Former Speaker of the House Newt Gingrich on Sunday gave Lawrence O'Donnell a much-needed education on the economic impact of the Bill Clinton tax hikes in the '90s.
As O'Donnell precipitated the exchange, he perfectly demonstrated why MSNBC commentators are far too liberally biased to be invited on NBC's Meet the Press (video follows with transcript and commentary):
DAVID GREGORY: Lawrence, this-- this idea of how much room the president is willing to give becomes a big question because he wants-- based on what I’m hearing, he wants Boehner to say, okay I give-- I give on the rates. And then he-- maybe he’ll talk a little more.
So Gregory's question for O'Donnell was about Boehner and the fiscal cliff negotiations. Rather than answer that, O'Donnell chose to attack one of his fellow panelists:
LAWRENCE O’DONNELL, MSNBC: The problem for Boehner is how does he give on rates. He said this the other day I oppose tax rate increases because tax rate increases cost American jobs. That gives you no room to give on rates. It is, by the way, not an original thought. Who said this? The tax increase will kill jobs and lead to a recession, and the recession will force people out of work and onto unemployment and actually increase the deficit? That’s Newt Gingrich in 1993 on the Clinton tax increase. And those of us who were working on the other side of that tax increase, Newt, have been waiting for your apology for 20 years for being completely wrong about that.
So O'Donnell took this opportunity to go after one of his fellow panelists rather than answer Gregory's question.
This seems typical of MSNBC commentators when they're on Meet the Press thereby making one wonder why they're even invited.
Fortunately, Gingrich was up to the challenge:
NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE: Well, I don’t agree with you.
MR. O’DONNELL: Well with the-- but the economy soared, no one lost a job…
MR. GINGRICH: Baloney.
MR. O’DONNELL:…because of that tax increase.
MR. GINGRICH: Baloney. Baloney.
MR. O’DONNELL: There was no recession. You said there would be a recession.
MR. GINGRICH: You now see the case.
MR. O’DONNELL: There was no recession.
MR. GINGRICH: The fact is if you look at all the indicators the day I was elected speaker, virtually all the economic growth occurs after Republicans take control, virtually all the increase in the stock-- the matter of fact, all the increase in the stock market is after Republicans take control.
MR. O’DONNELL: You did not reduce the rates, Newt?
MR. GINGRICH: And-- and when we balanced-- wait a second.
MR. O’DONNELL: You said the rates would cause a recession.
MR. GINGRICH: When we balanced the-- when we balanced the budget, we balanced the budget with a tax cut not a tax-- four consecutive balanced budgets with a tax cut, not a tax increase.
In reality, this has been an ongoing battle between liberals and conservatives for years about this issue with the former believing that Clinton's tax hikes ushered in prosperity and the latter thinking it was the tax cuts and spending restraint that happened after the Republicans took over Congress in 1995.
Hopeless shills like O'Donnell conveniently ignore that in December 2010, Clinton himself went before the nation at a joint press conference with President Obama saying that it wasn't a good time for the economy to go back to his tax rates thereby brokering a deal to extend the Bush tax cuts for two years.
Beyond this, we have for at least a year - and much more so since Election Day - witnessed Democrats and their media minions such as O'Donnell demanding that America not reimpose Clinton's rates on 98 percent of the nation.
If these rates were responsible for the '90s economic expansion, shouldn't the left including O'Donnell be advocating that they be completely reenacted now?
Sadly, such logic escapes them.
As for Gingrich, he was quite accurate when he said the economy did better in the '90s after the Republicans took control of Congress, in particular after the '97 tax cuts.
In fact, the Gross Domestic Product shrank in the first year after the Clinton tax hikes to an annual rate of 2.9 percent down from 1992's 3.4 percent.
That's right: the economy as measured by GDP was better the year before Clinton took office and raised taxes than it was the year after.
By far the best years under Clinton came after the Republican tax cuts when the GDP grew annually by 4.5 percent, 4.4 percent, 4.8 percent, and 4.1 percent from 1997 to 2000.
The best job creation also occurred after the Republicans took over Congress with less than seven million new jobs created in 1993 and 1994 compared to over sixteen million in the next six years.
As for the fiscal impact of the Clinton tax hikes, the left always ignores that we ran budget deficits in his first term. It was only after the Republican tax cuts that surpluses occurred.
As for the stock market, Gingrich was of course correct that it did far better after the Republicans took over Congress than the two years when the Democrats controlled everything:
Looking at that chart of the S&P 500, it looks like the stock market rally began right after Election Day 1994 when Republicans won their historic victory.
But don't tell O'Donnell that. Like most of his colleagues on MSNBC, he's deathly allergic to facts.