The Dot Com Bubble is a fascinating foray into supply, demand, and tech hysteria. As the name suggests, the Bubble started as a wave of mass investment. Simply put, investors purchased shares of newly formed web-based companies. These investments were not necessarily prompted by sound business models or impressive sales, but simply because of the excitement surrounding the boom of the World Wide Web (WWW). I mean, at least one business had to succeed right?

Impressionable investors paid significantly more for WWW-based stocks than they were actually worth. As a result, initial public offerings (IPOs) were heavily inflated. For example, when Netscape Communications corporation made an IPO, it closed its stock at $58.25, valuing the company at $2.9 billion. Overall, the National Association of Securities Dealers Automated Quotations (NASDAQ) saw growth from 1995 where it had 1000 points to around 5000 points in 2000.

The eponymous Bubble itself came from the result of all these investments. The difference between the investor’s perceived value of a Dot Com company and the actual income generated from these companies created a market bubble. In short, colossal amounts of money being invested in web-based companies that couldn’t return the expectations created a system that was not sustainable. The bubble would eventually have to “pop”.

And early in March of 2000, the bubble did indeed finally burst. The NASDAQ has lost over two-thirds of its value near the end of 2002. Hundreds of web-based companies lost value, such as 360networks, Inc., Broadband Sports, and Freei. However, not all companies went defunct. Notable players in today’s industry survived the bubble burst. These include Amazon and Ebay, which were able to raise billions of dollars leading up to the bubble pop.

Today, new economic bubbles are emerging-  student loan debt, federal debt, and unfunded state pension liabilities. Time will tell if investors have learned their lesson, or if companies will become more creative in mystifying new industries.

Economic indicators give analysts clues to how future trends will likely behave. For example, a drop in purchases of diamond-based jewelry may imply that fewer Americans have the means to spend on luxury items.  Similarly, employment indicators offer economists signs of employment indicators could go either way and they don’t have to be tied to a recession relief; an increase in employment suggests a rise in consumer spending.

“But what about the beans?” no one but a legume connoisseur asked.

Among one of the more unusual economic indicators, no comma are baked beans and similar canned food items. The Baked Beans Index refers to a rise in consumer spending on canned goods. This suggests that the population turns to the salty alternative out of necessity, not preference. In times where fresh fruit and organic vegetables would be a luxury, such as recessions, baked beans allow for a filling meal for the common folk.

A look at the canned food industry suggests that, save for a dip in sales in 2016, there would have been slow but steady growth. The drop in canned goods purchases could be attributed to the after-effects of the Great Recession. Though the last major recession took place between the years of 2007-2009, the economy itself took time to stabilize.
Additionally, though the poorest people in the USA didn’t have far to  fall when it came to the quality of life, the middle and upper classes were affected the most. According to the U.S. Bureau of Economic Analysis, “real GDP fell $650 billion (4.3%) and did not recover its $15 trillion pre-recession level until Q3 2011.”

Most notably, unemployment rose to its highest at 10.0% in October 2009, and did not return to its pre-recession level of 4.7% until May 2016. Due to employment rates normalizing in 2016, it could be assumed people were making enough to be able to spend on “luxuries” like fresh food and veggies. Thus canned goods sales dropped dramatically. The spike in revenue growth for the fruit and vegetable processing industry shown in 2017 could be attributed to the settling normalcy of the job market. 

The above graph displays the fruit & vegetable markets in the USA, within the same time period as the first chart. The 3.19% decrease in canned fruits/vegetable sales corresponds with the revenue growth for fresh goods. In fact, market research firm IBIS World indicates that there was a 1.2% increase in fresh vegetable consumption in 2016. To put that into perspective, people in the US on average ate 640.29 lbs of fresh vegetables in 2016; people, by comparison, ate an average of 633.31 lbs of fresh vegetables in 2015. 

So take note: next time you buy fresh fruit over canned, be sure to savor it before another recession.