Remember just 10 years ago when we were worried about the Y2K bug, when a stamp cost $0.33 and when our budget had a surplus of $200+ billion? In his new whitepaper, NAI chief economist Dr. Peter Linneman discusses the factors that enabled a decade that began with a roaring start  to come to a punishing conclusion.  The following is an excerpt:

What a difference a decade makes. It was just 10 years ago that:

  • panic was rampant about the Y2K bug;
  • the Nasdaq closed at 5,048.62, its highest point before the dot-com bust;
  • AOL bought Time Warner for $162 billion;
  • Vladimir Putin took charge of Russia;
  • Bill Gates stepped down as Microsoft’s CEO;
  • Elian Gonzalez (who?) was on the front page of every newspaper;
  • Vermont approved gay unions; and
  • the Bush vs. Gore election was too close to call.

In 1999, the New York Yankees won the World Series, the Denver Broncos won the Super Bowl, and Andre Agassi won the U.S. Open. In 2009, the Yankees took the Series again, the Pittsburgh Steelers won the Super Bowl, and Agassi told the world he took crystal meth. Roger Federer took the Open, in case you were wondering. In 1999, Hilary Swank and Kevin Spacey claimed Best Actor awards and “American Beauty” won Best Picture. In 2009, the winners were Sandra Bullock, Jeff Bridges and “The Hurt Locker.” In 1999, it cost $0.33 to mail a letter in the U.S., $0.35 to make a phone call from a public telephone booth (anyone remember those?) and $1 for a hot dog on the streets of Manhattan. Ten years later, it costs $0.44 to mail a letter, no one uses public phone booths and a hot dog can be as much as $5 on the streets of Manhattan

 

And that’s just the fun stuff. Over the past 10 years:

  • Real GDP grew by only 17% after growing by 34-40% during the previous three decades;
  • Real federal debt held by the public increased by some 95%, or about $4 trillion;
  • Employment stands at about 1.4 million fewer payroll jobs than what existed in 2000; and
  • Consumer confidence ended the decade 31% lower than it began.

Where have the good times gone?

In 2000, our federal budget surplus was over $200 billion under Bill Clinton, and the world was at relative peace. In 2010, Barack Obama led the U.S. to a federal budget deficit in excess of $1.3 trillion, the U.S. is at war in Afghanistan and still has a strong military presence in Iraq. In between those two, the Bush administration took us through two recessions, two wars and we witnessed the horror of the September 11th attacks. We experienced oil prices of nearly $150 per barrel, a booming and plunging housing market and an extreme financial crisis.

The first decade of this century had a roaring start and a punishing conclusion. A scorecard for the 10 years from mid-2000 through mid-2010 reveals that annual population grew by 0.94% per annum, while real GDP rose at the compounded annual rate of 1.58%, resulting in annual per capita GDP growth of 0.64%. Over the prior three decades through 1999, real GDP grew by 34-40% per decade. In comparison, it only grew by 17% over the last 10 years.

Read the entire article here.

And if you like what you read, join us for Dr. Linneman’s next webinar on January 19th where he will discuss how we move on from such a disastrous decade. Register here.