My Life

TWENTY-THREE

On January 11, 1983, I took the oath of office for the second time, before the largest crowd ever to attend an inauguration in our state. The celebrants had brought me back from the political grave, and their support would keep me in the governor’s office for ten more years, the longest period I ever stayed in one job.

The challenge I faced was to keep my promise to be more responsive to the people while maintaining my commitment to move our state forward. The task was complicated, and made more important, by the dismal state of the economy. The state’s unemployment rate was 10.6 percent. In December, as governor-elect, I had gone to Trumann, in northeast Arkansas, to shake hands with six hundred workers at the Singer Plant, which had made wooden cabinets for sewing machines for decades, as they walked out of the plant for the last time. The plant closing, one of many we had endured over the last two years, dealt a body blow to the economy of Poinsett County and had a discouraging impact on the whole state. I can still see the look of despair on so many of the Singer workers’ faces. They knew that they had worked hard, and that their livelihoods were being swept away by forces beyond their control. Another consequence of the poor economy was a falloff in state revenues, leaving too little money for education and other essential services. It was clear to me that, if we were going to get out of this fix, I had to focus the state’s attention, and mine, on education and employment. For the next decade, that’s what I did. Even when my administration took important initiatives in health care, the environment, prison reform, and other areas, or in appointing more minorities and women to important positions, I tried never to let the spotlight stray too far from schools and jobs. They were the keys to opportunity and empowerment for our people, and to maintaining the political support I needed to keep pursuing positive changes. I had learned in my first term that if you give equal time to all the things you do, you run the risk of having everything become a blur in the public’s mind, leaving no clear impression that anything important was being done. My longtime friend George Frazier from Hope once told an interviewer, “If he has a flaw, and we all do, I think Bill’s flaw is that he sees so much that needs to be done.” I never cured that flaw, and I kept trying to do a lot, but for the next decade I focused most of my energy, and my public statements, on schools and jobs.

Betsey Wright had done such a good job with the campaign that I was convinced she could manage the governor’s office. In the beginning I also asked Maurice Smith to serve as executive secretary, to add some maturity to the mix and to ensure cordial relations with the senior legislators, lobbyists, and power brokers. I had a strong education team with Paul Root, my former world history teacher, and Don Ernst. My legal counsel, Sam Bratton, who had been with me in the attorney general’s office, was also an expert in education law.

Carol Rasco became my aide for health and human services. Her qualifications were rooted in experience: Her older child, Hamp, was born with cerebral palsy. She fought for his educational and other rights, and in the process acquired a detailed knowledge of state and federal programs for the disabled.

I persuaded Dorothy Moore, from Arkansas City in deep southeast Arkansas, to greet people and answer phones in the reception area. Miss Dorothy was already in her seventies when she started, and she stayed until I left the governor’s office. Finally, I got a new secretary. Barbara Kerns had had enough of politics and stayed behind at the Wright firm. In early 1983, I hired Lynda Dixon, who took care of me for a decade and continued to work in my Arkansas office when I became President. My most notable appointment was Mahlon Martin as director of finance and administration, arguably the most important job in state government after the governorship. Before I appointed him, Mahlon was city manager of Little Rock, and a very good one. He was black, and an Arkansan through and through—

he always wanted to take the first day of deer season off from work. In tough times, he could be creative in finding solutions to budget problems, but he was always fiscally responsible. In one of our two-year budget cycles in the 1980s, he had to cut spending six times to balance the books. Shortly after I became President, Mahlon began a long, losing battle against cancer. In June 1995, I went back to Little Rock to dedicate the Mahlon Martin Apartments for low-income working people. Mahlon died two months after the dedication. I never worked with a more gifted public servant. Betsey saw to it that my time was scheduled differently than it had been in my first term. I had been perceived as being inaccessible then, in part because I accepted so many daytime speaking engagements out in the state. Now I spent more time in the office and more personal time with legislators when they were in session, including after-hours card games I really enjoyed. When I did attend out-of-town events, it was usually at the request of one of my supporters. Doing those events rewarded people who had helped me, reinforced their positions in their communities, and helped to keep our organization together.

No matter how far away the event was or how long it lasted, I always came home at night so that I could be there when Chelsea woke up. That way I could have breakfast with her and Hillary and, when Chelsea got old enough, take her to school. I did that every day until I started running for President. I also put a little desk in the governor’s office where Chelsea could sit and read or draw. I loved it when we were both at our desks working away. If Hillary’s law practice took her away at night or overnight, I tried to be at home. When Chelsea was in kindergarten, she and her classmates were asked what their parents did for a living. She reported that her mother was a lawyer and her father “talks on the telephone, drinks coffee, and makes ’peeches.” At bedtime, Hillary, Chelsea, and I would say a little prayer or two by Chelsea’s bed, then Hillary or I would read Chelsea a book. When I was so tired I fell asleep reading, as I often did, she would kiss me awake. I liked that so much I often pretended to be asleep when I wasn’t.

A week into my new term, I gave my State of the State address to the legislators, recommending ways to deal with the severe budget crisis and asking them to do four things I thought would help the economy: expand the Arkansas Housing Development Agency’s authority to issue revenue bonds to increase housing and create jobs; establish enterprise zones in high-unemployment areas in order to provide greater incentives to invest in them; give a jobs tax credit to employers who created new jobs; and create an Arkansas Science and Technology Authority, patterned in part on the Port Authority of New York and New Jersey, to develop the scientific and technological potential of the state. These measures, all of which were enacted into law, were forerunners of similar initiatives that passed when I became President in another time of economic trouble.

I argued hard for my utility reforms, including the popular election of Public Service Commission members, but I knew I couldn’t pass most of them, because Arkansas Power and Light Company and the other utilities had so much influence in the legislature. Instead, I had to be content to appoint commissioners I thought would protect the people and the state’s economy without bankrupting the utilities.

I proposed and passed some modest educational improvements, including a requirement that all districts offer kindergarten, and a law allowing students to take up to half their courses in a nearby school district if the home district didn’t offer them. That was important because so many of the smaller districts didn’t offer chemistry, physics, advanced math, or foreign languages. I also asked the legislature to raise cigarette, beer, and liquor taxes and to allocate more than half of our projected new revenues to the schools. That was all we could do, given our financial condition and the fact that we were awaiting a state supreme court decision on a case claiming that, because our school financing system was so unequal in its distribution of funds, it was unconstitutional. If the court ruled for the plaintiffs, as I hoped it would, I would have to call a special session of the legislature to deal with it. As it was, the legislature was required to meet only sixty days every two years. Though the legislators usually stayed a few days longer, something often came up after they had gone home that required me to call them back. The supreme court decision would do that. Such a session would be difficult, but it might give us the chance to do something really big for education, because the legislature, the public, and the press could focus on it in a way that was impossible in a regular session, when so many other things were going on. In April, the National Commission on Excellence in Education, appointed by U.S. Secretary of Education Terrel Bell, issued a stunning report entitled A Nation at Risk. The report noted that on nineteen different international tests, American students were never first or second and were last seven times; 23 million American adults, 13 percent of all seventeen-year-olds, and up to 40 percent of minority students were functionally illiterate; high school students’ average performance on standardized tests was lower than it had been twenty-six years earlier, when Sputnik was launched; scores on the principal college entrance exam, the Scholastic Aptitude Test, had been declining since 1962; one-quarter of all college math courses were remedial—that is, teaching what should have been learned in high school or earlier; business and military leaders reported having to spend increasing amounts of money on remedial education; and finally, these declines in education were occurring at a time when the demand for highly skilled workers was increasing sharply. Just five years earlier, Dr. Kern Alexander had said children would be better off in the schools of almost any state other than Arkansas. If our whole nation was at risk, we had to be on life support. In 1983, 265

