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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (45833)	11/26/2008 11:52:58 PM
From: koan	Respond to of 149317

I never heard that distinction made between now and the dot com bust, but what you say has comanding logic. As such, a real boom, the dot com bust did not cause a deflationary depression .

To: Lizzie Tudor who wrote (45833)	11/27/2008 3:31:09 PM
From: tejek	Read Replies (1) \| Respond to of 149317

I've seen the first interview with Laffer and Schiff on CNBC but not that second fox one which was just awful. The thing I disagree with Schiff on is is constantly uses the dot com bubble allegory for where we are today. My view is the dot com bubble was just an extreme example of the way the economy is supposed to work and I'm not even sure it was all that extreme relative to the real wealth created by dot coms. All the dot com bubble was was another frothy growth period for an emerging industry, this is the way its supposed to happen, all these competitors come out, many fail and you are left with the winners. The dot com bubble produced a huge number of winners much more than the PC bubble years ago- those are amzn, ebay, paypal, cisco, google and on the chip side broadcom etc. those are real wealth. The only companies that failed in the dot com bubble were those associated with this new industry. Dot com did not take down 200 year old financial firms or anything. Well I agree the dot com bubble is a bit different from the housing bubble. First of all, the bubble was in tech stock.....just tech stock. Secondly, tech has been and continues to be a relatively small portion of the employment base in the US albeit a growing one. On the other hand, housing and the finance industry permeate everything and have a much broader reach, effecting many more consumers. However, the conditions that led to the creation of the two bubbles are similar. Both experienced unprecedented demand which led to unusual growth. However, as the growth began to abate, dot.com began coming up with more and more crazy concepts to turn into companies because so much money was getting thrown at the industry. The same was true with housing......new crazy loan concepts to allow more and more people to qualify for loans. I think you forget how many dot. com companies no longer exist.......the Nazz is a pale shadow of the market it once was. Housing is a totally different beast than the dot com bubble. At the end of this we will have all this debt and no wealth, just houses in the boonies. The only new industry created were SIVs, securitization, thats something but nothing in comparison to cisco, amazon, ebay, google etc. In fact the biggest securitzation companies might have gone under unlike ebay which never had any inclination it would go under, ever. Lizzie come on.......how many tech stocks were once trading for over $100 and now are trading for less then $10 bucks? Where did all that wealth go? There is huge debt....but much of it doesn't appear on any company's books. The debt is with all the shareholders who got burned. As for the housing boom, new suburbs were created. Right now, they are hurting but assuming things eventually recover, they too will recover and become viable once again. This decade, unlike the dot com bubble decade, produced no wealth for the middle class. The 90s in the USA was more like the 50s with the middle class wages rising and full employment. The reason we had so many surpluses in the 90s is because it was a REAL BOOM unlike this decade with so many deficits. That's true....although the housing boom created middle class jobs, they were dependent on the demand continuing. Once the demand evaporated so did the jobs. I wish Schiff would make that distinction but he does not. He just lumps everything together as if every boom is a bad one like a broken clock. Those idiots on fox are the worst, but I have yet to see a real discussion of the differences between this decade and last, from anybody. Schiff is given 5 minutes to talk.......its not always possible to go into all the nuances in such a short span of time. Given the way his views are treated, I am surprised he talks at all.