In case you missed it, the U.S. economic recession ended this week. Now that wasn't so bad, was it? Depending on which macroeconomist you bump into at Starbucks, a recession is usually defined as two or more consecutive quarters of negative growth in the economy. And the end of recession is defined by two consecutive quarters of resumed economic growth. According to the National Bureau of Economic Research, which is the official arbiter of these things, last quarter the economy showed slightly positive growth, but this quarter, well we just started this quarter, so the economists all think I am jumping the gun by declaring the recession over. But I am not jumping the gun at all, just proposing a new way to measure these things. The recession is over because the Information Technology industry — the largest industry in the U.S. — has decided to fight terrorism.

Here is the way it works with economic booms and busts. First the booms: They are generally caused by investor exuberance either due to some technology fad or by an economic artifact of war. We had a telegraph boom, a railway boom, a telephone boom, an automobile boom, a computer boom, and an Internet boom. We also had booms not immediately but fairly soon after both world wars, and those booms were caused by an economic aberration — everybody owed us money. Busts happen when the fads turn out to be not as great as we thought and we realize that the fortune we were expecting to make in eucalyptus plantations or Web stocks just isn't going to happen. So we literally stop spending, shutting down the economy until some positive economic event comes along, usually a war.

President Bush keeps telling us we are at war against terrorism, hence the end of the recession.But hey, we've been warring against Bin Laden since September, so why did it take me until now to declare prosperity? Because of IT product cycles, which are six months long. It takes at least six months for the IT industry to shift gears, in this case from stuffing PCs into a mature market to fighting suicide bombers with bits and bytes.

The important thing to remember here is that Information Technology, which used to mean computers and punched cards, now means EVERYTHING. It is difficult to find an industry where IT doesn't form the largest cost component of whatever it is that they do. Take the automobile industry as an example. The single most expensive component in any car isn't the body, and isn't the engine and transmission. It is the wiring harness, which now costs up to $1,500 per vehicle. The wiring harness, which used to be just a way to turn on the headlights, is today a data network in your car, carrying multiplexed electrical signals, and soon, optical signals, too. And that is just one component. Then there is the engine management computer, the computer that runs the entertainment system, the computer for this and the computer for that — cars are filled today with an average of eight computers, each. The PowerPC processors are a success not because they power so many Macintoshes, but because they power so many cars.

That's the IT in the car, but what about the IT required to make the car and sell it? Again, we are talking about the single greatest expense, just keeping track of all those widgets and defects and customer preferences. Car companies spend more money on IT than on anything else. And so does every other industry. Health care is more about IT through diagnostics, record-keeping, and financial communication and billing, than it is about anything else. Ditto energy, telecommunications, you name it.

So IT has become our economic bellweather. And just as Charles E. Wilson, the former head of General Motors and Secretary of Defense under President Dwight Eisenhower, told a Senate subcommittee in the 1950s, "What is good for the country is good for General Motors, and what's good for General Motors is good for the country." Well, that rash and self-serving statement pretty much covers IT, too.

But the difference between IT in this decade and automobiles half a century ago is the product cycle. It takes a decade to shift from gas guzzlers to minivans, but the IT industry can reshuffle its bits in only six months. The mineshaft canaries of the IT industry are the startups, which tend to lead by growing in a particular direction and by dying-off in directions that no longer seem to be working. And more and more, the startups I am hearing about have to do with security — not just data security, NATIONAL security. Get ready for a feeding frenzy built on using Information Technology to save us from unnamed bad guys. Loyalty oaths to follow.

My perennial favorite startup is Oxford Microdevices, where Steve Morton does a better job than anyone of twisting his technology to meet some pressing national need. And Steve is representative of at least a thousand other companies operating right now and aiming at that same emerging market.

This week, Steve is pushing a number of security initiatives based around networking and digitizing America's 10 million video security cameras, turning them from, well, cameras, into a frigging supercomputer. Want to find anyone, anywhere? Steve suggests iris scanning, literally using security cameras to identify the iris (the external colored part) of everyone's eyes. Irises are unique, like fingerprints, and they can be easily scanned through dark glasses and contact lenses. First, make those 10 million cameras intelligent, then program them all to find a certain iris, and how long do you think it would take to find that person? Not long at all. Buy gas, visit a convenience store, go to the bank, walk through an airport or bus station, and you are busted. If it isn't iris scanning, it will be something else, like those GPS chips that are about to go into every mobile phone.

If you think this kind of thing isn't going to happen, you are simply naive. The Bush Administration is eager to pay for it, and industry is eager to build it. Tens of billions of dollars are going right now into new security initiatives based on IT. Heck, Larry Ellison smells so much money he has completely reengineered his company to take advantage. And remember Microsoft's "trustworthy computing?"

While chilling in its potential impact on personal freedom, this trend does have some positive aspects. Certainly, there is the dollars and cents side, where today's anti-terrorism spending is exactly analogous to the retooling of the U.S. defense establishment just prior to World War II, which finally pulled us out of the Great Depression. The recession is over, by golly, no doubt about it. And while all this new technology probably won't end terrorism, it will make it easier to stop individual terrorists provided we know in advance who they are, which will be used as an excuse to gather more data about more people than J. Edgar Hoover could ever have imagined on his happiest day wearing his prettiest dress. Certainly, it will help find deadbeat dads and kids who are presently pictured on milk cartons. Manhunts are going to become mere database searches. It will change our lives forever.

Trying to put a positive spin on it, where we are headed is back to village life, where everyone knew everyone else's business. Only this will be a digital village where those with money and power will know what they want to know and where our best defense is probably to join in, trying to make all the data available to everyone. This is because the alternative of opting-out really isn't going to be an alternative much longer.

If thy right eye doth offend you, then pluck it out.