Page 221 - Psychology of Money - Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

7. The boom resumes, but it’s different than before.

COBACOBA

Ronald Reagan’s 1984 “Morning in America” ad declared:

It’s morning again in America. Today more men and women will go to work
than ever before in our country’s history. With interest rates at about half the

record highs of 1980, nearly 2,000 families today will buy new homes, more
than at any time in the past four years. This afternoon 6,500 young men and
women will be married, and with inflation at less than half of what it was
just four years ago, they can look forward with confidence to the future.

That wasn’t hyperbole. GDP growth was the highest it had been since the
1950s. By 1989 there were six million fewer unemployed Americans than
there were seven years before. The S&P 500 rose almost fourfold between
1982 and 1990. Total real GDP growth in the 1990s was roughly equal to
that of the 1950s—40% vs. 42%.

President Clinton boasted in his 2000 State of the Union speech:

We begin the new century with over 20 million new jobs; the fastest
economic growth in more than 30 years; the lowest unemployment rates in
30 years; the lowest poverty rates in 20 years; the lowest African-American
and Hispanic unemployment rates on record; the first back-to-back surpluses

in 42 years; and next month, America will achieve the longest period of
economic growth in our entire history. We have built a new economy.

His last sentence was important. It was a new economy. The biggest

difference between the economy of the 1945–1973 period and that of the
1982–2000 period was that the same amount of growth found its way into
totally different pockets.