Vanity Fair Says It’s a Bubble!

With the tech industry awash in cash and 100 “unicorn” start-ups now valued at $1 billion or more, Silicon Valley can’t escape Nick Bilton reports. HT: JO’D

Note below that “Vikram Mansharamani, a Yale lecturer and author of the book Boombustology, has argued that virtually every great bubble bursting has been preceded by an attempt to build the tallest buildings.” based “his” arguments entirely on my 2005 article in the Quarterly Journal of Austrian Economics, “Skyscrapers and Business Cycles”.

“Perhaps the clearest way to observe the tech industry is through its architecture. When the I-280 deposits you into San Francisco, the view is like no other in America. To the left, waves of thick fog roll slowly off Twin Peaks. To the right, dozens of massive container ships sit like specks on the bay. If you drive farther into the city, toward gilded Nob Hill, the area that once belonged to the robber barons—the city’s original entrepreneurs—is now filled with upscale boutique hotels. But as you enter the city itself, every corner of the sky appears the same: spikes of lanky cranes protrude hundreds of feet into the air, their fishing lines plucking concrete and steel from street level, stacking these beams atop one another.”

“San Francisco, a city that zones about half of its land for residential use, is on track to increase its office space by 15 percent, with a majority of it presumably allocated for tech start-ups. Travel about 50 miles south to Cupertino and you will see the site of Apple’s new gargantuan glass headquarters, “the Spaceship,” designed by Sir Norman Foster, which will span 2.8 million square feet and house more than 12,000 employees. And then there’s the new, recently occupied Facebook building, designed by Frank Gehry, with its rooftop park and what it claims is the largest open floor plan in the world. Google is currently planning its own updated campus—this one designed by Bjarke Ingels and Thomas Heatherwick— that will include an army of small crane robots, known as “crabots,” which can move office walls, floors, and ceilings and transform the spaces in mere hours.”

“Yet there may be no greater monument to what’s going on in the Valley than the 1,070-foot edifice under construction at 415 Mission Street. The new, glassy Salesforce Tower is slated to soon become the tallest building in San Francisco, rising more than 200 feet above the Transamerica Pyramid. And that may be a big problem. Vikram Mansharamani, a Yale lecturer and author of the book Boombustology, has argued that virtually every great bubble bursting has been preceded by an attempt to build the tallest buildings. Forty Wall Street, the Chrysler Building, and the Empire State Building were under construction during the onset of the Great Depression. The Petronas Towers, in Kuala Lumpur, were completed in time to inaugurate the Asian economic crisis. The Taipei 101 tower, once the tallest building in the world, laid its foundation right at the height of the dot-com boom.”