How to sum up the 2000s? Well…
It started out in a vacuum, the space left by an implosion. The tech boom of the Nineties was fading. The last straw was a Judge up in Washington, ruling Microsoft ought to be broken. That was April, and it was more than the market could take. Five trillion dollars in wealth, disappeared with the sagging universal recognition it had no business existing in the first place. “The metrics are all different now!” “Dow 36,000!” “P/E ratios mean nothing!” The profits would never cease. The Internet would change all the math. Only it didn’t. Because in 95% of the cases, there wasn’t any revenue behind it. Just a whole lot of neat business models and people talking “paradigm shifts.”
Then we had the election. We argued and debated and nobody knew what to do. Nobody knew who’d run the country. Some judges saw it one way, some another, and then a bunch of really powerful ones stepped in and picked a winner. They came up with a logic for the ruling, offered some tortured explanations. But nobody really bought it. The decision was basically a coin flip, and though the judges labored hard to give it heft, that’s how it’ll always be remembered. Not much of anything behind it.
Next came September 11th, which seemed to change the whole world. Everything got tactile for a while, a re-assessment kicked in. That, of course, passed in a flash. The President told us to spend. Run off to Disneyworld, Forget. Crank up the engine of consumption! A boom will bring the country back! We agreed and opened our wallets. But not really. We didn’t have any money. So we borrowed and spent someone else’s.
The first war followed soon after that. We chased bin Laden way up into the hills, dropped bombs all over Tora Bora. The news gave us constant updates – how we were closing in on Osama, how our jets bombarded the mountains and a Coalition pitched in to help, because madmen like Al Queda… Well, they didn’t have any allies. Then, somehow, bin Laden got away, and everybody pretty much forgot about what was going on in those hills. Press didn’t bother much. Rebuilding’s an interesting story, but it takes an attention span to watch. Not much in ratings behind that.
Besides, by this point, we were too busy spending to watch any news on TV. We’d just started emerging from a recession. Unfortunately, the recovery was jobless. Luckily, that didn’t matter. A bunch of politicians a few years before had decided everyone ought to have a home, even if they couldn’t afford one, and that the government should back all the loans. In turn, a bunch of bankers gave all sorts of money to all sorts of home buyers, and sold all kinds of securities in their mortgages to people far, far away, a lot of them in Iceland and Finland. This brought the banks more money, to make all kinds of interesting loans to just about every kind of American who ever wanted a home. As that happened, millions of people who used to make money going to work started making money buying and selling houses, or borrowing against the value of their own, which kept going higher and higher. And we kept doing as the President told us. Spent and spent some more. Because everybody knew, unlike that Internet boom, there were real revenue streams behind this one. Housing prices never go down.
While we were flexing all our equity lines, the President decided we needed another war. He argued that Iraq had “Weapons of Mass Destruction,” and that Saddam was a dire threat. The skeptics among us called bullshit, but half of us were pretty damn sure he had something to do with 9/11. Those people vote more than the skeptics, and the cost of being wrong on one side outweighed being wrong on the other, so most Senators and Congressmen agreed with the people who wanted Saddam gone. Colin Powell went to the U.N. and held up pictures of those weapons of mass destruction and based on all of that evidence, we invaded a little while later. This time, however, we couldn’t get a Coalition built. The rest of the countries looked at the pictures and listened to our argument, and they didn’t see much behind it.
There was another election in 2004. We hadn’t found the weapons of mass destruction in Iraq and the war had gone very badly, but the people who were sure those weapons existed showed up to vote as they do, and the President got another term. A lot of other people figured he’d lose. Democrats were angry and Michael Moore had put out a movie exposing how he’d stolen the 2000 election and lied us into Iraq. Problem was, the more people examined the film, the more they noticed Moore had fudged a lot – that half of its conclusions were fiction.
