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.

In the Minneapolis winter, hot soup makes an appealing lunch. At a local eatery specializing in such fare I learned an important lesson for IT.

This restaurant serves soup in bowls and “bottomless” bowls. Bottomless gets you unlimited refills. Here’s your challenge: As an IT analyst, devise a system to keep track of who’s entitled to those free refills. How would you do it?

Would you print a card at the register with a bar code, to be scanned to verify which customers should get refills? Would you ask bottomless customers to show their receipts each time they return for another helping? Or …

Design your solution before you read how the restaurateur handled the problem.

Okay ready?

Bottomless customers get a differently shaped bowl.

Every time I eat there I wonder if I’d have found this simple solution. Ask yourself, and your analysts and designers too, because if they restrict their thinking to IT they can cost you a lot of money. Sometimes, a second type of bowl can replace a million lines of code.

Whether you’re selling soup or silverware, hardware or handbags, you’re in retail. And while IT has tremendous importance in the retail back office, in the store itself its importance is limited. Which is ironic, because CRM is one of the hot applications of IT these days, and most retailers live and die on good customer relations.

Take data warehousing, one of the most important tools in what we usually think of as a CRM implementation. You can use data warehousing to collect terabytes of customer information and slice it, dice it, cross-correlate it, and do multidimensional scaling if that will teach you anything.

When you’re done you’ll learn (among other things) which customer segments, and maybe even which customers do and don’t buy which products from you.

Pick up a copy of Paco Underhill’s excellent book on retail, Why We Buy, and you’ll see the importance of watching shoppers shop. If you watch shoppers in action you’ll learn something data mining can’t teach you: Why (for example) your older customers aren’t buying concealer from you. It isn’t their demographics or your branding. It’s a merchandising problem: You’ve placed the concealer on the bottom shelf. Shoppers have to bend down for it, and it’s in a high-traffic area besides, where other shoppers brush buy them on their way to pharmaceuticals. For older shoppers bending down is bad enough. Being “butt-brushed” (Underhill’s term) makes it intolerable, driving them to forgo the concealer despite their need for it.

If you’d relied on data warehousing and data mining alone, you’d have adjusted your inventory planning to stock less concealer. This would have reduced waste — a good thing to do. By going into the store and watching actual shoppers actually shopping you rely on observation — a more powerful tool than mere inference. You’d know to move the concealer to a higher shelf, increasing sales instead of fine-tuning inventory. That’s much better.

There’s a double-barreled lesson here for IT. The first is to recognize when an IT solution is incomplete. To take another retail example, I once discussed the possibility of setting up “register-pop” in a client’s stores. Similar to the familiar screen-pop used in CTI-enabled call centers, which helps telephone agents interact more effectively with callers, register-pop would identify shoppers at the register and provide information that could help store clerks up-sell.

Ultimately, we decided against this approach. While technically feasible, it would have provided just-too-late information. By the time customers reach the register they aren’t shoppers anymore. They’re buyers — they have what they want, have already waited in line, and don’t want to go back into the store for more stuff.

Some advanced retailers are looking into an alternative that identifies shoppers before they reach the register. It relies on an advanced face-recognition technology called the Sales Associate. By giving the sales associate a wireless PDA connected to a central customer database, they hope to make their sales force more effective in helping regular customers.

That’s the first lesson — that IT solutions are often incomplete. The second lesson is more universal: Infer when you must, but watch when you can. This is true whether the subject is merchandising, customer interface usability, or whether a process design will work in your warehouse. Given a choice, don’t guess, don’t assume, don’t even ask.

Position yourself unobtrusively and … observe.