of our high schools offered no advanced biology, 217 no physics, 177 no foreign language, 164 no advanced math, 126 no chemistry. In the 1983 regular session, I asked the legislature to authorize a fifteen-member Education Standards Committee to make specific recommendations on new curriculum standards. I put together an able and fully representative committee and asked Hillary to chair it. She had done an excellent job chairing the Rural Health Committee and the board of the national Legal Services Corporation in my first term. She was very good at running committees, she cared about children, and by naming her I was sending a strong signal about how important education was to me. My reasoning was sound, but it was still a risky move, because every significant change we proposed was sure to rattle some interest group.

In May, the state supreme court declared our school financing sys-tem unconstitutional. We had to write a new aid formula, then fund it. There were only two alternatives: take money away from the wealthiest and smallest districts and give it to the poorest and fastest-growing ones, or raise enough new revenues so that we could equalize funding without hurting the presently overfunded districts. Since no district wanted its schools to lose money, the court decision gave us the best opportunity we’d ever have to raise taxes for education. Hillary’s committee held hearings in every county in the state in July, getting recommendations from educators and the public. She gave me their report in September, and I announced that I would call the legislature into session on Octo-ber 4 to deal with education. On September 19, I delivered a televised address to explain what was in the education program, to advocate a one-cent increase in the sales tax and a hike in the severance tax on natural gas to pay for it, and to ask the people to endorse it. Despite the support we had built for the program, there was still a strong anti-tax feeling in the state, aggravated by the poor economy. In the previous election, one man in Nashville, Arkansas, asked me to do just one thing if I won: spend his tax dollars as if I lived like him, on $150 a week. Another man helping to build Little Rock’s new Excelsior Hotel asked me to remember that while the state needed more taxes, he was in his last day on the job and didn’t have another one waiting. I had to win those people to the cause.

In my speech, I argued that we couldn’t create more jobs without improving education, citing examples from my own efforts to recruit high-technology companies. Then I said we couldn’t make real advances as long as “we are last in spending per child, teacher salaries, and total state and local taxes per person.”

What we needed to do was to both raise the sales tax and approve standards recommended by Hillary’s committee, “standards which, when implemented, will be among the nation’s best.”

The standards included required kindergarten; a maximum class size of twenty through third grade; counselors in all elementary schools; uniform testing of all students in third, sixth, and eighth grades, with mandatory retention of those who failed the eighth-grade test; a requirement that any school in which more than 15 percent of students failed to develop a plan to improve performance and, if its students didn’t improve within two years, be subject to management changes; more math, science, and foreign language courses; a required high school curriculum of four years of English and three years of math, science, and history or social studies; more time on academic work during the school day and an increase in the school year from 175 to 180 days; special opportunities for gifted children; and a requirement that students stay in school until the age of sixteen. Until then, students could leave after the eighth grade, and a lot of them did. Our dropout rate was more than 30 percent. The most controversial proposal I made was to require all teachers and administrators to take and pass the National Teacher Examination in 1984, “by the standards now applied to new college graduates who take the test.” I recommended that teachers who failed be given free tuition to take regular courses and be able to take the test as many times as possible until 1987, when the school standards would be fully effective.

I also proposed improvements in vocational and higher education, and a tripling of the adult education program to help dropouts who wanted to get a high school diploma.

At the end of the speech, I asked the people to join Hillary and me in wearing blue ribbons to demonstrate support for the program and our conviction that Arkansas could be a “blue ribbon” state, in the front ranks of educational excellence. We ran television and radio ads asking for support, distributed thousands of postcards for people to send their legislators, and passed out tens of thousands of those blue ribbons. Many people wore them every day until the legislative session was over. The public was beginning to believe we could do something special.

It was an ambitious program: Only a handful of states then required as strong a core curriculum as the one I proposed. None required students to pass an eighth-grade test before going to high school. A few required them to pass tests in the eleventh or twelfth grade to get a diploma, but to me, that was like closing the barn door after the cow is out. I wanted the students to have time to catch up. No state required elementary school counselors, though more and more young children were coming to school from troubled homes with emotional problems that inhibited their learning. And no state allowed its education department to force management changes in nonperforming schools. Our proposals went well beyond those of the Nation at Risk report.

The biggest firestorm by far was generated by the teacher-testing program. The Arkansas Education Association (AEA) went ballistic, accusing me of degrading teachers and using them as scapegoats. For the first time in my life, I was charged with racism, on the assumption that a higher percentage of black teachers would fail the test. Cynics accused Hillary and me of grandstanding to increase our popularity among people who would otherwise oppose any tax increase. While it was true that the teacher test was a strong symbol of accountability to many people, the case for the test came out of the hearings the Standards Committee had held across the state. Many people complained about particular teachers who didn’t know the subjects they were teaching or who lacked basic literacy skills. One woman handed me a note the teacher had sent home with her child. Of the twenty-two words in it, three were misspelled. I had no doubt that most teachers were able and dedicated, and I knew that most of those with problems had probably had inferior educations themselves; they would have the chance to improve their skills and take the test again. But if we were going to raise taxes to increase teacher pay, and if the standards were going to work for the kids, the teachers had to be able to teach them. The legislature met for thirty-eight days to consider the fifty-two bills in my agenda and related items offered by the lawmakers themselves. Hillary made a brilliant presentation before the House and Senate, prompting Representative Lloyd George of Yell County to say, “It looks like we might have elected the wrong Clinton!” We had opposition from three quarters: the anti-tax crowd; rural school districts that feared they would be consolidated because they couldn’t meet the standards; and the AEA, which threatened to defeat every legislator who voted for teacher testing.

