Buying high, selling low

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America may already be in a recession. If not, we are on the verge of one - and one that will be felt here.

The iconic figure in this state may well be our new U.S. senator, Maria Cantwell, whose shares in RealNetworks were worth $66 apiece a year ago and have shriveled to $6 recently. She borrowed against them when they were high, and now owes U.S. Bank $3,221,490 and other creditors $386,000.

Cantwell, who a year ago was said to be worth $40 million, was one of many winners from the New Economy. The wealth created from computers, telecoms and the Internet is still substantial, but a staggering amount is gone. That is particularly troubling for those who borrowed against the stock and kept it, as Cantwell did.

Millions of others did this indirectly by borrowing on their credit cards, taking out home equity loans, or simply by ceasing to save out of current income. For the first time in memory, the American savings rate went negative. Why bother to save if your stock was going up? That was the savings.

"This has been going on so many years that most people think that's the way God made the world," says economic consultant A. Gary Shilling. In fact, the world is full of opportunity; it's just that it tends to take more work. In a normal economy, one does not sell at a loss and make it up on volume, or become a billionaire before one's company is clearly successful.

Shilling says recovery from the recession now unfolding will be slow. The tone of business will be more sober. That's not to say the late boom was false. Some of the promises were false, but the boom was real. So was the debt it left behind, as is being discovered by our junior senator.