David Levy - Vice President
Published June 1, 1998 | June 1998 issue
By Bob Davis and David Wessel
Two top-notch, national journalists, Bob Davis and David Wessel, have co-authored the book Prosperity, which argues that in the U.S. economy, over the next generation at least, living standards for the great middle class will improve markedly, and, at the same time, income inequality will narrow. This will happen, they say, because of the productivity gains that are slowly but clearly manifesting themselves, extensions of the information technology revolution, global competition and revolutionary changes in educationmost notably at the community college level.
It's a positive story they tell, making it unique. Typically, book length efforts of this sort tend toward rather dark projections of pending doom; Davis and Wessel see instead a boom that will flow from today's economic circumstance. They urge the reader to understand that economic effects of this sort take time and generally have a considerable lag to the corresponding cause. Electricity is an earlier example and parallel in American history. Eventually, it had an unfathomable effect on productivity.
Mercifully, both authors are journalists for the Wall Street Journal and that has put them in the habit of writing in the vernacular. Prosperity is at all times comprehensible, intelligent and certainly not dumbed-down for the mass market. It's full of the authors' observations gathered as national correspondents; it feels informed at the highest level, giving the book yet another unique quality.
In the final chapter the authors argue that the federal government could help ensure the coming middle class prosperity. This should bring everyone with libertarian sympathies to the edge of their seats. Take a breath, their recommendations to the government urge: Never take your eye off the productivity ball. That is, government involvement in the marketplace should concentrate sharply on encouraging ever greater productivity. It's a prescription free-marketers can live with, more or less.
To the Federal Reserve, Prosperity is an especially interesting book. Certainly that's so because of its thesis regarding productivity-based economic growth, but also because one of its authors, David Wessel, is a chief economic correspondent for the Wall Street Journal, where, among other things, his beat is the Fed.
The Federal Reserve has many interpreters. Some have talk shows, others are working journalists, and the rest range from those conducting mock Federal Open Market Committee meetings to the guys at the local Chat n' Chew cafe. Among these interpreters, few are more respected at the highest levels within the Fed than David Wessel. So when Wessel writes a book, we pay attention. Especially when that book contains a chapter on the Federal Reserve. (In Minneapolis, it was recommended reading for senior officers and directors.)
Wessel's Federal Reserve chapter is aptly titled: "Alan Greenspan, Optimist at the Top: Why the Fed won't be an obstacle to faster growth." (The terms Greenspan and Federal Reserve are used almost synonymously by Wessel, as he points out, "What matters more than anything else at the Fed is what the chairman thinks, even though other top Fed officials legally could outvote him.") The Fed/Greenspan represents America's greatest concentration of economic power and should it/he make the wrong policy choices, then the coming prosperity could be endangered, says Wessel. That won't happen, (although the naysayers imagine it will) because Greenspan is essentially optimistic about the economy and he sees gains in productivity not unlike the projections of the book's authors. The economy, like a massive ocean liner that can't sink, is moving in the proper direction, and Greenspan will not change its course, even though he has the power to do so. And don't worry, if President Clinton selects another chairman before his term expires, it's also well within the institution's ethos to stay the course. Greenspan's legacy will live on.
Sprinkled throughout the Greenspan chapter are a few otherwise unknown anecdotes about the chairman. On the surface these personal notes have no connection to the book's argument or the chairman's economic compass, but they do suggest that Wessel takes a holistic approach to his Fed beat and is interested in the man as well as his policies. For instance, speaking of Greenspan's new bride, Wessel says, "When a Steinway piano, a wedding gift from Andrea Mitchell's parents, was delivered, she was on the other side of the world, covering the travels of the Secretary of State. He telephoned her, placed the receiver near the piano, and played a tune so she could hear it." Also, we learn of the chairman's method (perhaps meditative) to soak up "numbers-laden Fed-staff reports." It happens in the bathtub before going to work.
Those who have followed Wessel's byline might know that he shared a Pulitzer Prize in 1984 for a series of Boston Globe stories on the persistence of racism in Boston. Last year, the Washingtonian magazine put Wessel among the top 50 journalists in Washington, which had the effect of "pleasing his parents to no end." Wessel landed his current beat, including the Fed, on the day the stock market crashed in October 1987, and to that he formally "denies any connection between the two events and is prepared to testify to that before any grand jury." If there is any information to the contrary, it hasn't leaked.
One last note. So much can be gleaned from a perusal of a book's notes. Regarding the Greenspan chapter, we spotted a Region citation. We now know where Greenspan does some of his reading; we wonder where Wessel reads The Region.