[mcvey]

So, Freepers, in examining a textbook to use in my Introduction to American History course, I ran into this and some other items about Reagan. This is not my era and I know many of you would be more up on this than I would. How correct is this (in whole or in part)?

McVey

[mcvey]

Education ping list
Let Republicanprofessor, McVey, JamesP81, or eleni121 know if you wish to be placed on this ping list or taken off of it.

[Eric in the Ozarks]

Pity.

[SlowBoat407]

Automated sell programs made the problem several times worse than it should have been.

[Red Badger]

No bias there, kiddies, move along!.........

[coconutt2000]

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?

[<1/1,000,000th%]

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.

[HitmanLV]

All I know is the stock market crashed in 1987 when Steinbrenner announced that Billy Martin was coming back to manage the Yankees.

[eleni121]

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.

[oldleft]

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.

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.

[untenured]

If "corruption" caused the 1987 crash, why did the boom resume soon after? While it was sudden, in percentage terms it was far from the worst postwar bear market.

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.

[weegee]

Media Schadenfreude and Media Shenanigans PING

The 1990s were the decade of GREED, not the 1980s.

[weegee]

PING

[ChadGore]

Check the DOW history of that week.

If my memory serves, the DOW recovered 100% of that "crash" the very next day.

[KellyAdmirer]

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.

Hey dude, you could say the exact same thing about today. Or 1996. Or 1976. Or 1966. We are more in debt, have way bigger chronic trade deficits, are paying with more borrowed money, and are consuming way more now than in the 1980s. And besides, the stock market "crash" (really just a market correction, albeit a steep one, "crash" is a complete misnomer created by the press) had nothing at all to do with foreigners not wanting to finance our "spending binge." Foreigners were and are completely willing to buy our bonds. Stocks had just become temporarily over-valued, and had recovered all their losses within a couple of years. It was an EXCEPTIONALLY good time to buy stocks.

So, this doesn't explain anything, except by putting the nebulous label "Reaganomics" on it and expecting rows of gullible college students to go, "Yeah, the evil Reaganomics."

Throw that book out and look for something that isn't just a polemic.

[VeniVidiVici]

And more government officials, including Attorney General Edwin Meese, became entangled in the web of corruption

Someone correct me if I'm wrong but wasn't Meese's "corruption" accepting a gold watch from the Japanese?

As an aside, I'm taking a micro-economics class this fall. God help me.

[GeronL]

A seeming epidemic of greed and self-absorbed materialism had spread through the country

well then your textbook was written by idiots.

[Al Gator]

I was a broker for Blinder Robinson when that occurred.

The main culprit was computer trading. The market took a quick dip for whatever reason, but the institutional traders had just set up their software to protect their portfolios. Software trading was still relatively new and the institutions took a chop and slash attitude toward protecting their portfolios. No one knew that these systems would behave the way they did.

The drop happened so quickly, I couldn't call my clients. All we could do was sit and look at the ADP monitor and marvel at how fast it went down.

The SEC made serious changes to the way software controls the market.

This other stuff about greedy capitalists and the such is just more fart gas from the commie pinkos.

[ansel12]

"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.”"





In 1980 the boomers ranged from age 16 to 34, how can they be responsible for every bad thing that has happened in America for the last 50 years.

[USFRIENDINVICTORIA]

It's difficult to judge the whole book from these snippets -- but, I can give some feedback on the snippets.

First, "Yuppies" were largely an invention of market researchers, and the media. That ethos certainly didn't manifest itself in rural and remote parts of the continent. Boomers had finally graduated from college and antiwar demonstrations to careers and acquiring material goods. Nothing new here -- except that the boomer generation (I'm one) was like a pig in a snake (a big demographic bulge that is moving through stages of life -- or digestion).

One of the main reasons for the sudden drop in the stock market was "program trading" -- i.e. trading driven by computer models, which contained feedback loops, and no dampers. When the market started to fall, more automatic selling was triggered, -- and the spiral didn't stop until trading was halted. Numerous institutional reforms were subsequently made in the stock market -- in particular to prevent runaway automatic trading. There's no mention of this in your snippet.

The stock market rebounded almost as quickly as it fell. In large part, this is because the Fed pumped massive amounts of new money into the system. Also -- it rebounded because the initial plummet was not a true reflection of the state of the economy -- it was an artifact of structural weaknesses in the trading system itself (e.g. program trading). The rebound belies the textbook's premise of weaknesses in the economic system itself.

[VOA]

I don't envy your challenge in getting balanced history textbooks.

I'm afraid I'm old enough to have grown up in an affluent "Oil Town"
in Oklahoma in the 1970s.
And thus also saw the oil boom of the last 1970s and oil-crash of
1982.
Stuff like seeing guys that didn't have high-school diplomas that could get
bankers/investors shoving millions at them with just the prospect of drilling
a well.

I was working in graduate school when the 1987 "crash"
(it was a bump) occurred.

If there was an epoch of greed...it happened in the 1990s.
That was when a "new era economy" was hailed and stock prices rocketed
without any apparent fundamentals.
I think someone even wrote a book about their experience in launching a tech
start-up called "Burn Rate". The theme was that the faster the company expended
money (even without revenues), the higher their stock went.

But I wouldn't expect a textbook to speak badly of the 1990s as the true
"decade of greed".
Because textbook writers/revisionists liked the guy that was in the White House
for most of that decade.

For your reading about the current state of history education:
first paragraph under the heading of
Our Failure, Our Duty

http://www.hillsdale.edu/imprimis/2005/April/