5.Clinton and Greenspan Bubble
When Alan Greenspan ended his run as the Federal Reserve chairman in 1999, he cemented his spot in history and linked himself forever to the Clinton administration. It was during the Clinton years in the White House that Greenspan made his biggest mistakes. Alan Greenspan relied on his rationality of the current market, which eventually would be his undoing. During the recovery of the recession in the early 1990’s, he decided to keep the monetary policy tight as a basic anti-inflation safeguard. The high-tech economy, in association with productivity improvements, caused Greenspan to consult with Clinton and start a reversal of course. The cheap credit during this administration initiated a Wall Street boom, resulting in many investors packing on debt by purchasing shares in stocks, thinking that the price of those shares would rise indefinitely. Despite the administration warning the public of irrational exuberance, the buying boom ultimately turned into a huge bubble. The result was that the Feds had to step in and raise the interest rates, creating a brief recession and collapsing the dot.com bubble. The u-turn of the chairman and the support of the administration did nothing to slow down the collapse.
These horrible economic mistakes Democrats made should be used as a measuring stick for helping navigate the troubled financial waters in the near future. History repeated itself when the real estate market collapsed, just like the stock market of only a few years earlier. The Democratic Party and this country as a whole are seeing small strides in economic recovery as of late, something the candidates can build on and make this country great once again.