But a nation divided on politics can still hold much else in common. Like reality television. We fell in love with the O.C. and The Hills and it was all so awesome because, like, it was different and better than, like, every show that ever came before. And it was real. Except for how it wasn’t – how it was scripted.
Back on the political side, after it got crushed in 2006, the GOP started purging all of its RINOs, Libertarians and Rockefeller Republicans, reconnecting with its moral majority – the salt of the earth, God-fearing base of the party. This seemed like a really good idea. Until a number of politicians who were part of that new moral base got busted for sexting young men, sleeping with their donors’ wives and soliciting oral sex in airport bathroom stalls.
As all this was going on, the unthinkable happened – houses stopped rising in value. And worse than that, all the people who couldn’t afford them stopped paying for them. This caused a panic in the banks, and not just from the cruel recognition that a person lacking any source of income can’t afford to pay on a mortgage. Though they’d passed on the risk of those loans to those people in Iceland and Finland, the banks were also acting as insurers. To make a bit more money on the notes they’d securitized and sold, they agreed that if the borrowers defaulted, they’d step in and pick up the tab. This was an excellent idea and it worked except for one little problem – lack of money to pay. Unlike an insurer’s guarantee, the banks had no reserves for that behind them.
We all freaked out a bit when the Treasury asked for $700 billion dollars to prop all the big banks up, but not too much. Twitter’d come along by this point, on top of Facebook, which had taken over from Myspace. “Social media” they called it, and it was the next huge thing. We got it on our IPhones, like texts, and it was going to revolutionize all of our communication, how every type of business was done. “Web 2.0,” making every man his own advertising agency, creating a whole new base of customers for everyone on it. And now Twitter’s got a hundred million users, Facebook’s valued in the billions, and these social media platforms are filled with all kinds of really social people telling all the other people how those sites are the key to our future… How they can blow up a business overnight, make it an instant sensation. But there’s this one nagging question no one asks – a lot like some I heard in the Nineties: How does Facebook make money? Where’s the revenue behind it?
But I don’t think about that a lot. I’m a glass is half full kind of guy, and luckily, the decade ended on a high note. We got a President of Hope and Change. He said he’d fix our health care problems – make it so everybody who didn’t have insurance got it, and all the people who had it got their treatment a whole lot cheaper. So now, after the Senators and Congressmen did their fighting, and all the insurance companies lost the battle to stop it, we’re going to get Reform. Everybody’s going to receive more and better care. Only issue is that cost-cutting thing, because as lots of suspicious sorts predicted, if you look really close at the bills, there isn’t much in savings behind them.
That’s alright, though, because China keeps buying our bonds, which lets us buy tons and tons of health care, along with anything else we might want. The Chinese are a money juggernaut, with eight percent growth every year. Just look at the economic numbers their official apparatchiks put out. And things there are only getting bigger. Their real estate market’s red hot and millions and millions of people who never had houses before are borrowing from the big state banks, buying up all the construction builders can’t erect fast enough. They’ve got a trillion in stimulus money to keep that run-up rolling, and even if foreign demand’s collapsing, they’re still the world’s manufacturing center. With a billion people in the country, they can always just trade among themselves. China could never, ever go down.
And the stock market over here’s hot. With all of those earnings reports, and the banks back standing on their feet, it feels a lot like 1999. The talking heads on the finance networks are calling it a paradigm shift – that we’re emerging from a long malaise. One man in a bold striped suit said that the rally is just now beginning, and we’re headed for Dow 15,000. I guess he knows a lot more than me, and I certainly hope that he’s right. But again I have a couple questions. These profits have all come from cost cuts, unemployment’s going to reach 12%, and I can’t shake this déjà vu feeling we’ve been through this run-up before… And that we’ll go through it faster, more extremely and more often for the rest of our lives. Different drivers, winners and losers, but the same essential governing gravity – that there won’t be much of anything behind it.
The best way I can sum this decade? It isn’t easy drawing an absence. The only description that fits is “A whole lot of crazy, important stuff happened.” But not really.
