The Clintonites were wrong -The "new economy" was an illusion.

[kpete]

U.S. Economy
Monday, Jan 4, 2010 20:25 EST
The Clintonites were wrong
The "new economy" was an illusion. Neoliberals have to admit that before they can stop the bleeding

Remember "the new economy"? In the second half of the 1990s, after years of stagnation, the U.S. economy briefly boomed. Members of the New Democrat wing of the Democratic Party, associated with the Democratic Leadership Council (DLC) and the Progressive Policy Institute (PPI), made a number of claims.

First: The source of the boom was not a bubble associated with tech stocks, but rather a permanent increase in U.S. productivity growth produced by the information technology (I.T.) revolution. Second: Foreign money was pouring into the U.S. as a result of well-informed expectations that the U.S. would lead the world in economic growth for a long period to come. Third: Increased inequality in the U.S. was a result of the global market rewarding skilled Americans at the expense of unskilled Americans, and could be cured by more higher education.

Something like this was the cheerful and optimistic New Democrat party line in 2000, the last year of the Clinton administration. How do things look from the perspective of 2010?

It is now clear that the boom of the second Clinton term was driven by the temporary tech stock bubble. It did not mark the beginning of a "new economy" fundamentally different from the old.

more:
http://www.salon.com/news/us_economy/index.html?story=/opinion/feature/2010/01/04/new_economy

[ProSense]

1. You mean the vaunted Clinton economy was an illusion?

You don't say.

[HeresyLives]

2. That's not true.

There is definitely a new economy; it's lightyears away from the factory floor, and has nothing to do with 'productivity'.

It doesn't take place on the stock market either.

[starroute]

3. It's both true and not true

Yes, there's a new economy that's based on information and creativity rather than on the old extractive industries and heavy manufacturing.

But no, there was no economic miracle in the 90's that ensured it would be all crumpets and tea from here on in. In fact, the new economy has made for a lot of dislocation and technological unemployment.

So rather than blame Bill Clinton for deceiving all of us, it would be helpful to decide which part was true and which wasn't -- and where we can go from here.

[HeresyLives]

5. Agreed. Not in the 90s.

But that was a deliberate choice. And yes, there will be a lot of 'dislocation' during the switchover. And it will take years.

In the meantime you have to help those who cannot take that leap forward, and given the current debt and deficit, that's not possible either.

[mod mom]

27. It WAS a new economy for the Clinton crowd to get rich fast and leave the economy

for the rest of us in disaster. I know they do not deserve sole blame but their policies (repeal of Glass Steagall, NAFTA, MFN Status for China, Outsourcing etc played a major role in where we are today.

[TheBigotBasher]

4. I highlighted this a little while back.

As a result of "third way economics", adopted by Bush I, Major, Clinton, Blair and Bush II, the working people of the Anglo American economies were screwed over.

The Stock Exchanges collapsed, money poured in to the property markets. Property got removed from the inflation index. House prices started to bubble. To those that owned property, it was great. All kinds of expensive things were purchased on the back of ever rising capital values. It did not matter that pay was not rising.

To those who had not bought, fuck you, lie to get a mortgage.

Then when the bubble collapsed, they blamed the "liar loans".

Sick. Sick. Sick.

[HeresyLives]

6. I have no idea what you consider the 'third way',

but neither Bushes, Major or Clinton practiced it. Blair had a half-assed version of it, or claimed he did.

[dflprincess]

7. Perhaps the poster meant "third world economics"?

Because that's where we're headed.

[HeresyLives]

8. I doubt that.

And the US doesn't need to head to third world economics, again it's a choice.

Staying on the factory-work kick will ensure you get there tho.

[XemaSab]

11. The "Third Way"

refers to DLC policies.

It's a repudiation of progressive policies by supposed democrats.

[HeresyLives]

12. Ahh well then, different idea altogether.

The Third Way means to use a combination of public and private ownership, whichever works for any given industry/business. For example a utility is public, a clothing store is private.

Thank you for the explanation...I was mystified as to how Bush was doing this!

[Romulox]

17. You mean like mandating everyone buy a private product for the "public good"?

:hi:

[Romulox]

16. Bill Clinton was certainly not a traditional Democrat. His ideology was "triangulation"

I couldn't care less whether you parse that to be "truly" Third Way. It's meaningless.

