We have had 10 years of economic expansion, and five years when the markets went up over 20 percent. There was too much capital spending over a five-year period. There was a philosophy that you had to have the 'new, new thing' to maintain market share. Every year, Byron Wien issues a list of predicted surprises for the next 12 months. Fears of legislative gridlock notwithstanding, President Bush forges a surprisingly constructive working relationship with the new Congress.
Important legislation passes on health care, education and income-tax reduction.
A bipartisan bill to reduce estate taxes to the equivalent of the capital-gains rate passes easily. Germans take to the streets in protest over the unworthy successor of the once-proud deutsche mark. Wim Duisenberg resigns as president of the European Central Bank, and Hans Tietmeyer is called out of retirement to take the helm of the beleaguered institution. OPEC increases production modestly, but strained refining and marketing capacity keeps the price of gasoline and heating oil high, leading to an outcry by consumers and regulatory authorities. Legislators are outraged but confused about what action they should take.