A Zero Sum Game?

I came of age in our last great market bubble – the dot com era. Yes, billion dollar valuations for unprofitable businesses seemed surprising, but what did I know? (Certainly, not how to value a business.) And the suddenly rich littering the headlines were hard to ignore. Nevermind that Greenspan would save us all anyway. (My family delights in reminding me these days of my lectures on this point in particular.)

I loved many things about my Economics courses in college, but most of all was the great sense of relief I felt as a short lifetime of worries about the environment, social welfare, gender parity, the woes of small business, etcetera was replaced by a belief in an infinitely bountiful, self-regulating world. Yes, market failures abounded but we knew where to beware and generally the population could be left to fend for itself. I was happy to worry less.

I had come from a “nothing ventured, nothing lost” world where wealth, it seemed, came only at someone else’s expense. I was eager for proof of fast money gained at no one’s expense so it took a second crash, worst than the first, for me to finally come to terms with reality.

The defining lesson of the last decade for me is that there is no magic. Progress comes inchingly slowly at best, never at worst. Growth is fickle and driven only by human ingenuity and laborious effort, not financial engineering.

My feeling is that that last couple decades (perhaps not coincidentally when the U.S. turned from a surplus nation to a debtor nation) were a mirage. We are now returning to normalcy and my expectations are extremely moderate.

More on that soon …