Does anyone remember President Clinton’s proposed BTU tax?

Or care to?

It was a bad idea, even by Washington standards, and it failed to win Congressional approval. Oddly, Clinton’s biggest achievement may be a negative one: Expensive, job-destroying programs that weren’t enacted, freeing him to claim credit for initiatives pushed by the Republican majority in Congress.

But the proposed BTU tax is worth remembering when sizing up who deserves credit for the economic boom of the 1990s and trying to determine which party’s candidate better understands the intersection between politics and the economy.

The BTU tax is a head-scratcher now, but it was a key element in Clinton’s first budget and was expected to raise about $30 billion. Critics said the tax would have cost the economy 500,000 jobs, undercutting Clinton’s goal of “putting people first.” So much for John F. Kennedy’s tax cuts, eh?

Clinton planned to tax energy based on its heat content measured by the British thermal unit, or BTU. The tax would have been imposed on coal, liquefied gasses, natural gas, gasoline, nuclear-generated electricity and imported electricity.

Clinton got his tax increase, but it didn’t include the BTU tax.

The Democratic majority in Congress turned thumbs down on Clinton’s much ballyhooed $16.3 billion “stimulus package” – an odd-ball collection of unemployment, child immunization and summer jobs for teenagers. Hillary Clinton’s plan to nationalize healthcare collapsed. After two years, Clinton had nothing to show for his lofty plans to update Roosevelt’s omniscient, interventionist view of government.

Things got tougher for Clinton in November 1994. Voters, apparently seeking adult supervision in Washington, elected Republican majorities in the House and Senate, marking the end of Clinton’s economic agenda. This saved Clinton from his big government proclivities. Thanks in no small part to the Republican Congress, Clinton agreed to welfare reform and a capital gains tax cut, allowing him to burnish his “new Democrat” credentials.

The economy was fundamentally strong when Clinton took office. But President Reagan inherited a comatose economy from President Carter. The Gipper tamed inflation and, despite the yowls from the general press, cut the top tax rate to 28% from 70%. Reagan kept the dollar strong and took the first step toward global trade in an agreement with Canada. Reagan deregulated key sectors of the economy, including telecommunications, transportation, financial services and energy. This led to a fundamental restructuring of the economy and sparked technological innovation that created a historic economic boom.

American companies became the dominant force in a range of industries, including software, semiconductors, computers, fiber optics and the Internet. Think: Microsoft (MSFT), Intel (INTC), Apple (AAPL), Dell (DELL), Hewlett-Packard (HPQ), Cisco Systems (CSCO), Ciena (CIEN), Google (GOOG), Yahoo (YHOO) and, Genentech (DNA).

Coming soon (barring a government screw-up): Nanotechnology and biotech advances that now read like science fiction. However, this could be the screw-up that kills future growth: The Democrats propose to raise taxes, endangering America’s competitive advantage.

Tax revenue soared after Reagan’s tax cuts as the economy grew. But Congress spent it all – and more. Reagan failed to curb spending and it is spending – not tax cuts – that creates budget deficits.

The stock market edged up about 2% during Clinton’s first two years in office when the Democrats held majorities in both houses of Congress, but climbed at an annual rate of about 18% starting in 1995 when the Republicans took over. The Dow Jones Industrial Average closed above 10,000 in 1999 for the first time in history.

But Clinton deserves some credit: He reappointed Alan Greenspan as Fed chairman and, drawing on strong Republican support, bucked key elements in his party to win passage of the North American Free Trade Agreement, NAFTA, with Mexico, created the World Trade Organization and pushed for China’s admission into the group. Remember that Rep. Richard Gephardt campaigned as a protectionist in 1988 Democratic primaries. But none of these initiatives originated with Clinton. NAFTA and discussions with China started during the tenures of President Reagan and Poppa Bush. Reagan first appointed Greenspan to the Fed in 1987.

Clinton’s prodigious political skills (and innate modesty) allowed him to claim credit for the booming economy of the 1990s – despite the failure of his showcase initiatives during his first two years in office – and create the myth of forceful leadership. Washington reporters, including many who have no interest in Wall Street and have trouble calculating percent change, play a part in this continuing fable. It’s useless to prattle about media bias when neither Bush presented a coherent case for his economic decisions.

Dubyuh’s tax cuts revived the economy after the 9/11 terrorist attacks and would benefit the economy in the future, but he’s apparently incapable of explaining why. Perhaps there’s a fractured syntax gene in the Bush family.

Here’s a thought: Reagan laid the foundation for the nation’s economic boom by taming inflation and cutting taxes. Clinton built on Reagan’s effort after behaving like, well, a Democrat during his first two years in office. Congressional Republicans spent like Democrats and therefore lost their majority in 2006. But the real credit for growth of the nation’s economy goes to the entrepreneurs, venture capitalists, managers, and investors who built it with talent, energy, and a willingness to take risks. Don’t forget the employees who turn the wheels.

If recent history is a guide, we need a president who understands how the market works, has real world experience, can explain the issues concisely and has enough confidence to get out of the way and let American ingenuity flourish.

Fat chance. Most politicians believe they’re indispensable to... everything.