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To: Jim Willie CB who wrote (50103)4/17/2002 10:28:09 AM
From: stockman_scott  Read Replies (1) | Respond to of 65232
 
End 'World Wide Wait' and reboot the economy

By John Wohlstetter / Guest columnist
Special to The Seattle Times
Wednesday, April 17, 2002 - 12:00 a.m. Pacific

The latest numbers show U.S. economic growth at 1.7 percent in 2001, about the same as during former President Clinton's first three years in office and half the rate during the tech boom of the late 1990s. That sure beats recession, but today's pace is well under the growth rate needed to fully fund Social Security, Medicare and other obligations for the aging baby boomers. And it's nowhere near reviving the tech-dependent Northwest economy.

The conventional wisdom is that Congress will stall any economic stimulus bill until 2003. The Bush administration has its hands tied with the Middle East and terrorism. And opposition to telecommunications deregulation is piling up in the Senate, just as mid-term elections approach.

But the Federal Communications Commission, under chairman Michael Powell, is beginning to re-evaluate its baffling interpretation of the 1996 Telecom Act. Powell proposes to liberalize existing rules that have held up investment in broadband infrastructure, and there's a good chance that companies won't be forced to share or under-price their precious new investments with competitors, as they do now.

The precise shape of the rules, though, remains unclear, and lawsuits are sure to slow the process. That hasn't stopped one state from jumping into the broadband breach, hoping to jump-start new network deployment. Michigan Gov. John Engler recently signed a trio of bills offering state tax credits for broadband investment. The state anticipates 500,000 new jobs and $440 billion of gross domestic product from the legislation, although those estimates may prove a bit rosy.

None of these positive signs points to the ultimate goal, which is recovery of the telecom sector itself. Since March 2000, not only has the Internet bubble burst, but leading telecom firms have seen their shares plummet. Stock in the long-distance sector is selling 70 percent below March 2000 values, top wireless firms are more than 50 percent off, and telephone-equipment firms and new optical-fiber carriers sell at over 90-percent discounts. Bankruptcy looks imminent for more than a few.

There are several reasons for this. Telephone companies suffered unfair regulation that subsidized new and untested firms with no real business plans. The collapse of the Internet bubble — as well as Enron's ignominious implosion — pushed investors toward companies with solid, quality earnings, which many telecom firms did not have.

The recession, combined with a contractionary monetary policy, didn't help. And let's not forget several scandals in the telecom companies themselves, including too-clever-by-half accounting and executives cashing in while their company pension plans tanked, victimizing shareholder-employees.

In all, telecom encountered a "perfect storm" of bad news that engulfed the sector. Things are getting better. The economic slowdown appears to have ended and monetary policy has eased considerably. Firms that survive "Enron audits" will find their share prices rewarded.

But it all falls short without broadband growth. This will require a fundamental restructuring of the telecom industry.

Put simply, long distance is no longer a viable stand-alone business. The artificial division between local and long-distance service that was forced on AT&T two decades ago was based on economic assumptions that were dubious even then.

Today, the consequences are clear: Every major long-distance carrier is watching as its core business contracts. Vertical mergers between local and long-distance firms, creating several combined local/long-distance carriers, should be accepted as the best way to re-ignite the tech economy.

Broadband needs this especially. Today's so-called fiber glut in long-distance service is actually neutralized by slow local networks at the receiving end. The torrent of bits between provider and customer crawls through the marginal broadband connections that exist at the local level today. Without greater local network capacity, the World Wide Web will remain the World Wide Wait.

Without vibrant broadband expansion to spur economic growth, the U.S. will be hard-pressed to meet its mushrooming financial obligations. And the public will have to wait longer for the services that follow broadband's lead.
___________________________________
John Wohlstetter is senior technology fellow at the Seattle-based Discovery Institute. He'll join Discovery Institute senior fellow George Gilder, Craig Mundie of Microsoft and John Stanton of Western Wireless at a "Re-Igniting the Tech Economy" conference in Seattle today. For information call 206-292-0401, Ext.111.

