Cellphones, Texts and Lovers

By DAVID BROOKS

Since April 2007, New York magazine has posted online sex diaries. People send in personal accounts of their nighttime quests and conquests. Some of the diaries are unusual and sad. There’s a laid-off banker who drinks herself into oblivion and wakes up in the beds of unfamiliar men. There’s an African-American securities trader who flies around the country on weekends to meet with couples seeking interracial sex. (He meets one Midwestern couple at a T.G.I. Friday’s.)

But the most interesting part of the diaries concerns the way cellphones have influenced courtship. On nights when they are out, the diarists are often texting multiple possible partners in search of the best arrangement.

As the journalist Wesley Yang notes in a very intelligent analysis in the magazine, the diarists “use their cellphones to disaggregate, slice up, and repackage their emotional and physical needs, servicing each with a different partner, and hoping to come out ahead.”

Often the diarists will be on the verge of spending the evening with one partner, when a text arrives from another with a potentially better offer. To guard against not being chosen at all, Yang writes, “everyone is on somebody’s back-burner, and everybody has a back-burner of their own, which they maintain with open-ended texts.”

The atmosphere is fluid, like an eBay auction. This leads to a series of marketing strategies. You don’t want to appear too enthusiastic. You want to invent detached nicknames for partners. “Make plans to spend day with the One Who Cries,” a paralegal, 26, from the East Village writes. You want to appear bulletproof as you move confidently through the transactions. “I have a Stage Five Clinger on my hands,” a TV producer writes. “He asks me to hang out again this coming Sunday. I do not respond.”

People who send in sex diaries to a magazine are not representative of average Americans. But the interplay between technology and hook-ups will be familiar to a wide swath of young Americans. It illustrates an interesting roadblock in the country’s social evolution.

Once upon a time — in what we might think of as the “Happy Days” era — courtship was governed by a set of guardrails. Potential partners generally met within the context of larger social institutions: neighborhoods, schools, workplaces and families. There were certain accepted social scripts. The purpose of these scripts — dating, going steady, delaying sex — was to guide young people on the path from short-term desire to long-term commitment.

Over the past few decades, these social scripts became obsolete. They didn’t fit the post-feminist era. So the search was on for more enlightened courtship rules. You would expect a dynamic society to come up with appropriate scripts. But technology has made this extremely difficult. Etiquette is all about obstacles and restraint. But technology, especially cellphone and texting technology, dissolves obstacles. Suitors now contact each other in an instantaneous, frictionless sphere separated from larger social institutions and commitments.

People are thus thrown back on themselves. They are free agents in a competitive arena marked by ambiguous relationships. Social life comes to resemble economics, with people enmeshed in blizzards of supply and demand signals amidst a universe of potential partners.

The opportunity to contact many people at once seems to encourage compartmentalization, as people try to establish different kinds of romantic attachments with different people at the same time.

It seems to encourage an attitude of contingency. If you have several options perpetually before you, and if technology makes it easier to jump from one option to another, you will naturally adopt the mentality of a comparison shopper.

It also seems to encourage an atmosphere of general disenchantment. Across the centuries the moral systems from medieval chivalry to Bruce Springsteen love anthems have worked the same basic way. They take immediate selfish interests and enmesh them within transcendent, spiritual meanings. Love becomes a holy cause, an act of self-sacrifice and selfless commitment.

But texting and the utilitarian mind-set are naturally corrosive toward poetry and imagination. A coat of ironic detachment is required for anyone who hopes to withstand the brutal feedback of the marketplace. In today’s world, the choice of a Prius can be a more sanctified act that the choice of an erotic partner.

This does not mean that young people today are worse or shallower than young people in the past. It does mean they get less help. People once lived within a pattern of being, which educated the emotions, guided the temporary toward the permanent and linked everyday urges to higher things. The accumulated wisdom of the community steered couples as they tried to earn each other’s commitment.

Today there are fewer norms that guide in that way. Today’s technology seems to threaten the sort of recurring and stable reciprocity that is the building block of trust.

