How will the impending doom of the US Economy affect the blogosphere?
Written on September 15th, 2008 by Graham
Today, financial shots were heard round the world. Lehman Brothers has filed for bankruptcy. Bank of America has taken over Merril Lynch in a move that is expected to slash 20,000 jobs. The US Government has taken the reigns of Fannie Mae and Freddie Mac who collectively manage 5 trillion in mortgage debt. Foreclosures have spiked by 112% after a 75% increase last year, and the unemployment rate is rising rapidly. Alan Greenspan, the former head of the Federal Reserve, has stated publicly that this is the worst economy he’s seen in his lifetime.
What does all this mean? Quite simply, the shit has literally (no, wait, metaphorically) hit the fan. As more and more people are forced from their homes, former titans of banking crumble, people lose their jobs and things look worse by the day, I’m left with two thoughts.
1.) Why do you never see the US presidential candidates debating the economy? -and-
2.) How is the economic climate going to effect the blogosphere?
The blogosphere is perhaps the ONLY zero-barrier entry business you can start online. That means it doesn’t cost you a penny to start a blog. You can go to a local library, even if you don’t have an internet connection at home, sign up for free at wordpress or blogspot, and get rolling. And make no mistake, blogging is big business. As you all know, there are the John Chow’s and the Shoemoney’s who make about 400,000 from their blog per year, and then there are the TechCrunch’s and the HuffingtonPosts that make about 200,000 per month from their blog.
So when is a zero-barrier business opportunity looking its brightest and most attractive? Logically, it stands to reason that zero-barrier opportunities are the most attractive when the means to start other businesses are scarce. And they’ve never looked more scarce in the US than today.
A two years from now, I will look back from right here on the Entrecard blog, and show you a chart about how the growth rate of the blogosphere in the US spiked sharply in these few years when the economy is in the deadpool. All the factors are there; the soil is very fertile for the blogosphere. People have an increased pressure to make ends meet, to make rent, and an increased pressure to find a way to do it that doesn’t cost any money. Add to that the fact that everyone (or almost everyone) has opinions, and can think about blogging from the “hey I can do this, this is easy!” perspective.
As for the answer to my second question, why the presidential candidates don’t seem to be saying much about the economy, I don’t know why that is. But I know that one presidential candidate has been on the frontlines for years. Check out this video from last year:
Since starting Entrecard, I’ve become addicted to learning about economies, so I find this stuff fascinating. Ron Paul really gives it to them in the clip above. Essentially what the US is doing, if the US was Entrecard, is to make credits out of thin air, pump them into the economy, and then be surprised when the value of the Entrecard Credit tanks. Now, as for the Federal Reserve, let’s say instead of making my own Entrecard Credits, I let Turnip of Power click a button to generate Credits, and then I borrowed all the Credits in the Entrecard economy from Turnip, at interest. Well, then Turnip would be the Federal Reserve of Entrecard. It would also make me a really stupid business man. Why would I borrow Credits at interest (for the entire economy) from Turnip when I could just make my own? I wouldn’t unless someone passed a law that said I had to. But I would expect Entrecarders to be none too happy, because that law would lead to runaway inflation and people’s credits would be worth less and less and less as the years went by. For example, the US Dollar has lost 96% of its value since the creation of the Federal Reserve.
September 15th, 2008 at 3:44 pm
Make no mistake, the central banks are what control the world. Ever watched “Zeitgeist”?
September 15th, 2008 at 4:24 pm
“well what we’re about to show you is that there’s nothing federal about the Federal Reserve and there are no reserves. The name is a deception created back before the Federal Reserve Act was passed, in 1913, to make Americans think that America’s central bank operates in the publics interest. The truth is that the Federal Reserve is a private bank owned by private stockholders and run purely for their private profit.”
http://video.google.com/videoplay?docid=-515319560256183936&ei=dtLOSLzNEpD8-gHW2oW_Ag&q=the+money+masters&hl=en
September 15th, 2008 at 4:30 pm
Haha, well I’ll be damned if I’m ever going to let turnip create the Entrecard Credits for his private profit
September 15th, 2008 at 4:34 pm
All you have to do Turnip is get the legislators to cook up a bill that will allow you to have complete control over our currency and pass in during a Christmas break, then have the president sign off on it, Then Turnip could control us all.
September 15th, 2008 at 4:37 pm
Well at least I know who to call – Ron Paul
September 15th, 2008 at 5:28 pm
I’m a supporter of Ron Paul, but I hate how his name is thrown around like this. He is not a candidate and has already said he wouldn’t run as an independent.