We countered the argument that the test was degrading to teachers with a statement from several teachers at Little Rock Central High, widely recognized as the best in the state. They said they were glad to take the test, in order to reinforce public confidence. To beat back the argument that the test was racist, I persuaded a group of prominent black ministers to support my position. They argued that black children were most in need of good teachers, and those who failed the test would be given other chances to pass. I also got invaluable support from Dr. Lloyd Hackley, the African-American chancellor of the University of Arkansas at Pine Bluff, a predominantly black institution. Hackley had done an amazing job at UAPB and was a member of Hillary’s Education Standards Committee. In 1980, when college graduates first had to take a test to be certified to teach, 42 percent of the UAPB students failed. By 1986, the pass rate had increased dramatically. Dr. Hackley’s nursing graduates improved the most in the same period. He argued that black students had been held back more by low standards and low expectations than by discrimination. The results he got proved him right. He believed in his students and got a lot out of them. All our children need educators like him.

Near the end of the legislative session, it looked as if the AEA might be able to beat the testing bill. I went back and forth to the Senate and House repeatedly to twist arms and make deals for votes. Finally, I had to threaten not to allow my own sales-tax bill to pass if the testing wasn’t passed along with it. It was a risky gambit: I could have lost both the tax and the testing law. Organized labor opposed the sales-tax raise, saying it was unfair to working families because I had failed to secure an income tax rebate as an offset for the sales tax on food. Labor’s opposition brought some liberal votes to the anti-tax side, but they couldn’t get a majority. There was a lot of support for the program from the outset, and by the time the tax vote came up, we had passed a new formula and the standards were approved. Without a sales-tax increase, many districts would lose state aid under the new formula, and most of them would have to enact large local property-tax increases to meet the standards. By the last day of the session, we had it all: the standards, the teacher-testing law, and an increase in the sales tax. I was elated, and totally exhausted, as I piled into the car to drive sixty miles north to appear at the annual governor’s night in Fairfield Bay, a retirement village full of middle-class folks who’d come to Arkansas from up north because it was warmer but still had four seasons and low taxes. Most of them, including the retired educators, supported the education program. One amateur carpenter made me a little red schoolhouse with a plaque on it commemorating my efforts.

As the smoke cleared from the session, Arkansas began to get a lot of positive national coverage for our education reforms, including praise from Secretary of Education Bell. However, the AEA didn’t give up; it filed a lawsuit against the testing law. Peggy Nabors, the AEA president, and I had a heated debate on the Phil Donahue Show, one of several arguments we had in the national media. The company that owned the National Teacher Examination refused to let us use it for existing teachers, saying it was a good measure of whether someone should be allowed to teach in the first place but not of whether a teacher who couldn’t pass it should be able to keep teaching. So we had to develop a whole new test. When the test was first given to teachers and administrators in 1984, 10 percent failed. About the same percentage failed in subsequent attempts. In the end, 1,215 teachers, about 3.5 percent of our total, had to leave the classroom because they couldn’t pass the test. Another 1,600 lost their certification because they never took it. In the 1984 election, the AEA refused to endorse me and many of education’s best friends in the legislature because of the testing law. Their efforts managed to defeat only one legislator, my old friend Senator Vada Sheid from Mountain Home, who had sewn a button on my shirt when I first met her in 1974. The teachers went door-to-door for her opponent, Steve Luelf, a Republican lawyer who had moved to Arkansas from California. They didn’t talk about the teacher test. Unfortunately, neither did Vada. She made a mistake common to candidates who take a position supported by a disorganized majority but opposed by an organized and animated minority. The only way to survive the onslaught is to make the issue matter as much in the voting booth to those who agree with you as it does to those who disagree. Vada just wanted the whole thing to go away. I always felt bad about the price she paid for helping our children.

Over the next two years, teacher pay went up $4,400, the fastest growth rate in the nation. Although we still ranked forty-sixth, we were finally above the national average in teacher pay as a percentage of state per capita income, and almost at the national average in per-pupil expenditures as a percentage of income. By 1987, the number of our school districts had dropped to 329, and 85 percent of the districts had increased their property-tax rates, which can be done only by a popular vote, to meet the standards. Student test scores rose steadily across the board. In 1986, the Southern Regional Education Board gave a test to eleventh graders in five southern states. Arkansas was the only state to score above the national average. When the same group was tested five years earlier, in 1981, our students scored below the national average. We were on our way.

I continued to push for educational improvements for the rest of my time as governor, but the new standards, funding, and accountability measures laid the foundation for all the later progress. Eventually I reconciled with the AEA and its leaders, as we worked together year after year to improve our schools and our children’s future. When I look back on my career in politics, the 1983 legislative session on education is one of the things I’m proudest of.

In the summer of 1983, the governors met in Portland, Maine. Hillary, Chelsea, and I had a great time, getting together with my old friend Bob Reich and his family, and going with the other governors to a cookout at Vice President Bush’s house in the beautiful oceanside town of Kennebunkport. Three-yearold Chelsea marched up to the vice president and said she needed to go to the bathroom. He took her by the hand and led her there. Chelsea appreciated it, and Hillary and I were impressed by George Bush’s kindness. It wouldn’t be the last time.

Nevertheless, I was upset with the Reagan administration, and had come to Maine determined to do something about it. It had just dramatically tightened the eligibility rules for federal disability benefits. Just as with the black-lung program ten years earlier, there had been abuses of the disability program, but the Reagan cure was worse than the problem. The regulations were so strict they were ridiculous. In Arkansas, a truck driver with a ninth-grade education had lost his arm in an accident. He was denied disability benefits on the theory that he could get a desk job doing clerical work. Several Democrats in the House, including Arkansas congressman Beryl Anthony, were trying to overturn the rules. Beryl asked me to get the governors to call for their reversal. The governors were interested in the issue, because a lot of our disabled constituents were being denied benefits, and because we were being held partly responsible. Although the program was funded by the federal government, it was administered by the states.

Since the matter wasn’t on our agenda, I had to get the relevant committee to vote to overturn the rules by two-thirds, then get 75 percent of the governors present to support the committee action. It was important enough to the White House that the administration sent two assistant secretaries from the Department of Health and Human Services to work against my efforts. The Republican governors were in a bind. Most of them agreed that the rules needed to be changed and certainly didn’t want to defend them in public, but they wanted to stick with their President. The Republican strategy was to kill our proposal in committee. My head count indicated we would win in the committee by a single vote, but only if all our votes showed up. One of those votes was Governor George Wallace. Ever since he had been confined to a wheelchair by a would-be assassin’s bullet, it took him a couple of hours every morning to get ready to face the day. On this morning, George Wallace had to get up two hours earlier than usual to go through his painful preparations. He came to the meeting and cast a loud “aye” vote for our resolution, after telling the committee how many Alabama working people, black and white, had been hurt by the new disability rules. The resolution passed out of the committee, and the National Governors Association adopted it. Subsequently, Congress overturned the regulations, and a lot of deserving people got the help they needed to survive. It might not have happened if George Wallace hadn’t returned to the populist roots of his youth on an early Maine morning when he stood tall in his wheelchair.

