7 ms·

Clintons internet bubble?

maxxxxx 8y ago
During Clinton's time there was a huge run-up in the stock market fueled b a lot of internet companies. Clinton got all the credit for the growth during that time and then Bush suffered through the predictable collapse.
- salviasloth 8y ago
  He was making it sound like the bubble was caused by specific Clinton era policies. I'm pretty sure the dot com bubble was largely just a speculative bubble.
  - ohhellno 8y ago
    Al Gore invented the internet as part of that government.
- mhneu 8y ago
  Luckily for us, Clinton moved the budget toward balance during a good economy. So when the bubble burst, Bush was able to stimulate the economy and cut taxes. The current tax cut increases the national debt during a good economy. So this irresponsibility limits America’s options when this bubble (if it exists) bursts.
  - adventured 8y ago
    The current tax cuts are a trivial part of the deficit problem (to note, I'm against the personal income tax cuts they passed). The US deficit was going to $1 trillion regardless of the tax cuts. The forecast for a deficit explosion due to entitlement costs, long predates the Trump tax cuts. Half of those cuts reset. The primary item in the other half, the corporate income tax cuts, were a necessity to compete with the rest of the planet that has a more typical ~20% rate (including Europe, which has the lowest corporate income tax rates of any region). The deficit is going to $1 trillion, the tax cuts are an average $50-$75 billion per year of that problem over the next ten years. The tax cut is meaningless in that picture. It'll add at worst a trillion to the $30 trillion pile of public debt that will exist in 8-10 more years.
    - forapurpose 8y ago
      Could you provide some factual basis for this? For example, my understanding is that the corporate tax burden in the US was lower than other advance economies; one particular tax, which few paid in full due to loopholes, etc, was higher.
    - mhneu 8y ago
      It's a $3 trillion tax cut over 10 years. They get to $1B by finding an "offset" of $2 billion, which assumes a very optimistic growth estimate, which there was political push to develop. In particular, that offset assumes there is no bubble to pop. Good luck to the US. The yearly budget is $3.8T. Of that, only $1B is discretionary. $3T of tax cuts is three years of the entire discretionary budget. The cut is huge. And that cut wasn't Keynesian stimulus - it came during a good economy. Good luck to the US.
  - notadoc 8y ago
    > when this bubble (if it exists) bursts. This time is not different
- forapurpose 8y ago
  > During Clinton's time there was a huge run-up in the stock market fueled b a lot of internet companies. I'm not sure the dot-com boom and bust affected the rest of the economy nearly as much as it affected our industry. If there was a recession, it was the smallest in decades: https://tradingeconomics.com/united-states/gdp-growth-annual https://tradingeconomics.com/united-states/gdp-growth-annual
  - mywittyname 8y ago
    The recession happened just before Bush's election (officially starting in March 2000). The .com bust had a huge impact on the tech sector, but the Enron & Worldcom scandals hit the rest of the economy hard. It was a modest recession, but it wiped out a huge amount of wealth held by "main street" investors. It was bad enough that Bush, a very, very pro-business president, signed into law the Sarbanes-Oxley Act, which is widely criticized as an onerous and needless regulation by conservatives.
jonwachob91 8y ago
https://en.wikipedia.org/wiki/Dot-com_bubble https://en.wikipedia.org/wiki/Dot-com_bubble
- salviasloth 8y ago
  Yeah I know what the dot-com bubble is, thanks.
adventured 8y ago
During the second half of the Clinton Admin, there was an extreme stock market bubble, which began to crash at the end of his second term. Bush inherited a guaranteed recession, and then 9/11 occurred on top of that context. Which then led the Fed to make stupid mistakes on interest rates, which helped spur immense asset inflation in the real estate sector, which then collapsed, which led to the great recession, which got Obama elected with a Dem super majority to go with it, which delivered the ACA. Then the Fed lowered interest rates to basically zero, or below zero when QE is considered, for the better part of a decade to combat the great recession, which spurred / enabled extreme corporate debt binging, extreme government debt binging, and re-inflated both the stock market and real estate asset bubbles. The debasement of the dollar due to the Fed's abusive interest rate policies during the ~2001-2004 period also dramatically spiked both healthcare costs and college costs, while eroding US purchasing power and the US standard of living (represented by the simultaneous global skyrocketing of GDP in all other nations, as well as being represented in the epic commodity bubble (commodities are mostly priced in dollars)). Now we're waiting for the fallout from another round of idiotic Fed policies. All in the name of initially trying to avoid or skate around a rather mild recession in the GW Bush first term - because no politician can tolerate a recession these days - the assholes at the Fed delivered more than a decade of immense suffering with more to come.
- creaghpatr 8y ago
  100% agree, I'd put the blame on the Fed before Trump, Obama, Bush, or Clinton. If I had to choose it would be Bush for being president when TARP was passed but really the blame there falls on the Congress.
  - maxxxxx 8y ago
    You are probably right but people tend to give credit to presidents when things go well so they also should get the blame. Justified or unjustified.
  - mywittyname 8y ago
    TARP would have been signed by Obama (or McCain). The fact that the US has enjoyed a economic boom post 2008, while the rest of the world struggled for several more years (especially Europe), can be considered evidence that it was the correct action to take at the time. The current expansion is the second longest in modern history.

