Calvin Coolidge and Bill Clinton

[Kurt_and_Hunter]

Calvin Coolidge President 1923–1929. Oversaw a vibrant 1920s economy featuring a stock bubble that subsequently imploded.

Bill Clinton President 1993–2001. Oversaw a vibrant 1990s economy featuring a stock bubble that subsequently imploded.

Two of the most effective federal budget balancers we ever had.

Does fiscal "responsibility" create undesirably low interest rates that fuel bubbles?

(Merely a discussion topic question. I have no theory of the thing.)

[joeybee12]

1. The correct comparison is Coolidge and Bush...Like Bush's 00's, the 20's

were a false "vibrant" economy...wealth only on paper, speculation, no increase in real wages...during Clinton's time the economy was actually strong and we were close to virtual full employment at times...all through Bush's years the economy lost jobs and wages fell.

[Warpy]

5. It was wealth mostly at the top floated on an ocean of debt at the bottom

as working people who wanted in on the bubble took out 96% margin loans to buy stocks, exactly the way they took out no interest "creative financing" loans to get in on the housing bubble in the 00s.

Meanwhile, other assets were failing--farmland and housing in the 20s and equities in the 00s, and as they failed, jobs were starting to disappear, as in the 7 years of "jobless recovery" we had before the 2008 crash.

If we were assigning Depression era roles, I'd say Clinton was the first 4 years of Coolidge, while Stupid was his last 4 years plus the 4 years of Hoover, only he didn't do as much good as Hoover did.

[av8rdave]

2. In the case of Coolidge, the collapse occured at the very end of his term

In Clinton's case, a subsequent pResident and his policies took a good 6 or 7 years to cause the collapse.

While the root causes of the implosion may have been festering for some time, (as they were in the 20s), it's not a very accurate comparison IMO.

[Kurt_and_Hunter]

3. My view of that is controversial, but...

My view of that is controversial, but...

I believe that we had a broad, shifting bubble in investment vehicles from 1996-2007. The 1990s stock bubble was seriously huge--the largest bubble ever. It was more than sufficient to take down the US economy for at least a decade. But it didn't.

Also, bubbles are supposed to be generational phenomena that change the behavior of the bubble generation. One burned, twice shy. But after the stock-bubble burst people still thought it natural that some investment class earn an easy and reliable 10-15%, which is an impossibility.

I don't think it ended in 2000. There was a ton of hot bubble-money that pulled back from stocks, looked around, and then piled into real estate.

It went from stocks to real estate to oil to gold then there was nowhere left to run. All the funny money was cornered and the system came down.

The two largest bubbles in history occurred in the same economy only five years apart? I canot buy that. Truly burst bubbles create bubble aversion. It had to be one big meta-phenomenon. A total asset bubble.

That's how I think of the thing.

[wuushew]

4. Clinton is no economic genius

the 1990's more or less ran on autopilot thanks to steady or declining energy prices. Something that will never happen again thanks simple facts of geology.


The 21st century demands steady state economies and social welfare states, not fantasies of perpetual growth and their short term poltical gains.

[McCamy Taylor]

6. Try Clinton as Wilson, Bush as Coolidge.