At the end of the year, our family accepted an invitation from Phil and Linda Lader to attend their New Year’s weekend gathering in Hilton Head, South Carolina, called Renaissance Weekend. The event was then only a couple of years old. Fewer than one hundred families gathered to spend three days talking about everything under the sun, from politics and economics to religion and our personal lives. The attendees were of different ages, religions, races, and backgrounds, all bound together by a simple preference for spending the weekend in serious talk and family fun rather than all-night parties and football games. It was an extraordinary bonding experience. We revealed things about ourselves and learned things about other people that would never have come out under normal circumstances. And all three of us made a lot of new friends, many of whom helped in 1992 and served in my administration. We went to Renaissance Weekend virtually every year after that until the millennium weekend, 1999–2000, when the national celebration at the Lincoln Memorial required our presence in Washington. After I became President, the event had swelled to more than 1,500 people and had lost some of its earlier intimacy, but I still enjoyed going.

In early 1984, it was time to run for reelection again. Even though President Reagan was far more popular in Arkansas, and across the country, than he had been in 1980, I felt confident. The whole state was excited about implementing the school standards, and the economy was getting a little better. My main primary opponent was Lonnie Turner, the Ozark lawyer I’d worked with on black-lung cases back in 1975, after his partner, Jack Yates, died. Lonnie thought the school standards were going to close rural schools, and he was mad about it. It made me sad because of our long friendship and because I thought he should have known better. In May, I won the primary easily, and after a few years we made up.

In July, Colonel Tommy Goodwin, the director of the state police, asked to see me. I sat with Betsey Wright in stunned silence as he told me that my brother had been videotaped selling cocaine to an undercover state police officer, one who ironically had been hired in an expansion of state anti-drug efforts I had asked the legislature to fund. Tommy asked me what I wanted him to do. I asked him what the state police would normally do in a case like this. He said Roger wasn’t a big-time dealer but a cocaine addict who was selling the stuff to support his habit. Typically, with someone like him, they’d set him up a few more times on videotape to make sure they had him dead to rights, then squeeze him with the threat of a long prison term to make him give up his supplier. I told Tommy to treat Roger’s case just like any other. Then I asked Betsey to find Hillary. She was at a restaurant downtown. I went by to pick her up and told her what had happened.

For the next six miserable weeks, no one outside the state police knew, except Betsey, Hillary, and, I believe, my completely trustworthy press secretary, Joan Roberts. And me. Every time I saw or talked to Mother I was heartsick. Every time I looked in the mirror I was disgusted. I had been so caught up in my life and work that I’d missed all the signs. Shortly after Roger went to college in 1974, he formed a rock band that was good enough to make a living from playing clubs in Hot Springs and Little Rock. I went to hear him several times and thought that with Roger’s distinctive voice and the band’s musical ability, they had real promise. He clearly loved doing it, and though he went back to Hendrix College a couple of times, he would soon drop out again to return to the band. When he was working, he stayed up all night and slept late. During the racing season, he played the horses heavily. He also bet on football games. I never knew how much he won or lost, but I never asked. When our family gathered for holiday meals, he invariably came late, seemed on edge, and got up a time or two during dinner to make phone calls. The warning signs were all there. I was just too preoccupied to see them. When Roger was finally arrested, it was big news in Arkansas. I made a brief statement to the press, saying that I loved my brother but expected the law to take its course, and asking for prayers and privacy for my family. Then I told my brother and Mother the truth about how long I’d known. Mother was in shock, and I’m not sure the reality registered on her. Roger was angry, though he got over it later when he came to terms with his addiction. We all went to counseling. I learned that Roger’s cocaine habit, about four grams a day, was so bad it might have killed him if he hadn’t had the constitution of an ox, and that his addiction was rooted, in part, in the scars of his childhood and perhaps a genetic predisposition to addiction he shared with his father.

From the time he was arrested until almost the date of his court appearance, Roger couldn’t admit that he was an addict. Finally one day, as we were sitting at the breakfast table, I told him that if he wasn’t an addict, I wanted him to go to jail for a very long time, because he had been selling poison to other people for money. Somehow, that got through to him. After he admitted his problem, he began the long road back.

The case had been taken over by the U.S. attorney, Asa Hutchinson. Roger gave up his supplier, an immigrant even younger than he was, who got cocaine from family or friends in his home country. Roger pleaded guilty to two federal offenses before Judge Oren Harris, who had been chairman of the Commerce Committee in the House of Representatives before going to the bench. Judge Harris was in his early eighties but still sharp and very wise. He sentenced Roger to three years on one charge and two years on the other, and suspended the three-year sentence because of his cooperation. Roger served fourteen months, most of it in a federal facility for nonviolent offenders, which was hard on him but probably saved his life.

Hillary and I were in court with Mother when he was sentenced. I was impressed by the way the whole thing was handled by Judge Harris, and by the U.S. attorney. Asa Hutchinson was professional, fair, and sensitive to the agony my family was experiencing. I wasn’t at all surprised when later he was elected to Congress from the Third District.

In the summer, I led the Arkansas delegation to the Democratic convention in San Francisco to see Walter Mondale and Geraldine Ferraro nominated and to give a five-minute tribute to Harry Truman. We were in trouble to start with, and it was all over when Mondale said he would propose a hefty tax increase to reduce the budget deficit. It was a remarkable act of candor, but he might as well have proposed a federal car-tag fee. Still, the city put on a great convention. San Francisco had lots of pleasant small hotels within walking distance of the convention center, and well-organized traffic, so we avoided the crushing traffic jams that characterize many conventions. The Arkansas host, Dr. Richard Sanchez, was heavily invested in the efforts to treat and prevent the relatively new disease of AIDS, which was sweeping the city. I asked Richard about the problem and what could be done about it. That was my first real exposure to a battle that would claim a lot of my attention in the White House and afterward.

I had to leave San Francisco early to return to Arkansas to recruit a high-tech industry for our state. In the end it didn’t pan out, but I couldn’t have done any good staying in California anyway. We were headed for defeat. The economy was rebounding and the President told us it was “morning again in America,” while his surrogates sneered at those of us on the other side as “San Francisco Democrats,” a not-so-veiled allusion to our ties to the city’s large gay population. Even Vice President Bush fell into the macho mode, saying he was going to “kick a little ass.”

In the November election, Reagan defeated Mondale 59 to 41 percent. The President won 62 percent of the vote in Arkansas. I received 63 percent in my race against Woody Freeman, an appealing young businessman from Jonesboro.

After our family enjoyed Chelsea’s fifth Christmas and our second Renaissance Weekend, it was time for a new legislative session, this one devoted to modernizing our economy. Even though the overall economy was improving, unemployment was still high in states like Arkansas that were dependent on agriculture and traditional industries. Most of America’s job growth of the eighties came in the high-technology and service sectors, and was concentrated in and around urban areas, primarily in states on or near the East and West coasts. The industrial and agricultural heartland was still in bad shape. The pattern was so pronounced that people began to refer to America as having a “bicoastal” economy.

