Current Downturn???

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Thu Mar 22 08:05:15 PST 2001



> I've never been able to understand how physical
> objects can be a drag on the economy merely by existing.

A simple answer is that you keep paying for them (in current reductions of profit) via depreciation but you don't generate revenue to match. But this dot com stuff about computers is much less of an issue because computers are 5-year property that usually gets written down as soon as you stop using it (2-3 years in the normal case). It's a much bigger deal with 30 year property (like buildings) unless you can redirect their use to something that generates revenue (like subleasing the space, obviously hard for a special-purpose building like a steel mill).

/jordan



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