Falling into the category of the more things change, the more things stay the same an article by John Cassidy from The New Yorker’s January 14, 2002 issue titled Striking it Rich: the rise and fall of popular capitalism..

It wasn’t until after the First World War that Americans returned to he stock market in large numbers…In 1927, Barron’s, the financial weekly, hailed a “new era without depressions.” (In September, 2000 the same publication would carry the front-page headline “CAN ANYTHING STOP THIS ECONOMY? DESPITE RECENT SIGNS OF A SLOWDOWN, EXPECT THE ECONOMY TO REMAIN ROBUST, WITH NO RECESSION IN SIGHT.”) The mood of optimism spread to the stock market, and millions of people bought shared for the first time—only to be caught out in the stock-market crash of October, 1929
— The New Yorker, January 14, 2002, pp. 63

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One by one, most of the bears either changed their views or found themselves being shunted aside. Whenever the stock market took a tumble, as it did several times, it came back stronger than ever. Anybody who questioned the market’s ascent was seen as hopelessly antiquated…In April, 1996 Warren Buffet…warned that neither he nor his longtime partner, Charlie Munger, “would buy shares” in Berkshire Hathaway at prevailing prices, “nor would they recommend that their families or friends do so.”
— The New Yorker, January 14, 2002, pp. 65

A couple of years before, in early 1994 when [the Federal Reserve Bank] raised rates for the first time in several years, the Dow, which had been climbing sharply, fell back. At the next meeting of the F.O.M.C., [Alan] Greenspan congratulated his colleagues, saying, “I think we partially broke the back of an emerging speculation.”

But in the summer of 1996, Greensan was reluctant to repeat the trick. He was coming to believe that higher stock prices were justified by the economy’s sterling performance….He believed that, thanks to the application of new technology, American firms and American workers were becoming a lot more productive, even if the official statistics were failing to pick up on this.
— The New Yorker, January 14, 2002, pp. 66-67

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CNBC didn’t create the stock-market boom, but it did perpetuate and amplify it…the network acted as a “propagation mechanism” for the investing epidemic…On all but the darkest of days, CNBC maintained an upbeat tone. its reporters were enthusiastic and well informed. It produced smart, entertaining television. What it didn’t produce was objective news….”Joe Kernen”:google, CNBC’s stocks editor, who was himself a former stock-broker, complained to a reporter “It would be like having sportscasters who hate sports. I love capitalism.”
— The New Yorker, January 14, 2002, pp. 68

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In the spring of 1998, when the Dow topped 9,000, two prominent British publications called on Alan Greenspan to bring the stock market back to earth before it crashed of its own accord. “America is experiencing a serious asset-price bubble,” The Economist announced in an editorial…Several days later, the Financial Times compared the United States’ economy to Japan’s in the nineteen-eighties, saying “This is unquestionably a bubble.”
— The New Yorker, January 14, 2002, pp. 68

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Not until the terrorist attacks of September 11, 2001, did most Americans finally acknowledge that the nineteen-nineties were over, and that a darker more uncertain future had dawned.
— The New Yorker, January 14, 2002, pp. 73

Posted by skooter at 5:17 AM This entry is filed under America, Technology.