It was obvious that in order to accelerate job and income growth, we had to restructure our economy. The development package I presented to the legislature had some financial components that were new to Arkansas but already in place in other states. I proposed to broaden the state’s housing agency into a Development and Finance Authority that would be able to issue bonds to finance industrial, agricultural, and small-business projects. I recommended that the state’s public pension funds set targets of investing at least 5 percent of their assets in Arkansas. We were a capital-poor state; we didn’t need to export public funds when there were good investment options at home. I recommended allowing state-chartered banks to hold assets they foreclosed on for longer periods of time, primarily to avoid dumping farmland in an already depressed market, which would make it even harder for farmers to hold on. I also asked the legislature to allow state-chartered banks not only to lend money, but also to make modest equity investments in farms and businesses that couldn’t borrow any more money, with the provision that the farmer or small-business person had a right to buy the bank out within three years. Other farm-state governors were especially interested in this bill, and one of them, Bill Janklow of South Dakota, passed a version of it through his legislature.

The economic proposals were innovative but too complex to be well understood or widely supported. However, after I made appearances at several committee hearings to answer questions and did a lot of one-on-one lobbying, the legislature passed them all.

More than a decade after the U.S. Supreme Court decision in Roe v. Wade authorized it, our legislature banned abortions performed in the third trimester of pregnancy. The bill was sponsored by Senator Lu Hardin of Russellville, a Christian whom I liked very much, and Senator Bill Henley, a Catholic who was Susan McDougal’s brother. The bill passed easily, and I signed it into law. A decade later, when congressional Republicans were pushing a bill to ban so-called partial-birth abortions with no exemption for the health of the mother, I urged them instead to adopt a federal statute banning late-term abortions unless the life or health of the mother was at stake. Because several states still hadn’t passed laws like the one I signed in 1985, the bill I proposed would have outlawed more abortions than the bill banning the partial-birth procedure, which normally is used to minimize damage to the mother’s body. The GOP leadership turned me down.

Besides the economic package and the abortion bill, the legislature adopted my proposals to set up a fund to compensate victims of violent crime; strengthen our efforts to reduce and deal with child abuse; establish a fund to provide health care for indigents, mostly poor pregnant women, not covered by the federal Medicaid program; make Martin Luther King Jr.’s birthday a state holiday; and create a program to provide better training for school principals. I had become convinced that school performance depended more on the quality of a principal’s leadership than on any other single factor. The years ahead only strengthened that conviction.

The only real fireworks in a session otherwise devoted to good government and harmless legislative sideshows came from the herculean effort of the AEA to repeal the teacher-testing law just weeks before the test was scheduled to be given for the first time. In a clever move, the teachers got Representative Ode Maddox to sponsor the repeal. Ode was a highly respected former superintendent in his little town of Oden. He was a good Democrat who kept a large old photograph of FDR up in the school auditorium into the 1980s. He was also a friend of mine. Despite the best efforts of my supporters, the repeal passed the House. I immediately put an ad on the radio telling the people what had happened and asking them to call the Senate in protest. The switchboard was flooded with calls and the bill was killed. Instead, the legislature passed a bill that I supported requiring all certified educators, not just those working in 1985, to take and pass the test by 1987 to keep their certification.

The AEA said teachers would boycott the test. The week before it was given, 4,000 teachers demonstrated outside the Capitol and heard a representative of the National Education Association accuse me of “assassinating the dignity of the public schools and its children.” A week later, more than 90 percent of our 27,600 teachers showed up for the test.

Before the legislature went home, we had one last bit of fireworks. The Highway Department had gone all over the state pushing a new road program, to be financed by an increase in gasoline and diesel taxes. The department sold it to the local business and farm leaders, and it passed rather handily, creating a problem for me. I liked the program and thought it would be good for the economy, but in the election I had pledged not to support a major tax increase. So I vetoed the bill and told its sponsors I wouldn’t fight their efforts to override it. The override passed easily, the only time in twelve years one of my vetoes was overturned.

I also engaged in some national political activity in 1985. In February, I narrated the Democrats’ response to President Reagan’s State of the Union address. The State of the Union was a great forum for Reagan’s speaking skills, and whoever gave our brief response had a hard time making any impression. Our party took a different tack that year, featuring the new ideas and economic achievements of several of our governors and mayors. I also got involved in the newly formed Democratic Leadership Council, a group dedicated to forging a winning message for the Democrats based on fiscal responsibility, creative new ideas on social policy, and a commitment to a strong national defense. The summer governors’ conference, held in Idaho, was marked by an unusual partisan fight over a fundraising letter for the Republican governors signed by President Reagan. The letter took some hard shots at their Democratic colleagues for being too liberal with tax-and-spend policies, a violation of our unwritten commitment to keep the governors’ meetings bipartisan. The Democrats were so angry we threatened to block the election of Republican governor Lamar Alexander of Tennessee to the chairmanship of the National Governors Association, normally a routine action since he was the vice chair and the chairmanship rotated by party every year. I liked Lamar and doubted he had his heart in the attack on his Democratic colleagues; after all, he, too, had raised taxes to fund higher school standards. I helped to broker a resolution to the conflict, in which the Republicans apologized for the letter and said they wouldn’t do it again, and we voted for Lamar for chairman. I was elected vice chairman. We did a lot of good work in the governors’ conferences in the seventies and eighties. In the 1990s, when the Republican governors gained the majority and got more in line with their national party, the old cooperative spirit diminished. That might have been good politics, but it impaired the search for good policy.

On our way to Idaho, Hillary, Chelsea, and I stopped for a few happy days in Montana, thanks largely to Governor Ted Schwinden. After we spent the night with him, Ted got us up at dawn to take a helicopter up the Missouri River and watch the wildlife waking up to the day. Then we took a four-wheel-drive vehicle equipped with rail connectors along the Burlington Northern rail line for a couple hundred miles, a trip that included a dramatic crossing of a three-hundred-foot-deep gorge. And we drove a rented car up the “highway to the sun,” where we watched marmosets scramble around above the snow line, then spent a few days at Kootenai Lodge on Swan Lake. After all my travels, I still think western Montana is one of the most beautiful places I’ve ever seen.

The political trips I took were a minor diversion from my main mission after the legislature went home in 1985, and for the rest of the decade: building the Arkansas economy. I enjoyed the challenge, and I got pretty good at it. First, I had to stop bad things from happening. When International Paper announced plans to close a mill in Camden that had been operating since the 1920s, I flew to New York to see the company president, John Georges, and asked him what it would take to keep the mill open. He gave me a list of five or six things he wanted. I delivered on all but one, and he kept the plant open. When my friend Turner Whitson called to tell me the shoe plant in Clarksville was closing, I turned for help to Don Munro, who had managed to keep six shoe-making facilities open in Arkansas during the worst of the eighties recession. I offered him $1 million in assistance and he took over the plant. The workers found out about their jobs being saved at a meeting to help them file for unemployment and retraining benefits.