If you like his ideals, you should vote for a libertarian. They believe in the exact same things as Ron Paul.
Also, donating money to the libertarian party is the way to go. That way the party will grow, donating to Ron Paul only makes his support grow.
September 15th, 2008 at 5:41 pm
As far as voting is concerned, you have to vote your heart. This year my vote is going to Ron Paul on the write-in ballot. I live in a blue state that’s going to Obama anyway, but if it was close I’d vote for Obama just to keep McCain out.
September 15th, 2008 at 5:56 pm
I never thought I would hear Graham say he was going to write-in RP.
September 15th, 2008 at 6:03 pm
Yeah well here’s another thing you probably didn’t know about me. This video literally brought tears to my eyes:
http://www.youtube.com/watch?v=FG2PUZoukfA
September 15th, 2008 at 6:12 pm
Besides, given all the experience I’ve had with an “economy” even a really small micro-economy, it has made me so much more aware of everything and what RP says makes so much perfect sense
September 15th, 2008 at 6:12 pm
I just recall a time when I brought up RP one time…
BTW that is a great video.
September 15th, 2008 at 6:32 pm
I agree it does make a lot of sense
September 15th, 2008 at 7:24 pm
Ron Paul is by far the only candidate to make any since throughout this election season,but as we all know the elite that run this country(world) would never let a candidate that has a voice for the people remain to speak.
September 15th, 2008 at 9:31 pm
True, but look at Ross Perot in 1992 -he got one out of every five votes cast in the country, and he was largely independent, with so much money no one could buy him off.
I think the first step is opening up the debates. If we are all of the mind that debates need to be fair and open, and that people like Ron Paul should be allowed to debate Obama and McCain on the economy, we’d see a lot of progress.
September 15th, 2008 at 11:00 pm
Wow..I never been watch this video of RP since then. In fact this thing is less with my interest. US economy, that Obama and McCain. I don’t have nothing to do with this thing. I’m far from them lol! But I salute what was RP saying on this video. Full of sincerity isn’t it? I need to know more this RP.
September 15th, 2008 at 11:29 pm
Very nicely explained…especially the part where you used the example of Entrecard credits to simplify the US economy…
I hope things get brighter soon, though……
September 15th, 2008 at 11:43 pm
If Greenspan says worst in his lifetime that really means something. He has been around for like ever!
September 16th, 2008 at 12:22 am
@Graham speaking of Ross Perot, he is a direct example of what I was talking about. Generally, after an election candidates still have tons and tons of money. That money is then ‘donated’ back to their party. Ron Paul’s money will not go to the libertarians. It will go into a separate ‘Ron Paul’ group. This group will have almost the exact same ideals as libertarians, basically forcing their votes to be cut in two.
Right now, Ron Paul is hurting the effort of Bob Barr, meaning hurting the overall effort of both the Paulites and the Libertarians.
Want to make a statement? Vote for Barr and every Libertarian down to your city council.
September 16th, 2008 at 12:26 am
Maybe it is time for the US of A to lie low. The country has have enough power in the decades and maybe it calls for a change? Blogosphere and US economy? A lot of connections but for now, it is still vague for me to understand.
September 16th, 2008 at 12:29 am
If more peeps start blogs and there is the same or less amount of $$’s kicking around, won’t that mean that the earning potential of each blog is diminished?
September 16th, 2008 at 12:43 am
It’s not so hard to understand. Lots of people are going to need ways to make ends meet, and blogging is a potential business that has zero startup costs. Thus, the deeper into a crunch the economy gets, in theory, the more people will be turning to blogging as a side business.
September 16th, 2008 at 1:44 am
The more blogs the more money, at least in theory. This is because more people will want to advertise their blogs. If I offer 4 ad spaces on my blog, yet there are 50 people who want to advertise, I am going to charge the highest amount to get those 4 places filled.
September 16th, 2008 at 2:06 am
It’s the blogosphere that is killing the US economy. Go to a mall near me and all you see are boarded up stores. Why? Everyone buys online. And instead of the commission going to a local shop owner, it’s going to some scumbag cookie stuffer, an affiliate front end, and a drop shipper. If the item is made overseas, only UPS and Fedex make a dollar.
September 16th, 2008 at 4:30 am
Well I know one thing if you didn’t have this site you’d still be kicking ass as a blogger.Hey I should get a reward a “friend” sent me a stumble about how he was taking entrecard off his blog etc etc
Dude just don’t appreciate Jack or put the effort to “work it”
anyway.If I went by the support I have gotten from my fellow bloggers
I would of quit but raise the bar and Blogging is the best show in town.
