Most of the people I consider my “e-colleagues” — in other words, the guys who have the Web wired, and are making major bucks with their online efforts — are too young to have ever experienced a real recession.
Or a genuine economic panic.
I’m not bragging. At the last big seminar I spoke at, I enjoyed the respect I garnered from my many years in the front line trenches of advertising… but jeez, I was fifteen years older than the next oldest speaker. That’s just… annoying as hell.
Still, you’re only as young as you think you are… and since I never really “grew up” in the sense most people consider the concept, I’m not all that freaked out over being the wise ass with the salt-and-pepper hair. To my mind, I just have more stories to tell. Better ones, too.
And this is one of those stories.
The last vicious recession worthy of the name experienced in the Western economy was just after the first Iraq war (back when W.’s daddy did the honors). Almost fifteen years ago. To the thirty-something business moguls I deal with, that’s ancient history. To the twenty-something upstart entrepreneurs, it’s a hazy rumor that happened while they were watching Sesame Street.
That recession, however, was brutal enough to cost Bush the Elder the election… but it was still considered “medium-mild” by economists. Like an earthquake that only knocks a few buildings off their foundations — nowhere near “Hollywood-level disaster” status.
You wanna talk disaster? I left college and entered the job market in 1975, during the worst economic downturn America had seen since the Great Depression. Nixon had slapped on federal price and wage controls, gas lines went around the block, and Bears chewed up Wall Street something ugly.
The gas lines came back in ’79, when OPEC used the Iranian revolution as an excuse to starve us. (And, I kid you not, that was the first time it was finally deemed “okay” to drive a foreign car. Detroit was still pumping out behomoth gas-guzzlers — the typical sedan drank a gallon of gas every dozen miles or so — oblivious to the reality of the market. My little Datsun truck was a life-saver for a broke guy like me.)
A few years later, the economy went south again. There used to be these cute little quasi-bank institutions called “Savings and Loans” — and they became fodder for the new kind of pillage coming from the investing class. Imagine going to your bank one day to cash a check, and finding out the doors are locked, your money’s gone, and no one seems to be responsible. Or care much about it.
This happened, folks. An entire nation-wide financial institution, wiped out by uncontrolled greed (fueled by sudden, purposeful rule changes coming out of Washington).
This was around the time I started freelancing for the financial newsletter industry. So, hey, I know a little bit about the way things went down.
In fact, I had three — count ’em, three — direct response packages in the mail, all for Bullish advisors, on Black Friday in October, 1987. The day the Dow lost an arm and a leg.
On the following Black Monday, I hung up my financial writing spurs, and went back to more stable clients.
If you’re too young to remember any of this, don’t sweat it. I’m through with the short history lesson — I just needed to establish my bona fides to make a larger point.
See, I was immersed in the financial world at that time. The world seemed to be imploding — AIDS, the Cold War stare-down getting really nasty, role models telling kids that “greed is good”… and gold hitting $800 an ounce.
The mood of those mid-to-late eighties came back today in full fire-breathing color… when I saw a headline saying that gold had just topped $500 an ounce for the first time since 1987.
I bought two Kruggerands just after the $800 peak, for around $500 an ounce. Everyone I knew was hording silver dimes, rare coins, and as much gold as they could lay their hands on. Mortgage rates had recently hovered around 20%(!), several of the oldest and most stable U.S. airlines had just been dismantled through hostile take-overs (because greed-heads wanted the pension money) (I’m not making this up)… and I briefly succumbed to the panic.
And bought a couple of gold coins.
At a price that immediately collapsed… and hasn’t been touched again until today. Almost two decades later.
So what’s my point?
Hang on. It’s about the Web.
See, back then, I wasn’t running around scared. Hell, I’d grown up with ICBMs pointed at me. I was born during the Korean War, hit puberty during the Cuban missile crisis (“duck and cover”), went through high school in the late sixties — I’ll never run out of stories about that trip — and limped out of college just as Vietnam was ending. I lived in Silicon Valley during the years it was the prime target of Russian spying. And, as I said, I slagged finanical advice for much of the go-go eighties.
Crisis was my life, dude. I ate crisis for breakfast… and sipped a beer with it at night.
