Kausfiles Special

Waiting to XP

For some time, it’s been clear to me, as a non-economist, that the date when the U.S. economy finally emerges from its current slowdown can be fixed with some precision. The date is Oct. 25, 2001, when Microsoft starts selling its Windows XP program.

Why? I’m applying Kaus’ First Rule of Journalism (“Always generalize wildly from your personal experience”) to the business cycle. During the 1990s boom, it seemed there were lots of things I wanted to buy. New cars, new clothes, but most of all new computers and gadgets. I had a fairly intense and emotional relationship with the J&R Computer World ad that runs on the back page of the New York Times. But that’s all changed. I haven’t had a bout of konsumterror in months. I’m calm and content. And it’s not that I don’t have any money to spend. 

So it is, it seems to me, with the vast mass of trailing-edge yuppie consumers. They have their home computers. They have their SUVs. They have big screen TVs. They have DVDs. There’s Nothing Left To Buy.

Why will Windows XP give me and my cohort something to buy? No doubt it will have all sorts of fancy new multimedia features “for new and better user experience through improved functionality,” as a recent Microsoft brochure puts it. But its main advantage is that it uses the “proven code base of Windows 2000” for “greatly improved dependability.” In other words, it won’t crash all the time, unlike the Windows versions Microsoft has been selling to home computer users of late. (Microsoft calls this “elimination of most scenarios that forced users to reboot in earlier versions of Windows.”)

You’d have to be a fool to buy a PC today with Windows Me, the overburdened, critically unacclaimed last-gasp version of the dying old Windows code. If I, a relative ignoramus, realize this, millions of computer users must realize this, and businesses too. Not surprisingly, computer sales have been slumping badly, along with all the tech industries that depend on computer sales.

But in October, there will be a reason to buy computers again. In October, growth will come.

Windows XP is so important to the economy, and the economy is so important to so much else (the budget, Social Security, welfare reform, the progress of disadvantaged minorities, etc.) that a case could be made that the federal government would be acting prudently if–instead of delaying the XP rollout as part of its antitrust suit against Microsoft, as is being discussed–it gave Microsoft a multibillion dollar subsidy to accelerate the XP rollout. But I suppose giving money to one of the richest corporations in the world when there are people being laid off is what old Beltway hands call a non-starter. Plus Microsoft doesn’t have a track record of performing very well when rushed. One thing that could abort the XP-based recovery, in fact, is if the first versions of the program are filled with bugs, which would cause consumers to delay their purchases until the problems are fixed.

Why am I writing this now? Because the Washington Post’s Ariana Eunjung Cha has most of the story in this morning’s paper, and if I get this item up quickly (don’t crash on me, Windows!) you might not realize that kausfiles was beaten into print. …

Brill-Neutralizing Disclaimer: Microsoft owns Slate. But you knew that. This item is what I would have written if I wasn’t writing it for Slate. In fact, I didn’t write it for Slate. I wrote it for my own Web site. Then I figured what the hell.

Especially Chicken-Hearted Disclaimer: This is not intended as investment advice. If you invest on the basis of kausfiles, I have a Windows 98 machine I’d like to sell you. …