There is really no limit to where your blog can take you and the impact it can have on this planet.Unless the internet closes it’s full steam ahead.I don’t measure success by money and you can see that people who do are going by the wayside.I measure it by talent and commitment and making love to the Google BOT doesn’t hurt;)
hope whatever personal thing you had going has been solved.
The main thing you will miss in Vegas besides Mike Shonoda is being around a bunch of lame fake ass brownosers;)
Peace maybe like me that’s why your really not going;)
http://mike.linkinpark.com/ is a modern Mozart and it is almost worth being around all those clowns to rap to the music master himself.
Peace
September 16th, 2008 at 9:47 am
Very interesting post. In fact, I read the whole post in my inbox and came here to comment.
I’m anticipating what will happen to the blogosphere. I guess more and more people will come over to blogging and the field will get crowded. But I think the time now is ripe. So if someone jumps in now quickly, they’ll get the worm.
September 16th, 2008 at 10:10 am
I think economic is not a global issue now. The US presidential candidates saw that the most popular current issues are security and global warming. I dont have enough knowledge about politic, but I think if you like to start blog and get monetize from it, you have to learn about economic-finance. Sorry, if my comment is OOT. Tks.
September 16th, 2008 at 10:18 am
What I don’t get is why you keep insisting EC is an economy when all it is is just a bunch of points like you would get on your credit card. And if you truly believe it were an entire economy why then ignore the tanking price of EC and just focus on the growing membership? That’s like a growing population with shrinking funds. The worst scenario for an economy.
September 16th, 2008 at 10:19 am
@Graham regarding the youtube video of Ron Paul: Talk about painting a positive picture. Obviously Ron Paul is the every man.. quite the “unconventional” poster boy – as usual my skepticism kills any trust regarding political messages in our present media/social infrastructure.
September 16th, 2008 at 10:28 am
TLE, an economy is defined as:
“the realized social system of production, exchange, distribution, and consumption of goods and services”
Social system of production: All of you placing the widget on your blog is actually a system of production, and the product you are all contributing to the economy is the ad spot.
Exchange: this occurs via the Entrecard Credit, our mechanism for exchange, which people are also selling for real money, buying ads with, and using to incentivize participation of their blog in other ways
Consumption of Goods and Services: Well, we only have one good right now, and that’s advertising, but it is being consumed tremendously.
Now, understand that the economy is a “vision” and given the limited resources I’ve had to work with, I think Phirate and myself have done damn well. It’s easy to sit in an armchair and complain about how I need to change this and that, but what no one ever highlights is the flips sides of all these coins.
I’m not ignoring the tanking price of the EC. Not at all. In fact, we have a plan in place to fix it, but it starts with bringing in the money we need to hire the developers we need to actually do the fixing. So, as I’ve been saying all this week, the first step is to start generating revenue. Then, we can put the fixes in place. There’s no easy fix, the only real fix is to create more things for you to spend your credits on.
September 16th, 2008 at 3:06 pm
@turnip I don’t think it is blogs who are doing it. Most shopping is done through eBay or Amazon. Bloggers tend to be more for information than selling while non-blog websites do the selling.
You are right though, the internet is killing local businesses. But it is partly the local businesses fault. They should have easy access to their products online.
September 16th, 2008 at 3:49 pm
Good point poet. Many of my firends own small companies. They still ask me “do you think I should have a web page?”. Just a bit behind the times.
September 16th, 2008 at 6:12 pm
Ex-Merrill Lynch Employee and you missed a few points in your rambling. Do you feel like I am picking on you?
I am………………………
Read more here if interested.
http://blog.servicelive.com/?p=82
September 16th, 2008 at 7:47 pm
@Graham: Definition of an economy: “the realized social system of production, exchange, distribution, and consumption of goods and services”
You’re not serious, right?
I have so much to say I don’t know where to start. EC is NOT an economy. It really isn’t, even with this definition- because its a social system- as in many players. The only player in this case is EC- EC dictates everything- who gets to produce, who gets to advertise, at what price, how it is distrubuted, etc.. Is that an economy? No, its a credit cards point system.
Simplicity is so much more elegant Graham.
September 17th, 2008 at 2:15 pm
The economy is what it is there are ways to make money, or be successful in a bull or a bear market! Just keep your chin up. and BLOG BLOG BLOG!