The modern economy of frenetic intemperance often resembles a pendulum. There are periods of extreme productivity followed by crashes and collapse. A classic example of this was the “dot-com” bubble in the spring of 2001. Huge amounts of venture capital had entered the market creating an enormous amount of excitement and spectacular profits.
When the bubble burst, many of the companies were either bankrupt or with shares trading below one dollar. In a short period of time, three trillion dollars of value was wiped off the books and tens of thousands of high-tech employees were out of work.
Dr. Peter C. Whybrow, a neuroscientist commenting on this episode in American economic history, compares “the frenzy and subsequent letdown that we experienced as a nation and the swings of emotion that occur in manic depression.”
In striking parallels, he finds modern economy often acts like the human mind in which “the same periods of high energy, creativity, and overconfidence alternate with angry self-criticism, pessimism, and social withdrawal.” (Peter C. Whybrow, American Mania: When More Is Not Enough, W. W. Norton, New York, 2005, p. 118.)
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