October 25, 2009

OP-ED COLUMNIST

In Defense of the ‘Balloon Boy’ Dad

By FRANK RICH

FOR a country desperate for good news, the now-deflated “balloon boy” spectacle would seem to be the perfect tonic. As Wolf Blitzer of CNN summed up the nation’s unrestrained joy upon learning that the imperiled boy had never been in any peril whatsoever: “All of us are so excited that little Falcon is fine.”

Then came even better news. After little Falcon revealed to Blitzer that his family “did this for the show,” we could all luxuriate in a warm bath of moral superiority. No matter what our own faults as parents, we could never top Richard Heene, who mercilessly exploited his child for fame and profit. Nor could we ever be as craven as the news media, especially cable television, which dumped a live broadcast of President Obama in New Orleans to track the supersized Jiffy Pop bag floating over Colorado.

Or such are the received lessons of this tale.

Certainly the “balloon boy” incident is a reflection of our time — much as the radio-induced “War of the Worlds” panic dramatized America’s jitters on the eve of World War II, or the national preoccupation with the now-forgotten Congressman Gary Condit signaled America’s pre-9/11 drift into escapism and complacency in the summer of 2001. But to see what “balloon boy” says about 2009, you have to look past the sentimental moral absolutes. You have to muster some sympathy for the devil of the piece, the Bad Dad. And you can’t grant blanket absolution to those in the American audience who smugly blame Heene and television exclusively for the entire embarrassing episode.

It would be lovely, for instance, to believe that cable audiences doubled in size that afternoon because they were rooting for little Falcon’s welfare. But as Seth Meyers and Amy Poehler would say on Weekend Update at “Saturday Night Live,” “Really?!?” Many of those viewers were driven by the same bloodlust that spawns rubberneckers at every highway accident: the hope of witnessing the graphic remains of a crash, not a soft landing.

It would also be nice to think that the “balloon boy” viewers were the innocent victims of a dazzling Houdini-class feat of wizardry — a “massive fraud,” as Bill O’Reilly thundered. But even slightly jaundiced onlookers might have questioned how a balloon could waft buoyantly through the skies for hours with a 6-year-old boy hidden within its contours. That so few did is an indication of how practiced we are at suspending disbelief when watching anything labeled news, whether the subject is W.M.D.’s in Iraq or celebrity gossip in Hollywood.

“They put on a very good show for us, and we bought it,” the local sheriff, Jim Alderden, said last weekend, when he alleged that “balloon boy” was a hoax. His words could stand as the epitaph for an era.

In this case, the show wasn’t even that good. But, as usual, the news media nursed it along, enlisting as sales reps for the smoke and mirrors. While the incident unfolded, most TV anchors hyped rather than questioned the aeronautical viability of a vehicle resembling the flying saucers in Ed Wood’s camp 1950s sci-fi potboiler, “Plan 9 From Outer Space.” But no sooner had the balloon been punctured than the press was caught in another flimflam. Reuters and CNBC delivered the bombshell that the United States Chamber of Commerce had abruptly reversed its intransigent opposition to climate-change legislation. The “spokesperson” source turned out to be the invention of liberal activists who had attempted to stage a prank press conference at Washington’s National Press Club.

Next to the other hoaxes and fantasies that have been abetted by the news media in recent years, both the “balloon boy” and Chamber of Commerce ruses are benign. The Colorado balloon may have led to the rerouting of flights and the wasteful deployment of law enforcement resources. But at least it didn’t lead the country into fiasco the way George W. Bush’s flyboy spectacle on an aircraft carrier helped beguile most of the Beltway press and too much of the public into believing that the mission had been accomplished in Iraq. The Chamber of Commerce stunt was a blip of a business news hoax next to the constant parade of carnival barkers who flogged empty stocks on cable during the speculative Wall Street orgies of the dot-com and housing booms.

As “balloon boy” played out, the White House opened fire on one purveyor of fictional news, Fox News, where “tea party” protests are inflated into a national rebellion rivaling the Civil War and where Glenn Beck routinely claims Obama is perpetrating a conspiracy to bring fascism to America. But the White House’s argument is diluted by the different, if less malevolently partisan, fictions that turn up on Fox’s competitors. On CNN, for instance, Lou Dobbs provided a platform for the nuts questioning Obama’s citizenship. When an ABC News correspondent insisted that Fox was “one of our sister organizations” in an exchange with the president’s press secretary, Robert Gibbs, last week, he wasn’t joking.

