TO: HRC

FROM: Bill

RE: Political Strategy

1. The pundits were already writing us off. They were saying we weren't ready for the big leagues. Gays, Zoe Baird, Kimba Wood. And then lately, Lord Owen on Bosnia and Colin Powell's retirement. Seemed like an unending streak of bad news.

All right, we've taken our licks. But this stuff is nothing more than talk show fodder and cocktail party froth. Remember, "It's the economy, stupid."

You'd think that they'd have seen through us after the campaign. But they still don't know who they're dealing with. They still think we're hicks. They think they know how to play this game!

Let them think they do. The more innocent and naive and starry-eyed they make us out to be, the more crafty we can be.

Sure we're young; we're a new generation. A new generation with new tactics. And Establishment Washington just doesn't get it. It would be sad if it weren't so damn funny.

2. State of the Union went as planned. I'm glad I practiced that ad lib. Thanks for warning me on that one.

Sometimes I really wonder why people haven't caught on to our game plan. It really isn't that complex. But when I turn on the evening news or pick up a newspaper, I stop wondering. The fact is that nobody understands basic economics, not the pols, not the pundits, not the press, and certainly not the public.

I've got to take the credit for this one: everyone thinks the economy is "worse than it was during the Great Depression." And everyone thinks the Japanese are swamping us. Good. That got us elected. We've fed their fears. Blown up the problem. Now we have to calm them down.

We had Reich float the $15 billion figure, but it didn't make a splash. Upped it to $30b, and now they pay attention. Good. The key is that growth be remembered as Clinton growth.

Of course, we both know the economy is moving into a long period of solid growth, even if Congress never passes a stimulus package. Hell, the economy's growing already. Of course, jobs are lagging, but they always do in recoveries.

We've had to deny the recovery. Oh well. Par for the course. You know, the people swallow those big whopper lies real easy. They catch you and put you through hell on the little half-truths.

As I said, the key is to make sure we get the credit for growth we didn't create. I'm confident the $30 billion "growth package" is doing the trick. But of course the problem with stimulating an already growing economy is that it pushes up inflation. We don't want a "Clinton inflation" to cancel out the "Clinton growth." So we have to raise taxes too.