DR and Jim,
The bubble was a natural byproduct of three simultanious innovations; cell phones, PC's, and the Internet. Go back to the late 80's, 1 in 10 folks used these "products". Fast forward to today, virtually everybody (except me) has a cell phone, virtually everybody has a PC at home and one on their desk at work, and virtually everybody uses the internet. That build out represents an astounding amount of incremental economic activity, not only for the products themselves, but in infrastructure.
The bursting of the bubble came with the end of the build out phase, and the subsequent start of replacement cycles. You can put that around mid-2000. It's the time when folks realized that trees don't grow to the moon; there is a finite market for everything, and that limits yoy growth. Growth expectations dashed, the market crashed.
Fortuanatly (unless you are unemployed), we are now seeing returns in the form of increased productivity from all those "bubble" investments. That should provide fuel for a steady growth in the standard of living until it ultimately plays out.
President's had little to do with any of this, except to create an atmosphere where business can function. I don't think they have short term effects, but they can have long term effects (I would argue that the Bush deficits will be a disaster for the next generation, with high taxes and high interest rates, taking money out of creative, productive circulation).
I don't think it was Clintons bubble or Bush's bust. But the next generation is going to have to pay for Bush lack of spending discipline, the Iraq war, and the tax cuts, at the same time they are paying for the Baby Boomers retirement.
John |
