Smoke and mirrors

Published 12:00 am Thursday, July 4, 2002

Was the great economic expansion of the 1990s mere smoke and mirrors?

With each passing day, it appears more and more such was the case.

First there was the dot.coms, which made millionaires and billionaires overnight. Those fortunes were built on a future that never materialized. The companies had no real value and their stocks ultimately reflected that.

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Other big growth sectors were energy trading and information. In cahoots with their auditors, we now know that many – if not all – of these companies cooked their books to reflect billions in earnings that simply didn’t exist.

In hindsight, the U.S. economy appears to have been nothing more than a giant Ponzi scheme. All these huge corporations had and have one thing in common – they don’t really produce anything. And that’s troubling for this country’s future.

More and more manufacturing – in which real companies produce real, tangible products – has been moved to other countries. Those manufacturing jobs are what created the middle class in the United States. Without them, we find that class disappearing and the gap widening between the rich and poor.

We don’t want a future in which Americans are at the mercy of foreign, often unfriendly, nations to supply the goods we need and a populace that cannot afford to buy them. It’s a recipe for disaster.