Richard Heene is the inevitable product of this reigning culture, where “news,” “reality” television and reality itself are hopelessly scrambled and the warp-speed imperatives of cable-Internet competition allow no time for fact checking. Norman Lear, about the only prominent American to express any empathy for little Falcon’s father, vented on The Huffington Post, calling out CNN, MSNBC, Fox, NBC, ABC and CBS alike for their role in “creating a climate that mistakes entertainment for news.” This climate, he argued, “all but seduces a Richard and Mayumi Heene into believing they are — even if what they dream up to qualify is a hoax — entitled to their 15 minutes.”

None of this absolves Heene of blame for the damage he may have inflicted on the children he grotesquely used as a supporting cast in his schemes. But stupid he’s not. He knew how easy it would be to float “balloon boy” when the demarcation between truth and fiction has been obliterated.

There’s also some poignancy in his determination to grab what he and many others see as among the last accessible scraps of the American dream. As a freelance construction worker and handyman, he couldn’t find much employment in an economy where construction is frozen and homeowners are more worried about losing their homes than fixing them. Once his appetite had been whetted by two histrionic appearances on “Wife Swap,” an ABC reality program, it’s easy to see why Heene would turn his life and that of his family into a nonstop audition for more turns in the big tent of the reality media circus.

That circus is among the country’s last dependable job engines. More than a quarter of prime-time broadcast television is devoted to reality programs. And so, with only a high-school education, Heene tried to reinvent himself as a cable-ready tornado-chasing scientist. Robert Thomas, a Web entrepreneur who collaborated with Heene on a pitch to ABC for a science-based reality show, saw the “balloon boy” stunt as a sad response to his economic plight. “I think in this case the desperation was too much for Richard to bear,” Thomas said in an interview with Gawker.com. (It’s no less desperate a sign of the times that Thomas insisted on being paid for his interview.)

Heene is a direct descendant of those Americans of the Great Depression who fantasized, usually in vain, that they might find financial salvation if only they could grab a spotlight in show business. Some aspired to the “American Idol” of the day — “Major Bowes Amateur Hour,” a hugely popular weekly talent contest on network radio. Others traveled the seedy dance marathon circuit, entering 24/7 endurance contests that promised food and prize money in exchange for freak-show degradation and physical punishment. Horace McCoy’s 1935 novel memorializing this Depression milieu was aptly titled “They Shoot Horses, Don’t They?”

In 1939, the year that John Steinbeck published “The Grapes of Wrath,” his Depression classic about dispossessed Dust Bowl sharecroppers migrating to California’s Salinas Valley in search of work, Nathanael West published “The Day of the Locust,” about those equally destitute Americans who traveled to Hollywood hoping to land in the movies. “They have been cheated and betrayed,” West wrote. “They have slaved and saved for nothing.” He could have been describing Americans who lost their jobs, homes and 401(k)’s in our own Great Recession.

The role models for today’s desperate fame seekers are “Jon & Kate Plus 8,” not Gable and Lombard. But even if they catch a break, as Heene did on “Wife Swap,” they still may end up betrayed by a stacked system. As The Times reported in August, many reality shows are as cruel as the old dance marathons. The usual Hollywood workplace rules allowing breaks for rest or meals often don’t apply. Nor, sometimes, does the minimum wage. Let ’em eat fame.

If Heene’s balloon was empty, so were the toxic financial instruments, inflated by the thin air of unsupported debt, that cratered the economy he inhabits. The press hyped both scams, and the public eagerly bought both. But between the bogus balloon and the banks’ bubble, there’s no contest as to which did the most damage to the country. The ultimate joke is that Heene, unlike the reckless gamblers at the top of Citigroup and A.I.G., may be the one with a serious shot at ending up behind bars.

October 21, 2009

OP-ED COLUMNIST

The New Untouchables

By THOMAS L. FRIEDMAN

Last summer I attended a talk by Michelle Rhee, the dynamic chancellor of public schools in Washington. Just before the session began, a man came up, introduced himself as Todd Martin and whispered to me that what Rhee was about to speak about — our struggling public schools — was actually a critical, but unspoken, reason for the Great Recession.

