Why the nineties should remain in the history books.
This may not look like a political rant, but I'm posting it here because of the subject matter.
I've said many times that if Hillary wins the primary, I will vote for her. But this is what I fear the most about her presidency. Each time she brings up the topic of triangulation it is a painful reminder of the nineties. It is an era that should not be resurrected. What I remember about the nineties was that it was a pyramid era. With each new change in the law, programs were offered by our fine financial institutions and people made it big and then...bust for everyone else.
The first flash in the pan were the dot.coms or maybe it was the "e" era. Everything that began with the letter "e-" was cutting edge. There are only a few reminders of that time: e-trade, e-mail. It felt like all you had to do was start a tech company that began with the letter e, and put together a prospectus sheet and money started rolling in. Everyone wanted to be an investor into the new Frontierland that was about to open up on the internet.
It was the first time I heard the term, "start-up company." More than a decade later, at my son's college graduation, I heard a speaker boast about starting and selling more than 50 start-up companies. So that was a thing. Starting companies, and then dumping them. He never did tell us how many of those 50 companies were still in business.
In the nineties, the dot.com or e-craze would be the first to bust.
But maybe it was all part of the stock market gamble. During this same era, there was quick money to be found for those who invested in stocks. And as the stories grew about people making it big, more and more people followed their example-just like a pyramid game. We were all investing in stocks like gamblers in Vegas, which is basically the same principle. (Though people would have been horrified if you had brought up the comparison back in the nineties. "No, no. This is nothing like gambling. This is an investment."
On paper, investments were growing at an astronomical rate. No one but the people who lived through the depression were happy to stick with 5 percent CDs. I know this because my parents were a perfect example. If the depression wasn't enough of a reminder of how unreliable the banks could be, they also made the mistake of investing a large sum of money in Robert Vesco's Fund of Funds or World of Funds. He was one of the biggest fraudsters of his time, and my parents, two of the most cautious people you can ever meet, fell for it. But they didn't fall for the over-exhuberance of the nineties.
We thought they were old-fashioned. It wasn't a risk if you stuck to the blue chips. We knew this, because our financial consultant told us so. When it came to investing for the kid's college tuition, we settled on a safe annuity. What we didn't know, was that nothing was safe in the nineties. Nothing. Because de-regulation of the banks was having the opposite effect. How could people who graduate from an Ivy League school not know that this would be the natural outcome of deregulation? Sure, the economic expansion would look great on the front end, but, if you're not really selling anything of substance, then all the profit is new-investor generated. This is exactly how a pyramid group works.
Probably the worst betrayal of the era, was learning that these fine financial institutions were separating investors into groups. High investors were given assurances, while the rest of us fed the pot. In sum, the pain was not equally spread around this country, which is probably why so many 1%ers are looking forward to a repeat.
The end came when the deregulated banks started playing creative accounting with risky real estate mortgages. These were mortgages that were never properly vetted, which is also a by product of deregulation.
There were people who said they were not touched by this era because they weren't buying stocks. But if you had a mortgage you were part of the game, even if you didn't know it.
Looking back, it was easy to see that money was easy to be had on the go in, and the people most responsible for setting up the ill-fated programs were allowed to walk away when it all fell apart. They lived to see another era of corruption.
The effect that the nineties had on us ordinary folks seems to be largely ignored. What I haven't mentioned is how this irresponsible, fast talking, money making attitude trickled down into our communities. I heard it in side talk before HOA meetings. "Why do you want to work harder, when there is an easier way?" No one was thinking about fiduciary responsibility, everything was up for grabs and it's still that way today because there was never a correction to the crooked way of thinking. But the local story will be left for another day.
What does need to be said, is that the bust that followed the large economic expansion of the nineties created hardships on the very young. As the older generations had to push off retirement plans, there was little movement in the employment ranks. Good job opportunities, with quick ascent into management became a thing of the past. And if there is any generation that needed these high paying jobs, it is this generation of young people who are facing debts from loans to pay $40,000 a year for college tuition. Not only were they hurt when their parents college tuition plans went into melt-down during the nineties, but now they're faced with the highest college tuition that we have ever seen.
What ordinary people need now is a positive correction to rectify the wrongs of the past. We don't need another era of smoke and mirror financial programs that are nothing more than pyramid ideas.
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