THE AMERICAN ECONOMY IN THE 1990s
By the mid-1990s, the country had not simply recovered from the brief, but sharp, recession of the Bush presidency . It was entering an era of booming prosperity, and do- ing so despite the decline of its tradi- tional industrial base . Probably the major force behind this new growth was the blossoming of the personal computer (PC) .
Less than 20 years after its intro- duction, the PC had become a fa- miliar item, not simply in business offices of all types, but in homes throughout America . Vastly more powerful than anyone could have imagined two decades earlier, able to store enormous amounts of data, available at the cost of a good refrig- erator, it became a common appli- ance in American homes .
Employing prepackaged software, people used it for bookkeeping, word processing, or as a depository for music, photos, and video . The rise of the Internet, which grew out of a previously closed defense data network, provided access to in- formation of all sorts, created new shopping opportunities, and estab- lished e-mail as a common mode of communication . The popularity of the mobile phone created a huge new industry that cross-fertilized with the PC .
Instant communication and lightning-fast data manipulation speeded up the tempo of many busi-
nesses, greatly enhancing productiv- ity and creating new opportunities for profit . Fledgling industries that fed demand for the new equipment became multi-billion-dollar compa- nies almost overnight, creating an enormous new middle class of soft- ware technicians, managers, market- ers, and publicists .
A final impetus was the turn of the millennium . A huge push to up- grade outdated computing equip- ment that might not recognize the year 2000 brought data technology spending to a peak .
These developments began to take shape during Clinton’s first term . By the end of his second one they were fueling a surging economy . When he had been elected presi- dent, unemployment was at 7 .4 per- cent . When he stood for re-election in 1996, it was at 5 .4 percent . When voters went to the polls to choose his successor in November 2000, it was 3 .9 percent . In many places, the issue was less one of taking care of the jobless than of finding employ- able workers .
No less a figure than Federal Re- serve Chairman Alan Greenspan viewed a rapidly escalating stock market with concern and warned of “irrational exuberance .” Investor exuberance, at its greatest since the 1920s, continued in the conviction that ordinary standards of valu- ation had been rendered obsolete by a “new economy” with unlim- ited potential . The good times were rolling dangerously fast, but most