The recession has arrived, and not a moment too soon.
Although bad economic times are generally portrayed as dour, miserable periods of history characterized by stagnant wages and high unemployment, most people, I think, secretly look forward to them. With a recession, it becomes safe to be a slug about current events again. Dinner conversations about the Dow Jones, manufacturing in Korea, and opportunities in theme restaurant chains vanish. Prosperity is fascinating, but tiring.
A look back on this century's culture only confirms this. The 1920s, an era of unprecedented wealth and opportunity, is now characterized by presidential scandals, the rise of mass media manipulation, jingoism, and a growing sense of ennui among the elite.
The Great Depression of the 1930s, on the other hand, turned out to be a boon for literature, government reform, and everyday casual wear. There's not much for sale at the Gap that doesn't come straight from a Dust Bowl photograph. The same can be said of subsequent economic downturns. The mid-'70s brought a long-needed revolution to the automotive industry and a shift away from album-oriented radio rock.
The appeal of a recession partly comes from the ham-fisted morality that comes with a downturn. Undeserved riches are wiped out. Guys with hair mousse and pie charts fade away. Meritocracy gives way to an unavoidable democracy of failures.
I've only lived through one recession in my adult life (1990-1993), but I have to admit to having some fond memories of the stagnant flavor of the time. It was like living in one of those dramas about contemporary England. I remember being able to read the whole paper and to make the discount matinee. Jobs were scarce, but comical. One acquaintance, an art director, took a job wearing a pizza slice and handing out coupons. When this failed, he went into balloon animals.
More importantly, downbeat economies lead to bursts of industrial creativity, which could be exactly what the high-tech industry needs at the moment.
Contrary to popular wisdom, periods of dynamism in technology bear little correlation to the stock market, interest rates, or even the tax structure. In fact, a case can be made that the industry only thrives in periods of hardship. Microsoft, for instance, was founded in 1975, during a period of double-digit inflation and terrible music. Apple Computer came in the with Carter administration. Compaq, another industry giant, came to be in 1982, the year someone robbed a McDonald's where Reagan gave a speech.
Leaders of industry are loath to confess this. Instead, they push for cuts in capital gains and the federal interest rates to ensure the engine can keep churning. The justification for these is often couched in terms of the recent past. The federal government cut capital gains taxes last year; the stock market continued to grow. Therefore, further cuts will allow the country to get back on track.
The theory that good ideas only emerge in optimal financial conditions doesn't hold up. The Internet boom, for instance, began in 1995 with the emergence of Netscape, years before the recent cut in capital gains and even before the massive surge in stocks.
By contrast, the soaring market values of the past year spurred new venture investments and an emergence of new business models for the Net--a wealth of opportunity.
Add to that a bunch of push technology CEOs.
Michael Kanellos yearns for evening in America.