Tuesday, February 09, 2016

The Dream of the 90s

"Imagination/ That's the way that it seems/ A man can only live in his dreams"
- The Flaming Lips

Thirtysomethings like myself - the leading edge of the Millennial generation - often speak with reverent nostalgia of the 1990s. We make silly songs about it. Twentysomethings - the younger Millennials - are confused by this. What made the 90s so amazing?

I want to explain.

In many or even most ways, life is better now than it was then. We have smartphones - supercomputers in our pocket! In the 90s we didn't even have cell phones. We have social networks now - in the 1990s you had to keep in touch with old friends by email. We have GPS and digital cameras and YouTube and Yelp. Society is better now too. We have gay marriage now - that was a pipe dream in the 90s. So was a black president. 

What did we have? We had expectations.

The world of the 1990s wasn't the best world in history. But for Americans, it was improving at a faster rate than at almost any other time. And when the world is improving at a rapid rate, we often expect it to continue doing so. Those great expectations - which economists call "extrapolative expectations" - contribute a lot to our happiness. The shining future becomes a kind of wealth, and everyone feels rich.

Here are some of the ways that the world changed for the better in the 90s.


As crazy as this sounds, I grew up thinking that the human race didn't have long to live. When I was a little kid in the 1980s, my parents told me that there would probably, at some point, be a third world war. The U.S. and Soviet Union would nuke each other, and human civilization would fall. This was presented as the most likely possibility - the only way for us to survive was to remain forever balanced on the knife-edge of Mutually Assured Destruction. The USSR was teetering economically, but everyone said it would never fall without launching its nukes in a final bitter gesture, like Hitler ordering all-out attacks in the last days of World War 2.

And that would be the end of us all. Look how many nukes there were in those days!

Nowadays a U.S.-Russia nuclear exchange would mean the end of both of our countries. In 1989, it would have meant the end of human civilization. 

Then one day I woke up in August of 1991, and I heard the radio in my parents' bedroom. They never turned on that radio, so I knew it was important. I asked my mom what was happening, and she told me that the Soviet Union had just fallen. Actually it was just a coup - the fall came somewhat later. But in that moment I knew. There would be no bitter, final world-destroying gesture. We would live on. 

Starting at the end of the 1980s, freedom and democracy - and American power - spread across the globe:

It really was the "End of History."


The 1990s saw the explosion of information technology. In the 80s we got personal computers, but in the 90s we got Windows, then email and Usenet and IRC, then - finally - the big one. 


At the beginning of 1994, if you wanted to find out a fact, you looked in a paper encyclopedia, or went to a library, or asked the nearest wise-seeming human being. If you wanted to talk to someone in another country, you signed up for a pen pal service (though Usenet and IRC were already chipping away at that barrier). 

In late 1994, if you wanted to do either of those things, you clicked on a little blue "N" icon, and suddenly this magical window opened, and you could talk to people in India, or read about how quantum mechanics worked, or learn how to get in shape, or get ideas for Dungeons and Dragons campaigns, or see what naked people looked like, or make fun of X-Files fans in real time. It was like going to college or moving to a big city, but for everyone. The world just exploded. It's impossible to describe the change. It was like adding another dimension to the Universe, and finding that you had been living in Flatland all along.

Of course, a steady stream of internet services followed - online shopping, chat, payments, games, maps, better search, video, video chat, etc. etc., and finally social media. But in 1994, as soon as that magic window appeared, it was clear that all of that stuff was on the way, and soon. 

Social Progress

One of the most remarkable and wonderful changes in the 1990s was the progress of gender equality. In 1980, a minority of women were working outside the home in the U.S. - by 1985, it was a majority, and by 2000 it was over 57 percent:

The gender pay gap for men and women also steadily shrank during the 80s and 90s, reflecting both more equal pay for equal work and more promotion and hiring of women to higher-paying positions:

The percentage of woman managers also increased dramatically:

Women also took a steadily higher percent of professional jobs.

Now, the gaps between men and women didn't close in the 80s and 90s. But they shrank a lot. And remember, the key to understanding the 90s is optimism. We thought those gains would continue. (Sadly, they did not.)

