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The ironic thing is that he's a massive outlier: the career he succeeded then failed in was comedy writing, an area where most people "succeeding" are pretty much living on the breadline anyway[1], whilst the vast majority only experience failure. And virtually none of it's down to the economic cycles that affect everyone else! He seems to have fallen so fast because he was so successful: he was rejected for being "too expensive" because he'd been so well paid on previous assignments, perhaps took those rejections rather harder than those more accustomed to them and didn't have the willingness (or perhaps the contacts and early-career experience) to fall back on writing advertising jingles, or humorous radio snippets, or co-writing on a large team, until eventually he was so out of touch with the industry Craigslist was his best option. For the majority of aspirant comic writers, Craigslist is the best option they'll ever get to earn a living doing it. Then again, half of them don't write stuff people want to watch...

[1]for comparison, in the UK, "success" as a comedy writer is getting the equivalent of $8,000 per episode total to write a standard six episode series which makes it onto BBC, and then getting another set of six next year before your show gets cancelled. Needless to say, you can earn less from radio, or co-writing, and most comic writers that aren't also actors have other income sources (and smaller families)

Hm... that makes me wonder what the key motivation for them to accept so low a level of expected economic reward would be... any insight?

I would think it would have to be passion for the job.

All I know is that if we rely on the free market to figure all of this out

The government creates bubble after bubble causing enormous amounts of economic dislocation in the housing market, college loans, healthcare, and on and on... and your conclusion is that somehow the free market is the problem or at very least not the solution?

contributing their unique gifts to the betterment of humanity

No system throughout history has ever contributed more to the "betterment of humanity" than the free market.

As with so many things, Friedman said it best: http://www.youtube.com/watch?v=RWsx1X8PV_A

How did the government create the derivatives bubble? Seems like the exact opposite happened: the government massively deregulated things, then just a few years later there was a bubble.

http://en.wikipedia.org/wiki/Commodity_Futures_Modernization...

Since the bubble burst, what corrections has the free market made to prevent there isn't another one?

So much of the rhetoric about "free markets" seems to come from looters who resent the government eliminating ways to make money by rent-seeking, collusion and fraud rather than producing useful goods.

(edit: fixed link)

what corrections has the free market made to prevent there isn't another one?

What does the free market care about bubbles? We've seen time and time again that the free market optimizes for "this quarter", not "this decade". If it means a crash a year from now, so what, let's just be sure to enjoy the ride and try to skim what we can before it hits!

> The government creates bubble after bubble

You can't make a statement like this and use it as a premise for something else and not expect to have to defend it as a statement unto itself. Given this is an extreme position you're going to have to have an extremely good argument for it for anyone to take it seriously.

But assuming that the government does cause all "bubbles", why is it understandable that during such times market participants should start behaving irrationally, against their own best interests? Markets can solve anything, except bubbles caused by the government?

This is trivial. Not sure anyone needs to debate it. Latin american debt crisis. Peso crisis. Asian currency crisis. Russian currency crisis. Nasdaq bubble. Telecom bubble. Housing bubble. And current "QEx" bubble accross all asset classes from farmland, to Gold, to Art to Bitcoins, to London Real Estate ... {etc WTF?}. Markets need regulation, rules, and governing oversight. Without those, they are crap. Without those and mypoic distortion they are even worse. The problem is that there is money to be made from advising the government to "intervene" and its a good business model. 1/3 of the us economy is spent by politically motivated non-market entities. But the real damage is done by corrupted financial markets, another large proportion of the GDP. Just look where the money is going. As the suburbs of Washington overtake New York as the highest income counties in the US. There shouldn't be a question at all: A nexus of crony capitalism has emerged in the past 12-15 years.

I'm not sure I get this? This seems to be "Governments control outsized amounts of cash and make bad decisions, for which well financed private markets exploit their bad positions sucking at the tax money and eventually a crisis occurs ending the situation till another political arbitrage occurs."

it's just that a lot of the crises listed are to me less "political corruption and collusion with financiers and more the road to hell being paved with good intentions. ending political corruption is feasible, ending good intentions?