There’s something to that. While the subprime mortgage mess involved a huge ethical breakdown on Wall Street, it coincided with an education breakdown on Main Street — precisely when technology and open borders were enabling so many more people to compete with Americans for middle-class jobs.

In our subprime era, we thought we could have the American dream — a house and yard — with nothing down. This version of the American dream was delivered not by improving education, productivity and savings, but by Wall Street alchemy and borrowed money from Asia.

A year ago, it all exploded. Now that we are picking up the pieces, we need to understand that it is not only our financial system that needs a reboot and an upgrade, but also our public school system. Otherwise, the jobless recovery won’t be just a passing phase, but our future.

“Our education failure is the largest contributing factor to the decline of the American worker’s global competitiveness, particularly at the middle and bottom ranges,” argued Martin, a former global executive with PepsiCo and Kraft Europe and now an international investor. “This loss of competitiveness has weakened the American worker’s production of wealth, precisely when technology brought global competition much closer to home. So over a decade, American workers have maintained their standard of living by borrowing and overconsuming vis-à-vis their real income. When the Great Recession wiped out all the credit and asset bubbles that made that overconsumption possible, it left too many American workers not only deeper in debt than ever, but out of a job and lacking the skills to compete globally.”

This problem will be reversed only when the decline in worker competitiveness reverses — when we create enough new jobs and educated workers that are worth, say, $40-an-hour compared with the global alternatives. If we don’t, there’s no telling how “jobless” this recovery will be.

A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. He said it was interesting: lawyers who were used to just showing up and having work handed to them were the first to go because with the bursting of the credit bubble, that flow of work just isn’t there. But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. They are the newuntouchables.

That is the key to understanding our full education challenge today. Those who are waiting for this recession to end so someone can again hand them work could have a long wait. Those with the imagination to make themselves untouchables — to invent smarter ways to do old jobs, energy-saving ways to provide new services, new ways to attract old customers or new ways to combine existing technologies — will thrive. Therefore, we not only need a higher percentage of our kids graduating from high school and college — more education — but we need more of them with the right education.

As the Harvard University labor expert Lawrence Katz explains it: “If you think about the labor market today, the top half of the college market, those with the high-end analytical and problem-solving skills who can compete on the world market or game the financial system or deal with new government regulations, have done great. But the bottom half of the top, those engineers and programmers working on more routine tasks and not actively engaged in developing new ideas or recombining existing technologies or thinking about what new customers want, have done poorly. They’ve been much more exposed to global competitors that make them easily substitutable.”

Those at the high end of the bottom half — high school grads in construction or manufacturing — have been clobbered by global competition and immigration, added Katz. “But those who have some interpersonal skills — the salesperson who can deal with customers face to face or the home contractor who can help you redesign your kitchen without going to an architect — have done well.”

Just being an average accountant, lawyer, contractor or assembly-line worker is not the ticket it used to be. As Daniel Pink, the author of “A Whole New Mind,” puts it: In a world in which more and more average work can be done by a computer, robot or talented foreigner faster, cheaper “and just as well,” vanilla doesn’t cut it anymore. It’s all about what chocolate sauce, whipped cream and cherry you can put on top. So our schools have a doubly hard task now — not just improving reading, writing and arithmetic but entrepreneurship, innovation and creativity.

Bottom line: We’re not going back to the good old days without fixing our schools as well as our banks.

Wall Street Smarts

By CALVIN TRILLIN

“IF you really want to know why the financial system nearly collapsed in the fall of 2008, I can tell you in one simple sentence.”

The statement came from a man sitting three or four stools away from me in a sparsely populated Midtown bar, where I was waiting for a friend. “But I have to buy you a drink to hear it?” I asked.

“Absolutely not,” he said. “I can buy my own drinks. My 401(k) is intact. I got out of the market 8 or 10 years ago, when I saw what was happening.”

He did indeed look capable of buying his own drinks — one of which, a dry martini, straight up, was on the bar in front of him. He was a well-preserved, gray-haired man of about retirement age, dressed in the same sort of clothes he must have worn on some Ivy League campus in the late ’50s or early ’60s — a tweed jacket, gray pants, a blue button-down shirt and a club tie that, seen from a distance, seemed adorned with tiny brussels sprouts.

