Legacy of the Clinton Bubble

In: Dissent: a journal devoted to radical ideas and the values of socialism and democracy, Band 55, Heft 3, S. 41-50

Abstract

Examines how President Bill Clinton's economic policies generated a bubble economy (including stock market & housing bubbles) rooted in the Washington Consensus & are at the heart of current US economic woes. Attention is given to Clinton-era deregulation of the financial marketplace, the Federal Reserve's use of interest rates as its key policy tool, the replacement of command-&-control regulation with risk-based regulation under Clinton, & the impact of the Gramm-Leach-Bliley Financial Services Modernization Act of 1999. How the Bush administration inherited the bubble economy from Clinton is outlined, & the hypocrisies laid bare by the current market panic are identified. This Washington Consensus crisis reveals the necessity for the kind of prudent government financial regulation & reined in Federal Reserve seen in the post-WWII years. Adapted from the source document.