Looking for the Next Economic Boom
Predicting the future is difficult and nearly impossible. Few people can do it, and oftentimes they aren’t listened to. Look at the housing boom. There were a select few that knew it was going to collapse and you know what? It still happened and roughly 8 million people lost their jobs, putting us in the worst economic hole since the Great Depression.
Every economic boom comes and goes. During the Clinton years we had the Internet tech boom, which created over 20 million jobs. People used their discretionary income to buy computers. The computers gave us the Internet, leading to online shopping. Online shopping led to identity theft and increased Internet security was created to protect users.
Let me put it this way, can you name a part of the technology sector that suffered from the Internet boom? Yes, a few companies like Amazon rose to the tippy top and put other websites out of business, Wall Mart style. You could probably say newspapers, but they weren’t in the tech sector until they started giving it away for free on the Internet (hussies!), allowing subscribers to cancel and still get the same content. We know all that stuff, though, because it’s in the past. No one could have predicted what was going to happen to the Internet when it first started.
What’s the next big thing? What part of the economy is going to expand and create millions of jobs?
This is the question that is plaguing our current President and will confound the next one. Whether or not to increase/decrease income taxes on the rich won’t matter unless you get lucky with a growing industry that you can capitalize on. More people at work in the private sector means more economic growth, a lower deficit and more confident consumers willing to spend.
Empowering entrepreneurs is a key in finding the next boom. In business you have the idea people, the implementers and analyzers. Think of an idea, test and analyze its potential. Only then can the entrepreneur come in with capital and grow the business to reach said potential.
That still doesn’t answer the question, though. Where the hell are all those jobs going to come from?
Some experts are saying Green energy will be the wave of the future. The problem is we’ve been waiting for that boom for 30 years! Solar panels and electric cars have been around for a long time. Only now are we starting to get serious about flooding the most unstable region on Earth (the Middle East) with billions and billions of dollars for their oh-so delicious oil. Part of the stimulus bill awarded $2 billion dollars to two companies who produce solar panels, one of which is in Arizona (don’t say the Obama never gave ya’ nothin’ Mrs. Brewer).
Green energy is great because it allows America to create jobs on our soil and corner the market. The electricity from large solar panels can be moved around to help power cities. People can put them on their house to drastically reduce their energy bills, which will give people more discretionary income. It’s all good, right?
Wrong! Solar panels are expensive, really expensive. Puzos Family Restaurant in Hawthorne, New Jersey just put solar panels on their roof. The cost was around $50,000. Granted it’s a pizzeria that consumes a massive amount of energy. The owner admitted that he would be able to pay off his loan in a few years because the savings would be so large, but $50 thousand plus interest in an uncertain economy with new bank regulations coming into place is a lot of money.
Still, even if the cost to power your home with solar panels was $20 thousand, would you head over to CitiBank and take out the loan? Aren’t there other things you could buy with that, like a car or new kitchen? Where’s the immediate gratification of buying solar panels? You don’t drive them to work every day like you would a hybrid car. They just sit there on top of your house collecting the suns rays and turning them into energy. It’s about as boring as photosynthesis, which isn’t exciting in a society of that feeds on self gratification.
And speaking of gratifying yourself; you can’t watch porn on a solar panel. It’d be awesome if you could, though. Porn was one of the benefactors of the Internet boom. As a result, men are becoming more domesticated and more deviant at the same time. Thank you Al Gore!
Green energy also has the distinction of being polarizing. Liberals seem to be the ones pushing green energy while conservatives are more “Drill baby drill!” Conservatives will go green if the savings are huge. They’re not allergic to progress when it’s profitable.
