The Golden Collapse

Despite the considerable hit that the wave of tech publication closures had on the pocketbooks of freelancers like me, it was terrific fun to have post-crash sport at the expense of jargon-addicted IPO charlatans and Koolaid-drinking late adopters, and there was a hope in those days that the post-crash Web would revert to the individual, low-budget level of wacky experimentation and cheap humor. That hope, we have seen, has turned out well.

But what turned out best of all, and what has the most relevance to today’s various economic busts, was the regulatory response to the technology crash: a grand, collective shrug.

Like the subprime collapse of 2008, the dot-com bust of 2000 took place during a heated presidential campaign. Yet the tech bubble didn’t merit a single mention in any of the presidential or vice presidential debates that fall. The Federal Reserve responded to the 2000 contraction by using the main mechanism at its disposal: repeatedly slashing interest rates (a move, many say, that helped inflate the next bubble). The Fed is responding to 2008, on the other hand, by proposing vast new mechanisms for itself, including regulatory oversight of investment banks, new rules for credit rating agencies, and authority over such far-flung sectors as insurance and commodities trading.

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The only substantial “reform” that came in the wake of that crashwas the disastrous Sarbanes-Oxley Act of 2002, a make-work program foraccountants that was more a reaction to the shoddy internal reportingof Enron, Adelphia, and WorldCom than it was to the fantasy-basedprice/earnings ratios of fill-in-the-blank.com.

What were thenefarious effects of the surprisingly laissez-faire attitude towardtech stock de-listings and baby boomer NASDAQ wipeouts? The Dow Jonesrecovered its 2000 highs by 2006, and even tech-heavy NASDAQ has morethan doubled its value since post-crash lows in October 2002. TheUnited States, led by the ongoing information revolution, has continuedto innovate and thrive, with only a few minor macroeconomic hiccups in15 years of robust growth. The broadband dream that seemed so far offin 2000 has long since become a reality: It’s YouTube’s world; we justlive in it.