he had the Gulf War and a 92 per cent popularity rating. Seasoned Democrats like Bill Bradley, Ted Kennedy and Mario Cuomo considered dipping toes in the election waters before deciding it was too cold and scuttling away.

Bill Clinton, the three-time governor of Arkansas, was thrust into the role as a “new Democrat“. He won 43 per cent of the popular vote – the lowest since Woodrow Wilson. Both of Clinton’s presidential campaigns were coloured by Ross Perot, who ran hugely effective third-party alternatives. The Republicans believed Perot had cost them both elections and, the authors argue, made strenuous efforts to woo his base.

“Bill Clinton might well have forestalled this GOP gambit had he been able to win over much of Perot’s constituency to a programme of economic construction,” Stein and Lichenstein write.

‘”But Clinton’s policy failures during the first two years of his presidency thwarted that hope; over time Perot’s economic nationalism, authoritarian disdain for congressional politics, and fixation on the budget deficit foreshadowed the GOP sweep in the 1994 congressional elections, the rise of the Tea Party in 2010, and the appeal of Donald Trump five years later.”

Clinton became caught between his progressive instincts and his pragmatism. The authors chart the arm-wrestles of the day on social reform, on fiscal stimuli, on the waning power of workers’ unions and Clinton’s absolute faith in NAFTA, his disastrously complex Health Security Act which relied on the insurance industry for support and ultimately foundered.

The economy began to roar – 11 months of unbroken growth and financial advisers like Larry Summers and Robert Rubin held conspicuously prominent roles in the administration. Clinton called Rubin “the greatest secretary of the treasury since Alexander Hamilton”. But the authors argue that any understanding of his economic worldview must be set against Rubin’s emergence as a risk-arbitrage wizard at Goldman Sachs. Ultimately Clinton was swayed towards deficit reduction rather than job-related stimuli.

The end of the Cold War had marked a shift from economic division to market solution. In 1996, Clinton would declare, in his State of the Union address, that “the era of big government is over”. His follow-up entreaty – “but we cannot go back to the time when our citizens were left fend for themselves” – was all but forgotten.

The conviction he shared with labour secretary Robert Reich that America could make a seamless transition to a skill-enhanced workforce never materialised. Even as national wealth soared, on-the-ground anxiety over job security travelled in the same direction. Ultimately, Clinton didn’t have the zeal or conviction to side with the average American or to take on the corporate and financial giants. He was a malleable figure in a time when future signals – the deregulation of derivatives; the creation of the tech behemoths – and crises were beginning to form.

Through it all there’s a powerful if-only strain running through this marvellous study of a fading period which bequeathed lasting consequences. Of course “what-if?” could well serve as an epitaph for Bill Clinton – and his fabulous failure of a decade.

Keith Duggan

Keith Duggan

Keith Duggan is a features writer with The Irish Times