. 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). Likewise, changes in communication technology opened up new opportunities for productivity. Allen writes:

First-generation fax machines from the 1970s took six minutes to send one page of documentation, but by the late 1980s the transmission time was down to three seconds and the popularity boomed. In 1987, 460,000 facsimile machines were installed in the U.S., compared to 190,000 in 1986 . . . By the early 1990s, there were over one million installations per year (Allen 8).

That a change in technology would bring about economic expansion is hardly unprecedented. Joseph Schumpeter, writing in 1934, suggested that innovation is “is largely responsible for most of what we would at first sight attribute to other factors” (Schumpeter 82), such as a change in consumer tastes or growth in general. Indeed, Schumpeter goes on to say that economies tend to operate on waves of technological innovation, and this “creative destruction” opens up new opportunities, while making others outdated.

But by themselves the last few decades of innovation in the IT sector, while impressive, at first don’t seem like gateways for the unparalleled wealth creation of the long boom. However, Allen notes that “changes in communications have always affected the structure of finance, but these developments of the last few decades were responsible for the truly global nature of today’s financial markets” (Allen 7-8). He points out how these technologies, when used by stock exchanges for example, made the process of trading incredibly efficient, and made access to global markets easier and cost-effective. When the U.S. NASDAQ index was connected to London’s off-exchange market, “It was estimated that between $200 million and $300 million of foreign stock shares changed hands daily” which was “roughly double the levels of 1981” (Allen 9). As technology improved, it’s no wonder that “from late 1980 to 1985, global foreign exchange trading volume doubled to a level of $150 billion per average working day,” which was “at least 12 times the value of world trade and services” (Allen 2).

Clearly, there was money to be made in financial markets, and people flocked to the financial sector both for investment opportunities and jobs. The Wall Street Journal reported about the growth and decline of financial service jobs on September 18, 2009. The newspaper writes about how the financial services industry dominated the mindset of jobseekers:

Over the past 20 years, finance grew faster than almost any other sector of the U.S. economy, offering rich pay and luring a growing share of bright minds to trade securities, make loans, manage portfolios, engineer mergers and turn complex mortgages into complex derivatives (Bannon 1).

The Journal goes on to say that creating such complicated financial instruments “drew brainy and aggressive people” and that by 2005 a finance professional earned 30% to 40% more money than engineers with a similar degree level (Ban