When the Sanyo company told me it was planning to close its television-assembly plant in Forrest City, Dave Harrington and I flew to Osaka, Japan, to see Satoshi Iue, the president of Sanyo, a vast company with more than 100,000 employees worldwide. I had become friends with Mr. Iue over the years. After I was defeated for governor in 1980, he sent me a beautiful piece of Japanese calligraphy that said “Though the river may force you to change course, hold fast to what you believe.” I had it framed, and when I was reelected in 1982, it hung at the entrance to our bedroom so that I would see it every day. I told Mr. Iue that we couldn’t handle the loss of Sanyo’s jobs in eastern Arkansas, where the Delta counties all had unemployment rates higher than 10 percent. I asked him if he would keep the plant open if Wal-Mart would sell Sanyo’s televisions. After he agreed, I flew back to Arkansas and asked WalMart to help. In September 2003, Satoshi Iue came to Chappaqua for lunch. By then, Wal-Mart had bought more than twenty million of those television sets.

It wasn’t all rescue missions. We also made some new things happen, financing new high-tech ventures, involving the universities in helping start new businesses, taking successful trade and investment missions to Europe and Asia, and supporting the expansion of successful plants like the ones run by the Daiwa Steel Tube Industries in Pine Bluff and the Dana Company in Jonesboro, which made transmissions with the help of skilled workers and amazing robots.

Our biggest coup was getting NUCOR Steel Company to come to northeast Arkansas. NUCOR was a highly profitable company that made steel by melting already-forged metal rather than creating it from scratch. NUCOR paid workers a modest weekly wage and a bonus based on profits—a bonus that usually accounted for more than half the workers’ income. By 1992, the Arkansas NUCOR workers’ average income was about $50,000. Moreover, NUCOR gave every employee an extra $1,500 a year for every child he or she had in college. One of its employees educated eleven children with the company’s help. NUCOR had no corporate jet and operated with a tiny headquarters staff out of rented space in North Carolina. The founder, Ken Iverson, inspired great loyalty the old-fashioned way: he earned it. In the only year NUCOR’s earnings were down in the 1980s, Iverson sent a letter to his employees apologizing for the cut in their pay, which was applied across the board because NUCOR had a strict nolayoff policy. The benefits and burdens were shared equally, except for the boss. Iverson said it wasn’t the workers’ fault that market conditions were poor, but he should have figured out a way to deal with them. He told his workers he was taking a 60-percent pay cut, three times theirs, a dramatic departure from the common practice for the last two decades of raising executive pay at a far greater rate than that of other employees, whether the company is doing well or not. Needless to say, no one at NUCOR wanted to quit.

When the Van Heusen shirt company announced it was closing its Brinkley plant, Farris and Marilyn Burroughs, who had been involved with the workers and community for years, decided to buy it and keep it open, but they needed more customers for their shirts. I asked David Glass, the president of WalMart, if he would stock them. Again, Wal-Mart came to the rescue. Shortly afterward, I hosted a lunch for Wal-Mart executives and our economic development people to encourage the company to buy more products made in America and to advertise this practice as a way to increase sales. Wal-Mart’s “Buy America” campaign was a great success and helped to reduce resentment against the giant discounter for putting small-town merchants out of business. Hillary loved the program and supported it strongly when she went on the Wal-Mart board a couple of years later. At its high-water mark, Wal-Mart’s merchandise was about 55 percent American made, about 10 percent more than that of its nearest competitor. Unfortunately, after a few years Wal-Mart abandoned the policy in its marketing drive to be the lowest-cost retailer, but we made the most of it in Arkansas while it lasted. The work I did in education and economic development convinced me that Arkansas, and America, had to make some big changes if we wanted to preserve our economic and political leadership in the global economy. We simply weren’t well educated or productive enough. We had been losing ground in average incomes since 1973, and by the 1980s, four in ten workers were experiencing declining incomes. The situation was intolerable, and I was determined to do what I could to change it. My efforts helped to broaden my political base, garnering support from Republicans and conservative independents who had never voted for me before. Even though Arkansas had been in the top ten states in new-job growth as a percentage of total employment in two of the last three years, I couldn’t convert everybody. When the oil refinery in El Dorado was about to close, costing us more than three hundred good union jobs, I helped convince some businesspeople from Mississippi to buy and operate it. I knew how much it meant to those workers’ families and to the local economy, and I looked forward to shaking hands at the plant gate at the next election. It was a home run, until I met a man who angrily said he wouldn’t vote for me under any circumstances. When I responded, “Don’t you know I saved your job?” he replied, “Yeah, I know you did, but you don’t care a thing about me. You only did it so you’d have one more poor sucker to tax. That’s why you want me to have a job, so you can tax me. I wouldn’t vote for you for all the money in the world.” You can’t win ’em all.

In early 1986, I launched my campaign for reelection, this one for a four-year term. In 1984, the voters had passed an amendment to change executive terms from two to four years for the first time since our Reconstruction Era Constitution was adopted in 1874. If I won, I would become the second-longestserving Arkansas governor after Orval Faubus. He won his longevity because of Little Rock Central High. I wanted to win mine on schools and jobs.

Ironically, my main opponent in the primary was Faubus himself. He was still angry at me because, in my first term, I refused to have the state buy his beautiful Fay Jones house in Huntsville and put it into the state park system to be used as a retreat. I knew he was strapped for cash, but so was the state, and I couldn’t justify the expense. Faubus was going to rail against the new education standards, saying they had brought consolidation and high taxes to rural areas, which hadn’t gotten any of the new jobs I was always bragging about.

And once I got by Faubus, Frank White was waiting. He was trying to win the best two out of three. Between the two of them, I knew a lot of charges would fly. I felt confident that Betsey Wright, Dick Morris, David Watkins, and I could deal with whatever came up, but I was concerned about how Chelsea would react to people saying bad things about her father. She was six and had begun to watch the news and even to read the paper. Hillary and I tried to prepare her for what White and Faubus might say about me and how I would respond. Then, for several days, we would take turns playing one of the candidates. One day Hillary was Frank White, I was Faubus, and Chelsea was me. I accused her of ruining the small schools with misguided education ideas. She shot back, “Well, at least I didn’t use the state police to spy on my political enemies the way you did!” Faubus had actually done that in the aftermath of the Central High crisis. Not bad for a six-year-old.

