The Coming Internet Depression: Why the High-Tech Boom Will Go Bust, Why the Crash Will Be Worse That You Think, and How to Prosper Afterwards

The Coming Internet Depression: Why the High-Tech Boom Will Go Bust, Why the Crash Will Be Worse That You Think, and How to Prosper Afterwards

The Coming Internet Depression: Why the High-Tech Boom Will Go Bust, Why the Crash Will Be Worse That You Think, and How to Prosper Afterwards

The Coming Internet Depression: Why the High-Tech Boom Will Go Bust, Why the Crash Will Be Worse That You Think, and How to Prosper Afterwards

Synopsis

The economist most renowned for predicting the New Economy of the 1990s now returns -- just as books like The Long Boom and Dow 36,000 are turning the idea of perpetual prosperity into conventional wisdom -- to say that the dominating economic event of the next few years is likely to be a deep recession, perhaps even a depression. Michael J. Mandel begins The Coming Internet Depression by explaining why just such a depression is not only possible but increasingly likely. His explanation is based in a comparison of the present period with the 1920s: both saw tremendous growth in GDP that was largely centered on the "hypergrowth" of a single industry -- automobiles in the 1920s, information technology today. When this "hypergrowth" reverts to a normal growth pattern, as the automobile industry did in 1929, the resulting overcapacity will slow down the entire economy. Mandel addresses three key questions: When will the Internet Depression start? How will we know when it's coming? How bad will it be? Finally, he shows how investors, workers, and businesses can navigate the bad times safely and prosper in the long recovery that will follow.

Excerpt

While the sun is shining, it's hard to prepare for rain. Similarly, while the U.S. economy is in the midst of the longest expansion on record, it's difficult to imagine that the prosperity is ever going to come to an end.

But let us look beyond the tech boom to the dark side of the New Economy. the downturn is likely to come, as violent and destructive as a hurricane. For investors, workers, and managers trying to prepare for the tech downturn, there are three key questions.

First: What are the indications that the economy has peaked and the good times will soon be over? These are difficult to read, but history suggests some signs to look for in advance of a downturn.

Second: What industries and occupations will get hit by the New Economy bust? the downside of the tech cycle will not be centered in the automobile and steel factories, which were the leading edge of the downturn of the 1930s. It will hit hardest at the new information technology and communications industries that drove growth in the 1990s.

Finally, the most important question of all: How long will the downturn last--and will it turn into a depression? After nearly a decade of prosperity, most households and businesses have built . . .

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