In regards to answering your question as to whether there were really 2 million or so jobs lost in the past 3 years, and
whether or not they even existed in the first place based on your "Bubble-World" thesis, I would say that
yes these jobs did in fact exist. However, I believe that you have dramatically overstated the amount of jobs that were lost nationwide in the past couple of years in high-tech. I would argue that the number is more closer to 700,000 than the 2 million that you have previously stated.
In any event, I believe that your argument is flawed because you simply fail to look at the Economy as a
dynamic entity, and your question makes a generalization that is based not only on "20/20" hindsight, but also looking at the Economy in
static snapshots. Therefore, your argument is null and void, pure and simple.
There was a tremendous realization at the time of the Millennium that advancements in telecom would truly revolutionize our Economy, much in the same way that the railroad revolutionized our Economy back in the 1890's, or the automobile in the 1920's, or commercial aviation shortly thereafter, or the computer in the 1980's. Companies like Commerce One and Ariba were reflective of just where the marketplace was expected to grow with revolutionary ways of doing business vs the old "brick and mortar" architecture. Did the Economy somehow not create all of these new jobs in high-tech during this explosive phase in telecom? Of course not! People and companies were making HUGE investments in their corporate assets in an effort to be competitive and realize market share. Try reading Joseph Schumpeter's theory on
Creative Destruction and you will get a handle on what I am talking about. That is the real world. There is nothing "imaginary" or fake about it, let alone discountable.
Moreover, I think that you give far too much credit to the Dot-Bomb phase, especially since our Economy is so much more diverse than what you give it credit for. Sure, 560,000 jobs were lost in high-tech jobs, nationwide from January 2001 - December of 2002 but nowhere near the 2 million number that you have mentioned. Furthermore, if you were to ask the likes of John Chambers at CSCO, or Scott Kriens at JNPR I'm sure that back in late 2000 or early 2001, they really did genuinely believe that their businesses were going to grow at a 40% annualized growth rate. As a result, people were hired. And when the marketplace finally realized that the demand for broadband was not what people had initially expected, and that Global Crossing had totally fudged their numbers regarding what the marketplace would bear regarding the growth in fiber optic cable being installed, orders were pulled and there was no longer a sense of urgency to grab marketshare. As a result, the growth in telecom imploded and jobs were cut. Did these jobs ever exist in the first place?
Sure they did.
They were real, corporations placed some huge bets on their insight and forecasts and they were a
portion of our Economy's growth at the time. To go back and try and make a case that these jobs never existed, thus they were never lost in the first place is pure poppy-cock, as my late grandfather would say.
For another example, just look at how
long Goldman Sachs waited before they finally laid off some employees in this last bear phase of the equity markets. In fact, even though the markets were starting to turn back in early 2003, broker/dealers were still cleaning house. And some of these investment banks would have been able to survive had they bitten the bullet much sooner in the downcycle. Case in point, the big IPO firm out here in San Francisco, Robbie Stephens closed their doors with 900 people employed. Had they cut this number by just one-third, they most likely would have been able to survive just from the buy-side funds picking up the phones and placing trades thru their desk like they were used to doing.
Thus, there are decisions that have to be made based on the profitability environment at hand, and these decisions and forecasts have to be continually updated. Again, they are
dynamic and contain many
variables let alone do not occur in a vacuum. Come on Mav, this is basic Econ. 101 here.
In any event, the Economy is very much a
dynamic animal. There are cycles in all sectors of the economy. Just because the Captains of the Telecom sector made a mistaken forecast doesn't necessarily mean that those jobs never existed!
For example, when the railroad industry employed 75% of the Nation's workforce and those people wound-up losing their jobs after the railroad industry had matured and the growth rate began to decline, do we then say that those jobs never existed because there was a "Bubble" in the railroad business? Was this "bubble" somehow different than telecom because this decline in the railroad industry took years to occur rather than a couple of quarters?
Of course not!
GO UCONN!
