LETTERS TO THE EDITOR

comparing the dot.com bubbles

Jos,

I was looking at a documentary film about the internet and the journalist was talking about the dotcom bubble of the late nineties (1995 – 2001). What he had to say was quite interesting because he spoke about the subsequent advantages of this crash in the expansion of the internet highway. In reality what happened was a massive growth in startups, which was followed by stock speculation by Wall Street in the process of making these companies public, which resulted in massive speculation in their net worth. This was followed by black Friday that wiped two thirds of the value of the NASDAQ and a lot of insolvencies followed. The author of the documentary points out that the crash was a dawn of a new age in internet use because vast amounts of venture capital which were used to lay things like fibre optics networks etc. This meant that in six years the internet was developed to the advanced state that it is in now and people were able to benefit from that. The same is true in the history of the railroad. There was a speculative frenzy in England in the 1840 that lead to massive development in railways followed by a crash, but the infrastructure benefited. The same happened the history of American railroad. The idea is that you have speculation, crash, and then long term structural benefits. The question I was thinking is what the consequence of the more recent property boom is going to be. I was thinking that one major feature of the bubble in Ireland is that there are no benefits from the property boom in terms of infrastructure. In the classical model of boom and bust, the government should have taken the blank cheque and used it as a golden opportunity to deal with the infrastructural problems of the country and laid the ground for the new golden age to follow afterwards. What the government did was to authorise developments without any infrastructural benefits as they were blinded by greed (the massive increases in tax revenue that lead to the expansion in public service).

Aren’t the election results great! It is like the people have spoken in what is really a referendum on the government. I think that it is interesting that so many independents and left wing parties got into the councils. Well, I managed to meet two successful candidates when we were over that time: Mannix Flynn and Richard Boyd Barrett.

Love R

http://www.youtube.com/watch?v=A-lFwdkqHqY&feature=player_embedded