These neoliberal measures fuelled a series of mergers, acquisitions,
and leverage buyouts, involving some of the nation’s largest
corporations. Innovative financing tools, including what came to
be known as ‘junk bonds’, were sold to investors to finance many of
these takeovers. Underperforming companies with lucrative assets,
including employee pensions, were often targeted by ‘corporate
raiders’ who initiated hostile takeovers and then sold off their
31
First-wave neoliberalism in the 1980s
assets for huge profits, usually leading to significant layoffs. Thus,
speculators and stockholders thrived during the legendary Wall
Street-driven Bull Market that lasted from 1984 to the autumn of
1987. Lured by the promise of quick profits and high returns, shortterm
investors often overlooked the substantial risks involved in
such transactions. Thus, by October 1987, most stock values were
seriously inflated. The disastrous correction came swiftly with the
‘Black Monday’ crash of the New York stock market, which lost a
third of its value overnight. In the wake of this crisis, calls for the
reinstatement of strict regulatory oversight grew louder. Once again,
the Reagan administration turned a deaf ear to these pleas,
refusing to support anti-takeover legislation on the new-federalist
premise that corporate regulation was a state prerogative.