Another bit of ancient history in response to a Wired magazine article on “The Long Boom“. I totally called the dotbomb collapse – only 2 1/2 years early. Calling a bubble early feels good and all, but you can’t make money unless you can cut it a hell of a lot closer than I did.
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Have the fundamentals of economics changed in recent years? Has some combination of globalization, re-engineering, networking, and the rise of information technology made economies work in fundamentally different ways? Have the basic factors of production changed? Have we, in fact, moved beyond a manufacturing-based economy? Beyond even an information economy?
I don’t think so. I would argue that things like JIT manufacturing, warehouse automation, EDI, corporate-corporate e-commerce, automated bidding, CFAR may have cut the friction of the US economy by shortening lead-times, cost of goods, etc. That may change the value of a few “constants” slightly, but a fundamental change in the way money works? A Long Boom?
Nah…Because bad management beats good infrastructure every time.
We’ve got a “Boom” because a lot of stupid yuppies are realizing they can’t afford to retire and only have 10 years to make up for 20-30 years of not saving. They can’t do it anywhere but in the stock market. In the 20′s tons of stupid middle income folks thought the stock market would make them rich. Now lot’s of stupid middle income folks think the market can save their retirement. It will last as long as it lasts, but once it starts to fall apart, whatever gains have been made for retirement will start coming out FAST.
The “re-engineering” many firms have gone through is crap. The vast majority of such projects do nothing but lower the immediate cost of salaried employees by getting rid of older, experienced people for less experienced contract workers. Nice for the immediate stock price, but a little scary once CEOs start to realize that more and more of their most important intellectual capitol is in the heads of ronin who walk out the door every day at 5:00.
Welcome to the brave new world of the service economy. You are not an employee, you are a commodity.
Joke for 2020:
“What are every boomer’s last words?
You want fries with that?”
