Business Cycles

Slate's man behind the Moneybox, Daniel Gross, looks at the giddy enthusiasm building around alternative energy and sees a parallel:

...extravagant promises about a new technology, investor enthusiasm, grandiloquent statements by entrenched executives, herd behavior from venture capitalists. Oh boy! You don't have to be a Wall Street sharpie to notice that the cultural and financial stars seem to be aligning around alternative energy much as they did around the Internet. And we all know how that ended.

Like most booms it went bust, of course -- and rather spectacularly, too. Which may make Gross's column sound like a warning. It is, but only partly. Gross goes on to say:

As consumers, investors, and workers, in other words, we've all been enriched by the fruits of the dot-com boom. It just took a while. A similar process may be unfolding now in the alternative-energy business. Many of these venture-backed alternative-energy firms will fail, and some of the publicly held ethanol stocks will turn out to be turkeys. But fierce competition will lead to price reductions in energy-saving equipment. The vast sums being plowed into research may lead to incremental improvements or revolutionary breakthroughs. And as more giant companies such as Wal-Mart become consumers of alternative-energy products and services, the industry will gain scale—a development that leads to price reductions for all consumers. So, let's hear it for the Prius Bubble.

What do you think? Are Gross's predictions premature, or are we really on the leading edge of the "New, New, New Thing" and poised for another economic rollercoaster ride?