Answer for "Why be so pessimistic?"
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Our and 1/2 of the world's economy have shifted to information and computer age economies.
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Yes. Exactly. This economy leverages the increases in productivity from information technology. If this infrastructure has major problems, alot of jobs become irrelevant. (People who use the tools and maintain the machines (appliance operators) are not capable of fixing the problems, so they are laid off until someone else fixes them.) And there is a shortage in people who can fix the problem.
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Therefore, while the Y2K solutions will take some outputs to be flat or down, the others related
to information and computers will increase substantially. How can a depression then occur?
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If this Y2K thing were only a computer industry problem, you might be correct. However, the problem manifests itself in places like electrical generation and power distribution. With so much of our economy information related, how can we not have a depression if the required electrical infrastructure fails?
>>>Also, when so many people expect something in the market, as this board and others like it suggest, it usually does not happen.<<<
If do many people expect a crash, why are virtually all the markets at record highs? It's a buy/sell market. so one must conclude that only a very small minority expect a crash at this time.
>>>A recent feature article in IBD pointed out that companies spending on Y2K solutions are also investing heavily in other major upgrades.<<<
From personal experience, I know that companies are making cuts in some future technology areas to pay for Y2K projects.
>>>It all boils down to seeing a glass half empty or half full.<<<
It all boils down to people focusing on inappropriate, over-simplified models of the world-wide economy. "half empty or half full" becomes completely empty if electrical power stays down making the city water pumps non-functional. |
