Globalization and the new economy
During Bill Clinton's presidency American political discourse focused mostly on domestic issues. While the early 1990s saw the US economy mired in recession, a recovery began starting in 1994 and began accelerating thanks to a boom created by technology. The Internet and related technologies made their first broad penetrations into the economy, prompting a Wall Street technology-driven bubble, which Federal Reserve chairman Alan Greenspan described in 1996 as "irrational exuberance". By 1998, the economy was booming and unemployment below 5%.
After the dissolution of the Soviet Union in 1991, the United States was the world's dominant military power and Japan, sometimes seen as the largest economic rival to the U.S., was caught in a period of stagnation. China was emerging as the U.S.'s foremost trading competitor in more and more areas. Localized conflicts such as those in Haiti and the Balkans prompted President Bill Clinton to send in U.S. troops as peacekeepers, reviving the Cold-War-era controversy about whether policing the rest of the world was a proper U.S. role. Islamic radicals overseas loudly threatened assaults against the U.S. for its ongoing military presence in the Middle East, and even staged the first World Trade Center attack, a truck bombing in New York's twin towers, in 1993, as well as a number of deadly attacks on U.S. interests abroad.
Immigration, mainly from Latin America and Asia, swelled during the 1990s, laying the groundwork for great changes in the demographic makeup of the U.S. population in coming decades, such as Hispanics replacing African-Americans as the largest minority. Despite tougher border scrutiny after the September 11 attacks, nearly 8 million immigrants came to the United States from 2000 to 2005—more than in any other five-year period in the nation's history. Almost half entered illegally.
Early 2000 to 2001 saw the dramatic bursting of the dot-com bubble. Excitement over the prospects of Internet stocks had led to huge increases in the major indexes. However, dozens of start-up Internet companies failed as many of the lofty promises heralded by the new world of the Web failed to materialize. On March 10, 2000, the NASDAQ peaked at 5,048.62, more than double its value just a year before. The downturn began on March 13, 2000, triggering a chain reaction of selling that fed on itself as investors, funds, and institutions liquidated positions. In just six days, the NASDAQ had lost nearly nine percent, falling to 4,580 on March 15. By 2001, the bubble was deflating at full speed. A majority of the dot-coms ceased trading after burning through their venture capital, many having never made a profit.
In 2002, the GDP growth rate rose to 2.8%. A major short-term problem in the first half of 2002 was a sharp decline in the stock market, fueled in part by the exposure of dubious accounting practices in some major corporations. Another was unemployment, which experienced the longest period of monthly increase since the Great Depression. The United States began to recover from the post-9/11 recession in 2003, but the robustness of the market (7% GDP growth), combined with the unemployment rate (above 6%), led some economists and politicians to refer to the situation as a "jobless recovery". Despite this, economic growth continued apace through early 2008 and unemployment dropped below 5%.