“O.K.,” I said. “Let’s hear it.”

“The financial system nearly collapsed,” he said, “because smart guys had started working on Wall Street.” He took a sip of his martini, and stared straight at the row of bottles behind the bar, as if the conversation was now over.

“But weren’t there smart guys on Wall Street in the first place?” I asked.

He looked at me the way a mathematics teacher might look at a child who, despite heroic efforts by the teacher, seemed incapable of learning the most rudimentary principles of long division. “You are either a lot younger than you look or you don’t have much of a memory,” he said. “One of the speakers at my 25th reunion said that, according to a survey he had done of those attending, income was now precisely in inverse proportion to academic standing in the class, and that was partly because everyone in the lower third of the class had become a Wall Street millionaire.”

I reflected on my own college class, of roughly the same era. The top student had been appointed a federal appeals court judge — earning, by Wall Street standards, tip money. A lot of the people with similarly impressive academic records became professors. I could picture the future titans of Wall Street dozing in the back rows of some gut course like Geology 101, popularly known as Rocks for Jocks.

“That actually sounds more or less accurate,” I said.

“Of course it’s accurate,” he said. “Don’t get me wrong: the guys from the lower third of the class who went to Wall Street had a lot of nice qualities. Most of them were pleasant enough. They made a good impression. And now we realize that by the standards that came later, they weren’t really greedy. They just wanted a nice house in Greenwich and maybe a sailboat. A lot of them were from families that had always been on Wall Street, so they were accustomed to nice houses in Greenwich. They didn’t feel the need to leverage the entire business so they could make the sort of money that easily supports the second oceangoing yacht.”

“So what happened?”

“I told you what happened. Smart guys started going to Wall Street.”

“Why?”

“I thought you’d never ask,” he said, making a practiced gesture with his eyebrows that caused the bartender to get started mixing another martini.

“Two things happened. One is that the amount of money that could be made on Wall Street with hedge fund and private equity operations became just mind-blowing. At the same time, college was getting so expensive that people from reasonably prosperous families were graduating with huge debts. So even the smart guys went to Wall Street, maybe telling themselves that in a few years they’d have so much money they could then become professors or legal-services lawyers or whatever they’d wanted to be in the first place. That’s when you started reading stories about the percentage of the graduating class of Harvard College who planned to go into the financial industry or go to business school so they could then go into the financial industry. That’s when you started reading about these geniuses from M.I.T. and Caltech who instead of going to graduate school in physics went to Wall Street to calculate arbitrage odds.”

“But you still haven’t told me how that brought on the financial crisis.”

“Did you ever hear the word ‘derivatives’?” he said. “Do you think our guys could have invented, say, credit default swaps? Give me a break! They couldn’t have done the math.”

“Why do I get the feeling that there’s one more step in this scenario?” I said.

“Because there is,” he said. “When the smart guys started this business of securitizing things that didn’t even exist in the first place, who was running the firms they worked for? Our guys! The lower third of the class! Guys who didn’t have the foggiest notion of what a credit default swap was. All our guys knew was that they were getting disgustingly rich, and they had gotten to like that. All of that easy money had eaten away at their sense of enoughness.”

“So having smart guys there almost caused Wall Street to collapse.”

“You got it,” he said. “It took you awhile, but you got it.”

The theory sounded too simple to be true, but right offhand I couldn’t find any flaws in it. I found myself contemplating the sort of havoc a horde of smart guys could wreak in other industries. I saw those industries falling one by one, done in by superior intelligence. “I think I need a drink,” I said.

He nodded at my glass and made another one of those eyebrow gestures to the bartender. “Please,” he said. “Allow me.”

Calvin Trillin is the author, most recently, of “Deciding the Next Decider: The 2008 Presidential Race in Rhyme.”

