★ “Good News! The Bubble that Never Inflated Has Popped”

Sarah Lacy for TechCrunch:

The dot com bubble was both economic and psychological. There was obviously huge financial devastation — and many of the people affected were kicked out of their homes, like we see with the housing bubble today. Many rebuilt their lives, found new jobs, and rebuilt their nest eggs by investing in stocks more wisely.

But the reason we still talk about the 1990s bubble (constantly) is the emotional or psychological devastation. The Internet was something that captured everyone’s imagination– it was one of those once-a-century inventions and because it coincided with a time of huge democratization of the stock market everyone could grab a piece of it, even more easily than you could play a role in the housing bubble. So it wasn’t just the insiders, it wasn’t just the millions who worked for lousy dot coms, it wasn’t just the VCs, it wasn’t even just the reporters and analysts who chronicled it– it was everyone who ever bought a stock in a money losing company that they believed would never go down. That’s a lot of people feeling foolish after March 2000.

Call bubbles early and call bubbles often. Also, I LOVE Sarah’s writing. I’ve said it before but she really is TechCrunch’s only reporter with a J-school degree. Her reports are always great to read.