Are You Better Off Now Than You Were Four Years Ago?

[athelind]

Politicians lie, but numbers don't.

Of course, the willing vassals of the Halliburton Administration will claim that these trends would have happened regardless of who was occupying the Oval Office -- while at the same time insisting that, nevertheless, we're "recovering" from the nose-dive that hit when the Miserable Failure siezed power.

And, yes, the dot-bomb started before the neofeudalists took over -- but understand that, in the words of an old economics prof of mine, "the stock market isn't economics -- it's psychology." More than anything else, it measures investor confidence. Faced with the prospect of an Administration so obviously and heavily biased toward Old Tech -- smokestack industry and Big Oil -- investors lost confidence in the New Technology that fueled the boom of the '90s.

I agree that, at some point, the vaporware speculation bubble would have burst, even with Al "I Invented The Internet" Gore in office -- but I don't know if it would have crashed the way it did, with investors fleeing solid infrastructure companies like Novell Cisco and Cypress with the same panicked terror that they abandoned pets.com.

Comments

[pathia.livejournal.com]

You're neglecting the 1-2year lag effect of any government interference in the economy, baring the Fed itself, who's been the same since Reagan now.

Any law, budget, tax-cut etc takes 12 to 18months or so to actually ripple into the economy. If you wanted to blame the recession on anything, you need to look 12 to 18months before it happened.

Bush the Elder's recession for example was more likely 'caused' by Reagan and not his own adminstration.

The entire dot.com stockmarket was insanely overpriced, even for the companies that were making money. P/E ratios were well over 100, this is something that is totally unsustainable, no matter what happened. The only thing that could keep those ratios that high was a tripling or quadrupling of profits every year.

That bubble is a sign of why laymen should not invest without proper research. Everyone and their mother invested, even if they had no idea what they were doing. It was 'cool' and 'neat' to do, thus when the smallest bit of trouble happened, they fled like panicked animals.

This is why I invested in the depths of the dot.com bubble burst-hell, the best time since after the 70's era of stagflation to invest.

[pathia.livejournal.com]

Also, the job diminishings were well known and expected to happen by many economists, because the largest drops were in the manufactoring sector.

It simply doesn't pay to pay people to make things when that lovely tech boom that just happened over the past decade made human grunt labor obsolete in many ways, the only way to compete was to move overseas or make everything automatic.

[richardf8]

The economy was indeed due to tank. However, having a competent pilot in the cockpit when the plane runs out of fuel can mean the difference between gliding in to a three point landing in a corfield, or hitting stall speed while you're still 3000 feet in the air.

[silussa.livejournal.com]

Sorry, Athelind, but I have to side with Dracono. The entire dot.com expansion was a classic tulip bulb mania (http://www.prestigeadvisors.com/The_Tulip_Bulb_Mania.htm). Many economic columnists were predicting the crash long before it actually occurred...and many bears lost their shirts betting against it.

Bull markets climb a "wall of worry" before they come down...the higher the wall, the greater the fall, and the tech mania climbed a very high wall, indeed.