A LOOK AT. . . The Gyrating Markets; IS THE BOOM OVER? The value of stock, particularly in high-tech companies, spiked sharply last week, though not enough to ease the fears of some investors who've watched their portfolios plummet since Labor Day. Two economic observers offer conflicting views on what happens next.; Relax, the Old Economy Will Save the New
Last summer, as the NASDAQ temporarily staggered back from its spring drubbing, a still brash Internet company ran a full-page newspaper ad with a bold and memorable line: "Thanks, old economy, we'll take it from here."</br></br>The ad got it exactly wrong. With the technology-heavy NASDAQ stock exchange about 40 percent below its March highs, the new economy no longer seems limitless. The American economy is entering an economic downturn. But even as the new economy implodes, the old economy will sustain us. This is a good thing: It means that the slowdown will be short and shallow after an impossibly long economic boom.</br></br>There will be other ironies in the coming months, the juiciest of which will be that old economy firms will surf the downturn more easily precisely because they have aggressively adopted high technology and made effective use of the massive structural shifts unleashed by New Economy forces.</br></br>Make no mistake, the downturn will feel awful. Going from 6 percent growth to 2 percent growth is a terrible swoon. But it will not be awful.</br></br>Despite a truckload of Chicken Littles predicting the end of the economic world, current economic indicators are pointing to a mild slump that never becomes a classic recession (defined as two consecutive quarters of negative growth).