January 2, 2001—All
About Tatters; We Hope O'Neill and Tommy
Fortunately, the family noticed that I am getting a bit
tattered. They paid attention to repairs this season, putting absolutely the
right things in my Christmas stocking. Since my shredded wallet has become
an embarrassment to them, they made sure my new billfold, however empty,
looks high class. As my brother-in-law Keith used to say, "You are looking
very prosperous." I would reply, of course, "Not really." And he would
rejoin, "Well, it's the illusion that counts."
I am encouraged by a few of the recent repairs the nation has made, even if
it, too, is quite tattered. I can't wait to ride the new high-speed Amtrak
trains from Washington to New York to Boston. Or to take a look at Houston's
vastly improved public-school system. Or to explore several more aspects of
Seattle, which has supplanted California as the cultural focus of the West.
Most encouraging, too, is the team Governor Bush is fielding in foreign
policy and defense. We have been amateurs abroad for too long. And it has
put the nation in some danger.
But the new administration's choices on the domestic and economic fronts do
not look to be so felicitous. For more than ten yeas we have neglected the
structural aspects of the economy. Since Reagan and running right through
Clinton, we have had Wall Street administrations that have jiggered our
finances and then left the rest to the states and to the private sector. At
the Federal level we have lacked meaningful policy goals for better than two
While some of the states and parts of business are much healthier, infra-rot
runs riot throughout the land. This also includes the non-profit arena, to
which Peter Drucker is now devoting attention. It's hard to think of a part
of the infrastructure that is in good shape, be it air or ground
transportation, education, pensions, health, electric power, or media. Here
in the Piedmont of North Carolina we are a flood disaster waiting to happen
due to decades of government neglect and rapacious development schemes. The
floods and mudslides which ensue will be more devastating than anything seen
so far in the Coastal Plain, even during Hurricane Floyd.
Since we find the Bush domestic team to be quite weak, we will pin our hopes
on Paul O'Neill, the wunderkind CEO of Alcoa who has turned that behemoth
around, and the effusive Tommy Thompson, governor of Wisconsin, who's had an
idea or two about welfare and transportation. These two fellows will have to
haul a lot of water.
At the end of the Clinton neo-Republican era (a Democratic administration
only in name), the question is not whether we will survive the Gore/Bush
election tempest in Florida. Can we survive, rather, the dot-com hysteria in
which huge economic resources and energy simply were spent on the wrong
things? Can we survive a worldwide credit bubble that has put the Financial
Fates under the thumb of short-term money managers?
If all this is too much for you, you can pick up a feel-good book out of the
Cato Institute called It's Getting Better All the Time: 100 Greatest
Trends of the Last 100 Years, which does show that everything is getting
more wonderful, Pangloss-style, even as we speak, and it will get better yet
if we will only be smart enough to abolish government.
Yet even realists can take heart at the central outcome of the end of the
Cold War. Nations at the margin are beginning to flourish and exert more
power in world affairs. Look at Ireland, Spain, Singapore, and Australia.
They are the surprises of the Millennium from which we must learn. Meanwhile
the U.S., Russia, China, et. al. work at being big and powerful, faltering
all the while. Well, as Teddy Roosevelt almost said, "How Can We Act Big and
Small, How Can We Carry a Big Stick and Walk and Talk Softly?" A little
modesty will go a long ways these days.
On the assumption that everything that ever counts is never seen, we will
now begin to plug some yardsticks into this letter for you, helping all of
us to see things as they are. For instance, last week we put up a note about
the Purchasing Managers Index (Agile Companies #74) which would have told
you earlier about the current recession which everybody insists is still not
happening. The PMI will become more and more important for our economic
understanding. Since business is learning to operate on less and less
inventory, we must understand better what buy-guys are up to.
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