[blues90]

9. It's all a damn illusion

It has been for decades. Do you actually think for a second your vote counts? We lost this conntry years ago now it's being realized.

[dkf]

10. Problem is their education is outclassing our education

We will be the ones left behind

[OHdem10]

13. Actually examine closely and you find it simply reinforces the

GOP move to the right.

[HeresyLives]

14. The new economy??

I must be misunderstanding you.

[MisterP]

15. thing is, neoliberals are messianic: they believe that once freedom and capitalism break out

a la Fukuyama, things can never go downhill again, because "at last we're free"; thus, they can celebrate "ending welfare as we know it" by treating recipients as criminals who have to "work off their debt to society." thus, when the economy goes south (as with the--admittedly exaggerated--dot-com bubble, Enron looting their employees' retirement, the economy smothering over 2001-10, etc.) people are out on the street or living in crap conditions (and not buying anything). in the vein of Thatcher and Norman Tebbit, they want welfare to be agonizing and drive off people, and provide for the barest survival in a slum.

that's why neolibs embrace "cyborgs," nanotech, the "telecosm," Monsanto, etc.: they whip themselves up into a frenzy over something if it's "dynamic," never let it go, and hysterically slander anyone getting in the way of Progress (I bet that in the 2060s they'll be ranting that Marxism is outdated in this go-go world, and that the AI gods will be coming to rapture us up from the planet that they're increasingly polluting)

[EFerrari]

18. Of course. Not challenging Raygun has had a price

and the people who didn't challenge him or the course he set this country on aren't paying it. We are.

[moondust]

19. It wasn't entirely a bubble.

There was a global tech boom in the 90s that created a lot of new tech jobs that weren't just about hype and "irrational exuberance." Unfortunately that diverted attention from and eased some of the pain of offshoring lots of "old economy" jobs. Still not so bad until they started offshoring the new tech jobs as well mostly during the Bush years. Now what?

[Romulox]

25. This is revisionism. We were told -it didn't matter- if "old economy" jobs were outsourced--

in fact, we were told we didn't want those jobs to begin with!

But we all noticed. :hi:

"Still not so bad until they started offshoring the new tech jobs as well mostly during the Bush years. "

LOL. The whine of the "moderate": but it's my ox that's been gored this time! :eyes:

[moondust]

32. I always knew it was a mistake

to ship all those jobs offshore no matter what you wanted to call them--"old economy" or "new economy" or something else. The sense of optimism in the 90s that was bolstered by a booming stock market and Help Wanted signs everywhere obscured the hard reality of losing all those "old economy" jobs and that has only been exacerbated by the subsequent loss of many "new economy" jobs during the Bush years. Those new tech jobs were what people were banking on for their kids' futures.

[Kolesar]

20. The stock market boom of the 1990s was driven by Greenspan-ish unregulated derivatives

That is how I understand it.

I am not with Michael Lind on this:

The moment when much-hyped alternative energy sources like wind and solar become competitive with fossil fuels and nuclear energy seems to perpetually recede into the future. The all-renewable energy sector is 30 years away -- and always will be.

Wind power is competitive with nuclear and gas fired generation. Wind is competitive with new coal plants. Coal fired electricity from old plants that have already been amortized (paid off) is cheaper than wind power, but those plants won't last forever.

[mmonk]

21. I remember it well. It was a time all economic principles were claimed

to be moot now and the stock market climb would never end or crash again.

[Doctor_J]

22. Hartmann blames the whole thing on Clinton too

BS. His little bitty tax hike on the hyper-wealthy was an excellent move, and the most he could do with the right-wing media in control.

[JoeyT]

28. Were the media going to burn him at the stake?

No, it was the most he could do and remain everyone's buddy.

[lib2DaBone]

23. There is a new economy out there.. but we are going 180 degrees in the wrong direction..

We need 30 Million new jobs just to be at full employment in the United States. 30 Million!

Obama should have done an about face.. and started on a high-tech high-wage economy-building project at home to get those 30 million jobs.

