It’s hard not to laugh at this 1999 news anchor as she blithely wonders, “Has the 1990’s boom shattered old assumptions about how the economy works?”
In hindsight, a sarcastic “Um, no?”, followed by LOL and perhaps a bit of ROFL, seem to be the only fitting responses. The mistakes of the dot.com crash appear glaringly obvious in the rear-view mirror, yet consider the way things were way back in 1999 when almost everybody was fooled.
With the benefit of experience, it’s easy to pass judgement upon the number of economics students “who fully expect to be billionaires by the time they hit their 30s”. (One wonders where these fledgling economists are now.) Yet was this really such an outlandish expectation in the 1990’s economy? University students studying in 1999 had never experienced the prevailing gloom of a market crash, had never contended with runaway inflation, or struggled to find a job during a period of high unemployment (or in some cases, ever).
As this clip neatly demonstrates, the ‘roaring nineties’ were a period of limitless optimism, where educated people really believed that, “technology, globalisation, and free trade [have] come together to create a truly new economy – one that allows for strong growth and little inflation”. If the Greater Fool Theory relies on market optimism, then it is perhaps appropriate that the symbol of American consumerism is the Ronald McDonald clown.
But don’t scoff so fast Australia – today’s mining boom has created similar conditions to those in 1990’s America, and although Aussies are not yet singing and dancing in haze of hopeless optimism, we may be falling for all of the same tricks. Consider, for example, the number of businesses, large and small, who are willing to engage in high internal spending on schmick office facilities and corporate functions (how fancy was your Christmas party?). The current era of invincibility has seen the Australian minimum wage bloat out to around five times higher than that of neighbouring economies, with Aussie kids now viewing the perks associated with a strong economy, such as weekend trips to Bali and cheap online purchases, as an entitlement rather than an enormous privilege.
We laugh at the idea of a ‘new economy’ today, but then again, hindsight is always 20-20.