Reset
How This Crisis Can Restore Our Values and Renew America
Chapter One
We Let the Good Times Roll
Let’s be honest: we all saw this coming for a long, long time.
In the early 1980s, right around when Ronald Reagan became president and Wall Street’s great modern bull market began, we Americans gave ourselves over to gambling (and winning). We started thinking magically. From 1980 to 2007 the price of the average new American home quadrupled, and almost doubled even after adjusting for inflation. The Dow Jones Industrial Average climbed from 803 in the summer of 1982 to 14,165 in the fall of 2007–a 500 percent increase after inflation.
From the beginning of the 1980s through 2007, the share of disposable income that each household spent paying off its mortgage and consumer debt increased by 35 percent. Back in 1982, the average American household saved 11 percent of its disposable income, but then the percentage steadily dropped, to less than 1 percent in 2007.
Not coincidentally, it was during t ...
read full excerpt from: Reset ebook
