August 29, 1993
"Two weeks ago, Time magazine published a picture of Ronald Reagan on its cover upside down, over the title 'Overturning The Reagan Era'.
And for all its compromises, the budget plan the US adopted this month is the first real rejection of Reaganomics, the curiously irresponsible combination of tax cuts and spending rises that very nearly left the US Treasury issuing junk bonds of its own by the end of the 1980s.
After a decade of 'voodoo economics', wasteful military spending and the savings and loan bail-out,
it has fallen to the next generation of taxpayers to restore the 'full faith and credit' of the US, and to Mr Clinton to distribute the pain.
If Mr Clinton is unpopular now on Wall Street, one can only imagine the reactions to such measures. But doing the right thing is proving as thankless a job on Wall Street as doing the opposite was wildly popular.
Most investment strategists believe that the economic stagnation that has accompanied austerity will soon f
orce him away from deficit reduction. If
he defies their expectations and
maintains his fiscally responsible policies through to 1996, says David Shulman, chief equity strategist with Salomon Brothers in New York,
'Wall Street would build a statue in honour of Bill Clinton. But he still would not get its vote, nor Main Street's for that matter.'"
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