Beware the Coming of the Green Bubble
Sun Jan 20, 2008 at 02:53:25 PM PDT
It’s been truly sickening to watch, in one decade, the implosion of the Dot Bomb and the housing/credit bubble. Like so many others, these implosions stop my personal economy dead in its tracks. I never invested anything in either pipe dream. I worked hard, saved, and kept my head. And I have nothing to show for it, since the work I do dries up as soon as I get ahead, and I have to weather the next storm of fiscal idiocy from our great business and political leaders. (Same thing for the most part.)
In 2002, I gave up trying to find programming work, and went back to school to get a business degree. I needed it, so it was okay. Now – hm. I need programming work, not more student loan debt or more academic fluff icons behind my name.
Business school was interesting. My small private, supposedly progressive, alma mater – John F. Kennedy University – had started a business incubation program on the coattails of the Dot insanity. When I got there, of course it was an embarrassment, and was not being replaced with anything. The new housing bubble was in full swing, but that one was not nearly as open to entry by student types. You can’t incubate real estate or credit businesses. They are accoutrements of wealth, not ingenuity or creativity. Not even the microloan business is all that well suited to bootstrapping on the provider side.
I studied a lot about hydrogen and its role in a renewable energy cycle. The dean of the business school played devil’s advocate the entire two years, stating repeatedly that the idea "had not entered the mainstream." I think it had, even then, but it certainly has now. Besides, what was a "progressive" business school dean doing worrying about the mainstream?
Al Gore last November joined with some powerhouse venture capitalists to help transform the Green Economy. Wow! Go Al...right? Well not so fast.
The company that Gore joined was one of the principal forces behind the dot com bubble. And they made out like bandits! How’d they do that, you ask? Short answer: they knew what was happening, and rode the wave like surfer dudes, while most people (not me – I never bought the hype) crashed and burned.
Actually, the VC’s and their ilk got out at the peak or near it – so it was just before everyone else crashed and burned.
The global economy is all about flows these days. All the wealth that has been accumulated in the history of the world accrues to the present moment – this would seem to be an obvious fact, but if you know anything at all about the mathematics of growth, it is staggering to realize how much money (in one form or another – today, largely just electronic 1’s and 0’s traded like cash) flows around the world each day.
And it is the enormous amount of wealth in the world, the need to park it somewhere so that it will grow and not stagnate, that drives this cycle of boom and bust. Well, actually capital markets themselves necessarily include boom and bust as a feature to some extent – they are inevitable. But my point is that there is more wealth to invest than there are good investment vehicles.
And next up for adoration by the venture capitalists of Dot Bomb fame? Green Energy. You may think, we have to recover from this one before worrying about the next one. But it’s not the case – we’ve got tons of money out there that is looking for refuge from real estate and banking. It’s going to go directly into the helium tanks. The Green ones over there. In Silicon Valley.
Watch out.
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