Many years ago, in a faraway land, a small band of us became friends in the financial chatboards devoted to amazon.com. Those of us who got together were of many minds, some perma-bears and a few devoted technical stock analysis mavens. But the majority of us were only there to see if this “New Economy” thang was somehow real. We parted ways once it became clear that the Tech Bubble was bursting and we were right to be at least suspicious. But how should we commemorate this event that rolled over the stock market and all of the US? The only thing I could come up with was: a musical.
Imagine an empty stage where a white spot comes on a figure seated on a stool. Nothing more. The figure begins to sing a gentle refrain, just loud enough to compel you to lean in to hear:
Something from nothing
Out of thing air –
More than a value,
More than a share
Here in this building
Within these walls
We can all
Have it all!
At this point, the lights come on to reveal an empty brick warehouse of a stage, and the hard rock overture rips. Propane powered forklifts come out to build the set, stacking cubicles as workers fill them and start typing away in their own grey world. The promise of something for nothing starts to become real immediately.
Why am I bringing this up now? I have two reasons. First of all, the Tech Bubble didn’t really burst but rolled forward into safe and stable real estate. As the stock market became hungry for more and more of it, they came to relax standards to the point where collapse was inevitable. Everything we see here today is part of the same phenomenon, the belief that financial and information management tools can actually make something from nothing.
The other reason for discussing this is that I think it’d make one Hell of a musical.
Think of the fantasy you get for shelling out just a few bucks – not the price of a ticket, but the process of opening a mutual fund account. People have been promised 6% returns forever. This money for nuthin’ is what most people’s retirement plans have been built on, the promise that an entire generation would be able to get rich and kick back at the same time. Now that the kids of the Endless Summer are entering their Winter of Discontent, we can expect a lot of things to change.
One thing that I hope changes is that we all start to realize that we can’t build an entire economy on nothing. Eventually, someone has to actually make something. While it’s entirely possible that we can continue to earn a lot by selling people software, movies, and other bits of intellectual property, we have to remember that those only have value to the extent that they increase productivity or people have disposable income. We can’t possibly maintain 22% of the planet’s GDP by relying on these secondary effects; our income depends entirely on everyone else making something, which is to say they have more productivity than we do at some point.
Manufacturing jobs typically have good wages and benefits. They are what made the USofA strong a century ago. Their share of the economy peaked in 1968 at 28% of all jobs, and is now only 10%. We’re not making as much stuff as a share of the economy, and people aren’t being paid the kind of good stable wages that come from that.
But instead, we want something for nothing. We want to live in something like a musical, a world where just about anything is possible if the right person is directing the stagecraft. What do you say, everyone? Are you with me on this?
No, not on producing the musical. I was referring to getting real about actually making something. But if you’d like, I think I could have the book for the musical ready in about 4 weeks, especially if you’ve got some money to produce it up front. See, I’ve been getting real about this stuff for quite a while now.