Awesome, and right on the money.
PL: Thank you. I enjoyed penning this one. Just kind of flew off the fingertips.
The 2004 Tsunami is stunning in the casual dismissal many Americans give a cataclysm that killed 250,000 people.
PL: That was kind of frightening. We gave more attention to the quake in Iran.
“… who ever who wanted a home.” Easy mistake to make.
No reference to the rise of Google? Youtube and how Charlie bit my finger? (http://en.wikipedia.org/wiki/Charlie_Bit_My_Finger)
A generation polarised between the hypomaniacs and the kids who came just a little too late for the grunge era?
That being said, this piece still conveys the sadness and resignation at the mindlessness of people that your pieces usually do, and it does it well.
P.s.
PL: Thanks on the typo. On the rest, true, but I only have so much space. No fun if this thing was as comprehensive as it could be.
P.s. I can only assume “China could never, ever go down.” was thinly-veiled sarcasm?
PL: You can trust your instinct there.
This is an excellent piece. I’ve been reading your stuff for a long time, but this one really hit home. Maybe it’s the scotch I’m drinking. More likely it’s the quality of the writing. It’s no easy task capturing the feel of an entire decade, but you’ve done it here as well I’ve seen. So here’s to 2010–let’s hope the smart people are wrong.
PL: Thanks. This piece has kind of a scotch feel to it. Perfect compliments.
On the smart people, well, at least 1/2 of them will be wrong.
Awesome! great writing.
PL: Thanks. Pass this one around if you can. Needs to resonate.
A very powerful post – poignant and disconcerting. Almost makes me want to take the “ignorance is bliss” route; what’s there to believe in? Great writing though, as per usual.
PL: Most everyone else does. Prozac, Zoloft, therapy? The explosion in these things in recent times isn’t based solely on their marketing.
Why do you think so many people probably read the first paragraph of this piece and then clicked away? No use looking in the sausage factory.
And that’s the real crisis in our national character today. Where we could once live in narratives, the speed and ease of accurate and skeptical information has undercut all the old authorities. They deserved it, no doubt, because they were lying. But now a lot of us who’ve never had to before are compelled to figure out on their own just what path to follow, what to take as fact. Some old philosopher who was an atheist (name escapes me at the moment) said despite his views, he feared a world without religion. That unmoored from baseline dictates, we’d devolve. I don’t agree with the latter, but he’s right that we’re facing a world of unusual volatility because nobody knows what to believe anymore.
I need a drink after reading that. Preferably Scotch like Eric suggests. In fact, I may need to stay drunk for the rest of the year.
2010 is off to a “shaky” start – think anyone remembers where Haiti is?
PL: Into every idyllic existence some rain must come. Haiti’s enjoyed such a robust economy, and so much peace and tranquility for so long… This will pass for them and they’ll be back to prosperity in no time.
Everyone ought to summer in Part-au-Prince. Lovely. Lovely place. Just check out some of the Youtube videos about Haiti. You’ll never want to come home.
(Seriously, though, if you’ve any excess $$$, send it to the Red Cross. These people truly need help and are more ill equipped to deal with the carnage around them than 99.9% of the nations on this planet.)
This is great as usual. I was fifteen when the decade started, so I’m hopeless to sum it up. It really feels, as you said, that so much happened but nothing happened. Almost as if we had hundreds of opportunities and squandered them. Then again, perspective on these things requires timescales larger than decades. I wonder what this period will look like squashed into a few factotems in my grandchildren’s textbooks? One might hope this is reprinted there verbatim.
PL: We live in the universe’s longest running slow-moving black comedy. Well, unless there’s a planet out there older than ours filled with humans.
Nice. I guess you could look at it this way – the decade of nothing or the decade that the US lost control of its own destiny.
PL: We never had that. No empire ever does. It’s the myth it exists, or can be achieved, that sinks them.
