Quote of the Day 1: Michael Barone on the Economy
From Barone’s Townhall column of September 26:
Polls show that most Americans think the economy is in dreadful shape, even though almost all the numbers are good: Inflation and unemployment are low, and growth is robust despite the exogenous shocks of Sept. 11, Enron and Katrina. After a generation of almost constant low-inflation economic growth, perhaps we Americans are only satisfied when we have bubble growth, as in the late 1990s, and are unimpressed when the American economy proves once again to be amazingly resilient. This is all the more astonishing when you consider that we are going through a time of increased competition and change, as China and India, with 37 percent of the world’s population, are transforming their economies from Third World to First World. Such a large proportion of mankind moving rapidly upward: This has never happened before and will never happen again.
To supplement, I would like to remind Mr. Barone that the “bubble growth” of the late 1990s turned out, with notable exceptions like Amazon and Ebay, to be largely an illusion:
Can you say “internet bubble”? Through much of the late ’90s, millions of Americans tossed their money into gems like Buy.com, flowers.com, and com.com without really knowing how these companies were ever going to turn a profit. We didn’t bother to look at the business models. We didn’t care. It was all so exciting-it was a movement. We were told that the “old rules” of the marketplace didn’t apply. Profit-to-earnings ratios of 50 to 1 were not uncommon, 20-something internet execs were becoming gazillionaires, and the stock prices just kept skyrocketing. (This assumes that these companies were making a profit–most never did, and never got close–Ed.)
But then reality set in.
It turns out that the old rules did matter. The slick dot-com television ads couldn’t conceal the fact that there was no there there. The bubble burst. In retrospect, it all seems so obvious. How could so many people have been fooled for so long?
The Internet Deathwatch is an extensive, but by no means complete, rundown of many of the dot-com wonders that sucked billions of dollars out of the economy that could have been invested productively instead of sent down a rat hole.
