[Read the story.]
Bring back the new economy? The author is kidding, right? The new economy was quite simply a repeat of Dutch tulip mania. How can you bring back such a mania, and why would you want to?
Also, the author, while calling for government intervention, gives several examples of failures of government intervention, from the eventual collapse of Social Security to steel protectionism. Yet the author wants more of the same?
Finally, while the author may be amazed that Al Gore "has shed any apparent claim to leadership," I am not. If I were Al Gore, I would backpedal as hard as possible to disassociate myself from the new economy.
-- David Edmondson
I thought your article about the economic situation was good, but you missed one important point, which Republicans and Democrats alike ought to be capitalizing on, but aren't: the government has, over the past 15 years, been actively stifling innovation.
Consider the facts. Patent protection now is much stronger than it was 15 years ago. So is "digital rights management." Remember the good old days in Silicon Valley when start-ups started in garages and grew into multibillion-dollar companies? That's not as possible now as it was then, because any new garage start-up is likely to be killed by a patent lawsuit, and many areas fertile for innovation are strangled by laws like the DMCA, which forbid innovation in the very areas that are of most interest to consumers of electronic goods.
The U.S. is far behind both Japan and Europe in terms of actual deployment of cool new stuff, like 3G telephony and broadband service. The U.S. is even moving backward, in that limits on bandwidth for broadband seem to be increasing.
So it should be no surprise to Wall Street that the economy is in the dumps. All of these special-interest laws are killing it.
I am frankly surprised that the Republicans and Democrats haven't figured out that they can make political hay out of this.
-- Ted Lemon
Although I agree with Suneel's main assertion in this article -- that innovation and small-business growth are the keys to an economic recovery -- I think that the article takes a very naive and misguided look at the situation.
Specifically, one major reason why we are in so deep an economic downturn is because of the hyper-growth and hyper-innovation that occurred from 1995 to 2000.
Although risk capital is certainly necessary for funding growth, the overabundance of venture capital over the past few years was ridiculous.
Companies were formed that made no economic sense; companies went public that were not making profits -- and would not for many years to come, if ever; project managers became CEOs; HTML scripters became programmers; and on and on and on. Quite simply, it was greed run amok -- with everyone participating, all across the economic spectrum.
And the reason that our economy has fallen so far so fast is precisely because of this hyper-greed. Had our innovation progressed more slowly -- lasted a decade or more, rather than three or four years -- we would not be in nearly as bad an economy now.
So when Suneel gripes about how much smaller venture capital funding is now compared to years ago, it's an absurd comparison. Years ago, venture funding was ridiculously too high. Now it's too low. The right level is somewhere in the middle -- not the overblown levels of a few years ago, as Suneel asserts.
When Suneel asks, "How do we get the innovation machine going again and plant the seeds of the next boom?" The answer is that, although we do want to have government encourage investment again, we don't want another boom.
Booms are followed by busts. It is when our economy has slower -- but steadier -- growth that we are at our healthiest.
-- David Rosenstrauch
I found the article insightful but would like to add a couple of points:
1. Those laid off include not just Xers but also those like me from "Generation Sucks" (see the Salon article "My Generation Sucks!"), as well as boomers.
2. The author, in a glaring omission, has not discussed the how the H-1B and L-1 visas have exacerbated unemployment in the entire IT sector.
-- Mike Gollub
Right now we have a golden opportunity to spur a new tech revolution but without waiting for consumer spending and corporate investment to revive. Renewable and clean energy technologies such as wind, solar and tidal can substitute for dirtier technologies and start producing revenue immediately, aside from the immense benefit of energy independence. If only a portion of the billions in subsidies paid to the coal, oil and nuclear industries were reallocated, these technologies could be implemented more quickly than they currently are.
Even with minimal government assistance, solar and wind energy is rapidly growing in the U.S. (even faster in Europe) while tidal energy plants have been implemented in Norway and Canada. Those who still believe that solar power is infeasible should have seen the houses designed and built by college students on the National Mall in Washington for the Solar Decathlon competition. Besides having a square footage smaller that the average American home, the houses prove that grid-independent and clean power can be enjoyed without altering lifestyles. Employing these technologies would also put Americans from all walks of life (not just the college educated) to work manufacturing composite wind blades and solar panels. The pieces are already there; it just requires some political will to popularize and speed the implementation of these technologies.
But these ideas will probably have to propagate at a slower pace, because "if you're one of those people who puts solar panels on your house or drives a battery-powered car, you might as well vote for Gore" (Dick Cheney, Oct. 3, 2000).
-- Suhas Malghan