Inflation nation.(FROM THE EDITOR)

How much does a balloon have to blow up before it pops? Americans should know since we are experts at pushing the limits, which is a good thing under the right circumstances. Certainly, by the end of World War II, our hard work and innovation helped build a dominant military, the largest middle class in our history and cities with impressive infrastructure. Americans not only saw their achievements, they were living in them.

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By the 1960s, though, the investors helping to build that nation--one coming out of a depression and a war--began pushing the limits, taking larger risks by using mergers and acquisitions to grow, often buying companies that were totally different than their core business. As it turned out, the diversification didn't pay off, and many of those conglomerates' holdings were sold off. The 1980s saw a still more risky group of large hostile takeovers from investors who wanted to buy companies by going directly to the stockholders. If successful, they would quickly break up the companies and profit by selling the individual operations. Hostile takeover attempts were met with equally wild leveraged buyouts from managers who took the company private using junk bonds to finance the purchase. That resulted in many bankruptcies because of their inability to meet the demands of the exorbitant debt. Is this starting to sound familiar?