Ed Driscoll

Bubble, Bubble, Toil... No Trouble

Tech Central Station’s Andrew Och discusses America’s tech and real estate bubbles of the last decade with Daniel Gross, the author of Pop: Why Bubbles Are Great for the Economy, and asks what next bubble is likely to burst:

GROSS: When you look back at history, you can see these early stages to a bubble. People say there’s a new technology and a new set of economic assumptions behind it. You tend to get government subsidies behind a new sector. You tend to get investor enthusiasm.

TCS: And where do you see those things happening now?

GROSS: We are seeing all those elements right now in alternative energy. People are saying that there are a new set of economic assumptions surrounding energy use. Oil prices are very high. There’s all the concern about global warming. Therefore, they say, we need to invest more in this area.

There’s been fantastic growth in wind, solar, ethanol. We have government subsidies for all of these things, which encourages people to invest in them even at high levels. And you can see it crossing over into the popular culture. It’s not just business publications. It’s everywhere you look – TV, radio, newspapers, company’s websites. Everybody is talking about producing alternative energy, using alternative energy.

So, I think the stars are aligning for a bubble in alternative energy.

It will be fun to watch the media report–or not–on that when and if it happens.