BOOK
$26
The Net's consummate critic does the math
Of the many ills afflicting business journalism, here's the worst: Most journalists can't count.
Never was this more apparent than during the new economy boom. Reporters raced to Silicon Valley, but they rarely got the numbers right. The superhighway was a multimillion-dollar dead end; entrepreneurs' paper wealth was left unrealized when stocks crashed long before shares were exercised. It was the bankers and the stock-flippers, not the whiz kids, who got really rich.
But in the pages of The New Yorker, writer John Cassidy showed that he could do his sums. As the magazine's economics reporter, Cassidy was a rare skeptical voice as he chronicled the emergence of the Internet stock boom. Many of those stories are gathered in Dot.Con, recast and buffered with new supporting material. Cassidy marshals them to argue that the bust was inevitable, the result both of irrational exuberance by investors and quite rational, if myopic, self-interest by Wall Street analysts and fund managers.
While many books chronicle the end of the boom, Dot.Con proves to be one of the few that combines an entertaining story with intellectual heft. Towering figures - like Mary Meeker, Jim Cramer, Marc Andreessen, Jeff Bezos, even Alan Greenspan - are laid low by Cassidy's scathing historical framework of the financial bubbles and the attendant stars of the past.
But the book's title promises too much - Cassidy never delivers the implied smoking gun. Indeed, he is unable to dismiss the most fundamental notion (a mantra among the true believers) that the Internet changes everything. Despite the stock market meltdown, almost any reading of the evolving business practice wrought by the Internet suggests that more dramatic changes are yet to come.
Cassidy tries to cast aside the touchstones of the new economists - his argument says rising productivity, growing markets, and falling prices may, in fact, be more mirage than miracle. When Cassidy started work on this book, he was a rare dissenter. But the subsequent collapse of the technology-driven economy has made this a more popular notion. And yet, by historic standards, productivity is still strong. Prices are still falling. The new economy isn't dead yet. In the end, Cassidy's argument is far from won, but his careful prose and broad perspective help his book go down easy.
HarperCollins: www.harpercollins.com.
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