Tag Archives: The 1980s

The Film Archives: Joe Nocera & Diana Henriques- The Worst Day in Wall Street History: The Stock Market Crash of 1987

Attachment-1-1768

Source: The Film Archives– Actor Michael Douglas 

Source: The Film Archives: Joe Nocera & Diana Henriques- The Worst Day in Wall Street History: The Stock Market Crash of 1987

Similar to what happened with the Stock Market last Friday and this Monday, is that we had a major downturn of the market or in 1987’s case a crash when the basic fundamentals of the economy were strong. Not counting the high budget deficit and national debt. But with solid economic and job growth, low unemployment, and even seeing wages ramong middle class Americans going up. Before the 1929 Wall Street crash the economy was fairly strong as well and then the crash happened and shortly after that we’re not only in a recession but the Greatest Depression and the economy hasn’t been worst since even with the Great Recession.

I believe as an non-economist that 1987 is where we see the negative consequences of what’s called Reaganomics. The theory being that you can cut taxes deeply and increase government spending dramatically and that somehow the new economic growth will pay for those new priorities. But the opposite actually happened. When President Ronald Reagan comes to office in 1981 he inherited a budget deficit of about 40 billion dollars, which even in the early 1980s was a fairly small deficit. By the time President Reagan leaves office in 1989, we had a budget deficit of around 2 hundred-billion-dollars, which in the late 1980s was a large budget deficit. Today that would be over 400 billion dollars. The economy bounces back in 1988, but struggles in 1989 and we’re in a recession by 1990 that lasted about two years and costing President George H.W. Bush reelection.

If you look at recession of 1990-91, you had high interest rates, combined with inflation, with the high budget deficit contributing to the high interest rates. Because you had the Federal Government competing with the private sector to borrow money just to pay for it’s government operations. America is now due for another recession simply because we’ve been growing as an economy coming up on nine straight years now and have growing since the Great Recession broke in the summer of 2009. The longest economic expansion at least in modern history. Rarely do you see a decade pass in America without at least one recession even if that recession is mild.

Assuming the Trump Administration continues to borrow money in huge chunks, if inflation and interest rates were come onto the scene again especially with the Federal Reserve feeling the need to raise interest rates to combat inflation because of higher consumer spending because of wages being increased, we may be in another situation like we were in the early 1990s. A recession to go with high budget deficits and a national debt. That will have to be addressed with major coming for people to prevent the economy from getting even worst.

 

 

Advertisements

NFL Films: Donald Trump-Decline of The NFL & The Rise of The USFL

img_9651Source: NFL Films: Donald Trump- The Decline of The NFL & The Rise of The USFL

There was a time in the 1980s when Donald Trump wanted to be an NFL owner. He could see the popularity and growth of the National Football League which by that time had become the most popular professional sports league in America, with the most popular championship in the Super Bowl. And The Donald or perhaps Big Don (does anyone call Donald Trump Don) decided he wanted a piece of that action. The problem that he had which was great for the NFL, is that the New York Giants, already had a solid ownership and management group. Same thing with the New York Jets, the Philadelphia Eagles, so The Donald was shut out of his own territory as far as having any opportunity to own and run his own NFL franchise. But this was a great thing for the NFL, because Big Don was a big reason why the USFL failed.

Again to Don’s credit he saw the growth potential of the upstart United States Football League that kickoff in 1983. And the USFL wanted a franchise in the New York market and they were a spring league and played their games in the spring and summer. When the Giants and Jets weren’t playing and that meant that Giants Stadium in East Rutherford, or Shea Stadium in Queens over on Long Island, would both be available in the spring and summer as far as not having a pro football franchise occupying it during that time of year. And the potential New Jersey USFL franchise didn’t have an owner and management group yet and that is how Don became part of the USFL. Because he had the money and to a certain extent (as small as that might be) the vision for how the USFL could succeed.

Originally the USFL had the right vision. Playing in the spring and summer when the NFL was in their offseason. Drafting and singing high quality NFL caliber players. Guys like Reggie White, Bobby Hebert, Gary Clark, Jim Kelly, Herschel Walker and many others. They had the money as far as investors in the USFL. They were playing exclusively in major media markets and big cities. Including markets that weren’t currently occupied by the NFL. Jacksonville, Orlando, Memphis, San Antonio, Phoenix, Portland, and Oakland. But a big problem that they had is that they listened too much to Donald Trump and he owning and running the New Jersey Generals. They expanded too fast having like 18 franchises by 1985 and probably their worst mistake and perhaps the death penalty of the USFL, was deciding to move from the spring and summer which is what they did from 1983-85, to trying to go right up against the NFL and try to play their games in the fall of 1986.

One of the best decisions that at the time NFL Commissioner Pete Roselle and the broader NFL made in 1983 and for the rest of the 1980s and ever since, was not getting involved with Donald Trump. Which is how The Donald ends up as part of the failed USFL, instead of becoming part of the NFL and making that league weaker or perhaps ruining a quality franchise, because of how much he would have tried to make his club and the NFL about him. Instead of what was the best thing for his club and the NFL. Because outside of Don’t beautiful family and I give him credit for how his kids turned out, the only thing that Don cares about when it comes to business is The Donald. If it was popular for Don’s club to fail as far as their record, but it would have been profitable for Don, that is how he would have run an NFL franchise. And the NFL doesn’t need another owner like that.