Bill Clinton often lamented that the greatness he sought for his administration was denied by history's failure to provide a grand stage of dramatic world events like those that sealed the legacy of Ronald Reagan through victory over Communism in the Cold War.
Yet the quarter-century since our 42nd president left office has allowed historians to closely examine his record, and these inquiries have made it increasingly clear that the impact of the Clinton Administration on the world was anything but inconsequential.
Today intense controversies and widely varying opinions surround the phenomenon of globalization and the effect it has had on people across the world. It is beyond doubt however that three central initiatives of the Clinton Administration would profoundly affect the manner in which globalization rippled through the economies of the world with very positive results for some, but very negative results for many more.
The three initiatives were the North American Free Trade Act (1993), the World Trade Organization (1995), and the US-China Relations Act (2000). Although launched by a Democratic administration, the three initiatives enjoyed broad bipartisan support—as well as severe critics from both parties. Without question they represented a watershed moment of cooperation and consensus between the worlds of politics and corporate finance.
All three rested on a foundation of the very best intentions and high expectations for exceptional benefits to ordinary citizens. However all fell far short of those expectations, and instead produced a host of unintended consequences that fell most heavily on vulnerable populations in the U.S. and beyond.
Among historians there are few recent accounts of these misfortunes that equal the monumental work of Zachary D. Carter: “The Price of Peace – Money, Democracy, and the Life of John Maynard Keynes.” By grounding this epic study, which won high praise across the political spectrum, in a biography of the 20th century’s most influential economist, Carter, previously a distinguished writer for the New Republic and The Nation, gives breadth and depth to his exploration of how globalization became the major driver of today's economic dilemmas.
Bill Clinton came to Washington as an outsider, an unabashed Southern populist whose central goals were improving America's healthcare and education systems. A believer in Keynesian economics like his hero FDR, he viewed taxation and spending as the principal tools for achieving these goals. However, his leading economic advisers – Robert Rubin, Alan Greenspan, et.al – persuaded him that the fragile state of the US economy, awash in debt and deficits, ruled out these traditional methods.
Instead, they proposed a new paradigm of “unleashing the innovative potential of financial markets" as the chief propellant for economic growth. Dubbed by the media as "globalization”, this doctrine eventually became the official narrative of the Clinton Administration and found full expression in NAFTA, the WTO, and the acceptance of China as an equal partner in the world economic community.
Clinton's embrace of this radical departure from long-established liberal dogma seemed a betrayal to some leading Democrats. Pollster Stanley Greenberg bluntly said "this presidency has been hijacked.” Strategist James Carville mocked the policy as a “shotgun marriage between the White House and Wall Street.”
Clinton however declared that 18 of 19 “serious studies” predicted “no net American job loss” from NAFTA and great benefits to Mexican workers. Similarly, experts like Thomas Friedman of the New York Times insisted that “few economists believe the WTO treaties threatened American workers.”
The realities, however, proved far different. NAFTA sent huge numbers of middle-class union jobs south to become $1 an hour jobs in Mexico, while also displacing 4.9 million Mexican family farmers who couldn't compete with giant American agri-business. In Zachary Carter's words, “instead of a win-win, NAFTA delivered a lose-shrug.”
Carter further states that the “WTO – China results were even worse” noting that after 2000 when the China bill was approved, “U.S. manufacturing employment went off a cliff, plunging from 17.3 million to 14.3 million.” Additionally, during the Great Recession of 2007, he notes, “another three million jobs disappeared."
Of the three initiatives that bet on the future, the one that went most spectacularly awry was the idea that permanent normalization of relations would compel China to work within WTO rules and steadily move towards greater freedom and democracy for its people.
Instead, President Xi abolished term limits for himself and set China on a path to become today's aggressive dictatorship that openly flouts all rules and relentlessly works on all fronts to undermine the West while embracing Russia—and making no secret of its determination to subjugate Taiwan by 2027.
While globalization created vast wealth for the elites, it also spawned massive income inequality for the working class throughout the West, ultimately causing them to revolt against the parties and the policies that had gravely diminished their life prospects.
This dubious legacy, together with that of having empowered a huge elevation of China's economic and military might, unavoidably sets the agenda for all future historians inquiring into the causes and consequences of Bill Clinton’s busted bet on globalism.
William Moloney studied history and politics at Oxford and the University of London and received his doctorate from Harvard University. His articles have appeared in the Wall St. Journal, USA Today, The Hill. The Washington Post, Washington Times. Philadelphia Inquirer, Baltimore Sun, Denver Post and Human Events.