A couple distinct differences.
First, most of the inflationary money was pumped into the tech sector by way of venture capitalists and whoever could get their hands on it so while some regular folks who invested on their own lost money most of the losses were from things that had no real value to begin with. It was quite common for someone with an idea and no business plan to get a bunch of money invested into their company with the hopes that it was the Next Big Thing.
Silicon Valley was full of paper millionaires, folks who got a salary plus stock options that were highly overvalued–turned out that a lot of them were correctly valued at zero once the flow of venture capital stopped.
Dubya and crew decided that we should be a nation of homeowners so intentionally pumped a bunch of money into the housing sector and having the Fed set the interest rates at 1% for a good long while didn’t do a whole lot of good to keep the mortgage ‘predators’ at bay either. Kind of like the VCs who would throw money at any CS geek who could put on a slick powerpoint presentation on how giving away your marginally useful product would eventually lead to massive Google-sized profits.
Secondly, it could be argued that this business cycle is just the continuation of that one and the one before as the malinvestments were never allowed to be liquidated because the Fed simply lowers interest rates whenever it looks like that is going to happen.
My personal opinion is that we have been constructing a super bubble that started after Volker cleaned house and we are finally reaching the breaking point of the main bubble with the ‘housing crisis’, ‘credit crunch’, ‘dot-com bust’ and ‘S&L scandal’ merely being symptoms of the larger disease.
This bubble is affecting the common people since they earned the better lifestyle from the Reagan ‘deregulatiory’ boom and have been lately financing this unsustainable lifestyle by pulling out all the equitiy from their homes even though the underlying economic situation would have suggested it’s time to tighten the belt a little after the dot-com bust, stagnant wages, 9-11 and a couple of unfinanced wars being waged.
Another personal opinion is all those fiat dollars that we sent out into the world in exchange for real goods are coming home to roost and this will be nothing but bad. The Brits were bitching that Jaguar is now owned by an Indian company but forgot the fact that it was Ford that sold it to them. Budweiser just got bought by the Danes (or someone in that general vicinity…edit…turns out Belgian, same difference right?), South American companies are buying up mining companies.
Everyone wants some real tangible goods before the dollar crashes and all these multi-billion dollar deals lead to that money leaving foreign reserves and re-entering the US economy further adding to inflationary pressure. If you look at the numbers the Fed really isn’t creating very much new money, especially if you consider that a lot is going to recapitalize the big banks after all the write offs they have had lately, yet inflation is still going crazy.
I do predict that the developing world is done subsidizing our consumer driven lifestyle (and European social programs) by buying US debt to manipulate the value of their currency on the world markets (hello China) so there are significant changes in the not too distant future that weren’t felt during the last few business cycles.
I think when Thomas Jefferson said “If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered” he really didn’t consider that the US government would be the ones who sold the bill of sale as a worldwide ‘reserve currency’ or that it would be foreign individuals picking up the property at fire sale prices.
Hold on while I don my flame retardant suit because I mentioned Thomas Jefferson…
Just wait until St. Obama starts up with protectionist measures and gets the New Deal 2.0 going, then you’ll start seeing some serious Great Depression analogies.
----edit----
Should also point out that post-cold war era military cuts also helped out a bunch.