2000 to 2009: The Rise of Social Networks and Economic Crises - The Technical and Social History of Software Engineering - page 267

In the absence of fresh capital from film credits, external investors, the state,
or other sources, the company missed payrolls, ran out of funds, laid off the entire
staff, and then declared bankruptcy.
The bottom line is that urban and state governments are not necessarily quali-
fied to judge whether a given company will actually add jobs, as they all promise,
or will merely occupy space until financial problems overcome them. The soft-
ware and high-tech industries are attractive to novice investors because it is
true that a number of these companies have become enormously successful and
wealthy. But it is also true that a much larger number of these companies have
failed and gone bankrupt.
The software engineering personnel who had been working for these compan-
ies found themselves out of work and facing a declining job market for the first
time in software history. Even admissions to software engineering curricula in col-
leges and universities declined when it became obvious that software jobs would
not expand rapidly forever.
The Great Recession
Although the dot-com bubble was a serious crisis for software and technology
companies, it was not the only bubble to burst during this decade. Starting at the
end of 2007 and running through 2010, the country and much of the world en-
countered what has come to be known as the Great Recession , which is an echo of
the Great Depression, which started in 1929.
The recession rippled through the entire economy and affected thousands of
companies and millions of individuals. However, the burst of the housing bubble
and the severe reductions in real estate costs had the greatest human impact on or-
dinary consumers.
Real estate bubbles have occurred so many times over history that they have
even been statistically analyzed, but the big bubble burst circa 2008 was partic-
ularly severe. It was caused in part by speculative building of homes for “flip-
ping” or purchases by investors rather than by homeowners who wanted to live in
the homes. In some communities in Florida and Nevada, there were actually more
houses on the market than there were people to live in them.
Overall, the Great Recession was caused by a very complex set of interlocking
events and mistakes. In approximate chronological sequence, they run as follows:
1995