Where the Next Boom Will Start

Think of this as Volume 11, Number 43 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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Every economic recovery is different. What worked before may recover but it's never the same.

That said, note that every new boom starts slowly. Growth is never uniform, not between industries or within an economic cycle. Recovery will be slow. It will take years. But its pace will accelerate and at some point we'll forget again what hard times felt like. That's when we'll be ready for another bust.

Let me start by looking at previous booms I have lived through:

• The 1970s happened in the oil patch. I was in Houston then and it was a lot like Dubai has been the last few years. One bank put up what looked from the air like a huge green dollar sign. That's how things were. After the crash, which was hard, there was finally a recovery, but it was never the same as it had been.
• The 1980s happened on Wall Street. I was a business reporter then and I watched as supposedly brilliant people took apart companies, then put them back together to reveal value. Everything else went up in sympathy. After the crash the Wall Street game changed. You still read about the "heroes" of that era, like Carl Icahn, but it's not the same. Nor will it be.
• The 1990s  happened on the Internet. I was an Internet reporter. I started warning of the crash in 1997, but the boom happened despite me. The bust took down a ton of companies, and I was out of work completely for over two years. But it did come back. Amazon and eBay came back. Other sites came back. Google barely existed at that time. But, again, this decade, online, has been mainly about consolidation and steady change, not revolution.
• The 2000s were all about housing. Whether the boom was real or artificial, the product of lax regulation or an attempt to cover up for the Iraq War's costs, is irrelevant right now. We created enough Confederate Money to paper the world, backed by houses that were only worth a fraction of what we paid for them, and it will take years to unwind that. When housing does "come back" it won't be the same. It can't be. But, in time, it will come back.

The next boom will be about making things. It will start with alternative energy technologies -- there are an immense number of breakthroughs just ready for market -- and that will give the U.S. a cost advantage over its economic competitors, as well as products for export.

The boom will start here because our markets will recover faster. We are making the correct political adjustments in order to create sound regulation, transparency that will renew confidence in the dollar, and in stocks. Despite all that Confederate Money the U.S. dollar is strong today, and it will generally continue to strengthen over time, although at a modest pace, because we'll have to pull down money supply in order to recover from today's excesses.

The dollar's strength gives us the ability to launch the War Against Oil in a meaningful way, despite the lowered price that commodity carries today. We can negotiate a floor price that OPEC will accept and that will guarantee our new technology a market.

We are about to undergo an infrastructure boom the likes of which hasn't been seen in this country since the 1950s. The economic impact of this global bust is going to be, a little, like that of a war where we don't feel that strong but in fact, are. We will have the breathing space to start building the broadband, rail networks, and new utilities we need to lower our total energy bills and gain the redundancy present networks don't have.

All this will make the U.S. a much more attractive place to do business. We're going to become a nation of makers again. We're going to have cost advantages over even China in the manufacture of steel. Our chip technology will become mass marketed for domestic consumption, in the form of solar panels. Standards will emerge that let us replace those panels with better ones on a regular schedule. The West will undergo a geothermal and hydrogen boom.

Then will come the medical advances. We have enormous opportunities in robotics, in wireless applications (what I've called AlwaysOn), and in all the technologies needed to care for an aging population. We will increase the productivity of our medical workers, by orders of magnitude, and that will give us an advantage in other, related markets.

The U.S. is going to make a ton of money from education. We still have the best universities in the world. They have been our primary growth engines for decades, through research, but we're also going to see a new boom in services, as more of the world's elites come here for their own degrees.

There are tremendous opportunities for growth in the world, and those opportunities will appear here first, because we led the downturn and our liquidity will lead the recovery. We are going to have wiser leaders, less internal rancor, and we're going to get back to work.

Count on it. Tomorrow is another day, a better one. The next boom is just around the corner.