Ethical questions apart, the world's financial markets should be thankful to Bill Clinton. Under his presidency, economic policies have been remarkably sensible - the free trade agenda has been pursued, the Federal Reserve has been left alone to do its job free from political interference, the dollar has been kept strong, again with a minimum of "noise" from administration officials, government regulation has not been particularly excessive and, perhaps most importantly, the large budget deficit has been eliminated and turned into a large surplus.
Now the financial markets have to assess the prospects for the policy environment under a new US president - George W Bush or Al Gore.
Trade: Mr Clinton has steered quite a clever course on free trade. Traditionally, Democrats have been quite opposed to free trade. On the other hand, Republicans traditionally favour free trade, in line with their generally pro-business policies.
Mr Clinton has gone for the middle ground, seeking to increase free trade between the US and its various trading partners while including "side agreements" on issues such as the environment and working conditions for employees in poorer countries. These agreements have been used to appease moderate trade union opposition, allowing the overall free trade agreement to pass, albeit sometimes by the narrowest of margins. It is debatable whether a President Gore or a President Bush will have as much success. Mr Gore is perceived to be far closer to the trade unions than Mr Clinton and most US unions are opposed to further moves towards free trade. In the case of a President Bush there would also be difficulties. Although Mr Bush is favourably disposed to expansion of free trade, he would need to get the agreement of Congress to any new treaties.
Freed from the need to support their party colleague in the presidency, it's likely that congressional Democrats would seek to block such deals; if they control either house of Congress, this would make agreement on controversial trade deals very difficult.
Budget Surplus: When Bill Clinton took office in January 1993, the federal budget deficit was running at about 5 per cent of GDP - a huge level by any historical or international standard. In its first year in office, the main priority of the Clinton administration was to put in place a long-term plan to reduce the budget deficit in a sustainable way.
Eventually a compromise plan was put in place and it has worked. This year the federal government will have a surplus of more than 2 per cent of GDP and long-term forecasts are for large surpluses to continue to mount up in the years to come.
However, there are reasons to be very cautious about whether those surpluses will actually materialise. The presidential election polls remain very tight, causing both candidates to promise tax cuts and spending increases if elected.
Both candidates say their plans can easily be afforded - don't they always! But there is little doubt that it will be increasingly difficult to maintain tight control over federal government finances if it is kicking off those large surpluses.
Just as in Ireland, the suggestion that the Government has money to spare brings spending demands from many interest groups. It is therefore likely to be very difficult for either candidate to continue to run large budget surpluses. Given that the US has a huge trade deficit, which has to be financed by overseas investors, a smaller budget surplus going forward could hurt confidence in the the US economy and hence the dollar.
The Fed and the Dollar: In other important policy areas, the Clinton administration has a track record that will be difficult to match. For example, Mr Clinton has long ago recognised the reality that putting pressure on the Federal Reserve to lower interest rates is utterly counter-productive. It has been learnt that it is best to leave the setting of interest rates to the Fed and in particular to Reserve chairman Mr Alan Greenspan.
Mr Clinton has rarely if ever criticised the Fed and that seems to be a rule across his administration. The same administration has generally followed a strong dollar policy and has avoided the populist but ultimately dangerous policy of pushing the dollar down to make US exports more competitive.
Again, the number of people allowed to comment on the dollar has been kept very tight, ensuring that there is an administration uno voce on the issue in the financial markets. On the basis of a "continuity" argument, it would appear more likely that Gore will continue with this strong dollar policy. A President Gore would probably keep the vastly experienced Treasury Secretary, Larry Summers, in office.
Mr Bush's economics team cannot be as experienced due to their lack of time in office. It is also not clear who will head up that team in a new administration. When looking for portents is should be noted that Texas, where Mr Bush is governor, favours a lower rather than stronger dollar, something that would be a very significant policy switch if carried to Washington.
All in all, then, none of the above means that the US economy is in danger, nor that that the dollar will collapse, inflation rise or budget deficit explode. What it does mean is a notable rise in the percentage chance of financial risk, with possible negative global effects, under a new president. Mr Clinton may be no saint but he has been good for financial markets.
Eoin Fahy is chief economist at KBC Asset Management Ltd. The views expressed here are personal, and do not necessarily reflect the views of KBC Asset Management Ltd.
