“The last thing IBM needs is a vision.” – Lou Gerstner, 1993
Year: 2001
The answer: Little, brittle, and fiddle (first appeared in InfoWorld)
Johnny Carson, in the Carnac routine he lovingly borrowed from the late, great, Ernie Kovacs, gave the answer first. The question was in a closed envelope that had been “kept in a hermetically sealed mayonnaise jar on Funk and Wagnall’s doorstep.”
In best Carnac/Kovacs fashion, the answer is, “Little, brittle, and fiddle.” But you have to wait for the question while we take care of some unfinished business.
Awhile back, as evidence of my bipartisanship when taking cheap shots at politicos, I promised to never mention Zippergate without also mentioning Iran Scam. I should have left it at that.
It turns out the particular infraction I reported — selling drugs to Americans to finance the Nicaraguan Contras — was a story reported and then retracted by the San Jose Mercury News, not a finding of Walsh’s official investigation. So from here on in, I’ll be bipartisan by referencing Iran Scam’s arms-for-hostages deal and gleeful destruction of evidence. My thanks to the readers who pointed this out.
Why bring up politics yet again? Because, to paraphrase another Carson-ism, this is one of those theme issues that only InfoWorld can do with such panache. The theme? IT and the Bush administration.
As I said, the answer is, “Little, brittle, and fiddle.” It’s a three part question. Part 1: What impact will the Bush administration have on the IT industry? The answer: “Little.” Bush will mostly let industry evolve on its own.
The biggest IT impact will be increased telecom costs. Why? Michael Powell, the FCC’s new head, has already announced he’s going to be the ultimate deregulator. In particular, he does not plan to review mergers and acquisitions, so business and bigness will increasingly converge (probably into the Texan noun “bidness”.)
You’ll hear merger proponents argue the need to remain competitive, and that increased economies of scale will reduce costs for consumers. The reality: Fewer competitors means less competition, leading to higher prices, not lower ones.
The big open issue is the FBI’s proposed Internet surveillance system, Carnivore. The Bush administration might view it as Big Government (bad), or National Security (good). My guess: Bush Sr. headed the CIA, Cheney headed up Defense, so National Security wins and Carnivore is a go.
Time for Part 2. The answer is, “Brittle.” The question: What will the economy be like?
This won’t be Bush’s fault. It also isn’t Alan Greenspan’s fault, nor can we tag anyone named Clinton with it either.
The last boom was fueled by access to capital, not sustainable demand for goods and services, so capacity increased far in excess of real economic growth. Inflated equity financed the difference. The mechanisms were indirect, but nonetheless real — irrationally high stock prices drove unwarranted business expansion. Now the balloon has returned to earth.
Retail space increased at three times the rate of economic growth; the story for manufacturing capacity and warehouse space is similar. With stock prices returning to normal, the imaginary wealth that drove anticipations of continued high spending is gone. And there’s nothing to replace it on the horizon.
So for the next several years, the economy will be brittle, and there’s very little that Bush, Greenspan, or anyone else can do about it. There’s the proposed tax cut, of course, but its impact will be marginal at best. Why? For every new dollar made available for consumer spending, there’s one less dollar spent to pay off the Federal debt. That leads to less government spending on programs that would also directly boost the economy, or increased federal debt that requires more taxes to pay off.
Which leaves Part 3. The answer: “Fiddle.” The question: What impact will this administration have on the information technology used by the federal government itself?
So far, there’s no evidence Bush himself even thinks about the question. Between the sputtering economy and proposed tax cut there won’t be much left to reform and rationalize the government’s IT infrastructure anyway. So don’t expect much in the way of large-scale IT programs during this administration. The possible exception is the military’s infrastructure. Given who Bush has on its team, Defense IT could get a shot in the arm — most likely through application of commercial technology, though, as opposed to the advanced research projects sponsored by the defense community in years past. It’s too bad, too. After all, another advanced research project created the Internet.
On the whole, though, expect the Bush team to fiddle with IT to the extent possible given very limited resources and a president who’s attention will be elsewhere.