Race relations also seemed to be improving in the 90s, after the disasters of the 80s. Positive attitudes toward interracial marriage jumped. The black-white income gap was cut by about a third between 1992 and 2000:

Again, these were gains we thought would continue (but which sadly did not).

Health and Crime

The 1980s and early 90s saw an enormous crime wave. Everyone knew victims and perpetrators. Cities were anarchistic no-go zones. My cohort had one of the highest teen murder rates in the country. 

Then, suddenly, crime dropped off a cliff. In a few short years, the murder rate dropped to levels not seen since the golden years of the early 1960s:

Cities became livable again. Whole communities turned from war zones to nice neighborhoods. We still don't know what caused the great crime drop, but its positive effects are undeniable, and were exhilerating at the time.

It wasn't just crime, either. Health was surging. Life expectancy was increasing. Smoking was vanishing. Teen pregnancy was dropping:

Suddenly, the kids were alright.

The Economy

In the early 1980s, there were two deep recessions. Unemployment rose and persisted. The middle class spread apart and inequality increased. Everyone said that Japan was eating our economic lunch (yes, competitive corporate nationalism was still a thing back then). The late 80s were a good time, but productivity was still extremely sluggish, as it had been since the early 70s.

Then came the 90s boom. Productivity growth accelerated, and in many industries even exceeded its postwar heyday. Labor's share of income, which had been declining, spiked upward. With the addition of a second income, most families became much more materially comfortable. Two or more cars, a sign of wealth when I was a little kid, became the norm. Instead of one small TV, people suddenly had many large and beautiful TVs. Of course, we had computers and the internet as well. House sizes increased dramatically in the late 80s, then again in the 90s. 

In the late 90s, full employment was reached. Wage growth was rapid. Manufacturing rebounded. Everyone who wanted a job had a job. The stock market absolutely soared. House prices rose. Retirement accounts were flush. 

Times were good for the working class, but for the educated class, it was unprecedented party. As a Stanford student in 1999, I didn't even think about what kind of job I was going to get. None of us did, really. People in my dorm were getting rich over the summer on stock they received for interning at Amazon and eBay. It was OK to be a slacker. We all assumed that whenever we got tired of playing video games, we would go out and get rich. 

And once again, what mattered most was the sense that this was only the beginning. The end of the Cold War meant that we didn't have to maintain a big military, and the threat of destruction wasn't looming over the markets. Globalization was uniting the world. Technology was changing things in fundamental ways. A.I. and the internet were going to make progress go hyperbolic - it was The Singularity, man!! 

We thought we were living in a Vernor Vinge novel. The 20th Century was a long, dark tunnel from which we had finally emerged - the last bloody, terrible trial of humanity as we wrenched ourselves up from our agrarian and animal past into the bright future of peace, freedom, equality, health, riches, and neverending wonder.

Well, that's how it seemed, anyway. Then we had Bush, Florida, 9/11, the Iraq War, Hurricane Katrina, Putin, the rise of China, Lehman, the Great Recession, years of flat or falling incomes, a resurgent racial income gap, falling female labor force participation, the breakup of the working-class American family, slowing productivity, rising inequality, political polarization, the Tea Party, the heroin epidemic, the alcoholism epidemic, the huge rise in suicide, the end of Pax Americana.


Depsite these challenges, the world really is better now in many ways. But it's a darker, grimmer world, at least in America and the other rich countries. Because now we know that although the dreams of the 90s may all still come true, it will be a longer, harder, bumpier road than we had hoped. We have lost the wealth represented by the capitalized value of our extrapolative expectations. We've made progress, but much of our optimism is gone.

That's why I feel like my generation has a duty to the ones that come after us. Because we remember the 90s, we remember what unbounded optimism was like. That optimism doesn't come cheap - you actually have to make the world better if you want to feel the rush of progress. We may be able to get that 90s feeling back, but we're going to have to fight for it. 


  1. Bush v. Gore, man. Ruined so much. Also those things Clinton did in the last year. Commodity futures modification, man...

    1. Anonymous12:54 PM

      It wasn't ALL the fault of Bush v. Gore.

      I was flipping around my car radio (no CD player) in 2004 and landed on a fiery, articulate, liberal criticism of the George W. Bush presidency on C-span. After a few minutes a voiceover identified the speaker as Al Gore.