When the Great Dot Com Stock Market Crash rocked the globe at the turn of this century, I yawned. I had friends watch their fortunes vanish, right there on their computer monitors, and knew several businessmen who — having bought the hype that “the good times will never end” — had leveraged themselves to their eyeballs… and were now leveled onto their asses.
I don’t like seeing good people get hurt… but I had been wondering for a very long time why otherwise smarkt people were buying all the “we’ve reinvented the economy” nonsense. You don’t reinvent an economy. It can change, even mutate, under your feet… but nothing YOU do will ever make a ripple.
What was it Greenspan warned everyone of, just before the dunk? Irrational exhuberance?
People thought they could control Fate solely by being really, really goggle-eyed positive. And ignoring bad stuff.
For several years now, I’ve been telling anyone who’ll listen that the Web has been going through a Gold Rush period — where the lack of rules and standards (and especially the lack of seasoned Big Companies competing) meant that almost any wild-hair scheme could succeed. And you could make a fortune slapping up silly Websites… because the Big Boys were not yet paying attention.
It was fun. A lot of people made a lot of money. And good for them.
And there’s still a lot of money to be made.
But… it’s not so much a Gold Rush anymore. The change happened very recently, and was spurred by economics.
Two very recent news stories sum it up: On November 19th, the Wall Street Journal more or less announced that newspapers as we knew and loved them… are now in their graves, waiting for the dirt to be shoveled on. The smart papers, like the Journal, the Washington Post, the New York Times, and a few others, are going online in a big way now. Soon, there will be no more paper-rustling at the breakfast table.
Just the faint buzz of the DSL line.
Of course, there are many online e-mags, blogs and all sort of other e-media waiting for the “Old School” journalists, and the battle has begun in earnest.
As someone who cares about information, and about truth… I have a horse in how this all plays out.
The other story is from the Post. November 21st: The United Nations makes a bid to “control” the Internet. By taking over the registration of domain names from the U.S.
Now, that ain’t gonna happen just because they asked nice.
But the writing’s on the wall, kids. China is desperately trying to control blogs and incoming news online. Up-for-election Congressmen in the U.S. are voting for laws that will make the Web obedient to their Puritanical peeves. When was the last time you visited your bank? You’re likely doing most of your bill-paying online… and all your money is just blips on a hard drive somewhere.
Perhaps in India.
I’m not panicking. I don’t panic easily — not because I’m brave, but because I’m so jaded.
The Web is changing, and changing fast. Google’s stock is out of control, considering that MicroSoft and Yahoo are gunning for their share of the search engine market. That’s like being the biggest and baddest guy in the local bar, and getting all the respect… and then hearing a couple of hard-ass bikers are now in town, and they’re comin’ for ya.
Hey, it’s like living through a real sci-fi novel. If anyone tells you they know what’s gonna happen, get as far away from them as you can. (My favorite pre-Dot Com Crash go-go financial advice book of 200 was “DOW 30,000!”)
But you don’t have to run around blind and crazed and freaked. If all the conspiracy theories in the world all come true tomorrow, then maybe we’ll be UFO food, and none of this matters.
However, if the economy is as flexible as it’s shown itself to be — over and over and over again since the Industrial Revolution — then you shouldn’t be losing sleep over the possibility of a Neo-Nazi take-over of the West Wing.
Instead, you should keep your wits about you. Stiff upper lip and all that. All we have to fear, is fear itself, and all that other time-tesed jargon is pretty good to remember. Whatever doesn’t kill you, blah, blah, blah.
Personally, I am financially diversified up the yin-yang. (I’m even considering stuffing money into coffee cans and burying them in the back yard… except I’d have to shoot the neighbors if they saw me…)
And I’m still very close to many of the young entrepreneurs who work magic on the Web, because it’s the only marketplace they’ve ever known or cared about… and they do what they do very, very well.
However, the smart ones also stay close to grizzled old veterans like me, and Halbert, and Kennedy.
Cuz we’ve been there, man.
Experience is like insurance, in uncertain times.
Things are getting interesting. Consider yourself blessed to be living in such exciting, fast-moving times. In another life, you could have been tending corn on a peaceful farm somewhere far from the action.
Now, the action comes to you, online.
Okay, I’m done.
If gold goes up another fifty bucks, I’m selling the Krugs, though. on eBay.