Welcome to my profile. I was born in the city of Boston and raised in the town of Maynard , Massachusetts. I joined the United States Navy and served two years sea duty on the USS Rowan and with great honor was a member of the Apollo 17 spaceship recovery team. After my Navy hitch I attended and graduated from Fitchburg State College, Portland State University, The Fielding Institute , and completed professional development programs in organizational transformation at MIT and still attend annual research seminars and conferences there. I currently teach Human Resource Management classes at Portland State University School of Business . I've spent most of my career in HR doing EAP types of work. My professional areas of interested area Human Resources Information Technologies (HRIT) and sociology within the workplace. I spend way too much time following the Boston Red Sox and wine tasting . Really all you need to know about me is I love to teach, think, and analyze social systems

The Great Gradualist

By DAVID BROOKS

In the days since Ted Kennedy’s death, the news programs have shown and re-shown the unforgettable ending of his 1980 Democratic convention speech — the passage from Tennyson and the beautiful final lines: “The work goes on, the cause endures, the hope still lives, and the dream shall never die.”

But if you go back earlier into the heart of that speech, you see how bold Kennedy’s agenda really was. His central argument was for a policy of full employment. Government should provide a job for every able-bodied American. His next big goal was what he called “reindustrialization.” The computer revolution was just getting under way, but Kennedy called on government to restore the industrial might of America’s cities.

The third big goal was national health insurance. “Let us insist on real control over what doctors and hospitals can charge,” Kennedy cried.

There were other proposals. He vowed to use “the full power of government to master increasing prices.” Kennedy was proposing to fundamentally transform America’s political economy. He knew he had lost the nomination by this time, and his liberalism was unbound.

The speech was radical, and he could have gone back to the Senate, content to luxuriate in his own boldness. He could have excoriated his opponents for their villainy and given speeches about dreams that would never come true.

But Kennedy became something else. He became a compromiser. He became an incrementalist.

Those words have negative connotations. But they shouldn’t. Kennedy never abandoned his ambitious ideals, but his ability to forge compromises and champion gradual, incremental change created the legacy everybody is celebrating today: community health centers, the National Cancer Institute, the Americans With Disabilities Act, the Meals on Wheels program, the renewal of the Voting Rights Act and the No Child Left Behind Act. The latter law, by the way, has narrowed the black-white achievement gap more than any other recent piece of legislation.

Kennedy’s life yields several important lessons. One is about the nature of political leadership. We have been taught since, well, since the days of Camelot to admire a particular sort of politician: the epic, charismatic Mount Rushmore candidate who sits atop his charger leading transformational change.

But the founders of this country designed the Constitution to frustrate that kind of leader. The Constitution diffuses power, requires compromise and encourages incrementalism. The founders created a government that was cautious so that society might be dynamic.

Ted Kennedy was raised to prize one set of leadership skills and matured to find that he possessed another. He possessed the skills of the legislator, and if you ask 99 senators who was the best craftsman among them, they all will say Kennedy. He knew how to cut deals. He understood coalitions and other people’s motives and needs.

I once ran into John McCain after a negotiating session with Kennedy on an immigration bill they had co-sponsored. McCain was exhausted by the arduous and patient way his friend negotiated. In my last interview with Kennedy, I asked about big ideas, and his answers were nothing special. Then I asked about a minor provision in an ancient piece of legislation, and his command of the provision and how it got there was jaw-droppingly impressive.

There is a craft to governance, which depends less on academic intelligence than on a contextual awareness of how to bring people together. Kennedy possessed that awareness.

A second lesson involves the nature of change in America.

We in this country have a distinct sort of society. We Americans work longer hours than any other people on earth. We switch jobs much more frequently than Western Europeans or the Japanese. We have high marriage rates and high divorce rates. We move more, volunteer more and murder each other more.

Out of this dynamic but sometimes merciless culture, a distinct style of American capitalism has emerged. The American economy is flexible and productive. America’s G.D.P. per capita is nearly 50 percent higher than France’s. But the American system is also unforgiving. It produces its share of insecurity and misery.

This culture, this spirit, this system is not perfect, but it is our own. American voters welcome politicians who propose reforms that smooth the rough edges of the system. They do not welcome politicians and proposals that seek to contradict it. They do not welcome proposals that centralize power and substantially reduce individual choice. They resist proposals that put security above mobility and individual responsibility.

In 1980, Kennedy proposed an agenda that jarred with the traditions of American governance. In the decades since, a constrained Kennedy and a string of Republican co-sponsors produced reforms in keeping with it. The benefits are there for all to see.

Till Debt Does Its Part

By PAUL KRUGMAN

So new budget projections show a cumulative deficit of $9 trillion over the next decade. According to many commentators, that’s a terrifying number, requiring drastic action — in particular, of course, canceling efforts to boost the economy and calling off health care reform.