Another great piece. What happens when China stops/reduces buying our debt either because they can’t…or becuase they don’t like our misleading balance sheet?!?!
PL: Deflation from a mountain of outrageously cheap goods being dumped into the global marketplace. Inflationary effect effect domestically due to effect in price of our bonds. Do they cancel each other out or work as a one-two punch on us? That’s above my pay scale.
I believe the PIZZA! PIZZA! thing still hasn’t been explained. I mean, is it a Little Caesar’s reference, or something?
Thought you might like this. http://www.recombinantrecords.net/docs/2009-05-Amusing-Ourselves-to-Death.html
PL: Only Rosie knows for sure. I think it has something to do with John Sinclair and MC5, but he refuses to tell me me for certain. The man’s a huge walking riddle.
That cartoon is brilliant. Everyone should read that.
Nice piece. I was twenty in 2000 and I pity anyone younger having to go through that decade. I think you summed up the overall feel of the past ten years very well. It is easy to be depressed when seeing it all laid out like this.
Looking at these events and trends leads me to wonder about the best way to make money in the next ten years. I know there isn’t enough money in engineering (current profession). Maybe I should open a bar. People are always into booze right?
PL: It’s a freakshow, a confederacy of miscreants, dunces and the disgusted, too-overburdened-to-change-it driving the bus over a long series of small cliffs, one after another, with one really big one at the end. Just hope you were lucky enough to have been born into a smoother part of the ride and laugh as the mess rambles onward.
Because it’s a blog post, the brevity is fitting…but I think you could really do the topic justice with 200 pages. Well done as usual, I’ll fire it around for you.
PL: I’d have to shoot myself afterward. This is just long enough to laugh… Anything longer would get maudlin. Thanks for the plugs.
Great piece. From a first time commenter, I have to say that this website and your twitter updates are pure gold.
On a little different note, I think one can see how awful the current state of the country is when the former treasurer of California is on Capitol Hill lecturing Wall Street about financial responsibility.
PL: Thank you. On the other thing, Why not? Seems utterly consistent.
The irony is, 2010 is beginning much in the same way 2000 did… And your observation that we’ll all observe this cycle more than once and more frequenty, I’ve privately thought the same thing for some time now. Good read, gonna link to it and get you some more eyes. Everybody ought to see this one…
PL: they used to call it a business cycle, or the stages of a bubble. Now it’s the “bullshit cycle.” The PT Barnums ramp up the machine, the smart money gets in and out, the suckers wait to long and then it’s “Rinse and Repeat,” just like the directions on your shampoo. All the dumb money down the drain and on to Round #537242936456.
Couldn’t have said it any better. Poignant and spot on as always. Along the China line, whats any opinion on this opinion?: http://www.nytimes.com/2010/01/13/opinion/13friedman.html
Also, in case you all haven’t heard yet, Haiti is fucked right now because they made a pact with the devil. Seriously, Pat Robertson said so:
http://www.breitbart.tv/they-have-been-cursed-pat-robertson-says-haiti-swore-a-pact-to-the-devil/
PL: Friedman = Whiffle pundit. Nice guy, but he’s been phoning his shit in for years. As to Robertson, I applaud his consistency. In the face of every horrific human tragedy, he finds the gays, heathens and alliances with mythical demons at the heart of the disaster.
P/E ratios* not rations. By the way, have you ever tried reading a Chinese company’s financial statements? Its nearly impossible to decipher who owns what or the type of accounting they’re using. Keep up the good work!
PL: How did that happen? Thanks.
No. God bless anyone who has to do that. Judging from the language’s infinite complexities, I can only assume it’s like trying to read a Jackson Pollack.
Great piece, PL. I couldn’t agree more about China.
