Climb Every Mountain
February 26, 2010
By Bill Virgin
Journalists love anniversaries that end with zero; the math
is so much easier to handle that way.
So, as you prepare your calendars for March, here is a
10-year anniversary to jot down and for which to plan the appropriate
commemoration: March 10, 2000.
That date isn’t jarring a flood of memories, is it?
Not to worry. March 10, 2000, didn’t register as terribly
significant at the time, either. But it was, hugely so, as hindsight proves. On
March 10, 2000, the NASDAQ composite index hit an intraday record of 5132.52,
and a closing record of 5046.
It never reached those heights again.
By the end of 2000, the index had shed more than half its
value-and still had farther to tumble. By early October 2002, the index closed
at 1114.11; it closed 2009 at 2269.15, better but still less than half of the
The evaporation in value of the NASDAQ market was a big deal
nationally, but it was an even bigger event for the Puget Sound region. NASDAQ
was seen at the time as the market for America’s emerging corporate stars, the
companies that would lead the New Economy the way the component companies of
the Dow Jones Industrial Average led the Old.
No city saw itself at the vanguard of the emerging New
Economy the way Seattle did. No city had Seattle’s concentration of brainpower,
entrepreneurial drive and technological innovation. No city stood to benefit
more from an economy that would run on e-commerce or whatever the next
technology-driven bright idea would be. Initial public offerings seemed as
routine and numerous as sunrises.
Or so went the story Seattle told itself and the rest of the
world, and until March 11, 2000, it was a tale that seemed both enthralling and
credible. But a city that wagers so much of its economic fortune on a chancy
proposition like high tech runs considerable risk of losing its stake if the
dice come up snake eyes. It did for the tech sector, for the tech-heavy NASDAQ
composite index and for Seattle’s economy.
Which, as bad as the local picture was, wouldn’t have been
quite so economically bruising had it not been followed by two more economic
calamities. The terrorist attacks of 9/11 led to a decline in travel and
cancellations of airplane orders, which led to Boeing cutting thousands of jobs
(employment by the company in Washington dropped from 80,000 at the time of the
attacks to less than 53,000 by May 2004).
The regional economy was barely on the mend from those hits
when the recession took hold, first in finance and housing construction. These
problems clobbered companies like Washington Mutual and the state’s lumber and
building-products mills, then, later, virtually every sector.
We finish that decade (last Jan. 1 or next, depending on how
you count it) in an economic muddle. The tech sector is recuperating, sort of,
as a new generation of hopefuls in everything from wireless communication to
social networking to clean energy emerge. Meanwhile, the company most
responsible for Seattle’s status as a tech hub, Microsoft, is struggling to
find its place in a world where computing is increasingly done away from a
desktop and on wireless devices.
Boeing is back to selling planes and developing new models,
and its employment levels rebounded in the latter half of the decade. But even
as the company faces new competitive challenges from around the globe, it
raises questions about how long and to what extent it will meet those
challenges from its traditional base in the Puget Sound region.
As for the recession, we’re not even certain whether it has
ended or how we’ll know when it has, much less figure out who survived and in
March 10, 2000,
marked the end of a remarkable run for Seattle in economic terms and the start
of a bleak decade for the Northwest. We didn’t know what was coming at the
time. Economic peaks and valleys are not like those of real mountains. You
never know when you’ve reached the summit of a market or an era of economic
growth until you’re well past it.
Ten years after March 10, 2000, we see where the peak was.
Ten years from now, we’ll probably understand where the bottom was and whether
we found a path back up the mountain.
There is one parallel, however, between metaphoric mountains
and the real things. One misstep and it’s a long way down.