Copyright © 2002 The Seattle Times Company

seattletimes.nwsource.com



To: Jim Willie CB who wrote (50103)4/18/2002 2:13:10 AM
From: stockman_scott  Respond to of 65232
 
GM's Car Guy, in Overdrive

By George F. Will
The Washington Post
Thursday, April 18, 2002

DETROIT -- One car company is running ads in which its suave, 44-year-old CEO underscores his love for the outdoors by saying, "I won't even stay in a hotel if I can't open the windows."

Another car company, its tone set by its 70-year-old vice chairman -- an ex-Marine aviator -- is putting up three billboards. One shows a 1957 Chevy's grille -- think of Teddy Roosevelt's grin in chrome -- and says: "Proof your parents were actually cool once." Another shows the rear deck of a little red 1963 Corvette Sting Ray and says: "They don't write songs about Volvos." The third shows the gritted-teeth grille of a 1970 Chevy Chevelle SS and says: "Not everyone wants a car with a bud vase on the dash."

Guess which company is doing best.

Bill Ford's problems at the company his great-grandfather founded are bigger than odd advertising. And there are many reasons why GM is soaring like the jet fighter Robert Lutz flies for fun. But institutions are the lengthening shadows of strong individuals, and Lutz is, in the elemental argot of this muscular city, a "car guy."

When GM lured Lutz back into the car business last summer, the Detroit News headline ("Lutz Rides In To Rev Up GM") was of a size usually reserved for Pearl Harbors or two-game Tiger winning streaks. But are Americans still "car people" the way they were when Lutz was young, in the 1950s?

Then, they were automobile voluptuaries, Detroit was in its rococo period and its great stylist was GM's Harley Earl, "the Cellini of chrome," of whom it was said that if he could have put chrome on his clothes, he would have. Cars had front bumpers that were protuberant, not to say nubile, and tail fins. Cars looked, a wit said, "like chorus girls coming and fighter planes going." Indeed, Buick's LeSabre emulated the F-86 Sabre jet.

Lutz, tall and trim, knows that today's Americans generally have a less erotic relationship with cars. They look upon many cars, he says, "as more or less an appliance." As mere transportation. Utilitarian. Boring. Furthermore, 20 years ago a "premium" car meant one substantially more capable. Today premium technologies (e.g., high-tech engines, overhead cams) are everywhere.

But, Lutz says happily, your car is still "an extension of your psycho-motor system." More than the other stuff we surround ourselves with -- do you know the brand of your refrigerator? Will you replace it before it breaks down? -- your car "continually makes an instant statement about you, even to complete strangers."

So, Lutz insists, design is still central to success in the automobile business. Art is supposed to "evoke emotional responses" and cars are art -- "mobile sculpture." He also believes that when everybody else is doing it, don't. Most cars today have rounded aerodynamic lines. But the new Cadillac CTS, with angular lines, is described in ads as "edgy."

And when Lutz was at Chrysler a few years ago, he pushed through the development of the popular PT Cruiser, an echo of a 1937 Ford. Why? Surely not nostalgia. Probably most of the (mostly young) people buying these cars do not know who was president in 1937. Go figure.

Lutz believes that "aspirational aspects overwhelm the functional differences" when car customers make their choices. When that happens, the "left-analytical brain has been defeated again," the "right brain" has prevailed and Lutz rejoices. But this does not mean people plunk down large sums merely for high-status brands. Chevrolet sells more vehicles costing more than $30,000 than do Mercedes, BMW, Lexus and Audi combined, but this is partly due to the popularity of light trucks, a category that includes sport utility vehicles. Today an "extremely high-end demographic" -- e.g., investment bankers and stockbrokers -- are buying GMC SUVs.

Some Americans (let us avoid the term "liberals") hate fun, such as cheeseburgers, talk radio, guns, Las Vegas and cars that are larger than roller skates and that look more interesting than shoeboxes. They hated 1950s cars that looked -- as a sniffy critic said -- like jukeboxes on wheels. Such people love guilt, and want people to feel guilty about cars because cars have made possible suburbs, Wal-Mart, McDonald's and emancipation from public transportation.

GM's "car guy" knows that Americans generally keep their cars longer than they used to -- creeping utilitarianism -- and do not define automotive fun as they did in the gaudy 1950s. But he is betting that lots of them still are guilty of letting their right brains rip when purchasing a car.

© 2002 The Washington Post Company