The following post is taken from the National Review Online's "Kerry Spot" (15 June 2004), written by Jim Geraghty:
ABOUT THOSE JOBS THAT HAVE BEEN LOST SINCE 2000...
Brace yourselves for wave after wave of dueling statistics bigger than that tsunami that drowns Manhattan in Al Gore's "The Day After Tomorrow." After spending nearly two weeks laying out his foreign policy, Kerry is spending this week and next talking about the economy.
The Kerry message is that the economy stinks and he can do better. "A rising tide is supposed to lift all boats," Kerry said in a speech to the AFL-CIO labor federation's New Jersey affiliate in Atlantic City. "Today the middle-class boat is taking on water. I believe we can do better than rising costs and shrinking incomes."
A big Kerry theme is the total number of jobs that existed in the U.S. when Bush took office on Jan. 20, compared to now.
Of course, a good number of those lost jobs were dot-coms. And a quick trip to the Wall Street Journal's guide to closed dot-coms, or the web-site `bad-word used as a verb, past tense' company.com, reminds us of just how many people were employed in well-paying jobs in multimillion dollar businesses that had no concept of how they would make a profit.
Each day in late 2000 and the first half of 2001, dot.com upon dot.com -- Psuedo.com, Go.com, PlanetRX.com, eToys.com, MVP.com, jobs.com, officeclick.com, Rivals.com, NBCI.com, Wine.com (some of the domains may now be purchased by other companies with actual profits) -- announced layoffs of dozens, and in some cases, hundreds of employees. Many of these companies had gone through tens of millions of dollars to create little-visited fancy web sites.
Even survivors of the bubble's burst, like Amazon.com, Yahoo and CNN laid off hundreds. Outplacement firm Challenger, Gray & Christmas estimated that 149,363 jobs were cut at Internet companies between December 1999 to May 2002.
Of course, the closure of these businesses had big impacts on non-dot-com businesses as well - computer makers, office furniture makers, real estate, advertising, janitors, water cooler companies... Everyone who served the dot-coms suddenly saw their customers disappearing. So the impact probably goes well beyond those 150,000 or so.
Even if the American people had elected the Pets.com sock puppet instead of Bush in November 2000, with the sole aim of preserving the dot-com era, there is no way the President could have kept those jobs from disappearing.
The money to start up those companies came from investors and venture capitalists, who suddenly realized their investments were buying a lot of servers, web redesign teams, foosball tables, "advertising swaps" (an easy way to create pretend revenue), ludicrously excessive Silicon Valley startup parties, memos about guerilla marketing and "floating sticky eyeballs" and an endless array of promotional knickknacks. The only way to replace that money would have been direct federal subsidies, which we should be glad never got seriously discussed.
As much as we might have liked seeing 24-year-old millionaire CEOs, stock options thrown to employees by the thousands and (ahem) web-savvy journalists making money hand over foot, no economist in their right mind would have said that craze was sustainable. Those jobs had to go, because venture capitalists were flushing billions into companies that did not have sustainable business models, or were wastefully creating a product for which there was no market.
But now Kerry uses the height of the dot-com hysteria as the benchmark.