The economic system crash

OK, the following is not a yuk. Some musings, is all. What the fuck do I know? I dunno. But here’s what goes through my head...

Every now and then an obvious idea taps you on the shoulder like your lost little child in the supermarket. You’re thinking, Jesus, almost lost the kid. How could I do that? Am I blind?

Here’s the idea...

Something is wrong. Something is wrong with the economy. Once proud, it has turned into a permanently limp dick. Can’t get it up but we don’t know why. The dismal scientists go yattayatta but they don’t know either.

OK. Here goes...

For the last ten years we’ve been “downsizing.” Bigtime CEOs get bigtime points for slashing lots of people. Less people working longer hours — that spells productivity! ATT cans the equivalent of a few Titanics and the stock market applauds.

At the same time we’re inching up on the next economic paradigm, poking our Kilroy noses over the cliff embankment just to look at the promised land (fuck, look at them giants) — the specifics are shadowy, broad outlines clear. A decentralized, distributed system. The PC becomes the next TV; mass media turns into on-demand targeted media. Manufacturing does the same thing. Smart micro-factories crank out the car, computer or whatever you want when you want it.

Think “Snowcrash” or “Neuromancer.”

I’m not selling this shit. I’m not saying it’s good or bad. Like any wave of change, it’ll be both good and bad (depending on how it affects you). But it’s where things are going. The next evolutionary handhold on the long vertical cliff...

Any idiot can see it, hence the internet goldrush. Some idiots oversold it, hence the consumer burnout. For the last year or so I figured that’s why the crash. Until the little lost child tapped me on the shoulder...

And the child said...

Each wave requires an infrastructural investment; trains need tracks, cars need roads and gas stations, bulbs need wires, phonelines need wires, etc. In some cases, as with railroads, some corporations with deep pockets (or free government land) build the infrastructure first. Often what happens is early adapters get the technology before the infrastructure really exists — people bought cars before the roads were designed for cars, people bought TVs before there were all that many TV stations. All those early adapters forced the infrastructure to catch up.

But the early adapters had money. (New technology is very, very expensive). To get to the next wave, your stuff has to come down in price — but your buyers, still, have to have SOME money even so. And, looking at the system as a whole, your buyers are also your workers. (As Henry Ford put it, he paid his workers a decent wage so they could afford to buy his cars. Bastard that he was, he knew it was his self-interest.)

But today’s corporate bastards aren’t so smart.

So here’s corporate America in the 90s — investing in and hyping the internet with everything it had while at the same time downsizing its professional class as fast as possible. Cutting ‘em off at the legs..

The same people who’re supposed to BUY the goddamn cable modems and flat HDTVs; a wave of consumer demand that’d pump some money into the next big paradigm — and push the “digital economy” to the point it’s not the equivalent of a bunch of rich people driving their brand new motorcars over dirt roads a faddish, new hobby.

Add to the mix that, thanks to deregulation, price fixing and general bullshit, the prices on shit like electricity, cable TV and gasoline went up up up in the 90s. If your electric bill is pushing $300 bucks or filling a gas tank costs you $25, that eats into what’s left to buy digital vidcams or cable modems.

In other words, all the downsized people couldn’t afford all the new shit.

The “lack of consumer demand” spooked investors.

The stock market tanked.

The economy tanked.

Everybody got scared.

No investment money, no risks, no R&D.

No next wave.

That’s what happened.