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To: re3 who wrote (77409)	9/15/1999 5:05:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Thurow sees U.S. recession after tech-driven boom By Sara Ledwith, European Technology Correspondent PARIS, Sept 14 (Reuters) - The U.S. economy is heading for recession as consumers buy faster than they save, although it would be foolish to predict when it will come, Professor Lester Thurow from the Massachusetts Institute of Technology said on Tuesday. "There's a recession built into the American economy," he told a conference organised by International Data Corp., citing the negative savings rate of consumers, and adding that a country cannot continue spending more than it saves. "Any economist who tries to predict the timing of these things is dumb and I'm not dumb," said Thurow, a professor of management and economics. He said technically recession could be six months of contraction, need not be a Japanese-style 10-year slump, and was "not the end of the world." Thurow said there was a "dark side" to America's technologically driven economic force -- productivity growth was slow and the mean wages of the American male had fallen. He said historians a century from now would look back on the current era of "man-made brainpower industries" as the third industrial revolution -- symbolised by the fact that the world's richest man, Microsoft <MSFT.O> Chairman Bill Gates, controls no natural resources, but instead "a knowledge process." INTERNET COULD END CONVENTIONAL RETAILING For example, he said electronic commerce -- shopping over the Internet -- could bring to an end 5,000 years of conventional retailing, if e-commerce sites could marry the price advantages of an electronic mall with the entertainment value of physically visiting the stores. But globally on the negative side was the scope for recession and "financial meltdown" opened up by the new challenges. He argued cultural differences made Japan, and to a certain extent Europe, unable to grapple with the challenges of the new age. "You have to destroy the old to build the new, cannibalise yourself and it's very hard to do" he said. For example, the antitrust laws in the United States which caused the break-up of telecommunications giant AT&T <T.N> had spawned major job losses, but subsequently triggered a vibrant growth industry. "Deutsche Telekom <DTEG.DE> can't do it," he argued - the risk that half its staff would end up out of work would be too great in Germany. Thurow said that while in the United States eight to nine of 10 new high-tech startups would fail, "in Japan if you do you're literally expected to commit suicide." REUTERS Rtr 14:19 09-14-99