1. Bring all troops home... NOW

2. Kill NAFTA and CAFTA

3. Reign in the Banksters.. Bring Back Glass-Steegal. Impose a $1 Tobin Tax on all trades.

4. Get rid of the Fed. Get control of our money. Offer "Interest Free" loans to businesses (big and small) to re-build.

5. Expand Medicare for ALL and raise the minimum wage immediately to $15 an hour.

6. Nationalize the car companies. We are going to need their production lines and tool and die capabilities to rebuild.

7. Start a massive public works project for high speed rail, road repair, bridge repair, electrical grid repair, school repair, wind farms, alternate energy. There is a potential 30 million jobs almost overnight.

8. Offer free advanced education for those interested in Mathematics and Engineering.

9. Repeal Taft-Hartley... promote Union and livable wages for all. Start a race -to-the-top. NOT a race-to-the bottom.

10. And finally, KIll the TSA, end the WOD, and keep the lobbyists whores as far away from Capital Hill as possible.


There is the Hope and Change out there.. there IS an answer. But what do we get in reality? We get Hillary Clinton on TV selling the War in Yemen.. as she spins on the Fruit-of-the-Boom Bomber as a PR Blitz for her war machine. WTF?

[Raster]

24. This is the post I want to K&R!

:applause:

[Desertrose]

36. +1

Great post!!!!!

[invictus]

26. K&R

[Tierra_y_Libertad]

29. Not so much an illusion as a devastating flop.

[glitch]

38. Not for everybody.

Recommend reading The Shock Doctrine by Naomi Klein :scared: if you haven't already.

[aldo]

30. Yeah, but the Clintons are now worth millions

Their foundations worth hundreds of millions. They were well rewarded for selling out America and the middle class.

[LeftHander]

31. WRONG!

The GOP was in power in congress in the second half of Clinton...

They passed and Clinton gave into all kinds of deregulation.

Then they cheated and got W in the WH on the tail of a scandal.

The first goddamn thing W did was send up a 1.9 Trillion dollar tax cut and then went on vacation as people were planning to cash in bigtime... (LIHOP)

911 happened and everything went to shit. The Republicans were in a awesome position to take advantage of the collective national fear and they sold us the Iraq war that broke us. All the while they shoveled the the regulations under the carpet and threw money at wall street. the wealthy ripped as much money from the middle class as they could in 8 years of GW bush.

The GOP took a BUDGET SURPLUS and turned it into the biggest deficit ever.

W's fucked up reign fucked up this country.

That salon article is full of Right Wing garbage. Blame Clinton 8 years after we closed the WORST PRESIDENCY EVER.

Had BUSH not been asleep or better not "elected" WE WOULD BE SO MUCH BETTER OFF NOW!!

BUUUULLLLSHIIITTTT ARTICLE!!!

[Greyhound]

33. And then they stabbed us in the back.

Just as this new economic engine was beginning to gain real traction, Clinton & Co. gave it away so that we could have a few billionaires instead of millions of families with a measure of security.
:kick: & R

[kpominville]

34. CORRECT!

I vividly remember Clinton telling Americans to go get retrained for the "New Economy" (i.e. the Internet) and that the "Old Economy" (i.e. Manufacturing) was never coming back. Then 10 years later all the "New Economy" jobs got outsourced JUST LIKE THE "OLD ECONOMY" jobs did. The result = "Weak consumer demand" which, because of the abuse of derivatives, led to the global economic crisis.
The IT industry which was the heart of the Clinton economy has been gutted of American workers who have been replaced by legions of cheap, foreign workers on H1B Visas. I watched it happen right here where I work at one of the "big three" auto manufacturers. The offered "early retirement" to all their American workers and either sent their job to India or replaced them with more people from India living 10 people to 1 apartment because they are making so little. Those few Americans who still have jobs are very fortunate and struggle every day to keep out jobs by being more competent than our foreign competition.

[bobthedrummer]

35. "Inconvenient truths about the New Democrats, the Third Way, Democratic Leadership Council, etc"

(archived DU thread and part of my sentiments about the Clintons and their influence on The Democratic Party)
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x2973191

[Cleita]

37. I think Casino economy describes what we have today best.

Everything in our economy today is a bet on Wall Street.