Electing a Clinton won’t recreate the ’90s — Nor should it

Among the many things Hillary Clinton has going for her is more than a hint of nostalgia.

And it’s a shame a subset of U.S. voters persist in a wistful longing for the 1990s (rather than Clinton’s laser-focused intelligence and achievement-packed resume), because the past in this case is very much the past.

Americans, admittedly, miss the ’90s for good reason. Following some missteps, which roughened the first two years of his administration, Bill Clinton adopted his “It’s the economy, stupid” mantra, and placed emphasis on domestic economic policies that led to the first real wage improvements for average workers since before the recessions of the 1970s. His policies were good for the people who didn’t get to become Yuppies under Ronald Reagan and George H.W. Bush — in many cases, the same groups who back either Trump or Sanders right now.

Bill Clinton, along with his Treasury Secretary and his economic advisors, backed programmatic interest rate cuts originally launched by Fed Chief Alan Greenspan to save George H.W. Bush’s presidency. Bond markets loved Clinton’s embrace of the plan, and falling interest rates collided with pent up demand from Baby Boomers eager to either refinance existing mortgages or wade into the trade-up market for newer, larger homes.

By creating demand for building materials and household goods, this monetary-policy-based approach pumped stimulus into the economy in ways the Reagan and Bush era military spending policies never could.

The demographic sweet spot then broadened as those same boomers, becoming concerned about their prospects for retirement, lobbed cash freed up by lower mortgage payments into equity markets. Falling yields for fixed income, and a choice by cable TV providers to fill daytime programming holes with what came to be called investment pornography, further boosted the gravitation toward stocks.

That, of course, led investment bankers to start looking for new companies to bring public. It found them in the form of internet startups founded by tech wizards who’d been idled by the Gulf War recession. Turning the capital taps on full blast made things a little dizzy, but since those ’90s tech startups were prone to hire larger staffs, the rising tide really did lift all boats.

Problem is, Bill Clinton’s trick can’t be repeated. Heavy government borrowing for two (or three, depending on how you count them) global wars and the post 2008 bailouts has meant an inflationary cycle that should have started during the first decade of the 21st Century never materialized.

Which means, a full 24 years after the Fed kicked off its rate easing policy, each incoming president has inherited an economic climate in which the Federal Reserve Chair can’t properly rely on monetary policy to stimulate growth.

Thankfully, both leading and lagging economic indicators continue to clock gradual improvement. The U.S. economy continues to sputter along despite the Fed’s gradual retreat from quantitative easing and a recent tweak interest rate hike designed to test the waters.

The long, long jobless recovery is easing, real wages are beginning to rise, and recent consumer confidence measures show Americans are more optimistic now than they were just prior to the 2008 crash.

The next president must continue the practice of nurturing this gradual recovery. This task requires a measured, thoughtful approach to economic management and the intellectual discipline to maintain a delicate balance. Serious reforms are needed, but they must be saved for when everyone’s back on their feet. The 1990s will never return, but it’s still the economy, stupid.

Philip Porado is a Toronto-based writer and editor and an American living the Canadian dream.