Similarly, as Congress weighed the merits of a fast tax rebate to consumers last year, some argued it would do little good. Yet the tax breaks helped--the White House claims to the tune of an extra half point of GDP this year. "Politics aside, the tax cuts worked," says Chris Varvares of Macroeconomic Advisers in St. Louis.
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The new economy lives. The productivity boom continued through the recession, confounding skeptics and promising gains for both wages and profits. "We have not even scratched the productivity potential we have in America," says Treasury Secretary Paul O'Neill. Still, some touted tech-age benefits were overrated. Superior information was supposed to make inventory management more foolproof. Yet even with better information, businesses still screwed up--especially, as it turned out, many high-tech and telecom firms. "We exchanged a lack of knowledge for lousy forecasts," observes Naroff.
Just as firms reacted quickly to the slowdown, they are likely to pick up activity quickly as the economy turns positive. At least, that's what EnSafe's Coop says. "We closed the company down for the holidays and came back to work January 2," he says. "The phone started ringing, and it hasn't stopped since."
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