Clinton and Obama
Most people are talking about U.S. President Barack Obama's losing the Senate seat vacated by the demise of Democratic Senator Edward Kennedy without ever mentioning that former President Bill Clinton also lost Congress in 1994 and yet he was re-elected in 1996 with a wider margin.
In the 1994 mid-term elections, President Clinton saw his Democrats lose Congress. Critics blamed that Clinton's loss was the result of his abandoning tax-cutting centrist platform as a "New Democrat." Once in office, Clinton announced a huge tax increase and embarked on a national health care plan. As a result, most people thought he would be another Jimmy Carter and would go down as a single-term president.
And yet, Mr. Clinton was re-elected in a landslide in 1996 and his Republican opponent Senator Bob Dole, running on a tax-cutting agenda, went down in total defeat. Clinton did raise taxes on wealthy Americans (people earning more than $250,000 a year) to stem a runaway budget deficit left behind by earlier Republican administrations. Clinton's tax-hike on the rich, denounced by right-wing Republicans as "a passport to recession," balanced the budget, produced a surplus, lowered the long-term interest rate and triggered the longest economic boom in recent history. His successor President George W. Bush squandered the surplus by his staggering $1.67 trillion tax cut, producing a massive $400 billion deficit.
Like President Clinton, President Barack Obama faces an enormous budget deficit left behind by President Bush. And he must follow in the footsteps of Mr. Clinton and raise taxes on the wealthy to balance the budget. This will reduce the deficit and need to borrow from China. In fact, Mr. Obama is moving in that direction.
But like Clinton in 1994, Obama is now facing his critics who are blinded by a temporary setback. They fail to realise that Mr. Obama is showing his steel to tame the bankers who bankrupted America's financial institutions through their greed and incompetence. The Obama administration launched a modest regulatory reform initiative in the summer of 2009, proposing new consumer protections and some measures to strengthen financial stability. But the banks are fighting the measures at every step.
It's no surprise that the banks have tried to resist reform.
For all latest news, follow The Daily Star's Google News channel.
Comments