Rise and ... rise of America Inc.
Entrepreneurial spirit and technology fuel the longest economic expansion in US history.
A few years ago, Kathy Daigle was getting "farm workers" wages - $7,000 a year - at a seed company in rural Maine. To feed her two children, she needed food stamps and the free hot lunch the school provided. She navigated Maine's rutted roads in a 1981 Mercury with 220,000 miles on it.Skip to next paragraph
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Today the Brunswick, Maine, native drives a new black Nissan, her children buy their own lunch, and she has tripled her income. The difference: She's working for a two-year-old high-tech company, part of the reinvention of the economy that has helped turn America Inc. into the most envied and powerful economic force in the world.
In many ways, the turnaround in Ms. Daigle's life is emblematic of the economy in the 1990s. While the decade opened with a recession - back when surfing still required water and before the letters S, U, and V had been introduced to one another - it closed with almost untempered optimism and confidence.
In fact, on Tuesday it will pass another milestone, becoming the longest economic expansion in US history. In the process, it has changed both how Americans think about money and how the world does business. The latest brand of capitalism to emerge since the form evolved with 17th-century Dutch merchants is fueled by a combination of ubiquitous American entrepreneurial spirit, massive amounts of technology, and a man named Greenspan.
These factors combined to create a cold-fusion economy - one that grows at a steady 4 percent per year, with little sign of radioactive inflation.
Not only is this expansion the longest, but its steady pace has allowed it to overflow from Wall Street and spill over into the bank accounts of the middle class. It has added on average the equivalent of $20,000 per year to every household in America. More than most previous expansions, the jobs and larger digits on the paychecks have also filtered down to the poorest levels of society - though the gap between rich and poor is still growing.
"You see people at the bottom of the economic scales beginning to be impacted positively, and that's probably the best of the news of this economy," says Commerce Secretary William Daley.
A job machine
One of the hallmarks of this economic boom is the huge growth in employment. Since the spring of 1991, 21 million new jobs have been created, and the unemployment rate has dropped to around 4 percent. The last time it hit that level John F. Kennedy was president and bouffant hairdos were popular. It was the start of the longest previous economic expansion, which was aided by the ramp up to the Vietnam war and lasted into the Nixon administration to 1969.
The latest boom has been aided by - and helped to stimulate - an old impulse in the American character: a deep entrepreneurial drive among the young.
Indeed, it's now not unusual for the CEO of a new company to still be in his or her twenties or thirties. One measure of this drive: Last year entrepreneurs raised a record $100 billion in Initial Public Offerings, that is new stock shares, compared with $4.4 billion 10 years ago. Often those who go public become rich fast, generating a new class, "the working rich" - not to mention retirees so young they should be still paying off their college loans.