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ASPEN, Colorado -- To Dale Jorgenson, the U.S. economy's recovery from ruin depends largely on one tiny but vital technology: microprocessors.
Jorgenson, the former president of the American Economic Association, said Monday that over the next few years, the United States will experience "a growth rate of about 4.1 percent if a two-year cycle in semiconductors continues, as Intel says it will."
If American chipmakers instead take three years to churn out better and faster products, Jorgenson said, U.S. gross domestic product will grow at a more sluggish 2.8 percent annually.
Jorgenson was speaking to about 200 people who gathered here this week for the Progress and Freedom Foundation's annual Aspen summit. While previous Aspen gatherings were notable for their enthusiasm for all things Internet -- with speakers lauding the "digital revolution" and forecasting a sunny dot-com future -- this year's tone is far more gloomy.
Even Jorgenson, known as something of an optimist, acknowledged that his upbeat analysis was based on minimal information: "We don't have any models that project the product cycle. We don't have any reliable means of making forecasts."
Bruce Mehlman, assistant secretary of commerce, argued that the death of the tech sector was greatly exaggerated -- but he nevertheless fretted over what might "turn an economic recession into an economic depression."
He said that the Bush administration is trying to thwart that in four ways: improving education for workers, fighting to preserve U.S. firms' access to global markets, increasing federal spending on research and development, and limiting onerous "taxation, regulation and litigation."
Mehlman, who previously was a lobbyist for Cisco Systems, said President Bush endorses "extending the moratorium on discriminatory Internet taxes" -- which is set to expire in October unless Congress votes to extend it.
Tom Siebel, chairman and CEO of Siebel Systems, offered one solution to limit the impact of U.S. businesses buying less software: Sell to governments instead.
Siebel said that hawking e-business software to government agencies is "one of the most exciting and rapidly growing" areas for his company, and "this will be the largest vertical market for us in five years." Siebel's biggest customers include the U.S. Postal Service, NASA, and the Navy's recruiting division.
France and other European countries with fat bureaucracies also top the list. Said Siebel: "In many cases, the more socialized the country, the better."
Selling to the government also means playing politics, which Siebel has done by opening a Washington office and even starting a political action committee. It's designed "to assist the election and re-election of representatives who are committed to increasing the quality of services at their organizations," he said.
Siebel disagreed with Hewlett-Packard CEO Carly Fiorina's remarks on Sunday, saying that he didn't believe that Congress must aggressively move to regulate the privacy practices of firms offering services online.
"I am absolutely certain that the technology will be there to solve the problem.... I don't see this privacy issue as an impediment," Siebel said.
Fiorina made headlines at last year's Aspen summit when she became one of the first technology CEOs to welcome far-reaching privacy rules.
On Sunday, she amplified her position, saying that "there is a role for legislation around consumer privacy (that creates) a minimal standard, a floor beyond which companies cannot go."
Critics in the audience were quick to point out that HP, largely a hardware vendor, wouldn't be as hurt by stringent government regulations as its competitors might be.
Fiorina also lauded government-industry "partnerships," and said that the public should demand products that offer "not just economic value to companies, but usefulness to consumers."