      MY wife and I turned to each other and simultaneously asked, "Where the hell was this guy during the 2000 campaign?"

      The 2000 Gore campaign was political malpractice. They took everything Gore believed that might offend ANYBODY and locked it away in a closet. They made Gore into an SNL parody of himself.

      I still get angry when I see Gore's campaign director, Donna Brazile, on the Sunday news shows posing as a "political expert".

  2. I continue to hope for a future of stable growth in NGDP.

  3. Much of this is a change from forward thinking to backward thinking. We looked at what was coming and would come rather than what we were losing and would lose. Dominate corporations were viewed as dinosaurs and many businesses and technology as passe, yet we didn't feel anxious because they would adapt or be replaced. The destruction only hit the entrenched and what was created was better. Then the frenzied fever broke and destruction was everywhere, making money was paramount, and only housing was left standing until it wasn't.

    1. Yes. Progressivism is silly. It is always the best of times and the worst of times.

  4. Most importantly, the music killed the terrible crap that was the 80s.

    1. Anonymous1:00 PM


      Have you forgotten about The Police, The Clash, R.E.M., U2?

      How about the return of Aerosmith? Don Henley's solo work? Tom Petty and Bruce Springsteen continuing to crank out new, excellent work?

  5. bjdubbs12:02 AM

    This doesn't really explain why it's darker. It can't be economics - the post below explains why the economy has never been stronger. And it can't be foreign policy, because the US is as powerful and dominant as ever. It has to be something else. What could that be?

    1. It's because the author was a kid! The '90's feeling' was the period of life where they were becoming aware of the world but still did not have adult responsibilities.

    2. I was a kid in the 80s.

    3. My assumption based on being a leading edge Millennial was that you were born around 80/81. That's around 9-10ish at the start of the 90's. It seems like people get this weird nostalgia about their teen years.

    4. Anecdotally speaking, I think that smuglydismissed has a good point here. The start of my teenage years roughly coincided with the 2007-08 crash, and I still have quite a rosy view of those years and the ones that followed immediately afterward, one that would seem highly implausible in someone, say, graduating university at the time.

    5. I think the "youth nostalgia" period lasts up until you leave your parents' house and have to start earning your own living.

    6. My teen years were the 70s. Gas rationing anyone? Not much youth nostalgia there...

    7. I was pretty unhappy and depressed as a teenager. My most fun years were in the early and mid 2000s.

    8. Anonymous5:00 AM

      This isn't just youth nostalgia here. The 90s were an amazing decade to be alive. People were happy because of what the future looked like. Things were good.

      My parents came of age in the 70s and they will both tell you that was a crappy decade to be a teenager. When I ask them what their favorite decade has been so far they always tell me the 90s.

  6. The matrix was set the 1990's because the machines learned that if life were any better than that people would reject it because they knew it was fake.

  7. Hmm... From two decades earlier we grew up with the battle between clean energy/conservation and coal/petroleum, problems in the middle east revolving around Iran and Iraq, a rise in gold buying due to the belief fiat money would fail any day, terrorists fixating on planes, a debate over the growth and power of Wall Street, 1987's Black Monday and issues of leverage, environmental problems with pollutants in our rivers, the threat of an unstoppable Asian economy (the other one) and then its falter, an emerging virus that affected millions but first only gained widespread attention because of its effects on a specific population of sexually active people, CEO adoration (Lee Iacocca!) who could "get things done," rap music that infuriated some for its lack of respect for authority and danger of undermining the safety of policemen (or another way to say black people and their music)...

    For us older it feels more like a giant repetition. Granted, the 90's were our first taste of a noticeable government shutdown. But that's just another day in déjà vu now. The biggest differences are the way our children are taught now versus then and the absence of constant and pervasive talk about nuclear annihilation... Oh, wait... Climate change. Damn.

  8. Interesting. We went from "extrapolative expectations" with Clinton in the 1990s to "expletive expectations" under W to "expiring expectations today. What's next? If Trump wins, my guess is "expatriate expectations."

  9. "Nowadays a U.S.-Russia nuclear exchange would mean the end of both of our countries. In 1989, it would have meant the end of human civilization."

