[socialist_coder]

Justin is fundamentally missing what people are saying the bubble is. From my perspective, no one is arguing that high tech and programming won't be more and more important in the future.

"Anyone who tells you that you shouldn’t be in tech, or that the current market situation will create an oversupply of people in tech, is doing you a massive disservice."

Who is saying this? I don't think anyone is trying to dissuade people from getting high tech skills.

I believe that the bubble consists of the massive amount of startups that do not actually provide a valuable service. Do we really need another social network or sharing site or "X for Y"? No, we don't, but it seems like 90% of the startups getting funded by incubators are just rehashes of that.

I believe that point is explained very well here: http://scripting.com/stories/2012/04/19/itsDefinitelyABubble...

The key points are here:

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2. We're bundling young people into things called startups, and selling them to investors for ever-increasing amounts of money.

3. In an effort to bring more suckers in, they just passed a law that makes it legal to pimp these startups to people who don't know anything. You will be able to take their investment by swiping a credit card. Probably using a $4 billion valuation Square dongle for an iPhone.

4. They have started incubators in every major city on the planet. Unfortunately it hasn't been stylish to learn how to program for a number of years, so there aren't that many programmers available to hire. And it takes years to get really good at this stuff.

5. Even if they could find enough programmers, there aren't that many businesses to start to satisfy the demand for investment vehicles. A lot like the situation with mortgages in the last bubble. So the VCs and angels and no doubt some very shady folks are putting together deals with people who can't program with no actual idea for the business. Don't look to Y-Combinator, they're the quality act here. But there are incubators in every city from Santiago to Beirut.

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The most important sentence there is "A lot like the situation with mortgages in the last bubble. So the VCs and angels and no doubt some very shady folks are putting together deals with people who can't program with no actual idea for the business."

And that is the bubble. Startups being founded with people who can't program with no actual idea for the business. Just like the last mortgage bubble.

And to be fair to Justin, I think twitch.tv is great. It is novel, has a clear path to monetization, and provides a service that people actually want. We need more venues for professional gaming and twitch.tv is a great step in that direction.

[olalonde]

I'm not a big fan of protecting people from themselves. Who are you to tell me I shouldn't be allowed to invest in a startup because I'm too dumb to make that decision for myself? Whether or not you are right about the bubble is besides the point.

[scarmig]

Well, aside from well-meaning paternalism... everyone who overextended themselves with a too-large mortgage did it of their own free will and hypothetically were only screwing themselves. But when things go to shit, the effects of a large number of people screwing themselves spill over to a bunch of complete innocents (well, people who are innocent of everything except existing in our contemporary economy).

[olalonde]

I agree with your observation but I still disagree with the conclusion that we should protect people from themselves for the simple reason that people do not have a responsibility towards the economy. If half Silicon Valley stops going to work tomorrow, the economy will unquestionably take a massive hit. Should we have a law preventing people from stopping going to work? If Zuckerberg decided not to build Facebook, should he be held accountable for all the jobs he could have created but did not?

[scarmig]

In practice for this particular instance, I agree with you on the correct policy position: the amounts of real-world money that would be being put at risk are small compared to the real estate bubble, and the financial nervous centers of our economy are more insulated from this bubble than the one in 2008.

I do think your general principle for appropriate government action is too strong and leads to some questionable results, but that ends up getting too involved in abstract political principles for this particular thread.

[MaysonL]

I think we would all be better off if the Comptroller of the Currency, the Office of Thrift Supervision, the FDIC, and the Fed had been much stricter in keeping banks and others from making liars' loans.

[emmelaich]

I suspect that the reason that a large number of people screwed themselves over is because sometime in the past some smaller subset was protected from slightly screwing themselves over.

[ubasu]

It's called information asymmetry. As an individual, you do not have the power to get all the necessary information to make a sound decision, but working through the government - which in a democracy ideally represents you and others like you - you can get that information.

[iandanforth]

This is an important point. You could provide a valuable service to the new angel class by running a site that provides startups with easy to fill out forms that translate into useful, actionable, understandable explanations of their new businesses.

I'm sure the standard brokers will provide guidance like this for a price, but you could establish norms as to what information is most important for every single new company to get out there, or take standards set by the government and make that information accessible.

[olalonde]

I'm not opposed to laws preventing corporations from providing false/misleading information, witholding relevant information, etc. I'm just saying people should be free to make the final judgement of whether or not they want to invest after having been presented with all relevant facts.

[ubasu]

There's also the issue of enforcement. If a company gives you false information, you may not have the resources to sue them if it's only a civil matter, or if the local prosecutor declines to prosecute.

[pessimizer]

It's not themselves they should be protected from, but the people who are going to try to sucker them.

Now if you lay out all of the facts in front of the mark, and he/she dismisses them as pessimism or a conspiracy - I'd say society's responsibility should end there. But I think that the less credulous people in a society should institute enough oversight over situations that could be potential scams so that the more credulous can have the best picture of the situation that a neutral party could provide.

Statistically, a large amount of people will always be too dumb to make that decision for themselves, so we should try to ply them with all of the supplementary smarts that it's pragmatically possible to muster:)

[Drbble]

The mortgage bubble was a great time to sell a house. The dotcom bubble is a great time to sell tech (companies or your labor). Just be wary of what you buy. I am bubbling all the way to the bank.

[greendestiny]

From the perspective of the 2000 bubble though, that's exactly what people thought. Pre-crash people thought everything needed to go online, post-crash people thought you couldn't succeed unless you were 'clicks and bricks' but really just bricks was better. Now we're looking at some over-valuations in social companies that will probably burst but people won't be reevaluating whether you can really have a business on the internet or not. And yes the 2000 bubble had a big impact on the careers that kids choose.