Any thoughts on the 2000’s as the decade that destroyed the legal industry? (Keep in mind, I’m not saying it’s a bad thing…)
PL: Thanks. On the legal industry dying, I’ve written it to death elsewhere – been predicting it for years. I’d like to say, “Told you so! I jumped off the fucking Titanic two years before it all went to shit!” but that’d be little in the way of self-congratulation. Because everybody who had a fucking clue realized the economy could not sustain the outrageous overhead and preposterous overbilling that characterized most firms at the height of the boom. It had to break, and when it did, you just knew – the first people to get their invoices sliced to shit were the people corporations have quietly loathed for years: the lawyers. I can’t understand how any lawyer who was paying attention to the metrics didn’t see this coming years in advance.
Good point on the speed at which the tsunami came and went from Americans. I heard about it from Baghdad, but had other priorities and by the time I got back in April it was like it didn’t even happen.
Same situation with Haiti (in Iraq until April). This time I’m going pretend like I don’t know and see how long it is till it gets mentioned either socially or on the news. I think its going to be a while.
PL: Haiti will get a little more exposure because it’s only a few hundred miles away, and the other side of the island is a resort Americans like to visit.
Awesome piece, never read anything that nailed the decade this well. It was a cool decade to grow up in because of Google, Wikipedia, Napster, porn, and rap music that glorified getting fucked up and laid instead of self-loathing grunge, but now that I’m getting a job and entering the world I kind of wish things had gone differently.
PL: It’s always a joke. I was talking about this subject w/a person twenty-five years my senior last night. She laughed at one point and said, regarding the McEconomy, “Of course it’s all bullshit. That’s nothing new.”
The only difference I see is cynicism is celebrated these days. Used to be, people tried to fight the system and change it for the better. The new rebellion is joining and milking it. Can’t say that’s unwise, as I do it myself, and everyone inevitably does that in commerce, but elevating that behavior to laudable goal isn’t exactly a healthy shift for society.
When it all comes tumbling down, and we’re left to fend for ourselves in ramshackle villages built atop the rubble of our own skyscrapers and hubris, I want you to know that you’ll have my vote for Head Warlord. Keep up the good work.
PL: I’ve lead nothing in life but my fraternity’s social fund, and I think that’s about as far as my political career will ever get. But thanks.
Something about your post just reminds me of 1984, where we have production for production’s sake, with no real meaning behind it. How we handle entertainment is the equivalent of how they handled history. It’s all a bunch of bullshit, and to be honest, the system needs to come down (in flames or not) before any real work can be done.
A mass jubilee. That’s what the world needs. A blank slate where we can all start over and live our lives to the fullest while being sensible about it. Alas, Wall Street execs will still continue to claim increased profit margins by laying off workers until they’re the only ones left.
PL: No one has to borrow from the banks. It’s a pusher/junkie relationship. But now, given where we’re headed, there’s a chance we’ll finally be forced to break it. I wonder how long they can keep cranking out trading profits when consumption and economic activity all but dries up from lack of liquidity on the street. Volatility from uncertainty, confusion and manipulation by those with a handle on this market will last for some time, but once that peters out, and China stalls from lack of US consumption, ending that bubble, where will the hot money and traders go? They’ll find a place, I guess. They always do. But there will be less of them.
This is one of the saddest, truest things you’ve written–and as someone who writes a lot of things that are poignant in some way or another, and someone who writes a lot of true things, that’s a significant statement.
I missed most of the decade, or at least was only vaguely aware of it, so maybe that’s why I find this sad intellectually, but don’t feel it properly. I grew up with nothing, it’s what I understand best.
I’m out of scotch, but that won’t stop me from drinking something. Here’s to nothing at all.
PL: Don’t sweat the lack of substance. There’s no narrative and no point to anything but the one you make of it. As Vonnegut said, “We were put on this world to fart around, and don’t let anyone tell you anything different.”
I turned ten in 99, and naturally turned twenty in 09, so this piece covers pretty much every important event I’ve ever been able to observe and understand. This is not a good thing.