The truth is more complicated and less frightening. Right now deficits are actually helping the economy. In fact, deficits here and in other major economies saved the world from a much deeper slump. The longer-term outlook is worrying, but it’s not catastrophic.

The only real reason for concern is political. The United States can deal with its debts if politicians of both parties are, in the end, willing to show at least a bit of maturity. Need I say more?

Let’s start with the effects of this year’s deficit.

There are two main reasons for the surge in red ink. First, the recession has led both to a sharp drop in tax receipts and to increased spending on unemployment insurance and other safety-net programs. Second, there have been large outlays on financial rescues. These are counted as part of the deficit, although the government is acquiring assets in the process and will eventually get at least part of its money back.

What this tells us is that right now it’s good to run a deficit. Consider what would have happened if the U.S. government and its counterparts around the world had tried to balance their budgets as they did in the early 1930s. It’s a scary thought. If governments had raised taxes or slashed spending in the face of the slump, if they had refused to rescue distressed financial institutions, we could all too easily have seen a full replay of the Great Depression.

As I said, deficits saved the world.

In fact, we would be better off if governments were willing to run even larger deficits over the next year or two. The official White House forecast shows a nation stuck in purgatory for a prolonged period, with high unemployment persisting for years. If that’s at all correct — and I fear that it will be — we should be doing more, not less, to support the economy.

But what about all that debt we’re incurring? That’s a bad thing, but it’s important to have some perspective. Economists normally assess the sustainability of debt by looking at the ratio of debt to G.D.P. And while $9 trillion is a huge sum, we also have a huge economy, which means that things aren’t as scary as you might think.

Here’s one way to look at it: We’re looking at a rise in the debt/G.D.P. ratio of about 40 percentage points. The real interest on that additional debt (you want to subtract off inflation) will probably be around 1 percent of G.D.P., or 5 percent of federal revenue. That doesn’t sound like an overwhelming burden.

Now, this assumes that the U.S. government’s credit will remain good so that it’s able to borrow at relatively low interest rates. So far, that’s still true. Despite the prospect of big deficits, the government is able to borrow money long term at an interest rate of less than 3.5 percent, which is low by historical standards. People making bets with real money don’t seem to be worried about U.S. solvency.

The numbers tell you why. According to the White House projections, by 2019, net federal debt will be around 70 percent of G.D.P. That’s not good, but it’s within a range that has historically proved manageable for advanced countries, even those with relatively weak governments. In the early 1990s, Belgium — which is deeply divided along linguistic lines — had a net debt of 118 percent of G.D.P., while Italy — which is, well, Italy — had a net debt of 114 percent of G.D.P. Neither faced a financial crisis.

So is there anything to worry about? Yes, but the dangers are political, not economic.

As I’ve said, those 10-year projections aren’t as bad as you may have heard. Over the really long term, however, the U.S. government will have big problems unless it makes some major changes. In particular, it has to rein in the growth of Medicare and Medicaid spending.

That shouldn’t be hard in the context of overall health care reform. After all, America spends far more on health care than other advanced countries, without better results, so we should be able to make our system more cost-efficient.

But that won’t happen, of course, if even the most modest attempts to improve the system are successfully demagogued — by conservatives! — as efforts to “pull the plug on grandma.”

So don’t fret about this year’s deficit; we actually need to run up federal debt right now and need to keep doing it until the economy is on a solid path to recovery. And the extra debt should be manageable. If we face a potential problem, it’s not because the economy can’t handle the extra debt. Instead, it’s the politics, stupid.

August 9, 2009

PROTOTYPE

Staving Off a Spiral Toward Oblivion

By MARY TRIPSAS

DRIVEN by the pressure to innovate, companies facing major technological change have wholeheartedly embraced management gurus’ advice on how to develop creative, breakthrough products. As a result, corporate America is flush with incubators, skunk works and innovation silos.

But has the pendulum swung too far? New technologies are obviously important, but even in today’s fast-paced environment, they can take a long time to substitute for the old. In the meantime, incremental innovation based on old technologies can help a company survive.

