For the average American, the “long boom” from the 1980s to 2006 seems like a distant memory as the country emerges from the worst financial crisis since the 1930s. While many understandably look forward to economic recovery, it is instructive to examine the last two decades if we are to learn from what happened. This paper will examine how technological change and government deregulation drove the boom, and how critics say these “golden egg” years set the stage for what some now call the “Great Recession.”

While the long boom had negative consequences, it was a period of economic growth and opportunity. President George W. Bush’s 2007 State of the Union Address showcases the view of American prosperity at the time:

A future of hope and opportunity begins with a growing economy — and that is what we have. We’re now in the 41st month of uninterrupted job growth, in a recovery that has created 7.2 million new jobs — so far. Unemployment is low, inflation is low, and wages are rising.

At the beginning of 2007, Bush and most of America had little reason to believe the country was on the verge of a severe economic downturn. The previous year, 2006, was the height of the boom period and a banner year for the U.S. economy – the golden egg seemed stronger than ever. As Roy Allen writes in Financial Crises and Recession in the Global Economy, the U.S. had received over $800 billion a year in financial inflows from the rest of the world, and there was a “150 percent increase in the average US house price from $100,000 in the late 1990s to $250,000 at the peak in early 2006” (Allen 114). Likewise, the stock market was skyrocketing, and the Dow Jones Industrial Average hit a peak of 14,198 on October 9. It should be noted that much of the wealth creation during this time occurred in financial markets, and not in GDP / “real” markets for goods and services. While these figures seem overinflated and dangerous two years later, at the time they appeared to most people (with the exception of a few economists) as signs of a vibrant economy.

The long boom – like the recession it preceded – had a dramatic start. Like numerous business cycles in American history, this one was kick started by a technological revolution: information and communication technology progressed rapidly in a short period of time. Allen explains how this revolution was aided by the miniaturization and widespread use of computers. The first widely recognized computer, the ENIAC, weighed 30 tons and stood two stories tall in 1946. But by “1956, there were 600 computers in the US, in 1968, 30,000, in 1976, half a million, in 1988, several million, and by the end of the century half of all the households in the U.S. had a free-standing computer” (Allen 7). Likewis