Gore Invented the Internet, Rubin Financed IT

“During my service in the United States Congress, I took the initiative in creating the Internet.”
- Vice-President Al Gore on CNN

They now have a term for it - "Swiftboating" a reference to extreme personal attacks and outright lying to gain political advantage that came into usage after the campaign to destroy Democratic candidate John Kerry in the 2004 Presidential election. But in the 2000 election Al Gore was also smeared and ridiculed for his "lies". The above quote was turned in a claim that Gore had said that he "invented the Internet". Here's my (brief) version of how the Internet came about and Gore's role in it.

The Internet's origins are usually traced to the development of the ARPANET, the first packet-switching network that went online for the first time a few weeks after the first Moon landing in 1969. But the Internet really became the Internet years later when new protocols were developed to connect the University of Hawaii via a satellite.

But the real transformation occurred in the 1980s when Gore took the initiative, as he said to help connect supercomputers, around the country. The Supercomputing Study Act of 1986 and other Gore-supported legislation got the National Science Foundation to support linkages between supercomputing facilities at universities and research centers around the country using the ARPANET technologies. Students at one of those supercomputing centers designed a visualization application called Mosiac that was the precursor to Netscape and thus all browser interfaces to the World Wide Web. From there the Internet took off and garnered the attention of the private sphere as well.

Enter the financial markets. By the early 1990s, the financial world had forgotten the implosion of October 1987 and was busting at the seams with institutional money. The telecom market had already been attracting money in the wake of the AT&T breakup and the growth of cable TV and wireless communications. But the Netscape IPO in August of 1995 was arguably the beginning of the "dot.com" frenzy, one of the most extraordinary speculative episodes in stock market history punctuated just a little over a year later with Fed Chairman Alan Greenspan's "irrational exuberance" speech.

Despite Greenspan's warning, stock markets such as the NYSE and the NASDAQ continued to boom and one of the main reasons was global instability in the currency markets and the flight to the "safe" markets of the US. The issue can be traced to the value of the Japanese yen which was reaching highs in 1995 of when it could buy a US dollar for less than 80 yen, roughly making the Japanese economy worth as much as that of the United States. The US attempt to devalue the yen, orchestrated by Robert Rubin would, ignited the financial shot that was heard around the world. The yen lost nearly half its value over the course of the next three years.

The problem was that many countries around the world had pegged their currencies to the US dollar which was suddenly appreciating - very rapidly. (The other side of the JPN/USD equation) The newly termed "Emerging Markets", heavily dependent on exports to the US saw the prices of their exports rise. These countries tried to maintain their currency pegs but were attacked by hedge funds speculating on the currency imbalance. The "Asian Financial Crisis" emerged and spread to Latin America and then Russia by 1998.

The international financial crisis made the US markets the safe haven for world's wealth. The US eased the transition by "bailing out" these countries, in effect, supporting the transfer of wealth back to the US markets and into the dot.coms and telecom industries. The NASDAQ climbed from under 1000 in 1995 to over 5,100 at its peak in early 2000 making Cisco and Microsoft the largest companies in the world (by capitalization). Incidentally, this was time the first accusations of Gore claiming to have "invented the Internet" emerged.