To: Ken Salaets who wrote (3991 ) 2/20/1999 10:28:00 AM From: flatsville Read Replies (2) | Respond to
Ken--You should read this pos:zdnet.com According to the Conference Board's Chief Economist, Gail Foster, the Gross Domestic Product (as compared to the GNP, the older designation of roughly the same amount of new wealth created each year) is just one of 10 indicators that make up the Leading Economic Indicators (LEI). Writing in the Conference Board's February 1999 StraightTalk newsletter, Foster said, "In general, a 1.0 percent decline in the LEI spread across 5 of the 10 indicators is a strong recession signal." This has happened several times in the last 15 years, but only led to a recession once, in 1990-91. Economic shocks and/or events must be of much greater magnitude than generally assumed to cause the whole economy to contract." This is a critical point, because it underscores the naiveti of commentators on Y2K, like Yourdon, who writes, "I see Y2K as a 'catalyst' or as the straw that breaks the camel's back [leading to depression]." HIT to the 20% import/export portion of the GDP (assuming Victor is correct) would be quite a SHOCK! This is your BIG GUN Ken. She's obviously assuming a perfect world scenario where the job gets done, gets done correctly and on time as the next paragraph indicates:With key indicators of labor use at near or record highs, further output gains in this expansion must come from productivity gains." In other words, there are a lot of reasons that the economy might slow, but the Y2K problem is not one - this because the investment in Y2K repairs, which is on-going, but decreasing, is non-productive. When these resources are shifted back to productive work and performance-enhancing investments, they will add to productivity. Perhaps not enough to offset other economic pressures, but certainly enough to ameliorate damage from Y2K itself.
