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To: JSwanson who wrote (15493)	3/3/2001 7:04:50 PM
From: MeDroogies	Respond to of 19079

You know, Keynes (who I don't like nearly as much as Schumpeter, but still had much to offer) pointed out that manufacturing is a losing game over time in terms of the overall economy. He pointed out that manufacturing requires a service sector, and that service sector would grow over time, likely becoming the larger portion of the economy. Due to comparative and competitive advantage, this should never be considered a hindrance. Rather, based on Keynes' multiplier, it should be considered an opportunity. The question remains, however, what is the engine of growth and how do you keep it stoked? Unfortunately, there are many answers to that and none are all that interesting. The best is the model of entrepreneurship, which calls for the encouragement of forward thinking business acumen. It is precisely this model that led to the last 5 years of hyper growth. The problem the last 5 years had was the mixture of marketing hype mixed with entrepreneurial behavior. Much as I love business and entrepreneurs, there is this incessant need to hype, hype, hype. Probably because MSFT has had so much success with that approach, and nobody wants to get swallowed by them (let alone any other company). Had the entrepreneurs allowed their companies to grow organically, it is likely our growth would have moderated somewhat, the market would still have grown (but at more stable rates) and the questionable situation we are currently faced with wouldn't be nearly as "bad" (I don't consider it all that bad, but why fight a bear just as it's waking?). Instead, there was the desire to grow and reach critical mass as soon as possible. This approach seemingly helped some companies (AOL, AMZN, YHOO). But, when you look at the companies it benefitted, the ones it hurt most in the end were new ones (AMZN, YHOO) while older ones (AOL...it just turned about 18 years old) are still in pretty good shape.