Highly interesting. The US economy seems to be headed for a “fall”:http://ko.offroadpakistan.com/world/2003_08/iraqus_roundup.html, and Paul Krugman explains the whole situation well. This comment sums it up best: _”The emperor really has no clothes, and Krugman has been the first to say so.”_ The interesting thing is that Paul Krugman seems to be the first widely read journalist/writer to start talking about the US facing something akin to the “Great Depression”:http://www.amatecon.com/greatdepression.html unless the US govt. gets it’s act together and fast.
bq.. …Is Krugman merely someone who dislikes Bush and thinks his policies are horribly misguided? Oh no. In fact, in his most recent book, The Great Unraveling, he makes it clear that he thinks it’s *much, much worse* than that.
… but the general view is: yes, but this is America, it can’t happen, so something will come up. And I’m just willing to say I don’t see any noncatastrophic solution to this, I don’t see an incremental stepwise resolution. I think something drastic is really going to happen.
>> “CalPundit: Interview with Paul Krugman”:http://www.calpundit.com/archives/002170.html
p. And on on the other side, Daniel Drezner and a whole lot of posters “blast Krugman from here to Kingdom Come”:http://www.danieldrezner.com/archives/000734.html.
Note: Newsweek called Krugman a “future Nobel prize winner”:http://econ161.berkeley.edu/Economists/paulkrugman.html.
*Update:* Lots more doom and gloom by Krugman:
bq.. There is now a huge structural gap ? that is, a gap that won’t go away even if the economy recovers ? between U.S. spending and revenue. For the time being, borrowing can fill that gap. But eventually there must be either a large tax increase or major cuts in popular programs. If our political system can’t bring itself to choose one alternative or the other ? and so far the commander in chief refuses even to admit that we have a problem ? we will eventually face a nasty financial crisis.
The crisis won’t come immediately. For a few years, America will still be able to borrow freely, simply because lenders assume that things will somehow work out.
But at a certain point we’ll have a Wile E. Coyote moment. For those not familiar with the Road Runner cartoons, Mr. Coyote had a habit of running off cliffs and taking several steps on thin air before noticing that there was nothing underneath his feet. Only then would he plunge.
What will that plunge look like? It will certainly involve a sharp fall in the dollar and a sharp rise in interest rates. In the worst-case scenario, the government’s access to borrowing will be cut off, creating a cash crisis that throws the nation into chaos.
>> “NYTimes: Don’t Look Down By PAUL KRUGMAN”:http://www.nytimes.com/2003/10/14/opinion/14KRUG.html
p. *Update:* Another “interview with Paul Krugman at Alternet”:http://www.alternet.org/story.html?StoryID=17169 on November the 12th: New York Times columnist Paul Krugman tells how he found his voice, why Bush makes him miss Nixon, and why he insults Fox News whenever he can.
I don’t think many but Farid from Newsweek proclaim Krugman to be the furture nobel laureate. However, true his stances may be, I haven’t yet understood what made him that there is no competition between nations. I can’t disagree with him due to lack of knowledge on the subject matter, though. anyone to shed light on this?
KO, so many comments on Kevin and Dan’s sites… but truly I’m more interested in what you and your readers think. Where are you putting your money? Where do you see the growth opportunities? Asia? Europe? US?
As for IT, I don’t see any mushrooming growth in North America for any silly reason and probably not even in Europe except sensor networks or ubiquitous wireless networks. However, one area might give it a greater push than any other country elsewhere: Asia Pacific, India and China. China has already knocked off Cisco and Oracle, hijacking their corporate customers. They are more liberal and ambitious than any time in recent decades about their foreign investment, foreign exchange reserves and overall revenues and India won’t let it play that big either. North Korea already showed some promising ideas. Yahoo Japan was included in Fortune and Business Week’s own lists of top companies whose profit shares are soaring by more than brighter IT companies.
Oracle might get hold of PeopleSoft but what bad mouth would that create to SAP who would still be the leader. The corporate clients of Oracle, PeopleSoft and JD Edwards are already “satisfied” with their existing IT infrastructure and they won’t give a damn to thousands of dollars software for mere upgrading. Times Warner want to keep AOL’s name off of its stationery: probably they would like to keep it completely off of its corporate desk, who knows. Microsoft is not out of hot waters as yet. If EU see her escaping from its jaws, Eolas must be happy now having 230$million and that sends a bad news to web developers all over the world. The market Cap and revenues are falling in Intel’s labs and IBM is trying to get rid of SCO’s claim which seems to be quite valid:
SCO (formerly Caldera), a founding member of the UnitedLinux group and until recently a Linux distributor, upset the Linux party in March when it turned its legal guns on IBM with a $1 billion (now raised to $3 billion) lawsuit alleging breach of contract and the sharing of trade secrets.
Don’t expect WorlCom (Now again MCI) or WalMart to rise to the heights they once cherished. Corporate west is surely in deep trouble and Nick Carr (Former Harvard Business Review editor) may not be downright true about IT DOESN’T MATTER, but he is not pointless either.
If anything else, Bio Tech sector is far more promising than the rest and you just have to wait for few more years probably.
Ejaz