One of Newt Gingrich’s answers at the Iowa debate on Thursday (8/11/2011) reminded me how lucky we’ve been for the last 30 years. When asked about his qualifications to be President, Newt touted his experiences in congress both as a member and leader during periods of divided government when pro-growth policies nevertheless emerged. The two periods he referred to were the Reagan era Kemp-Roth Tax cuts, and the Clinton era Welfare reforms and capital gains cuts. While both those were in fact accomplished with divided government, I maintain they were very different, and one of them actually qualifies as a miracle.
Not all divided governments are equal. In Clinton’s case the legislature after ’95 was united under Republican leadership. That gave two thirds of the government to the pro-growth Republicans. To Clinton’s credit he went along and reluctantly signed the pro-growth agenda into law, but he was the minority who went along with the majority.
In Reagan’s case, the house was under hostile Democrat leadership and the Democrats could stop the Senate any time they wanted. How then did Reagan get to sign a sweeping pro-growth tax law? Much of that had to do with Reagan’s ability to go directly to the people, but there was another factor; Reagan was shot early in his presidency and within about 4 months, Kemp-Roth made it through congress.
Had Reagan not taken a bullet and built-up such a reservoir of good will and respect, would Democrats have given him his wish? We’ll never know, but I’m skeptical.
In other words, John Hinckley’s deranged act and poor marksmanship may be the reason we had almost 30 years of full employment and economic growth in the US. Sorry Newt, it wasn’t all you.
(Note: this piece was edited 4/2012 for inaccuracies.)