There were two
grand illusions about the American economy in the first decade of the 21st
century. One was the idea that housing prices were no longer tethered to normal
economic trends, and instead would just keep going up and up. The second was
the idea that in the age of Web 2.0, we were well on our way to figuring out
how to make lots and lots of money on the Internet. The first idea
collapsed along with housing prices and the stock market in 2007 and 2008. But
the Web 2.0 illusion survived long enough to cost credulous investors a small
fortune last week, in Facebook’s disaster of an initial public offering.
