The Coming New New Economy

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Author Kurt Andersen's new book, Reset: How This Crisis Can Restore Our Values and Renew America, examines the economic, political and cultural opportunities to be found in the wake of the financial crises. In this excerpt, the second of five pieces to appear on, he examines the corporate ingenuity that often arises in the wake of fiscal disaster.

If you want to feel encouraged about our economic near future — not this damned decade but the teens — go talk to some venture capitalists. They aren't quite giddy (after the '80s, '90s and '00s, beware all giddiness), but they do sound optimistic about an imminent tide of innovations in information technology, energy and transportation. Recall, please, the national mood in the 1970s: after the 1960s party, we found ourselves in a slough of despond, with an oil crisis, a terrible recession, declining productivity, a kind of Weimarish embrace of cultural decadence, national malaise. And yet at that very dispirited moment, Federal Express, Microsoft and Apple were all founded. Even now Apple and Amazon and Google have been doing better than the rest of the economy. The next transformative, moneymaking technologies and businesses are coming soon to a garage near you.

Plenty of quintessentially 20th century businesses that have been sickening will now, finally, die. A generation or two of managers in those industries coasted along in denial, behaving as if the dark horizon would remain perpetually a ways off. With this recession, many of them are arriving at the abyss. However, people will still want to buy cars, still need to buy houses, still want to read quality journalism, watch TV series and movies at home, listen to recorded music, and all the rest. And so starting now, as some of the huge, dominant, old-growth trees of our economic forest fall, the seedlings and saplings — that is, the people determined to produce and sell new kinds of transportation and housing and media and other merchandise in new, economically rational ways — will have a clearer field in which to grow.

The implosion of Wall Street is already having this salutary effect, prompting some bankers to start up new financial firms and others to go to work for smaller, no-name companies. Which should, among other things, help reduce the dangerous overconcentration of capital and risk that made the present crisis so dangerous and devastating. "If the risk-taking spreads out to these smaller institutions, it is no longer a systemic threat," according to Matthew Richardson, a finance professor at New York University. "And innovation is spreading out too. This is a good thing."

GM and Chrysler may be on their last legs — but small, visionary startup companies like Aptera Motors, Fisker Automotive, Tesla Motors and Bright Automotive are starting to sell their cool, cutting-edge, battery-powered cars, and a decade from now any one of them might be the household name that epitomizes our 21st century industrial rebirth. (I just drove in an Aptera. It looks like an awesome Jetsons vehicle, plugs into the wall, drives like a dream, goes 100 miles on a charge, costs under $30,000 — and I want one.)

Read the first, third, and fourth excerpts from Reset.