why is technology so sick?

A

andrasnm

I admit - I am stumped. I have spent better part of my life in technology and it was the driving force of US growth.
I thought I understood economics and the marketplace well.
I have heard the rationale some analyst use to explain this phenomenon. There are obviously many very smart people on this board hence I solicit your opinion. Why?
Obviously to the software sector it must have something to do with the Y2K hype and overspending.
It can't explain it away however, every sector of technology is ailing.
 
Any prolongated cycle of growth is preceded by an explosion of new technologies. These require a lot of capital, and the cost, should it be passed directly to the final users, would be just too high. So, the cost has to be passed on to the larger society.
This is achieved through bankrupcy and/or national governments taking care of the debts. In the end, the new technologies will be available to the end user at a low cost.

Think about railroad, then about electricity.

At this point, technology must be sick, that is the only way to pass the cost of infrastructure building to the greater society.


OHLC
 
I have a very cynical view of this subject. Technology and the internet have caused governments around the world to shudder. This also includes banks and insurance companies who also have a hand in milking the public. Internet brokers have caused major losses to banks and brokers who charged a percentage of the trade. In europe they charge mostly 3 to 5 % of a total trade also most do not participate in shorttrading. Although there was clearly a bubble Greenspan definitely screwed this up . So many people were getting rich and ahead, America would have had so many retirees and the government would have had to import so many people from third countries to work. Also with the internet governments are not able to "see" your money. One can move money wordwide. Governments love to see your money in an ira or 401 really cause they know where it is. Eventually they'll tax the internet to hell because they cant track you so easy.
 
I really think it is just plain overcapacity, and that overcapacity is tied into the investment bubble. Basically, too much money went into IT too quickly and a lot of it was just plain wasted. Spending on IT infrastructure, and the massive increase in hiring of IT workers was historically unprecedented. You can't have 15% a year increases every year indefinitely in any area. The mistake that was made was that people thought it was a "NEW ECONOMY". Well, now we know that there is no such thing, there is just the economy.
 
Originally posted by andrasnm
I admit - I am stumped. I have spent better part of my life in technology and it was the driving force of US growth.
I thought I understood economics and the marketplace well.
I have heard the rationale some analyst use to explain this phenomenon. There are obviously many very smart people on this board hence I solicit your opinion. Why?
Obviously to the software sector it must have something to do with the Y2K hype and overspending.
It can't explain it away however, every sector of technology is ailing.
More...

I am going to offer a different opinion here, I don't think technology in general is going to stay "sick" for long...honestly, I think there still is hope for this NEW ECONOMY idea, just think of the untapped potential of the web once broadband becomes as ubiquitous as cars back in the roaring twenties, the world never looked the same after that. Already there is the Internet2 used by universities and the government (like the Internet we use now once was used by them in the 70s) and I read that they can transfer a whole movie in seconds, that is some crazy bandwidth and speed. You can imagine how much potential new business can be created from that alone, such as holographic technology over the Internet to your holo-projector to your home (PCs may be replaced)...HDTV broadcast will be required by the FCC in 2006, one can only imagine how our TV and Internet will work together in the future (i.e. watching any movies you choose simply by surfing over to TMC and streaming it on your HDTV with the remote control)...since technology grows at an exponential rate, I can see this happening in under 5 to 10 years. At that time, our longer view looking back would be that the Internet bubble never popped, but this few years are just minor corrections to the most explosive growth in the new global economy. Guys, don't flame me after reading this...I am just trying to offer a different opinion to make the topic interesting.
 
i will try not to flame anyone but whenever i heard the term "new economy" during the bubble i would get so aggravated!!!! i also loved the constant spin of taking energy out of the price indices.... let's take this bubble higher is what they were saying. when 2+2=5 i will believe in the "new economy."
 
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