Just before reading this, is was thinking about how Hunter Thompson wrote of the feeling of being there in the mid- and late-sixties, and how it felt great to be a part of the collective existence in that time. I thought maybe I should write about how growing up through this decade was the exact antithesis of that, as if my existence has been cheapened by growing up through the years of shitty reality TV, shitty presidents and shitty business practices. It appears you’ve already written it. Like you said, “A lot of crazy, important stuff happened.” But not really.
PL: The Sixties are ridiculously romanticized, I think. When I’ve ask people who lived through them whether it was anything like the media’s portrayal, the answer seems to be, “The music was a lot better and it was easy to get laid.” The protests and volcanic social upheaval don’t seem to have been as ubiquitous as nostalgic documentaries would have us believe.
…Or I’ve just been asking squares.
I’m surprised, with your blog and book (which finally came in the mail a couple days ago) you didn’t mention Long Tail economics. Amazon, iTunes, Rhapsody, print on demand, etc…the little guy is getting exposed to a global market and becoming relevant once again.
PL: Have you finished the book? That theme’s in there.
Really entertaining recap of the decade. I definitely take it as comedy though, rather than a truly serious analysis. Although, there are clearly many truths included, which is the basis for the comedy.
As for the future, the only thing you can be sure of, is that none of us have any idea of what is going to happen. To assume that the economic future will look like a fast forwarded version of the 2000’s is flawed thinking in my opinion. This decades events were preceded by the unique decades beforehand. Now that we already went through the 2000’s, the ensuing decades will bring their own unique, unpredictable challenges. I think it is a bit shortsighted, a bit being blinded by the moment, to assume that things will now always continue like this. That is the same fallacy of thought the suckers use in getting in too late on booming industries.
I don’t mean to diminish the article though. I thoroughly enjoyed it and is surely some of your best work in my opinion.
PL: Of course every space of time people brand as an “era” has its own uniqueness. But we write things to make people think, and take what they will from the words. I personally don’t think there’s any such thing as a narrative. They’re all revisionist. But if I couldn’t give you a narrative, I couldn’t write, and if I didn’t write what I wrote, we wouldn’t have this discussion, which might cause other people to think about whether the past predicts the future or is, as I believe, a bunch of things that just happened to have happened sometime before now.
When I say I think something is going to happen, I don’t base the conclusion on what happened before. To assert a certain cycle is being repeated isn’t folly. It’s assessment of the players and the formula they’ve been using successfully, and the solid assumption that people will do what works for them until it doesn’t work anymore… Among a whole lot of other empirical evidence that I’d never have the time or inclination to cite in what aims to be, as you astutely note, an entertaining article.
I see your point about people being too cynical, but it’s hard to fight for change growing up today. People who want to do good are split into two groups, one denies science and the other denies economics. Can you blame kids for seeing that both are completely full of shit, and focusing on getting drunk, laid, playing sports and making money for themselves. I think this generation will go down as one that was more cynical but more rational, but maybe we’ll oversee Western civilization’s downfall. Either way, Jersey Shore tonight kicked ass.
PL: I agree with you. I think people are getting a lot more rational. But it’s worth reminding ourselves that the finish line of exclusively rational thought is nihilism. Cautioning like that keeps folks a little more decent than they otherwise might be. And its a neat topic to discuss – an existential hot button issue. Causes people to consider whether we’re more than mere accidents of an organic evolution. That causes people to think about their “values” and things like that, which gives what could be a pedantic or overly-philosophical piece an amusing edginess. Nobody ever lost readers inviting people to gnaw on, or at, sacred totems.
Page, good stuff.
PL: I was inspired on this one. Thanks.
“Are these the Nazis, Walter?”
“No, Donny, these men are nihilists, there’s nothing to be afraid of.”
PL: I can never tire of Lebowski quotes.
Speak of the devil: http://www.abajournal.com/news/article/do_super_lawyer_designations_and_the_like_matter_to_you/
PL: Nice. About time. Dumb fucking marketing gimmick. Like any client ever reads that shit.