On election night in 1992, I was driving north from Texas toward Chicago, searching for work while my family remained trapped in poverty back in Los Angeles. The economy was still reeling from the recession of the early 1990s – a “peace dividend” bust after the Cold War – and despite graduating third in my college class in 1990 with a degree in Telecommunications Management, job opportunities were scarce. As I crossed Oklahoma listening to talk radio, the news announced Bill Clinton’s victory. Immediately, the post-election chatter erupted – especially Rush Limbaugh slamming the incoming president with every insult he could muster. I remember thinking to myself, “Can you give the guy a chance to fuck up first?”

I shrugged it off, popped a music tape into the stereo, and kept driving north, hoping for something better for me and my family.

The Third Way Turns Thirty

Now, in 2025, Bill Clinton has been out of the White House for a quarter-century. His policies are largely remembered for prosperity and scandal – a booming economy and a soiled blue dress. But when I reflect on the ideology he brought to the Democratic Party – the so-called “Third Way” – I see a far more consequential legacy.

Clinton’s Third Way claimed to balance progressive goals with market-friendly policy. In practice, it meant deregulation, globalization, welfare reform, and the belief that the private sector could solve public problems1. It turned out to be Reaganism with a Democratic face. The party of the New Deal and Great Society had become the party of NAFTA, welfare cuts, and Wall Street finance.

Prosperity on a Cracked Foundation

The 1990s looked good on paper. The economy expanded, jobs were created, and Clinton ended his presidency with a budget surplus. But the very policies that fueled this “boom” hollowed out the working and middle classes. Clinton’s administration repealed the Glass–Steagall Act in 1999, allowing commercial banks to merge with investment banks2. He also signed the Commodity Futures Modernization Act in 2000, leaving derivatives like credit default swaps completely unregulated3.

These choices encouraged reckless financial behavior. By the mid-2000s, the economy was heavily reliant on a housing bubble and predatory lending. When it all collapsed in 2007, the fallout was catastrophic. Millions lost their homes, jobs, and retirement savings. The groundwork for the Great Recession was laid during Clinton’s presidency.

The Price of Globalization

Clinton’s signature trade deal, NAFTA, went into effect in 1994. It was hailed as a win for modern economics, but the human cost was steep. Manufacturing jobs vanished. Whole towns in the Midwest and South were gutted4. And even if economists argued the net losses were “minimal,” the damage was concentrated and political. Many former Democrats in these communities began voting Republican – a trend that culminated in Trump’s rise.

NAFTA’s logic was simple: let the market decide. But when the market decided to outsource your job, there was no safety net waiting for you. Clinton’s faith in globalization didn’t come with a plan for the people left behind.

Welfare “Reform” and the Abandonment of the Poor

In 1996, Clinton fulfilled a campaign promise to “end welfare as we know it.” The result was the Personal Responsibility and Work Opportunity Reconciliation Act. It replaced a federal entitlement with a state-run block grant, imposed work requirements, and capped lifetime benefits at five years5.

This “reform” was celebrated when the economy was strong. But when the recession hit, it became clear how vulnerable poor families had become. By 2011, researchers found that the number of U.S. families living in extreme poverty – less than $2 per person per day – had doubled since 19966. The safety net was shredded in the name of responsibility.

A Global Order Without Justice

Clinton’s foreign policy also reflected Third Way ideals: a belief that American-led globalization would bring peace and prosperity. But the same logic that deregulated banks and cut welfare also led to an overconfident, interventionist foreign policy. The 1990s saw the rise of al-Qaeda, and although Clinton took some action (like the 1998 embassy bombings response), his administration never treated the growing threat with urgency.

Meanwhile, economic injustice at home and abroad created fertile ground for resentment. Studies show that income inequality and lack of opportunity correlate strongly with terrorism7. The world Clinton helped build – unregulated finance, collapsing safety nets, global labor arbitrage – created both instability and backlash. September 11, 2001, was a reckoning with a world many thought was under control.

The Legacy of the Third Way

Looking back, it’s clear the Third Way wasn’t a solution – it was a delay. It masked inequality with credit cards. It traded manufacturing for financial services. It pushed responsibility down to the states and glorified markets over movements. And in doing so, it laid the groundwork for 9/11, the Great Recession, and the rise of populism.

Bill Clinton didn’t cause every disaster that followed. But his choices created a system that was brittle, unjust, and unsustainable. And as someone who lived through it – who went looking for work while listening to the radio the night he was elected – I now understand that triangulation wasn’t about balance. It was about abandonment.

Footnotes

  1. Lichtenstein, N. (2011). State of the Union: A Century of American Labor. Princeton University Press. ↩
  2. Johnson, S., & Kwak, J. (2010). 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown. Pantheon Books. ↩
  3. Morgenson, G., & Rosner, J. (2011). Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon. Times Books. ↩
  4. Barfield, C. E. (2001). Free Trade, Sovereignty, Democracy: The Future of the World Trade Organization. AEI Press. ↩
  5. Schram, S. F., Soss, J., Houser, L., & Fording, R. C. (2010). The End of Welfare as We Know It? University of Michigan Press. ↩
  6. Edin, K., & Shaefer, H. L. (2015). $2.00 a Day: Living on Almost Nothing in America. Houghton Mifflin Harcourt. ↩
  7. Krieger, T., & Meierrieks, D. (2011). What causes terrorism? Public Choice, 147(1-2), 3–27. https://doi.org/10.1007/s11127-010-9601-1 ↩