As a deep recession in the early 1990s lifted, the economy went on a tear. American corporations, increasingly operating in a multinational context, dominated the global economy. Taking advantage of remarkable advances in communications technology, corporations found it easy to do business in a world smaller than ever before. The easy availability of money encouraged middle- and upperclass Americans to invest in the stock market and mutual funds, often enabling them to realize large gains, at least on paper. The troubling budget deficit that had soared in the Reagan administration disappeared as the government, guided by Democratic president Bill Clinton, ran a surplus for the first time in years. The unemployment level dropped, yet for Americans at the bottom of the economic ladder, some of them immigrants from abroad, conditions remained difficult. Many of the jobs now available as a result of the relentless shift toward a service economy paid little more than the minimum wage, and people who dreamed of a better life still found themselves struggling to survive. Meanwhile, the global scene shifted abruptly. The cataclysmic events in Europe that ended nearly a half century of Cold War required the United States to redefine its international role. This led to substantial debate as both Republicans, who controlled Congress for most of the 1990s, and Democrats, who controlled the White House for the same period, voiced reservations about playing an interventionist, and potentially expensive, role abroad. Then, as the new decade began, the United States confronted the menace of terrorism on a scale never known before. The attacks that destroyed the World Trade Center towers in New York City and left a gaping hole in the Pentagon in Washington, D.C., led to a war on terrorism and a fundamental reconfiguration of American foreign policy. This chapter describes demographic shifts, reflected in the census of 2000, that changed the face of the American people. It highlights the revival of the economy that brought unprecedented prosperity for many but still failed to accommodate the needs of less fortunate Americans, and then records the even greater suffering as the economy fell apart. It examines the political struggle between Democrats and Republicans that led to a debate about democratic values and brought the second presidential impeachment in American history. It notes the bitterly contested national election of 2000 and its conservative aftermath. Finally, it explores the continuing effort to define the tensions surrounding the American role in the turbulent and terrorist-dominated post-Cold War world.
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