Here’s What Economics Experts With No Silicon Valley Connections Say About The Tech Bubble


The New York Times ran a ‘Room for Debate’ column yesterday, featuring four economics professionals responding to the simple question, “Are we in a stock market bubble that could soon burst?”

Thankfully, none of the respondents had any direct connections to Silicon Valley, meaning we were spared any “rah-rah tech!” analysis — although these days, even entrepreneurs are beginning to admit that their world is getting frothy. Among the four NYTimes experts, we had two definite “Yes, get the f*ck out of the market,” one “Maybe, but let the gamblers have their fun!” and one “No, this time it’s different!”

Check out some notable quotables below:

Neil Barsky, former hedge fund manager and Wall Street Journal reporter: “I would argue that we are undergoing a period of rapid innovation where both brilliant and idiotic financial decisions will be made, and it won’t be clear for some time which is which.”

Reggie Middleton, editor of BoomBustBlog: “Think of you and your friends. How much money have you paid to Facebook recently? Now, think of your friends, family and businesses – how much have they paid Facebook? This method will likely reveal many a social media emperor hath threadbare jeans (a.k.a., no clothes) as well. ”

Yves Smith, writer at Naked Capitalism: “One argument is that there is enough talk of bubbles that there can’t possibly be one. But in fact, in the dot-com era, there was plenty of discussion of frothiness of the tech stocks, back to the Fed Chairman Alan Greenspan’s famed “irrational exuberance” remark in 1996.”

Michael Mandel, chief economic strategist at the Progressive Policy Institute: “Even if the market dropped suddenly — which could happen — the plunge wouldn’t drag down the rest of the economy…history suggests that a tech-driven stock market boom can broadly benefit Americans by boosting business investment, creating jobs, and encouraging innovation.”