    Really? Forget that looking solely at the number of warheads doesn't say anything about their destructive capacity. I'm not a nuke expert but I'd be surprised if current, total mega-tonnage wasn't more than enough to destroy civilization. I'm thinking we went from being able to destroy the world 10X over to 2X over. 1X over is all it takes and that's more than what I'd like to see.

  10. Anonymous9:23 AM

    Dropping and low unemployment allowed workers to make wage gains in the 1990s. Expansion of the EITC, child tax credits and other policy to supplement income of low wage workers were enacted. Low wage workers were much better off in 1999 than in 1989. Many of these benefits were lost during the 2001 recession and the anemic job growth of the 00s because they were tied to work. Tech was booming in the 1990s, but crashed in the Tech bubble and suffered (and still suffers) from like of public investment in public infrastructure. The idea of internet access to every school died even though the tech crash and glut made the possibility very affordable. Instead the Fed blew up a housing bubble.

    1. Anonymous4:09 PM

      If the Fed "blew" up a housing bubble, it did in 97-2000 when it was raising rates. You don't get it. The "housing bubble" was a larger formation of something that started in 1973 and began accelerated rapidly in 1997.

      The 90's are overrated, much like the 80's. America began to degenerate into nothing. They did nothing, they became nothing. Its "boom" was fueled by a temporarily generated innovation wave with computers that was fading by 2005. The industrial revolutions impact on capital, it was not. Stop acting like something was going on "right". Nothing has gone on right since 1969.

    2. "Nothing has gone on right since 1969."

      Apparently, you don't remember 1969 very well.

      In 1968 the Soviet Union invaded Czechoslovakia to stop a reform movement. In 1969 American society was tearing itself apart over the Vietnam war - the baby boomers were in full conflict with the generation that had come of age during the second world war. In 1970 the National Guard shot and killed white middle class university students (and some innocent people walking by hundreds of yards away) for protesting American incursions into Cambodia. Middle class parents lived in fear that their sons would be drafted and sent to die in Vietnam. IIRC, the music popular on college campuses in 1969 was full of rage and despair.

      A lot of things have gone right since 1969. They could have gone better.


    3. This is one of handful of iconic photos for my generation:


      The helicopter on the roof of the American embassy in Saigon, the little girl fleeing naked from American bombing and the Vietnamese general shooting the Viet Cong prisoner in the head are others. 1969 was not a happier, better time (except for the personal fact that I was sixteen - being sixteen is better than being sixty :-) ).

    4. Last I checked, 1970 came after 1969.

    5. "Last I checked, 1970 came after 1969."

      Har. Har.


      I remember the period 1968-1970 as a bad time in Europe and America. 1969 was not a golden age.

  11. Anonymous4:13 PM

    Your forgetting the Baby Booms were at their peak earnings years as well in the 1990's. That means you needed more growth to generate similar returns to today. Sadly, it was all turning all into consumption based bore.

    Much like then, Gen X gets blamed for whats their fault because real demographically adjusted GDP, is not far off from the bulk of the 90's and I suspect this decade's story is not over yet.

  12. In a nutshell: the Music and traffic were better, people were more optimistic, Cost of Living was lower, wages were higher, and technology doesn't necessarily make people happier.

  13. Or, as Hobbes said in the 90s (the 1690s, that is):
    "Felicity consisteth in prospering, not in having prospered"

    Y'know I'm REALLY old. I can remember articles just like this one in the 1970s talking about the betrayed hopes of the 1960s. It really is "its the economy stupid" (to borrow a slogan from the 90s) - everyone in the boom thinks the boom is going to last forever, everyone in the bust thinks that's going to last forever too.

  14. Anonymous8:26 AM

    The 1990s was when the Republican party made it's final turn into darkness and became the Party of Gingrich. Life might have looked great if you were American middle-class--but not in Eastern Europe, or in the inner cities. Institutionalized racism persisted in the police, and maybe grew because our attention was elsewhere, on feeling good. Low prices for oil, so we squandered a moment when maybe we could have tried to break oil addiction rather than guzzling cheap gas. The 1990s was an era of blind hubris.

