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.
As someone who was told that the “knowledge economy” was our future rather than manufacturing, where we make stuff, I am now questioning the validity.
The real problem (methinks) is that when we make stuff _up_, like overvaluing things that are not tangible, etc. So making stuff involves producing things outside our imagination. 🙂
Yes, that’s a good way to put it. Ultimately, all that stuff made in China, Korea, et al gave them all the cash. We have overvalued paper, or we did have it and now we’re looking for the Chinese to bail us out after we got stuck believing our own bullshit.
Wouldn’t it have been better to keep making stuff all along so that we had the actual cash?
The future will always belong to the nations that make things, assuming they have the financial and governmental framework to go to the next level. That’s why I go on about Brasil all the time – they aren’t the dictatorship-on-low-boil that China is, nor do they have the imperial ambitions of the Russian mafia state.
Ideally, it’s all a balance. We create the ideas, we implement them as real things, and the bankers write the loans that make it all possible. Glorifying money fer nuthin’ only gets us … well, where we are now.
More to the point, I don’t see why this is a radical idea to so many people.
Jeanne, you’re no backward ass Texan – you’re one smart person. There’s no shame in not making sense of the senseless. It takes either a liar or a fool to claim that they do.
Bankers are a good lot, when they do their job right. They provide the grease that allows everyone who has a good idea to make it into reality, and that’s a rather noble calling. Where it gets all mommocked up is when they make it possible for con artists to become something like minor deities – people who can make a rabbit or a lot of money come out of a hat. It sure sounds to me that your Dad understood the difference, assuming that you got your attitudes from him.
I only hope that the “little guys” become more valuable through all of this. It might make it all worthwhile. Hell, I’m going to keep dreaming of it as if it was a Golden Age, damn this talk about Depression and Collapse. This might yet be our time.
Thank you so much for your comment, and may all the best be with you and yours.
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Please have a realtor in this musical sitting in the corner crying . . one like me who lost her job when the tech bubble went pop
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