The Corner

Economy & Business

Why We Can’t Be Too Far from a Silicon Valley Bust

Henry Blodget of Business Insider, who was on Wall Street for the last big tech bust, has an interesting semi-answer to a question a lot of people have been asking: When does the tech business’s insane tear end? 

It’s a when, not if, question, he notes, because that’s just the nature of the tech business. And it can’t be that far away, he argues, because Silicon Valley and tech investors are no longer “thinking critically.”

The way he illustrates the illustrates this point: a recent exchange he with a couple Valley “bigwigs” who were explaining to him why tech firms can and should get into the car business, will shake it up, and make billions. It might sound like a silly data point (well, presumably the confidence at hand is sillier), but that kind of arrogance really should suggest we’re getting to the end of a bubble. Some of our natural assumptions about business and financial markets can be upended by exceptional events — but not all of them, again and again.

It’s reminiscent of the likely apocryphal story about how Joe Kennedy said he realized he had to get out of the stock market when his shoe-shine boy started offering investment advice. (Joe did get out; we might not have the Kennedy dynasty without his investment timing.) What’s happened at Apple and a few other companies is likely a once-in-a-generation business miracle. The generation will surely come to an end.

Patrick Brennan was a senior communications official at the Department of Health and Human Services during the Trump administration and is former opinion editor of National Review Online.

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