The U.S. economy’s high-tech sector (internet, computers, telecommunications,
etc.) burst its classic speculative bubble in 2000. The
Nasdaq stock market lost 40 per cent of its value during the year and
lost another 20 per cent in the first quarter of 2001. The Nasdaq
dragged down most other stock market indicators in the U.S. Trillions
of dollars in U.S. wealth vanished. The wealthiest citizens turned
away from the stock market as rapid losses replaced the absurdly
high gains of 1999. Other U.S. citizens watched in horror as their
recent expansions of securities holdings rapidly shrank in value (also
confronting many with vanished savings and reduced retirement benefits
since their pensions were invested in ‘history’s greatest boom’).
See Appendix 5 for the details on U.S. stock ownership patterns.
Industries began to scale back their investment programs as rapid
growth shifted to slow growth and recession loomed. The majority of
workers slowed their spending and their accumulation of debt
because of falling stock prices and because they fear a recession’s
impact on wages, benefits, and job security. All these negative developments
are continuing into 2001.