But the dot com bubble wasn’t enough to fuel that economy. The dot coms were a small part of the economy. And it wasn’t just the dot coms that boomed. It was everything—except oil, which was in a depression because of low oil prices.
If you want to have a handle on what the dot com bubble did, compare the CA economy to other states. CA was booming because of the dot coms, and because of techs in general. But the rest of the economy, based in other states, was also booming. Detroit, for example, was in one of its greatest expansions, even though the dot coms were far away. I am in Florida. Florida’s economy was bonkers even though our connection to the dot coms was primarily just that we owned stock in them. Tourists were swarming down here, though, and it was largely because of the low oil prices which made Florida vacations a great deal.
When you have cheap oil, that covers up a lot of warts on your economy, and it even provided the money that drove up the dot com stocks in the first place. The dot coms certainly did not generate that cash themselves.
Most of them were losing money hand over fist. They had IPO’s at inflated prices and paid their staff from the proceeds. Absent the IPOs, there would have been no money, and no staff. And absent the money from other sectors of the economy, there would have been no inflated stock offerings.
The proof is that as soon as oil prices began to rise, the dot com bubble burst.
The tech boom was more than just the dot coms. It was the advent of E-commerce and Y2K too. The latter was a multi-billion dollar stimulus all by itself.
The proof is that as soon as oil prices began to rise, the dot com bubble burst.
I didn't need to monitor the oil prices to know that the COBOL programmers hired for Y2K would be let go when January 1, 2000 came and went.
And I don't dispute that low oil prices will help the economy. I just don't accept that E-commerce, Y2K, or on-line news forums such as FreeRepublic wouldn't have happened without low oil prices.