Thank You 1990s Political Gridlock
IF FORCED TO PICK ONE MEASURE of the quality of a President's economic policy, I will generally choose the average return of the stock market during his term. The stock market is the world's most sophisticated computer, and more than any other indicator it balances out the pluses and minuses of economic activity, inflation, and interest rates. And the market is forward looking. If the President seeks to boost growth with shortsighted policies, the market will factor that in. If a President sacrifices current gain to create a climate that will be more beneficial in the long run, the market will give him credit for that as well.
Which brings us to an interesting problem for believers in limited government. The adjoining graph ranks U.S. Presidents back to Roosevelt by the performance of the stock market during their terms. And according to this measure, the best economic President--by far--is Bill Clinton.
Back in 1992 when Clinton took office, visions of economic catastrophe danced in the heads of Republicans. The Democrats controlled the House, and liberals' cleverest schemes were about to become the law of the land. It was a critical break when Hillary's grandiose health care plan failed. But tax rates were raised significantly. Other …