I suppose this has cost me a good deal of money. The modest sum I have in my retirement account was in a mutual fund until 1997, when the Dow first topped 8,000. I moved my holdings into money-market funds because I thought stocks were overvalued relative to any rational measure, such as the P-E Ratio. And they were, in my opinion, and still are, but that didn't prevent them from soaring to unprecedented levels, as this instructive P-E graph from a New York Times article on Bubblenomics shows:
I'm still waiting for the Dow to hit 8,000 again (it almost got there). Then I might buy back in. (At which point the idiot herd would no doubt keep the market down for the next ten years in spite of any actual signals from the economy.)
I'm sitting in a house we bought in August of 2001. We thought long and hard before buying it; it's a lovely place, and perfectly suited to us, but we were sure we were buying at the top of the market. [Time out for prolonged laughter.] We decided we could deal with the 25% drop we anticipated, sucked in our bellies, stuck out our chests, and put down our money.
Of course, over the next few years the house more than doubled in market value, and even now, after the real estate bubble has supposedly popped, it is still valued at 50% above what we paid for it. Do I expect it to go down further? You betcha. Houses have been valued at prices that make no sense relative to people's incomes, and now that people are losing their jobs, and a gazillion houses are in foreclosure, I don't see how things can't slump further.
In other words, I think we are still in bubble-land, in both stocks and real estate, and the fact they are desperately being pumped up to get back to "normal" makes me fear this is going to drag on for a while.
And how does this relate to novels? I'm not sure. But after 9/11, if you recall, we had that disturbing "non-fiction" moment, where it appeared no one wanted to read fiction ever again.
Over on his blog, David Thayer makes the argument that bad times for the economy means good times for crime fiction, and he may be right. After all, insider-trading scandals and misstatement of profits haven't made for a very exciting crime-fiction environment--
OUR DETECTIVE: ...but then you, Olsen, passed those losses on to the two offshore subsidiaries to prevent them showing in the current account. But that dame in accounting got wise to you, didn't she? The minute she saw you'd switched from straight-line depreciation to sum-of-the- years-digits, she started checking, and then she realized there were all those other assets that had been expensed rather than depreciated, and--
OLSEN: She was like a madwoman! I tried to reason with her, tried to pay her off. But even backdating her stock options wasn't enough--she just wanted more, and more--!
OUR DETECTIVE: And so you decided you had to get rid of her, right, Olsen? Get rid of her permanently...
OLSEN: Yes! Yes, it's all true! I--I called in some shady venture-capital people I'd heard about, and we spun off her whole division in an overpriced IPO. Not just her. Her whole division...
OUR DETECTIVE: Even though your corporate mission statement clearly stated your primary goal was to preserve and promote shareholder value...?
OLSEN: Oh my god...what have I done?
Even though mergers and acquisitions people call their published statement a "tombstone," it really isn't the stuff of gritty crime fiction. I'm hopeful that Mr Thayer is correct, and this economic downturn will get us back in the gutter where we belong.
If we're in for a slump, what other genres might enjoy a renaissance? Judging from the Great Depression, when Astaire-and-Rogers movies ruled the world, there's also plenty of room for pure escapism. If you could manage to be the PG Wodehouse of the 21st century, you'd be in good shape. And pulpy science-fiction may be in for a big upswing, but the emphasis would have to be on pulpy. It may not be a good time for science fiction that is realistic or relevant. In fantasy, it's hard to say; the genre was near unto nonexistent back in the 1930s. At first glance, it might seem that fantasy would be the perfect escapist vehicle, but as Tolkein pointed out, even when fantasy is not allegorical, it is often very applicable, and good fantasy might not be as escapist as the public would like.
Me, I'm switching over to Time-Travel Romances. And with the rise of audiobooks, I don't see why we can't have musical-comedy novels...