  15. Anonymous9:16 AM

    You should add the discovery of effective treatments for HIV infection/AIDS to your list, which I think was mid-90s. Until then, the number of deaths and really horrifying illnesses due to the virus was escalating pretty fast, at one point, and AIDS (if I remember right) had become a leading cause of death for some demographic groups. The discovery that HIV could be transmitted through heterosexual sex had freaked out a whole generation.

  16. Anonymous9:17 AM

    ...and at one point AIDS (if I remember right)...

  17. "That optimism doesn't come cheap - you actually have to make the world better if you want to feel the rush of progress. We may be able to get that 90s feeling back, but we're going to have to fight for it. "

    Congratulations. You have re-invented the core principle of the Enlightenment. The world can be improved but you have to work for it and you have a moral obligation to try.

    So what went wrong after the 1990s? The Second Iraq war was a huge mistake and arguably a war crime. If America promoted the current civil war in Syria, that has been another terrible mistake. America successfully brokered the rise of China for geo-political reasons but at terrible cost to factory workers in America and Europe. Tax policies designed to favor the rich, with their low marginal propensity to consume, coupled with the rise of China, with its low factory wages and 40% savings rate, have created global deflationary pressures and financial bubbles.

  18. I think this post accurately describes the giddiness of the late '90s, but the early '90s were a different time. The mood was a lot darker and grittier. You can see this culturally, for example in pop music, which turned from the bubbly, carefree sounds of hair metal to the darker, angst-driven sounds of grunge, and from the boastful early party rap styles to the violence and alienation of gangsta rap.

  19. Anonymous9:52 PM

    The late '90's was the out of control dot.com bubble economy. That is the worst bubble in the history of man, which we are still trying to deal with today. That simple.

    Any correlation with Bush, Clinton, etc. is very weak. It is a failure of executives at all levels. Even now the brainiacs at the Fed say they can't identify bubbles.

    I can. I did; invested accordingly and it has been life changing, for the better.

    The '90's? First Half ~ OK except for the war. The 2nd half? A steaming pile of time bombs that have been detonating for 16 years now.

    1. Wow.

      So, the dot.com bubble was comparatively tiny (go check out the tulip bubble!) and its aftereffect quite minor.

  20. We let 9/11 collapse back into fear and war, except this time without a competing, expansionist super power as a rival.

  21. Anonymous1:54 PM

    I saw Jurassic Park in movie theaters back in 1993. I was eleven; Dinosaurs! Real living dinosaurs! cementing the idea for a solid decade that the world was a fabulous playground, created just for me.

    I was just beginning to get suspicions there was something interesting about the opposite sex and only a few years (though it felt like an eternity) from driving. The 90s were an era of achieved dreams and even greater promises.

    1. Did those promises work out? With the opposite sex, I mean. Just sayin'. ;-)

  22. Anonymous2:15 PM

    I hope this means you're voting for Bernie Sanders. Perhaps he spooks economists a bit because of a misunderstanding of his meaning of socialism, but I hope people realize he's really just a genuine progressive.

    Why did it take a self-declared democratic socialist to run a campaign on a progressive footing? Why couldn't this party run on this agenda any other way?

    I broke my promise of not donating to campaigns, but only for Bernie. He needs our help.

  23. While in Poland, 90s meant - after a short burst of ethusiasm and happiness - surging unemployment, raised gender pay gaps, breaking of social fabric, an impression of crime rising and so on - while media were keeping telling us that everything is allright and those who complain are just frustrates who would, hopefully, die out within next decades and all will be even more alright then. And the, at the end, slow recovery.

    (OK, i am unfair here, as many my friends DO remind the 90s as wonderful times, but I am speaking for those, who feel they lost during 90s - and there were a lot of them in Poland, a lot)

  24. Anonymous1:06 PM

    The 90s are to millennials (especially older millennials, a group I identify with although I'm probably a few years younger than Noah) what the 50s were to Boomers (again, especially older Boomers). A time of peace, prosperity, and relative optimism that intuitively feels like the way things *should* be, especially in comparison with the apparent degeneration that came after.

    Like all myths, and like the 50s myth, the 90s myth has lots of holes. But it comes from somewhere. The 90s were, for the most part, an optimistic and peaceful time if you were a middle-class American.