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Editorial—Slowdown: it hasn’t happened yet



Slowdown: It Hasn’t Happened , Yet

It seems that about this time every year we anxiously anticipate the bottom dropping out of our economy as soon as the clock strikes midnight Dec. 31.

This year is no different. Dour economic forecasts coupled with a deepening energy crisis and a still-jittery stock market is adding up to a stormy 2001.

But before we start squirreling away acorns to last us through next winter, let’s take a quick look back at the past couple years.

Late in 1998 we had just come off a huge roller-coaster ride on the stock market. Local stocks had taken a nasty beating , tech stocks in particular , with many posting record lows.

The local real estate market zoomed out of control. And of course, the White House was in turmoil as well, as the Monica Lewinsky sex scandal widened.

In the fall of 1999 we were paralyzed by the fear of Y2K. As much as we were assured by government leaders that all would be well come New Year’s Day, no one really knew for sure until early on Dec. 31, when the first reports of no trouble rolled in from Asia.

If anything, this fall has mirrored several images from 1998. Tech stocks took another beating, real estate prices are still out of control and the Presidency again is in turmoil.

Unlike ’98, when the New Economy boom propped up what otherwise would have been an economic tailspin, there are several economic factors we must consider today. Predictions for 2001 , including the well-respected UCLA Anderson Forecast , call for more selective investments from venture capitalists. While we have a diversified economy here in San Diego, our tech industry certainly could feel a pinch.

At some point the repeated failures of Internet companies will have a negative effect on the economy. From the loss of high-paying jobs to consumer spending to investments, the Great Internet Shakeout of 2000 could hit hard in the coming months.

Our energy crisis cannot be ignored either. It appears we are just experiencing the tip of the iceberg, as dire predictions of spiraling costs and severe shortages loom in the summer. Few factors would hasten a recession faster than a shortage of energy.

Most signs point to an economic slowdown for 2001. Still, the New Economy has kept the wolves at bay for the past several years. If we can weather the seemingly inevitable energy crunch, 2001 could turn out to be another prosperous year.

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