I won the primary with more than 60 percent of the vote, but Faubus pulled a third of it. Even at seventysix, he still had some juice in rural areas. Frank White took up where Faubus left off. Although he had called teachers “greedy” when they pushed for higher pay during his tenure, he got the endorsement of the Arkansas Education Association in the Republican primary when he changed his position from support of the teacher test to opposition. Then he started in on Hillary and me. White began by saying the new education standards were too burdensome and needed to be changed. I hit that one out of the park, saying if he were elected, he would “delay them to death.” Then he went after Hillary, alleging she had a conflict of interest because the Rose firm was representing the state in its fight against the Grand Gulf nuclear plants. We had a good response to that charge, too. First, the Rose firm was working to save Arkansans money by lifting the burden of the Grand Gulf plants, while White, as a board member of one of the Middle South Utilities companies, had voted three times to go forward with construction of the plants. Second, the Public Service Commission hired the Rose firm because all the other big firms were representing utilities or other parties in the case. Both the legislature and the attorney general approved the hiring. Third, the money the state paid to the Rose firm was subtracted from the firm’s income before Hillary’s partnership profits were calculated, so she made no money from it. White seemed more interested in defending the utility’s effort to soak Arkansas ratepayers than protecting them from a conflict of interest. I asked him if his attacks on Hillary meant he wanted to run for first lady instead of governor. Our campaign even made bumper stickers and buttons that said, “Frank for First Lady.”

White’s final charges did him in. He had been working for Stephens, Inc., then the largest bond house outside Wall Street. Jack Stephens had supported me when I first ran for governor, but then he drifted to the right, heading Democrats for Reagan in 1984, and by 1986 he had become a Republican. His older brother, Witt, was still a Democrat and supporting me, but Jack ran the bond house. And Frank White was his guy. For many years, Stephens had controlled the state’s bond business. When I dramatically expanded the volume of bond issues, I insisted that we open all of them to competitive bidding by national firms, and that we let more Arkansas firms have the opportunity to sell the bonds. The Stephens firm still got its fair share, but it didn’t control all the issues as it had in the past and would again if White won the election. One of the Arkansas firms that got some business was headed by Dan Lasater, who built a successful bond firm in Little Rock before he lost it all to a cocaine habit. Lasater had been a supporter of mine and a friend of my brother’s, with whom he had partied hard when they were both chained to cocaine, as too many young people were in the 1980s.

When Betsey Wright and I were preparing for our television debate with White, we learned that he was going to challenge me to take a drug test with him. The ostensible reason was to set a good example, but I knew White was hoping I wouldn’t do it. The blizzard of rumors spawned by Lasater’s downfall included one that I had been part of Dan’s party circle. It wasn’t true. Betsey and I decided to take a drug test before the debate. When White hit me on television with his challenge, I smiled and said Betsey and I had already taken a test and he and his campaign manager, Darrell Glascock, should follow suit. Glascock had been subjected to his share of rumors too. Their clever trick had backfired. White turned up the heat with the nastiest TV ad I’d ever seen. He showed Lasater’s office, followed by a tray of cocaine, with an announcer saying I’d taken campaign contributions from a cocaine-using felon, then given him state bond business. The clear implication was that I’d given Lasater preferred treatment and at the least I had known about his cocaine habit when I did. I invited the Arkansas Gazette to review the records of the Development Finance Authority, and the paper ran a front-page story showing how many more bond houses had done business with the state since I’d taken over from Governor White. The number had gone from four to fifteen, and Stephens still had handled over $700 million of bond business, more than twice as much as any other Arkansas firm. I also hit back with a TV ad that began by asking people if they’d seen White’s ad and actually showing a few seconds of it. Then my ad cut to a picture of Stephens, Inc., with the announcer saying White worked there and the reason he was attacking me was that neither Stephens nor anyone else controlled the state’s business any longer, but they would if White became governor again. It was one of the most effective commercials I ever ran, because it was a strong response to a low blow, and because the facts spoke for themselves. I was also glad that Roger and Mother hadn’t let themselves get too hurt by White’s bringing up Roger’s drug problem. After he got out of prison, Roger served six months in a halfway house in Texas, and then moved to north Arkansas, where he worked for a friend of ours in a quick-stop service station. He was about to move to Nashville, Tennessee, and was healthy enough not to let the old story drag him down. Mother was happy with Dick Kelley, and by now knew that politics was a rough game in which the only answer to a low blow is winning.

In November, I won with 64 percent, including a staggering 75 percent in Little Rock. I was gratified that the victory gave me the opportunity to smash the suggestion that I had abused the governor’s office and the implication that drugs had something to do with it. Despite the tough campaign, I wasn’t very good at holding a grudge. Over the years, I came to like Frank White and his wife, Gay, and to enjoy being on programs with him. He had a great sense of humor, he loved Arkansas, and I was sad when he died in 2003. Thankfully, I also reconciled with Jack Stephens.

As far as I was concerned, the campaign against Faubus and White was a battle against Arkansas’ past and against the emerging politics of personal destruction. I wanted to focus the people on the issues and on the future, by defending our education reforms and promoting our economic initiatives. The Memphis Commercial Appeal reported that “Clinton’s stump speeches in the area sound as much like seminars on the economy as pleas for votes and most political analysts agree that the strategy is working.”

I often told the story of my visit to the Arkansas Eastman chemical plant in rural Independence County. During the tour, my host kept saying that all the anti-pollution equipment was run by computers and he wanted me to meet the guy who was running them. He built him up so much that by the time I got to the computer control room, I expected to meet someone who was a cross between Albert Einstein and the Wizard of Oz. Instead, the man running the computers was wearing cowboy boots, jeans with a belt adorned with a big silver rodeo buckle, and a baseball cap. He was listening to country music and chewing tobacco. The first thing he said to me was “My wife and I are going to vote for you, because we need more jobs like this.” This guy raised cattle and horses—he was pure Arkansas—but he knew his prosperity depended more on what he knew than on how much he could do with his hands and back. He had seen the future and he wanted to go there.

In August, when the National Governors Association met in Hilton Head, South Carolina, I became the chairman and celebrated my fortieth birthday. I had already agreed to serve as chairman of the Education Commission of the States, a group dedicated to gathering the best education ideas and practices and spreading them across the nation. Lamar Alexander had also appointed me to be the Democratic co-chairman of the governors’ task force on welfare reform, to work with the White House and Congress to develop a bipartisan proposal to improve the welfare system so that it would promote work, strengthen families, and meet children’s basic needs. Though I had secured an increase in Arkansas’ meager monthly welfare benefits in 1985, I wanted welfare to be a way station on the road to independence. I was excited with these new responsibilities. I was both a political animal and a policy wonk, always eager to meet new people and explore new ideas. I thought the work would enable me to be a better governor, strengthen my network of national contacts, and gain a better understanding of the emerging global economy and how America should deal with its challenges.

As 1986 drew to a close, I took a quick trip to Taiwan to address the Tenth Annual Conference of Taiwanese and American Leaders about our future relations. The Taiwanese were good customers for Arkansas soybeans and a wide variety of our manufactured products, from electric motors to parking meters. But America’s trade deficit was large and growing, and four in ten American workers had suffered declining incomes in the previous five years. Speaking for all the governors, I acknowledged America’s responsibility to cut our deficit to bring down interest rates and increase domestic demand, to restructure and reduce the debt of our Latin American neighbors, to relax export controls on hightechnology products, and to improve the education and productivity of our workforce. Then I challenged the Taiwanese to reduce trade barriers and invest more of their huge cash reserves in America. It was my first speech on global economics to a foreign audience. Making it forced me to sort out exactly what I thought should be done and who should do it.

