nerd’s eye view

Home Economics

May 5, 2005 – 7:21 am | by nerd's eye view

The other night at dinner, the husband and I got to talking about the economy, retirement, how much it costs to retire, yadda yadda yadda. Pretty dull stuff, really, unless it’s your wallet. A friend of mine told me once that her financial planner says that a person needs one million dollars – or maybe it’s two now – in savings in order to retire painlessly. I think this could include the value of your home, too, but I’m not sure. Anyway, ever the blue sky optimist, I said, “Oh, we could do that.” When the husband asked how, I said that we’d do it by judicious investing.

This led to a discussion of corporate greed and scandal. Think Enron. Think Ken Lay. Think Haliburton. (Hi, Mr. Vice President!) Think Bernard Ebbers. We were talking about how the wealthy care for each other in sometimes illegal ways and that you need to be an insider to really make the bank. “You gotta have money to make money,” said the husband, suggesting that the most likely way to turn our paltry savings in to a million dollars would be to invest it offshore where there’s potential for the kind of growth we saw in the dot-com bubble.

This led to a discussion about whether the dot-com bubble was or was not a gold rush.

Having lived through, nay, participated in, the dot-com gold rush, I’m in firmly in the “Yup, it was a gold rush all right.” See, a lot of people poured in to Seattle (Alaska) to get a piece of the technology pie. There were jobs jobs jobs jobs jobs for anyone and everyone who could think (lift a shovel). And there were all those folks that supported the rush by making desktop computers (shovels) putting the perfect head of foam on your latte (cooking up bear stew), and selling real estate (administering claims) etc. etc. etc.

The husband says the dot-com bubble was an anomaly. The gold rush, he says, had a product that came out of it. “That start up you worked for, what did they make?” I said that code was the product of the dot-com bubble, code and the intellectual skills of the people that could write code, support it, document it, etc… Less tangible than gold, of course, but still a product. I also said that the people who survived after the bubble burst (the vein ran out) were those who had acquired skills or created a product that transcended the context of the boom. Levi Strauss (a mere shadow of it’s former self now) is a good example of a company that made a killing in the gold rush and lived sucessfully for another, what, 75 years? I’d theorize that companies like Microsoft and HP rose to market dominance on the needs of those working the dot-com rush, not under their own steam. Without frenetic purchases of desktops (dynamite) and software to run on them (ferry travel to the inside passage) would the providers of those things have become so wealthy?

I get that this is a facile comparison. I get that a prospector living in the mud for a year while digging holes in the ground is not the same thing as that guy with the bad haircut in the windowless office hacking out code. I get that comparing the brutal physical labor of mining with the sterile (except for the half eaten sandwiches and empty soda cans) intellectual work of programmers is, well, a little silly.

I’m just imagining it from a historical perspective. From my kitchen table, it looks like it was a gold rush. I am lucky enough to have acquired skills during the bubble that have remained useful in a post gold rush economy – though I did not get rich, a fact that never ceases to annoy me.

Like the seamstresses and hookers and suppliers who poured into Seattle during the first rush, the programmers and marketers and technical writers are still here, making a fair living. When it was over, the big money bought lofts and the laborers packed up and left, leaving a vast rental market the likes of which I haven’t seen since I moved here more than 10 years ago. But there are plenty of worker bees still here, buzzing away, sifting through the tailings and cobbling together a living.

I still think we could find a way to make a million dollars to retire, in spite of corruption, which I’m sure was as prevalent during the gold rush as it is in today’s less tangible economy. But, just like the prospectors that headed north to strike it rich, I am ever the optimist. See? The gold rush analogy works on all kinds of levels.