Eric Janzsen writes in the online February ’08 Harper’s Magazine:
Our economy is in serious trouble. Both the production-consumption sector and the FIRE sector know that a debt-deflation Armageddon is nigh, and both are praying for a timely miracle, a new bubble to keep the economy from slipping into a depression.
We have learned that the industry in any given bubble must support hundreds or thousands of separate firms financed by not billions but trillions of dollars in new securities that Wall Street will create and sell. Like housing in the late 1990s, this sector of the economy must already be formed and growing even as the previous bubble deflates. For those investing in that sector, legislation guaranteeing favorable tax treatment, along with other protections and advantages for investors, should already be in place or under review. Finally, the industry must be popular, its name on the lips of government policymakers and journalists. It should be familiar to those who watch television news or read newspapers.
There are a number of plausible candidates for the next bubble, but only a few meet all the criteria. Health care must expand to meet the needs of the aging baby boomers, but there is as yet no enabling government legislation to make way for a health-care bubble; the same holds true of the pharmaceutical industry, which could hyperinflate only if the Food and Drug Administration was gutted of its power. A second technology boom—under the rubric “Web 2.0”—is based on improvements to existing technology rather than any new discovery. The capital-intensive biotechnology industry will not inflate, as it requires too much specialized intelligence.
There is one industry that fits the bill: alternative energy, the development of more energy-efficient products, along with viable alternatives to oil, including wind, solar, and geothermal power, along with the use of nuclear energy to produce sustainable oil substitutes, such as liquefied hydrogen from water. Indeed, the next bubble is already being branded. Wired magazine, returning to its roots in boosterism, put ethanol on the cover of its October 2007 issue, advising its readers to forget oil; NBC had a “Green Week” in November 2007, with themed shows beating away at an ecological message and Al Gore making a guest appearance on the sitcom 30 Rock. Improbably, Gore threatens to become the poster boy for the new new new economy: he has joined the legendary venture-capital firm Kleiner Perkins Caufield & Byers, which assisted at the births of Amazon.com and Google, to oversee the “climate change solutions group,” thus providing a massive dose of Nobel Prize–winning credibility that will be most useful when its first alternative-energy investments are taken public before a credulous mob. Other ventures—Lazard Capital Markets, Generation Investment Management, Nth Power, EnerTech Capital, and Battery Ventures—are funding an array of startups working on improvements to solar cells, to biofuels production, to batteries, to “energy management” software, and so on. (link)
Wow. My ol’ buddy Highwayman sure called this one right, especially about ‘favorable tax treatment’, meaning Wall Street firms will get the favorable part, not us:
Yep, the Canadian element of Gore/Suzuki Morons Inc. are yapping their fool heads off, once again, bleating the virtues of a “Carbon Tax” that supposedly will make big business pay for polluting the environment! But, you know who REALLY is going to pay, now, don’t you? US! Not big business, whom ‘Stupid Pants’ really worships, but the common people! (link)
Say what you want about The Highwayman, (in fact, he doesn’t care what anyone thinks of him, he loves a good fight!) he has studied the world bankers and financiers for almost thirty years, so he has a good feel for what they do to the world’s working poor and middle classes. Yes, he’s a Christian and people accuse him of being a ranting fundie at times, but he’s a friend and never hid who he is from anybody.
Unfortunately, this economic bubble and tax the poor scheme the Federal Reserve gangsters have imposed upon us since 1913 is the only game in town. As Janzsen notes in his essay; “Given the current state of our economy, the only thing worse than a new bubble would be its absence.”
It gives the old tome ‘bubble, bubble, toil and trouble’ life like Frankenstein’s Monster! (Gawd, another cliche, somebody make me stop!)
Update: Interview of Investor Eric Janzsen in Wired Magazine; http://www.wired.com/science/planetearth/news/2008/03/cleantech_bubble