Posted on 08/22/2006 10:51:02 AM PDT by mcvey
A seeming epidemic of greed and self-absorbed materialism had spread through the country. Wall Street witnessed a rash of arrests and convictions . . . .
And more government officials, including Attorney General Edwin Meese, became entangled in the web of corruption. Commentators talked of a compulsive materialism energizing the . . . professionals dubbed “Yuppies.” Caught up in the race for money, goods, and status, these baby boomers in the fast lane captured the tone and mood of affluent life in the 1980s.
Then on October 19, 1987, the bill collector suddenly arrived at the nation’s doorstep.”
--snip—
“The Dow Jones industrial average plummeted . . . an astounding 22.6 percent.”
--snip—
What caused such a goring of the bull market?
--snip—
But most [analysts] agreed that the . . . problem was the nation’s spiraling indebtedness and chronically high trade deficits. Americans were consuming more than they were producing, importing the difference, and paying for with borrowed money . . . Foreign investors had lost confidence in Reaganomics and were no longer willing to finance America’s spending binge.
--snip—
For the first time, [Reagan] indicated that he was willing to include increased taxes in such a package. Yet the eventual compromise plan was so modest that it did little to restore investor confidence. As one Republican senator lamented: “There is a total lack of courage among those of us in the Congress to do what we all know has to be done.”
George Brown Tindall and David Shi, American A Narrative History (New York: W. W. Norton & Company, 2004) Brief Sixth Ed., pp. 1188-1189.
McVey
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Automated sell programs made the problem several times worse than it should have been.
No bias there, kiddies, move along!.........
How old are you that you can be a professor in a college and not be able to claim the 80s as an era which you are intimately aware of?
That is covered in this sentence:
"Others blamed new computerized trading programs that distorted market activity and misled individual investors." p. 1188
And note the prescription of that surefire fixall- the tax increase.
Sounds more like the '40's, '50's and 60's to me.
But what about that government corruption in the '90's? Worst ever.
All I know is the stock market crashed in 1987 when Steinbrenner announced that Billy Martin was coming back to manage the Yankees.
Quick before the semester starts: Paul Johnson's A History of the American People published by Harper Collins.
That should do it. Your students will thank you (and Johnson) for it.
Most of the rest is outright propaganda from the left.
Dear CCNT2000:
I was already a professor when this happened. In fact I was driving to work listening to reports that day.
But I am not a specialist in this era and I do not have the Reagan presidency at my fingertips in the way that others do. I try to present a professional course to my students and would like to shoot this out of the sky since my recollection is that this is nonsense. But I am not an economist and do not have the data easily at hand.
That is, if most analysts have a few extra chromosomes.
The crash had a lot to do with the internal strucutures set up at the NYSE, including computer trading with no stop limits. The market acutally bounced back in a fairly big way THE NEXT TRADING DAY! And, for the record, the Dow was up at the end of '87 for the year.
Bubbles and their popping happen because of the introduction of radically new technologies. Everyone knows that the technology is promising in the aggregate, but no one yet knows how. That is what entrepreneurs have to sort out. In the 1980s the personal computer was worming its way into society, just as the Internet was in the late 1990s. (In the 1920s, another famous bubble, it was electricity, radio and cars.) In the 1980s the Reagan tax cuts unleashed a lot of stock-market experimentation, further pumping up the bubble. These are unavoidable events given certain kinds of technological developments.
The 1987 crash was arguably a momentary pause in a boom that has been going on for over 20 years.
elenil121:
I don't have that option. We have a program where we agree on textbooks and then we all use them. I am trying to get the least nutty.
Thank you, old left, that is the type of data for which I was looking.
Media Schadenfreude and Media Shenanigans PING
The 1990s were the decade of GREED, not the 1980s.
How do they come up with this crap?!
Let me guess, it goes on to say that "the worst economy since Hoover continued until America came to its senses and elected Clinton in 1992."
Does it say anywhere in this "textbook" that the Dow was up for the year at the end of 1987?
And what is this nonsense about foreign investors losing confidence? It was during this time and afterwards that the Japanese went on a spending binge and started paying unheard of prices for prime NYC and California properties and companies.
PING
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