Try something like "Government has outsized power to change economical outcomes, and punishes sustainable decisions hard, making any rational person choose the viable unsustainable ones. People that make unsustainable decisions (everybody still in the game, as the government destroyed everybody else) can't sustain themselves for long, and routinely face deep crisis". I guess that's a bit longer, but more clear.

Things would be less bad if just one unlucky event in a crisis wasn't enough to destroy the entire life of somebody, but it is, so we must play russian roulette every few years.

Anyway, I'm quite sure reducing the government intervention will replace this problem with something worse (that we can check on history books), thus the solution has to come from some other kind of change.

ending political corruption is feasible

Wow, I'm not really sure what to say to that unless you mean that you can end political corruption by destroying the power base of government so that taking advantage of government doesn't mean much.

My Homeowners' Association doesn't really have any significant corruption, but that's really just because they don't have much power or money to control.

Whenever you concentrate large amounts of power, you will have corruption. That is as axiomatic as any part of life on Earth.

How did the government create the Dot-com bubble?

The legal structure that replaced pensions with 401k's and the like is considered the main source of the bubble. It isn't a coincidence that the dot com bubble happened right as all the baby boomers were hoping to retire.

The dot-com bubble was late 90s very early 2000s. The established dates of birth for the baby boomer generation are from 1946-1964. In the year 2000 this puts the age range of the baby boomers from 36-54 years old. That means none of the baby boomers were retirement age. So I'm not sure how your explanation of them retiring is correct?

36-54 is exactly the years that you will be told by everybody you know to go to a financial planner and "get serious about retirement".

Most people do their investing before they retire.

I have never heard that 401ks caused the bubble and would love to see more than one source that says this.

Before the 1970's most professionals and union workers had fixed-benefit pensions run by large corporations, supervised by accountants with very serious looks on their faces. As 401(k)'s became common for normal workers, instead of just perks for C*O's, all of a sudden their was a massive influx of money into the DJIA and NASDAQ, just as the baby boomers "save for retirement", mostly influenced by people like Jim Cramer and other dancing-finance-clowns.

Also notice that the housing crash happened just as all the baby boomers' children go off to college and they decide to down-size from their McMansions since they are empty-nesters now.

Thirdly notice how now medical expenditures nationwide are climbing greatly now that they are all becoming old and sickly. The next 10-15 years are a great time to be in the medical field, even with ObamaCare. But then as they die off it will be a horrible place to try to get a job.

You think all of the benefit money wasn't in equity markets before 401ks came about? You are taking one potential impact and over exaggerating in every case, but especially in your housing bubble theory.

The baby boomers are a major demographic event, and those will always have economic impact.

I would love to see a mix of new versus old homes sold from 2001 - 2006. If more than 60% are old, then you might have a leg to stand on, but you are probably wrong.

There is a possibility that the real interest rate that would force the market to full employment is negative, and therefore speculative bubbles and/or high inflation are the only ways we can currently achieve full employment. Paul Krugman has written a lot on this subject:

http://krugman.blogs.nytimes.com/2013/11/16/secular-stagnati...

The major takeaway from the article is that he fell into the same trap that a lot of us did in the 90s, that the future was so bright you had to wear shades. I had no idea the 2000s were going to be so dang BLEAK.

What happened to agricultural commodity prices in the Roaring 1920s began happening to almost human labor (except high-end private-sector social climbing) around 1998.

Badly managed plenty (in the '20s, in food; in the '90s, in services in general) leads to a catastrophic depression. If excellence-maximizers are in control, people see better uses for the freed-up resources. But the ones who succeed in human organizations tend to be the boring cost-cutter type, and if those sorts of people are in control, then growth (paradoxically?) leads to meltdown and widespread poverty.

>The major takeaway from the article is that he fell into the same trap that a lot of us did in the 90s, that the future was so bright you had to wear shades. I had no idea the 2000s were going to be so dang BLEAK.

I don't buy this. He knew that writer's jobs rarely lasted into their 50's. He knew the end was coming but didn't save enough, and continued to spend 400k per year while being unemployed.