If I remember well, Greenspan believed in the new paradigm. He thought that info-tech and new financial products would allow the financial leaders to “fine tune” the economy just like a car computer adjusts the air-fuel mixture for optimal driving. From then on, we would only have minor recessions. The “check engine” light would turn on before major damage is done. The next few years will be the true test of the Greenspan doctrine.

CEOs generally bought into this mentality as well. Remember the frictionless business model managed by computers? Data mining would allow businesses to “instantly” react to changing business environment.

Dell built all those assembly and distribution plants to “instantly” serve customers. But now their model is antiquated as laptops are shipped directly from China via DHL. Dell is weighted down by stateside costs whereas HP concentrates on design then ships directly from China.