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Bill Clinton’s Economic Exaggerations

Former President Bill Clinton — who will be called upon to help revitalize the U.S. economy if Hillary Clinton wins the presidency — made two inaccurate economic claims in a recent speech in Kentucky:

  • Clinton claimed that over the last 400 years “it has taken every single country at least 10 years to get over a financial crisis this severe.” But the former president’s office provided data that proved him wrong, showing, for example, that it took Japan four years and Italy six years to recover from the Great Depression.
  • He also told Kentuckians worried about coal jobs that Texas — known for its gas and oil industry — is one of only three states “that get over a third of their electricity from wind.” That’s wrong. Texas gets 10 percent of its electricity from wind.

Hillary Clinton said in a May 15 speech in Kentucky that she will put her husband “in charge of revitalizing the economy ’cause he knows what he’s doing.” As we have written, the U.S. added nearly 21 million jobs during President Clinton’s eight years in office, from January 1993 to January 2001, although he doesn’t deserve all the credit.

Three days before his economic role was announced, Bill Clinton was in Frankfort, Kentucky, where he talked in part about the economy.

‘Every Single Country’?

At the 9:50-minute mark of his speech, Bill Clinton said median family income “after inflation is $4,000 lower than it was the last day I was in office 15 years ago.” He’s close on that; median family income was actually $3,109 less for all families in 2014 than what it was in 2000, according to the U.S. Census Bureau (table F-7).

He then went on to explain why the median family income has still not recovered.

Clinton, May 12: Now, why is that? That’s because for 400 years — we actually have good records for 400 years — it has taken every single country at least 10 years to get over a financial crisis this severe.

That’s wrong.

The former president’s office referred us to data from “This Time Is Different,” a 2009 book by Harvard economics professors Carmen M. Reinhart and Kenneth S. Rogoff. That book covered financial crises in 66 countries over eight centuries — “from medieval currency debasements to today’s subprime catastrophe.” Clinton spokesman Angel Urena specifically directed us to figure 14.8, which, Urena said, shows “the average duration in years of Great Depression crises is shown to be at least 10 years.”

Urena is right about the average, but not “every single country” took “at least 10 years,” as Clinton claimed. It took Japan four years, Italy six years, and Germany seven years to recover from the Great Depression, as measured by “the number of years for output per capita to return to its pre-crisis level” in 1929, according to Reinhart and Rogoff. Plus, that particular data set is only for the Great Depression — not from 400 years ago.

Separately, Reinhart and Rogoff authored a 2014 paper in American Economic Review‘s Papers & Proceedings on recoveries from 100 economic crises from 1857 to 2013, again measured by how long it took countries to return to pre-crisis levels of real per capita gross domestic product. “On average it takes about eight years to reach the pre-crisis level of income; the median is about 6.5 years,” Reinhart and Rogoff wrote. In the current crisis, in fact, the U.S. was one of only two countries to beat the average.

“Five to six years after the onset of the current crisis only Germany and the United States (out of 12 systemic crisis cases) have reached their 2007–2008 peaks in per capita income,” they wrote.

As for the former president’s 400-year time frame, Urena cited “Manias, Panics, and Crashes,” which is a history of financial crises dating to the Thirty Years’ War in 1618. Urena did not refer us to any specific data or passages in the book to support Clinton’s claim that “every single country” has taken at least 10 years to recover. We were only told that it supports the former president’s claim that there are “good records for 400 years.” That may be, but the fifth and most recent edition of that book, which was coauthored by Charles P. Kindleberger and Robert Z. Aliber in 2005, said making past comparisons is difficult, because the “data collection is more comprehensive” in recent decades. The book also says the “period of financial distress may last weeks, months, even years, or it may be concentrated into a few days.”

What the former president has done is mix and match economic studies and data to create a talking point about 400 years of financial history that is not supported by the evidence.

Texas Wind Energy

Bill Clinton also made the point that renewable energy can help create new jobs in a coal state like Kentucky. Hillary Clinton has made the same point, although she has been criticized for the way she said it.

At a CNN town hall meeting in March, Hillary Clinton said, “I’m the only candidate which has a policy about how to bring economic opportunity using clean renewable energy as the key into coal country. Because we’re going to put a lot of coal miners and coal companies out of business, right?” She since has apologized for saying “we’re going to put a lot of coal miners” out of business, explaining “what I said was totally out of context from what I meant.”

In his speech, Bill Clinton used Texas as an example of how fossil-fuel states can create renewable energy jobs. “There are three states in America that get over a third of their electricity from wind,” he said at the 15:31-minute mark. “One of them is Texas — the oil and natural gas leader of America.”

That’s wrong. Only one state — Iowa — gets about a third of its electricity from wind. The top three states are: Iowa (31.3 percent), South Dakota (25.5 percent), and Kansas (23.9 percent), according the American Wind Energy Association.

It’s true that Texas ranks No. 1 in wind energy capacity, but only about 10 percent of its electricity came from wind in 2015, the American Wind Energy Association says. That 10 percent figure is unchanged from 2014, according to the Energy Information Administration. Wind energy capacity is the maximum amount of electricity that could potentially be produced under certain conditions, not the amount actually produced, as the EIA explains.

What was Clinton talking about?

Urena, the former president’s spokesman, told us “President Clinton was referencing specific times during the year, not average power generation from wind for the entire year.” He cited as an example a Scientific American blog item about “one windy day in December” when a sustained “burst of wind propelled Texas to surpass its all-time record for wind energy production, with wind providing 45 percent of the state’s total electricity needs — or 13.9 gigawatts of electric power — at its peak.”

But that’s not what the former president said. Instead, he left the false impression that Texas gets a third of its electricity from wind.