When Sony announced its Mavica electronic camera in 1981, headlines trumpeted that “Film Is Dead.” But it took 28 more years for Kodachrome, the film immortalized by Paul Simon, to finally die this past June.

E-book software by companies like Electronic Book Technologies was released in the early 1990s. Yet despite the recent buzz over the Kindle and other electronic reading devices, e-books are still less than 5 percent of overall book sales.

The reality is that most technologies eventually die. But unlike the ancient Greeks, who believed their destiny was controlled by the Fates, today’s managers need not assume that an old technology’s fate is predetermined. Companies can proactively manage the innovation endgame. Continuing improvements to extend the life of technology, particularly given the attractive margins on the old, can be a wise business decision — and not necessarily a reflection of narrow-mindedness.

The key is to extend the profitable life of the old just long enough to have a fighting chance in the new. But how?

Customers move at different speeds, so investments should be focused on market segments that most value the old. Criticisms of Kodak’s digital strategy abound, but one overlooked strength has been its ability to maintain its market position in segments like motion pictures, which, though small, are moving to digital more slowly.

History provides another illustration. Mechanical machines that used molten lead had dominated the typesetter industry for more than 60 years when photography-based machines were introduced in 1949. Along with many new entrants, the leading old-technology companies, Mergenthaler Linotype and Intertype, invested heavily in the new technology.

But the mechanical technology “was well known by the people who were using it,” Carl Schlesinger, a former typesetter operator for The New York Times and author of two books on the history of printing, said in a recent interview. The new technology required customers, particularly unionized newspapers, to make huge investments in retraining.

So throughout the 1950s and ’60s, Mergenthaler Linotype and Intertype continued to develop highly innovative mechanical machines, Herb Klepper, a lead engineer for Mergenthaler at the time, said in a recent interview. The speed of the old machines more than doubled, and newspapers kept using them. By 1978, when The Times retired its old mechanical machines, Mergenthaler Linotype was an established leader in the new technology, and Intertype, while not a leader, had survived to move on to yet the next generation of technology, digital typesetters.

Now, of course, newspapers are struggling to extend the life of print so they can develop new capability and business models for the Web and other forms of electronic distribution.

One mechanism for extending the life of the old is to borrow from the new. Daniel C. Snow, a Harvard Business School professor, says that the useful life of the carburetor was extended significantly by incorporating technology from electronic fuel-injection. Interestingly, he finds that only companies that were also developing electronic fuel-injection technology benefited.

The old can also create a bridge to the new through hybrid products that combine elements of each. Research on electric vehicles has been under way for many years, but a direct leap from gasoline-powered vehicles to electric vehicles has proved challenging.

“Hybrids were an easy way for carmakers to start this transition,” says Felix Kramer, founder of CalCars, a nonprofit organization. Because the required shift in behavior is minimal, many drivers have been willing to make the change. Later, as these drivers become accustomed to the electric-vehicle features of hybrids — the quiet ride, for example — they will presumably become more willing to acquire a purely electric vehicle.

“Once they started down that road, it pointed to the future of plug-in hybrids,” says Mr. Kramer, whose organization promotes the plug-in vehicles. While hybrids like the Toyota Prius use electricity as a supplement, plug-in hybrids go the next step and rely primarily on electricity, with gasoline as the secondary energy source.

“Because of plug-in hybrids, the supply chain and all the technologies will improve, so we gradually get batteries that are cheaper with longer range, and eventually we get all-electric vehicles,” he explains.

OF course, managers still need to know when to move on. When steamships began to compete with sailing ships for freight traffic, the sailing-ship producers responded with what the technology historian S. C. Gilfillan described in his 1935 book, “Inventing the Ship,” as a “noble flowering of the sailing ship.”

But the producers went too far. By 1902, with the building of the Thomas W. Lawson, the largest sailing ship ever, with seven masts and 25 sails, sailing technology had reached a point of diminishing returns, and the competition with steamships had already been lost.

Ultimately, it’s all about balance. The future of a company depends on success in the new. But the old needn’t be framed as simply as a “cash cow” or as a source of inertia holding back the company’s creative juices. Selective, intelligent innovation in the old may just hold the key to the future.

Mary Tripsas is an associate professor in the entrepreneurial management unit at the Harvard Business School.