The United States’ economic history has some of its roots in the economic boom that occurred in the nineteen nineties. This boom has been considered by many analysts as the main contributing factor to the further growth of the United States into a colossal, developed and integrated economy that it is today and that accounts for slightly more than a fifth on the world’s economy. The economic boom started with the conclusion of the early nineteen ninety recession and lasted for almost ten years during which the GDP showed continuous improvement. The objective of this essay is to discuss the roots of the economic boom of the nineteen nineties and in the process explain the impact of the economic boom on the American society and its people. Additionally, it will examine the response of the Clinton administration to the globalization of business.
The economic boom was dominated by the evolution of the globalization and the new economy which entailed the high tech sectors of the economy such as the telecommunication industry, the internet and the computer industry. These sectors formed the material basis that accustomed globalization and the developing assimilation of the world economies. Additionally, it was thought by many that the evolution of these sectors implied an essential progression of the country’s productivity after years of dormancy and lethargy. The internet sector in particular created spinoff industries, businesses and services in places where such things never existed: a cyberspace. One could operate a store without necessarily creating a store front; go shopping from the comfort of one’s house and email friends and relatives which was way much cheaper than communicating by phone and letters. All these contributed to the eventual growth and sustainability of the economy. Also, the growth and expansion of the mutual funds, pharmaceutical and biogenetics industries served to diversify the United States economy hence creating jobs. The growth in these sectors also meant that the capability to fight infections which negatively affected the United States’ economy, was enhanced.
The growth of the American free trade which was enhanced by the North American Free Trade Agreement in addition to the growth in the global market facilitated the expansion of economic and monetary prosperity to the Americas and other regions of the world. Moreover, the fall of communism resulted in the growth of Eastern European and Russian markets which provided a larger market to most of the American businesses. During the same period, most economies started liberalizing their economic practices such that fewer taxes were levied on business enterprises and free market economies were created in some regions. Nations became less involved in controlling the economic sectors and instead privatized most business entities thereby increasing the levels of economic competitiveness and business prosperity.
The impact of the boom was that the growth in the stock market which was similar in dynamism to the boom that occurred in the nineteen twenties. Moreover, between the years of nineteen ninety one and two thousand when the growth in economy hit its peak, the Dow Jones Index rose five times while the NASDAQ which is charged with the responsibility of registering the stock value of the economy increased ten times. The stock market boom in various regions of the world began in the year nineteen ninety five and climaxed three years later during the Asian crisis. Additionally, credit growth and development of financial operations became accelerated. The banking credit spread out rapidly to aid the stock market ecstasy and consumption of segments of the populace who profited from the economic boom. The total debt of the United States’ government decreased to about three trillion dollars of which almost a quarter was public, half was corporate and the remaining quarter was household debt. Moreover, many types of non-banking investments flourished, as did activities, particularly in the telecommunications and internet sectors, sponsored with the business enterprise capital.
The increased profitability of various business enterprises and industries led to an overall increase in wages for both men and women especially those who had no more than basic high school certificates. On the other hand, people living in the rural areas were negatively affected by the economic boom in that most of the rural natives migrated to the urban centers reducing the labor force required to plough the farmlands. Growth of the pharmaceutical sector meant the production of better drugs to treat diseases. It also meant the prices of medicines became lower hence more people could afford them. As a result, fewer people succumbed to infections compared to the earlier years. The growth of telecommunication and internet sector led to reduction in transport and communication costs whereby people could communicate cheaply via the use of electronic mails. Also, people could buy or even order goods and services online from the comfort of their rooms. Generally, the real output rose, the living standards of the American people improved, more jobs were created leading to the drop in unemployment levels. Some studies have shown that the drop in unemployment levels led to a decrease in crime rates since the minds of most people who were initially unemployed, found constructive outlets. Additionally, an increase in the production of goods led to decrease of inflation to manageable levels. This led to a rise in stock market: a phenomenon which came to be known as the dot com boom. The public was also given a chance to participate in the affairs of various companies that were developed during the economic boom. This was made possible through the issue of Initial Public Offerings by the High Tech Companies.
The Clinton administration recognized the potential of globalization to harmonize deeds, customs and policies and spur economic prosperity. Therefore, the Clinton administration devised strategies that could enhance globalization by promoting candidness, open access and stability. The administration dropped the policies that were associated with the postwar era and adopted the worldwide, integrative and independent stance of globalization. Moreover, security policies were replaced by economic policies on the United States of America policy plans and agendas making globalization the main focus of the administration. Free markets were tied to democracy and economic diplomacy was prioritized over the foreign policy. All these served to support and strengthen the market democracy all over the world. The Clinton administration further supported and sponsored fundamental research in the development of high-speed computers, efficient telecommunication networks, better transport systems and safe aviation network, all critical to the organized world of globalization. Moreover, the administration’s dedication to market opening, trade deregulation and liberalization of finance supplied the policy drive that made it possible for a range of global accords and arrangements encouraging an open and friendly world order. Thus have technology driven economic globalization and worldwide diplomacy been connected ever since the end of the American Civil War. The Clinton administration also encouraged most emerging and developed economies to deregulate most of their capital markets and open their doors so that financial institutions like banks could access them. The administration predicted that such a move would enhance the rapid expansion of globalization to all sectors and regions of the world. It is worth mentioning that the Clinton administration stance on globalization served to strengthen the American economy in the nineties even though some critics blame it for the recession that occurred thereafter.
This essay has discussed the economic boom and its impact on the American people. Additionally, it has highlighted the Clinton administration’s stance it took on globalization. It is worth mentioning that the economic boom of the nineteen nineties provided a template that has continued to propel the American and even the world economy to date. Therefore, the history associated with it should be carefully preserved so that the future generation can access and use it.