The major factor in the economic boom of the 90’s was the computer revolution. Every other factor, including the economic machinations of the government were swamped by a tidal wave of economic productivity.
“The major factor in the economic boom of the 90’s was the computer revolution” WRONG!! The MAJOR factor in the economic boom of the 90’s was the FACT of GINGRICH and the US House GOP Class of 1994!
Bingo! What did Bill Clinton do to create the dot-com explosion? Perhaps we should credit AlGore since he was the one who invented the internet? :=)
Capital gains rates were cut which leads to supply side prosperity.
The Federal and State governments had no idea why the economy was doing well in the 1990’s. They were completely clueless.
The Fed, likewise, had zero idea of what was happening and why.
The government can’t fathom productivity, they actually believe that interest rates and money supply are the primary driving factors in an economy.
If you could pull out the economic impact of:
1) ERP software
2) the web
3) Y2K consulting
which caused the earnings of millions of Americans to skyrocket...
the economy would have been decidedly laggard. All consumer spending on cars, homes, clothes, travel, etc., etc., would have been miniscule compared to what it was.
ERP software firms very purposefully kept their software as proprietary as possible so as to make knowledgable and capable consultants as rare as possible, with the number of them lagging the demand for them.
They also very purposefully artificially made the implementation of their software by their customers to be very labor intensive and complex.
These strategies pushed up the price of consulting services dramatically.
This made the whole idea of implementing their software attractive for the employees of their customers, as the employees would be learning highly marketable skills during the implementation.
At the same time this is happening, every business suddenly needed a website and had no experience with doing that since it was a new field.
Y2K consulting became every more lucrative as companies saw 1/1/2000 approaching, realized that a lot of their current software would malfunction, and became desperate.
Licensing ERP software was a way to shift responsibility to the ERP software vendor and consultants, since the software vendors advertised Y2K compatibility and the software packages would include any last minute updates - if any - that were necessary to get through the changeover. In the latter half of the 90’s Y2K drove new ERP business dramatically.
It was precisely because the government had no idea what was happening that allowed the internet to be a profitable business without government legislating it into oblivion, taxing it to death and allowing big-business lobbyists to push legislation to monopolize it.
Now that the government as a whole has gotten up to speed a bit more in the past few years, they are foraying into internet regulation.
Since all that software work is done, and the initial learning has taken place and the systems are in maintenance mode, much less labor is involved. Since we have way more knowledgeable people than necessary in those fields, the number of people in those fields has dramatically dropped from February 2000 levels.
All three of those fields had a purpose, so there was something real to be gained by businesses spending on them.
Trouble is now, there is no new purpose that is necessary or useful that is no simply an incremental change to what we have now.
It will be quite some time, probably decades, possibly 100 years or more until we see a significant invention (one that requires significant new and different hardware and significant new consulting) that is actually entirely new and not a simple alteration or combination of existing technology, and the new invention is necessary and worth spending money on. Given today’s availability of mobile computers, the ubiquity of internet connectedness and the power and functionality of computers, there’s not much else needed to be able to rather easily write software to do most anything.
The artificial pump up is over, and government did not take advantage of the tax windfall to pay down debt, so they missed their one-shot chance at doing that with very little pain.
Therefore, Congress and Clinton were baboons in the 90’s. Not only did they not create the good situation, or even know what created it, they missed out on using the windfall that was clearly due to peak in February 2000 as a stepping stone to making government sustainable.
Actually, the major factor in the economic boom of the 90’s was the buying to avert the failed Millenium bug. When it became obvious to the majority that it was a joke, it caused a deep recession.