What If the Feds Bailed Out the Busted Dot-coms?
If the feds took the bailout approach to failing dot-coms in 2001, what would the world look like now?What if the government had spent $750 billion to bail out the dot-com companies when the Internet bubble collapsed in 2001? I've been thinking about this as I've watched the feds run the spectrum from rugged free market individualist (tough luck, Lehman Brothers, don't let the door hit your butt on the way out) to a socialist bankers paradise (we can't fail as long as the U.S. Treasury has ink and paper). Were those dot-com companies too important and too big to fail?
If that had been the decision, I'd guess the world would look something like this.
CMGiOf course, the vital venture capital funding pipeline would have faltered and failed without the government's decision to pump $50 billion into CMGi. The revolutionary idea that companies don't need products, expertise or sales was a concept that had to be preserved and encouraged. Without the government's willingness to step in and grow the dot-com company creation economy, startups would have been forced to come up with real products for which real customers would plunk down real cash. Aren't we glad that never happened?
ComdexAnd where would the tech industry be without the fed's decision to pour $5 billion (and counting) into the Comdex trade show in Las Vegas? Comdex is the only place where buyers and sellers can confab over drinks, and it is impossible to consider that any other location or venue beyond Las Vegas would be a sensible site for techies to see the new toys. By subsidizing a yearly event where every techie in the world gets a free trip to Vegas, not only is the tech industry assured of continued survival, but the concepts of the endless buffet, the Elvis impersonator and the lap dance have advanced all of civilization. Anyway, you get the idea. Sometimes bailing out the folks who got us into the mess doesn't seem to make too much sense.