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Saturday May 25, 1998

The Computer and the Economy

By William Heartstone, Daily Republican Staff Writer

WASHINGTON DESK - In the past few days there has been an antitrust move against Bill Gates' company Microsoft. The reason has something to do with information technology breakthroughs and the marketing of them to the public over the Internet.

Information technology has miraculously boosted the nations otherwise lack-luster output in the past couple of years. This has been very good indeed for the current business cycle.

The present cycle boosts output and the resulting economic expansion is being sustained in face of a current period of economic contraction. The economic benefit of all this is really quite substantial as growth continues unabated.

The explosion in the variety of goods that are now being sold on the Internet ranges from expensive custom made guitars, to micro brew, food, clothing and household products.

Media The inventory/sales ratio has fallen to record lows at the same time the investment in information-processing equipment has surged to record highs. Computers have made on-demand inventory management a reality. The unintended consequence of this information management innovation now seems to be the evening-out of business cycles valleys and peaks. Hooray!  

Government statisticians explain this phenomenoa as the effect of higher quality technology production and greater customization on market stability. For example, computer technology made it possible for sport utility vehicles and subcompacts to be equally readily available on the same showroom floor.

Meanwhile. the trade report in March showed the trade deficit at $13.0 billion, up from $12.2 billion in February.

The decline in merchandizer exports to Asia was even more pronounced.

On a current-dollar basis, goods sold to the Pacific Rim stood 15.1% below the level of a year ago in March 1997.

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