This Time It's Different

But that doesn't mean today's slowdown will turn into tomorrow's recession. In fact, many economists insist it won't. And they credit many of the virtues of the New Economy. It was, after all, enhanced productivity brought on by technological innovation that brought us the economic boom that is now slowing. And increased productivity may help the economy fend off some looming threats. Spikes in energy prices, for example, helped kick the economy into its last three recessions. Oil prices are soaring once again, but the U.S. economy is now able to produce twice as much output per unit of energy as it did 30 years ago, and the convergence of several digital technologies is allowing oil and gas companies to tap resources they couldn't even locate a few years ago.

The chipmakers and fiber networkers may have overproduced themselves into a slump in recent months, but the technologies they're bringing to market will help all sorts of Old Economy businesses, from oil to steel to automaking, operate more efficiently and profitably. That's not to say this New Economy is immune to downturns. We're seeing right now that it isn't. But it just may be better able than economies past to pull off a graceful landing, with growth that is less spectacular than we've seen in recent years but more sustainable.