Hillary Clinton loves to tout her husband's credentials in terms of the economy. She uses the economic prosperity of the 1990's, during Bill Clinton's reign as president, as the reason to trust her on the economy. She talks about how great it will be to have Bill as a policy advisor. Well, let's look at reality.
The reality is that economies go through good times and bad times. Presidents will take credit for good economic times and take blame for bad economic times. Often, the president has very little to do with what happens in the economy. There is no doubt, at least on the surface, the U.S. economy did pretty well during Clinton's time in office and when he left office our government had a surplus. (As we all know, Bush II did away with that surplus rather quickly through things like tax cuts for the wealthy, un-funded drug coverage and wars. Then, he left office with the country with a huge debt and an economy in complete meltdown. But that's another story).
The reason the economy did so well during the Clinton administration is that he happened to be president during the internet bubble and start of the housing boom. He had nothing to do with the fact that a lot of smart and creative people figured out new ways to use technology. Some will say that the easy money policies of the Clinton-Greenspan era helped fuel the rapid increase in technological breakthroughs, and there is some truth to that. However, those advancements would have happened anyway. It might have been at a slower pace, but may also have minimized or even avoided the bursting bubble and its aftermath. During the buildup of that internet bubble people and companies could get lots of money without possessing any real business skills or even sound ideas. Many of the internet startups simply spent a lot of money and went out of business. It was nearly impossible to lose money in the stock market. Day-traders, without any real knowledge of business or market principles, were making millions of dollars because, for a long time, the stock market only went up. Many people bought homes they could not afford because loans were too easy to get, often without even having their incomes verified. These were not the signs of a sound economy. These were signs of a growing economic bubble that had to burst.
Bill Clinton was definitely a friend of Wall Street. He signed off on the repeal of Glass-Steagall, an act put in place after the great depression to separate commercial banking from investment banking. This act was intended to help insulate the average person from bad decisions made by investors on Wall Street. He also signed the Commodity Futures Modernization Act which exempted some of the wildest new financial investment vehicles from regulation. These things, coupled with low interest rates and an unsound lending environment, are what contributed to the financial meltdown that finally occurred in 2007 and 2008. It also added to increased income inequality, with investment bankers getting richer while the rest of us have been left behind. Wall Street and investment bankers loved this environment. It allowed them to run wild and make million and billion dollar fortunes. Unfortunately, it was at the expense of the general economy and the average person. Obviously Clinton did not do these things because he wanted to help set the table for the financial crisis. But these were decisions he made while listening to his economic advisors, all of whom came from Wall Street. Now we have even larger financial institutions with no way to insulate the average person from their poor decisions which are sure to eventually come. And when that time comes it will be we taxpayers who will be on the hook to bail out these institutions once again.
So when you hear Hillary refer to the good old days of the Clinton economic era, think about the reality of that time. No wonder Wall Street loves Hillary and contributes significantly to her campaign.
Remember. As teenagers, you will be living with and paying for decisions made during this election cycle for the rest of your lives. Bernie Sanders is the only significant candidate who is talking about real change when it comes to reigning in the influence, greed and excesses of the financial industry. Like he said in the last debate, the Wall Street bankers will probably not like him.