The American Economic Miracle: Who Deserves Credit?

• Position: Interview

An exclusive interview with Texas Governor and Republican presidential nominee George W. Bush's top economic advisor, Lawrence Lindsey.

TIE: Treasury Secretary Lawrence Summers is said to have told colleagues he believes that if the Clinton Administration can get through the early spring with the U.S. economy strong, Vice President Al Gore will enjoy, at worst, a neutral economy on election day. In other words, the lead times for any dramatic change are just too long for the economy to turn negative. Are U.S. elections decided on the economy? And, if so, isn't Gore sitting pretty? Isn't the race over before it's begun?

LINDSEY: I'd rather wait and let the voters decide.

TIE: But what about the whole issue of presidential elections and the role of the economy? As both an economist and also someone with an understanding of politics, you must have an opinion.

LINDSEY: The real question is whether or not the incumbents have used prosperity well, or whether they have basically been sitting there, like people with their fingers crossed, hoping everything will continue. And the evidence shows it's the latter. In spite of the prosperity, they have neglected to solve the nation's Social Security problem. They neglected to solve the nation's Medicare problem. Education and the quality of schools, particularly for inner-city children, have gotten worse. They let our national defenses deteriorate. So while the private economy has been doing very well for the last eight years -- it's actually been doing very well for much longer than that -- the government has fallen down on the job.

TIE: Who really deserves credit for today's economic miracle? Some say this is a long term process that really began with President Ronald Reagan. There was a combination of tax and regulatory factors under Reagan that led to a change, to a greater belief in the system and a belief that there was the political will to help unleash the U.S. private sector to reform itself after the Carter malaise. Thus, the so-called Bush recession was a slight hiccup in a long-term, fifteen-year upward trend of growth. Of course others counter that the Clinton White House faced a horrible recession and huge deficit problem, and acted decisively. The economy then really took off, so it's really the Clinton-Gore economic miracle. What's your take on this whole debate?

LINDSEY: The key decision was to liberate the private economy and let markets decide things. You spoke of President Reagan...