Millennium series: 1980s and 1990s

Continuing our millennium series, we look back at the last 20 years.

In recounting recent history, the danger of transplanting historical facts with personal memories looms large. In fact, reviewing the past twenty years and their long term impact may even be moot as it still lies ahead. Nevertheless, I will attempt to avoid unnecessary citations of such phenomena as Cabbage Patch dolls (Rubiks cube, Elmo, Pokemon), Valley Girls (Madonna wanna-bes, grunge), and ET the extra terrestrial (Star Trek the movie, and the Hollywood version of the Titanic.) (Did I just write those out loud?)

Yet the 1980s and 1990s were the backdrop for a number of events that render them the most significant decades of the 20th century. From a raging bull market to totally radical social consciousness to wars that, like, werent really wars, as a nation we will not forget these decades.

Its the economy . . .

Under the Reagan administration, the United States economy enjoyed one of its most prosperous decades. His implementation of deep across-the-board tax cuts managed to actually increase the share of federal income taxes paid by top wage earners from 35% in 1981 to 46% in 1988, while managing to cut the top marginal tax rate from 70% in 1981 to 31% in 1988. A combination of monetary policies to restrict inflation resulted in more than 21 million new jobs and a Dow Industrial Average that grew from less than 1000 in 1980 to 2000 in 1987.

The words Black Monday still plague the memories of 1980s investors who scrambled to sell as the market sustained its largest loss in history. On October 19, 1987, the Dow plunged 508 points, dropping 22.6% and tossing away $500 billion in stock market value.

But during the 1990s, the Dow continued on its upward path, swelling from less than 3000 in 1990 to more than 11,400 today, creating an unprecedented bull market for long term investors. The last 20 years have boasted a tenfold increase in daily average share volume on the New York Stock Exchange, from roughly 50 million in 1980 to more than 500 million in 1999. That same period saw the NASDAQ through its infancy stages into a mature, 15 year old index that surpasses the daily average share volume of the NYSE.

These years were not without crisis, as the American taxpayers ended up paying approximately $200,000 billion in the 1989 Savings & Loan Crisis . Despite the decade of prosperity, the exorbitant cost of the bailout represented a breakdown in public institution, calling the American confidence in its economy into question.

A social consciousness

In the record books, the 1980s have become known for creating the Me generation and adjusting the American dream to form a society of power mongers chanting the mantra, You can have it all. But despite its reputation, the 1980s also boasted an awakening in social consciousness. Celebrities became pivotal in the nonprofit world with their endorsements of such charities as USA for Africa, made famous by the conglomeration of artists known as We Are the World. Their single not only helped the cause of hunger in Ethiopia, but it became the best selling single of all time.

Looking outward did not end with We are the World as the Apartheid movement in South Africa angered the nation and institutions began divesting of companies that conducted business in South Africa. The result was a steady isolation of South Africa, creating sufficient economic hardships to force its government to make concessions and end Apartheid. The legacy of that divestment movement persists not only in South Africa, but in the United States where it gave rise to the socially responsible investing industry. By allowing investors to avoid owning companies that fail to uphold their personal values, individuals are now empowered to do their own research on the activities of corporate America through the use of such tools as The Investigator.

Continuing the tide of social consciousness, the maturation of nonprofit sector has been impressive in the 1990s as it was fueled by a strong economy and developments within the sector to increase efficiency and dramatic growth in donations. Following the Jim Bakker PTL scandal of the mid 80s, religious charities fell under scrutiny and discovered the need for a more regulated industry. To avoid the threat of government intervention, several prominent religious leaders gathered to create the Evangelical Council for Financial Accountability, creating an accreditation process that has increased the publics trust. Other watchdog groups continue to monitor the operations of secular charities, and in total the non-profit industry has been enjoying annual increases in donations that are more than ten times the annual rates of inflation.