It seems like there’s also a lack of stable homeowners, and by stable I mean someone who can actually afford to pay their mortgage. The cost of owning a home is already huge. Putting $20 thousand worth of solar panels on your roof, exposed to the elements, could be nerve-wracking. Who can repair solar panels if they get cracked by hail? What part of the country isn’t exposed to extreme weather? The Gulf has hurricanes, the Northeast has blizzards, the Midwest has tornadoes and the West has earthquakes. You’d better get some serious insurance just in case. Putting the panels in the yard would be a good idea, but these things called trees would block the sunlight. In an ideal world, your neighbor won’t plant a weeping willow that covers your panels and then act like a jerk about how it’s not on your property (that sounds like a joke Daniel Tosh would make).
I’m only 23 years-old and unsure of whether seeing savings on my energy bill would lift my spirits. “Honey, we were spending X but now we’re spending X on energy this month! I’m so happy! After the loan is paid off, we can start enjoying each other’s company again!” I just don’t see it, because to get that type of satisfaction you’d need the panels to be really cheap (to make and to buy) and savings would have to be massive.
What about electric cars? The Nissan Leaf and Chevy Volt will be released this year. The Leaf is an entirely electric car with no gas engine. It has to be plugged in and recharged. The Volt has a gas engine and Chevy claims that you won’t need to use it if your commute is 40 miles or fewer. The problem is that our electricity grids suck ass. Too much energy gets lost. I keep seeing IBM commercials saying their building a smarter grid. Where the frig is it? Why isn’t anyone investing in this stuff? It’s essential in getting people to buy electric cars. Maybe the car companies should band together and invest; spending money on upgrading the grids so electric charging stations can be built to help extend the mileage of the cars they’re building. Am I crazy to think that could help?
That’s where the whole $2 billion investment comes in. In reality, the US spends very little on green energy compared to say China, which is spending a ton on hybrid energy, solar panels and wind farms. The money is a step in the right direction, but stimulating demand is going to be really tough.
I honestly hope someone figures it out. As long there are financial incentives to ship work overseas, job creation will remain a serious concern in America. There’s not a quick fix out there or a boom we can look forward to.
America, we might just be screwed.
rjblack said,
July 20, 2010 at 8:02 pm
Nice thoughts and a good set of questions to ask, indeed looking for the next boom is not as complicated as one may think.
Converting over to green energy did not work out for Spain; the trade off in the economy was two to one in job loss. For every green job created, Spain lost two jobs in conventional industry and is very close to defaulting on its national debt. Spain also accounts for 12% of the European economic unions GDP so the Euro will have pressure applied to it as well causing more problems for States on the brink of default as the EU issues bonds to stabilize Spain.
With the loss of industrial capacity in the United States, the recovery will be difficult as industry that once existed exporting goods to foreign markets was exported to impoverished countries where labor and manufacturing costs are cheaper and there is minimum government oversight on product or employee safety, big savings all around!
The national infrastructure currently in the United States is in disrepair from the interstates to the bridges and overpasses. It was after WW2 that America went on the upgrading of the national infrastructure and has only done upkeep maintenance since then.
Implementing a national plan to upgrade the infrastructure in the United States working in conjunction with the private sector on a public/private initiative would instantly create millions of jobs and lead to the revival of spin off or supporting industry.
This would also give the United States the opportunity to revitalize inner-city cores and tie local and regional transportation needs to a more efficient national grid of road, rail and ocean venturing vehicles allowing for design that is more efficient and cost effective to cities and municipalities. Reducing the burden of expensive public transport with green alternatives such as light rail transit, designated biking trails and electric car only expressways and parking centers with charging stations.
Of course, weather conditions would have to be taken into account as you mentioned in the design and implementation of such a grand expansion plan.
But the point of the discussion is where is the next boom, if the political will is there this is achievable and the industrial spinoff in manufacturing sectors would create new industry and valuable employment to a much starved nation. The only thing holding us back is fear and gravity.
Cheers
get rid of spyware said,
July 20, 2010 at 8:21 pm
Nice post posing a good question. Not sure where the next economic boom is coming from but I’m sure there will be another on it’s way soon. And sure as night follows day there sooner or later be a equally sized bust oto go with it!