Nineties nostalgia

My article on "The Soaring Nineties," about markets and politics in that decade, is now up at Research magazine's website. Excerpt:

Democrats lost both houses in the 1994 electoral spanking, and soon House Speaker Newt Gingrich bestrode the Capitol like a Colossus. Republicans got various items of their Contract with America enacted, such as child tax credits and tort reform. But the Republican Revolution, as it was called, would start fizzling by the end of 1995, when a budget clash with Clinton resulted in an unpopular shutdown of parts of the government.

Equity prices, having treaded water in 1994, began an ascent that would reach unprecedented heights in subsequent years. Both political parties would seek some credit for this before too long. Democrats would note the huge gains in share prices that occurred in the Clinton era, and Republicans would point out that the early Clinton years had seen only modest rises, with the real gains starting after the 1994 election.

It may well be that divided government, combining a free-market Congress with a deficit-cutting administration, helped improve the investment climate. If so, both parties could be right in claiming a part in the stock gains of the 1990s. But a great deal of that boom was manufactured in Silicon Valley, and other places far from Washington. Technology drove the market and the economy to places few expected they could go.

Whole thing here.