By the end of 1986, I had formed some basic convictions about the nature of the modern world, which later developed into the so-called New Democrat philosophy that was the backbone of my 1992 campaign for President. I outlined them in a speech to the year-end management meeting of Gannett, the newspaper chain that had just bought the Arkansas Gazette.

Over the next five years, I would refine my analysis of globalization and interdependence and propose more initiatives to respond to them, juggling as best I could my desire to be a good governor and to have a positive impact on national policy.

In 1987, my agenda for the legislative session, “Good Beginnings, Good Schools, Good Jobs,” was consistent with the work I was doing with the National Governors Association under the theme “Making America Work.” In addition to recommendations that built on our previous efforts in education and economic development, I asked the legislature to help me get the growing number of poor children off to a good start in life by increasing health-care coverage for poor mothers and children, starting with prenatal care in order to lower the infant-mortality rate and reduce avoidable damage to newborns; to increase parenting education for mothers of at-risk children; to provide more special education in early childhood to kids with learning problems; to increase the availability of affordable child care; and to strengthen child-support enforcement.

From Hillary, I had learned most of what I knew about early-childhood development and its importance to later life. She had been interested in it as long as I’d known her, and had taken a fourth year at Yale Law School to work on children’s issues at the Yale Child Study Center and Yale–New Haven Hospital. She had worked hard to import to Arkansas an innovative preschool program from Israel called HIPPY, which stands for Home Instruction Programs for Preschool Youngsters, a program that helps to develop both parenting skills and children’s ability to learn. Hillary set up HIPPY programs all across the state. We both loved going to the graduation exercises, watching the children show their stuff and seeing the parents’ pride in their kids and themselves. Thanks to Hillary, Arkansas had the largest program in the country, serving 2,400 mothers, and their children showed remarkable progress. The main focus of my economic development efforts was to increase investment and opportunity for poor people and distressed areas, most of them in rural Arkansas. The most important proposal was to provide more capital to people who had the potential to operate profitable small businesses but couldn’t borrow the money to get started. The South Shore Development Bank in Chicago had been instrumental in helping unemployed carpenters and electricians set themselves up in business on the city’s South Side to renovate abandoned buildings that otherwise would have been condemned. As a result, the whole area recovered.

I knew about the bank because one of its employees, Jan Piercy, had been one of Hillary’s best friends at Wellesley. Jan told us South Shore got the idea to fund artisans who were skilled but not creditworthy by conventional standards from the work of the Grameen Bank of Bangladesh, founded by Muhammad Yunus, who had studied economics at Vanderbilt University before going home to help his people. I arranged to meet him for breakfast in Washington one morning, and he explained how his “microcredit” program worked. Village women who had skills and a reputation for honesty but no assets were organized in teams. When the first borrower repaid her small loan, the next one in line got hers, and so on. When I first met Yunus, the Grameen Bank already had made hundreds of thousands of loans, with a repayment rate higher than that for commercial lenders in Bangladesh. By 2002, Grameen had made them to more than 2.4 million people, 95 percent of them poor women.

If the idea worked in Chicago, I thought it would work in economically distressed areas in rural Arkansas. As Yunus said in an interview, “Anywhere anybody is rejected by the banking system, you have room for a Grameen-type program.” We set up the Southern Development Bank Corporation in Arkadelphia. The Development Finance Authority put up some of the initial money, but most of it came from corporations that Hillary and I asked to invest in it.

When I became President, I secured congressional approval for a national loan program modeled on the Grameen Bank, and featured some of our success stories at a White House event. The U.S. Agency for International Development also funded two million micro-credit loans a year in poor villages in Africa, Latin America, and East Asia. In 1999, when I went to South Asia, I visited Muhammad Yunus and some of the people he’d set up in business, including women who’d used the loans to buy cell phones, which they charged villagers to use to call their relatives and friends in America and Europe. Muhammad Yunus should have been awarded the Nobel Prize in Economics years ago. My other major interest was welfare reform. I asked the legislature to require recipients with children three years old or over to sign a contract committing themselves to a course of independence, through literacy, job training, and work. In February, I went to Washington with several other governors to testify before the House Ways and Means Committee on welfare prevention and reforms. We asked Congress to give us the tools to “promote work, not welfare; independence, not dependence.” We argued that more should be done to keep people off welfare in the first place, by reducing adult illiteracy, teen pregnancy, the school dropout rate, and alcohol and drug abuse. On welfare reform, we advocated a binding contract between the recipient and the government, setting out the rights and responsibilities of both parties. Recipients would commit to strive for independence in return for the benefits, and the government would commit to help them, with education and training, medical care, child care, and job placement. We also asked that all welfare recipients with children age three or older be required to participate in a work program designed by the states, that each welfare recipient have a caseworker committed to a successful transition to self-sufficiency, that efforts to collect child-support payments be intensified, and that a new formula for cash assistance be established consistent with each state’s cost of living. Federal law allowed states to set monthly benefits wherever they chose as long as they weren’t lower than they had been in the early seventies, and they were all over the place. I had spent enough time talking to welfare recipients and caseworkers in Arkansas to know that the vast majority of them wanted to work and support their families. But they faced formidable barriers, beyond the obvious ones of low skills, lack of work experience, and inability to pay for child care. Many of the people I met had no cars or access to public transportation. If they took a low-wage job, they would lose food stamps and medical coverage under Medicaid. Finally, many of them just didn’t believe they could make it in the world of work and had no idea where to begin.

At one of our governors’ meetings in Washington, along with my welfare reform co-chair, Governor Mike Castle of Delaware, I organized a meeting for other governors on welfare reform. I brought two women from Arkansas who had left welfare for work to testify. One young woman from Pine Bluff had never been on an airplane or an escalator before the trip. She was restrained but convincing about the potential of poor people to support themselves and their children. The other witness was in her mid to late thirties. Her name was Lillie Hardin, and she had recently found work as a cook. I asked her if she thought able-bodied people on welfare should be forced to take jobs if they were available. “I sure do,”

she answered. “Otherwise we’ll just lay around watching the soaps all day.” Then I asked Lillie what was the best thing about being off welfare. Without hesitation, she replied, “When my boy goes to school and they ask him, ‘What does your mama do for a living?’ he can give an answer.” It was the best argument I’ve ever heard for welfare reform. After the hearing, the governors treated her like a rock star. When I tackled welfare reform as President, I was always somewhat amused to hear some members of the press characterize it as a Republican issue, as if valuing work was something only conservatives did. By 1996, when Congress passed a bill I could sign, I had been working on welfare reform for more than fifteen years. But I didn’t consider it a Democratic issue. Or even a governors’ issue. Welfare reform was about Lillie Hardin and her boy.