Commentary: Boom and Bust Cycles Are the Same Today as in Past

By D. Singletary | THE JOURNAL RECORD, March 27, 2001 | Go to article overview

Commentary: Boom and Bust Cycles Are the Same Today as in Past


D. Singletary, THE JOURNAL RECORD


I don't know how it works, but somewhere on Mt. Olympus, the money gods decide who shall be blessed and who shall suffer judgment. The rulings and dissemination alter lifestyles and bank balances, all the while pushing and pulling different groups between boom and bust.

Today's busted Internet entrepreneurs are really no different than oil field wildcatters, high-rise developers, home builders, defense contractors, commercial bankers or savings and loan operators.

All of these industries have experienced the blessings that flowed when it was their turn at the trough. All of these industries have also suffered incredibly when the crash came and millions of dollars were lost, thousands of workers lost their jobs and the future seemed bleak, not bright.

Will we ever learn?

We didn't invent this phenomena in the 20th century, either. Gold and silver prospectors, lumbermen and shipbuilders from the 1800s, along with alchemists from the middle ages endured the boom and bust cycles long before our time.

I propose that the same set of principles that initially rewarded investors willing to bankroll gold mines in the 1800s, then led to diminished returns, employment losses and widespread financial ruin still exists today.

It just seems to happen quicker and we all hear about it as it is happening.

Two years ago the future seemed bright and the business models coming from MBA programs across the country anticipated years and years of steady, if not staggering, growth for anything connected to e-commerce or the Internet.

Cash came rolling in. IPOs, angel funds, private placement venture capital, hedge funds, and technology-based mutual funds provided a seemingly endless supply of operating funds for anyone with a pocket protector and a laptop.

But, there were warning signs.

But, we choose generally to look past warning signs and come up with new phraseology to explain fundamental accounting and economic precepts that aren't followed or met.

Previous boom and bust cycles should have provided a more meaningful insight, if analyzed properly.

When times are good, builders and developers can borrow their lifestyle and collateralize their future. When a bigger, more expensive project is waiting for you, it seems easy to roll operating expenses and extravagances into short-term borrowing. That is, of course, until sales slow, interest rates rise or some uncontrollable force decides the party is over.

The Internet entrepreneurs and investors developed the phrase 'burn through capital' to represent the amount of time and money that is consumed by business operations without any linkage to revenues from traditional sources. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Commentary: Boom and Bust Cycles Are the Same Today as in Past
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.