On September 5th, there will be a speech given by Bill Clinton at the Democratic National Convention in Bank of America arena in Charlotte, North Carolina. What is one of the messages that Bill Clinton will be giving? Maybe we can obtain a preview based on an ad that has been put out feature him.
This ad is called “Clear Choice”, and was paid for and approved by the Barack Obama campaign
So things were good under Clinton for the economy and people were living well, right? We want to have those good times back. So what do we do Bubba? Vote for Obama because things were good under my administration and they will do the same thing if you elect Barack Obama. But here is something that you do not hear a lot about from those great years under Clinton’s times. They were predicated under economic bubbles, which all exploded after his administration, which we are living through those busts now!
The Dot.com Bubble came up under the Clinton administration in the mid-90’s and crashed at the turn of the century, which happened around the time that Clinton left office. This was based about IPO’s (initial public offering) with internet companies that were to go public on the market. People were investing money or capital into something with nothing to really offer in products or services of value. This all came about to help push those economic good times under the Clinton administration, that Clinton is going to try to bring up and bring to the forefront of the Obama re-election campaign. Want to find out more about this stock bubble?
Here is a talk from an author on the history of the dot.com bubble. Dot.Con: The Greatest Story Ever Sold.Frontline, from PBS, also did a story called Dot.Con, but the video is no longer on their website.
Here is one of the things that were involved in such a good economic condition that Clinton can point to, but actually has a serious trade-off. “[T]he stock market booms and busts are often accompanied by the credit market booms and busts. A boom is often driven by a rapid expansion of credit to the private sector accompanied by rising asset prices. Following the boom phase, asset prices collapse and a credit crunch arises. This leads to a large fall in investment and consumption and an economic recession may follow.”(*)
Enron is also a great example of all the problems with that started under Clinton’s administration, which was a huge story, if not repeated with the housing bubble.
What people also fail to realize is that Clinton did something when he signed into law, and helped to create, NAFTA (North American Free Trade Agreement). Because of this law he helped to make it easier, i.e. give incentive, for producers of manufacturing to take their services overseas. This directly leads to less jobs for Americans who are unskilled workers and leads to less products that the Americans would export to other countries. Guess what? This is one of the serious issues that confronts the American people now with creating jobs. A basic principle of economics is that ” In nations where workers can produce a large quantity of goods and services per unit of time, most people enjoy a high standard of living; in nations where workers are less productive, most people endure a more meager existence. Similarly, the growth rate of a nation’s productivity determines the growth rate of its average income.”(**)
These production jobs that left America because of this treaty means Americans have less jobs in the states for people to take. And when those companies are giving incentives to be efficient in their production, the living wages of people rises. Less production jobs means less opportunity for people and also leads to dropping of living wage. What are we going through now? Living wages are dropping and we import more than we export. So the middle class gets crushed with loss of living wage because production is not here or inefficient.
Do we need to bring up the Housing Bubble? But let us do that anyway.
Fannie and Freddie Mac are government programs, and they have the market power when it comes to housing economy. And Clinton signed the the Community Reinvestment Act, which itself gave incentives for banks and people to invest money into situations where there is some serious downsides. The government gave incentive for banks to invest in something that no one would do if they were not giving these government incentives, let alone people themselves. One of the problems was also Clinton signing into law the repeal of Glass-Steagall.
There was even a case in which this could have been stopped, or regulated, before we had to suffer though the times that we are now. Brooksley Born was the former head of the Commodity Futures Trading Commission. In the mid-90’s she asked for some oversight and was never given this oversight. She was even stopped by some in the FED and Treasury. Clinton was told to ignore what she was saying, and here we are now.
Learn more from this Frontline video called “The Warning“.
Keep in mind that Clinton’s great economic conditions he will talk about were predicated on two economic bubbles. People do well when bubbles rise, but it is always the crash that makes one take attention, like the current conditions we have now. Welcome to the Clinton recession.
(**) Principles of Microeconomics pg. 13