During Clinton's time there was a huge run-up in the stock market fueled b a lot of internet companies. Clinton got all the credit for the growth during that time and then Bush suffered through the predictable collapse.

salviasloth 8y ago
He was making it sound like the bubble was caused by specific Clinton era policies. I'm pretty sure the dot com bubble was largely just a speculative bubble.
- ohhellno 8y ago
  Al Gore invented the internet as part of that government.
mhneu 8y ago
Luckily for us, Clinton moved the budget toward balance during a good economy. So when the bubble burst, Bush was able to stimulate the economy and cut taxes. The current tax cut increases the national debt during a good economy. So this irresponsibility limits America’s options when this bubble (if it exists) bursts.
- adventured 8y ago
  The current tax cuts are a trivial part of the deficit problem (to note, I'm against the personal income tax cuts they passed). The US deficit was going to $1 trillion regardless of the tax cuts. The forecast for a deficit explosion due to entitlement costs, long predates the Trump tax cuts. Half of those cuts reset. The primary item in the other half, the corporate income tax cuts, were a necessity to compete with the rest of the planet that has a more typical ~20% rate (including Europe, which has the lowest corporate income tax rates of any region). The deficit is going to $1 trillion, the tax cuts are an average $50-$75 billion per year of that problem over the next ten years. The tax cut is meaningless in that picture. It'll add at worst a trillion to the $30 trillion pile of public debt that will exist in 8-10 more years.
  - forapurpose 8y ago
    Could you provide some factual basis for this? For example, my understanding is that the corporate tax burden in the US was lower than other advance economies; one particular tax, which few paid in full due to loopholes, etc, was higher.
  - mhneu 8y ago
    It's a $3 trillion tax cut over 10 years. They get to $1B by finding an "offset" of $2 billion, which assumes a very optimistic growth estimate, which there was political push to develop. In particular, that offset assumes there is no bubble to pop. Good luck to the US. The yearly budget is $3.8T. Of that, only $1B is discretionary. $3T of tax cuts is three years of the entire discretionary budget. The cut is huge. And that cut wasn't Keynesian stimulus - it came during a good economy. Good luck to the US.
- notadoc 8y ago
  > when this bubble (if it exists) bursts. This time is not different
forapurpose 8y ago
> During Clinton's time there was a huge run-up in the stock market fueled b a lot of internet companies. I'm not sure the dot-com boom and bust affected the rest of the economy nearly as much as it affected our industry. If there was a recession, it was the smallest in decades: https://tradingeconomics.com/united-states/gdp-growth-annual https://tradingeconomics.com/united-states/gdp-growth-annual
- mywittyname 8y ago
  The recession happened just before Bush's election (officially starting in March 2000). The .com bust had a huge impact on the tech sector, but the Enron & Worldcom scandals hit the rest of the economy hard. It was a modest recession, but it wiped out a huge amount of wealth held by "main street" investors. It was bad enough that Bush, a very, very pro-business president, signed into law the Sarbanes-Oxley Act, which is widely criticized as an onerous and needless regulation by conservatives.

jonwachob91 8y ago

https://en.wikipedia.org/wiki/Dot-com_bubble https://en.wikipedia.org/wiki/Dot-com_bubble

salviasloth 8y ago
Yeah I know what the dot-com bubble is, thanks.

adventured 8y ago

During the second half of the Clinton Admin, there was an extreme stock market bubble, which began to crash at the end of his second term. Bush inherited a guaranteed recession, and then 9/11 occurred on top of that context. Which then led the Fed to make stupid mistakes on interest rates, which helped spur immense asset inflation in the real estate sector, which then collapsed, which led to the great recession, which got Obama elected with a Dem super majority to go with it, which delivered the ACA. Then the Fed lowered interest rates to basically zero, or below zero when QE is considered, for the better part of a decade to combat the great recession, which spurred / enabled extreme corporate debt binging, extreme government debt binging, and re-inflated both the stock market and real estate asset bubbles. The debasement of the dollar due to the Fed's abusive interest rate policies during the ~2001-2004 period also dramatically spiked both healthcare costs and college costs, while eroding US purchasing power and the US standard of living (represented by the simultaneous global skyrocketing of GDP in all other nations, as well as being represented in the epic commodity bubble (commodities are mostly priced in dollars)). Now we're waiting for the fallout from another round of idiotic Fed policies. All in the name of initially trying to avoid or skate around a rather mild recession in the GW Bush first term - because no politician can tolerate a recession these days - the assholes at the Fed delivered more than a decade of immense suffering with more to come.

creaghpatr 8y ago
100% agree, I'd put the blame on the Fed before Trump, Obama, Bush, or Clinton. If I had to choose it would be Bush for being president when TARP was passed but really the blame there falls on the Congress.
- maxxxxx 8y ago
  You are probably right but people tend to give credit to presidents when things go well so they also should get the blame. Justified or unjustified.
- mywittyname 8y ago
  TARP would have been signed by Obama (or McCain). The fact that the US has enjoyed a economic boom post 2008, while the rest of the world struggled for several more years (especially Europe), can be considered evidence that it was the correct action to take at the time. The current expansion is the second longest in modern history.