We all think of economic cycles in terms of the general U.S. economy. But that's not the whole story.

There are, in fact, regional and industrial cycles underneath the general cycle, cycles that are far more important and whose impact can be permanent.

Let's start with an example from the past. Back in the 1980s we had a recession, then a general recovery through 1987, then a slump after the stock market crash and a second recovery.

Underneath all that, we had an honest-to-goodness depression in Texas (and in the rest of the oil patch), and a tech boom followed by a near-bust starting around 1986, otherwise known as the waiting-for-Windows period. During this time Japanese manufacturers had their heyday in the U.S. market.

The Texas oil industry never recovered from the bust of the 1980s, as the chart above (from a Dallas Fed analysis) shows. It's not like things could just stay quiet until needed, then go back to the way they were a generation later.

Now let's apply that lesson to today.

Most people think we had a mild recession in 2001 and are enjoying a stable recovery.

Underneath the situation is quite different. We had a technology bust, followed by a recovery so weak the U.S. is losing major hunks of market share to China and India. We also have a white-hot real estate boom, particularly in residential real estate.

I got a taste of the latter yesterday when I went to pick up some shoes for my wife. The square in my intown neighborhood featured a huge beer truck with an open tap, some displays, and a bunch of young strangers driving SUVs with "W" bumper stickers, wearing dark sunglasses and cigarettes, getting happy drunk. These are the real estate speculators who have been remaking the area (although I'm certain most live far away), coming in like an occupying army to survey the conquered territory.

The paragraph above has some nasty political cracks in it, but the economic truth is this. Booms bust. Always. Those who don't get out beforehand (and most don't) wind up crying wistfully about the good old days, often for a good long time. Those who wrecked in Texas in the early 1980s never made it to see the oil recovery now taking place there.

I saw the Texas wreck, and I saw the Tech wreck, which we have yet to fully recover from. In fact, the Tech economy is looking a lot like Texas did in the 1980s, and if this is 1985 by that watch this could easily be a false dawn. Texas lost all its big banks, and much of its financial independence, to New York and (believe it or not) North Carolina in the 1980s. Tech has lost that to China in our time.

The point is, what looks like a stable rise and fall can hide a regional or industrial boom-and-bust. And the components of the recovery -- the strength of their booms, their sustainability -- will determine what follows.