Room for optimism
WSJ editor Wessel speaks at symposium
The Chinese have a fondness for naming things using numbers, David Wessel, the economics editor of the Wall Street Journal, told a Spokane audience Tuesday.
In a nod to that practice – and because he was stopping in Spokane on his way home from China – Wessel came up with “three challenges, three opportunities and three fears for America” for his keynote speech at Gonzaga University’s 23rd annual economics symposium.
The 59-year-old journalist oversees the Wall Street Journal’s coverage of economic trends, the macroeconomy and the Federal Reserve. He has shared in two Pulitzer Prizes and has written two New York Times best-selling books, the latest called “Red Ink: Inside the High Stakes Politics of the Federal Budget.”
• Wages have not risen, a problem that predates the recession. The typical American man working full time earns about $50,000 a year, less than the comparable man earned in 1987, he said. “This is a huge challenge to our country, to the survival of our middle class.”
• Our education system is broken. One in five Americans age 20 to 24 has not graduated from high school, Wessel said, dooming their chances of ever earning a decent wage.
• The country’s fiscal policy is unsustainable. The federal government spends 6 percent of its budget on interest on its debt, a figure that will surely rise. The cause is a lack of action by Congress, despite a lot of talk, he said, as well as “a fundamental disconnect” in the U.S. between the benefits Americans want the government to provide and the taxes they’re willing to pay.
• People are lining up to come to the United States, including some of the best and brightest from other countries. That’s unique in the world, he said. Wessel believes “we have a great opportunity in immigration.”
• Energy will be more readily available and cheaper in the U.S. in the future than it has been in the past.
• America has demonstrated “an enormous and impressive resilience” in coming through a horrible recession. The country’s economy has been growing for 15 quarters.
• The gap between winners and losers in society will widen. Wessel believes this gap partly explains the rise of the tea party, whose members “feel their world is deteriorating.”
• China. The country has had astonishing, sustained growth and has built an enviable infrastructure, he said. But the Chinese government, determined to leapfrog the West, will do anything to acquire know-how, including stealing it, Wessel said. “It’s such a big market, American companies have to be there. But if you’re there, they’re looking for your intellectual property.”
• A recessionary hangover in the form of a lack of willingness to take risks and innovate – by students, business people and banks.
Wessel said the economic situation isn’t dire; most mornings, he wakes up optimistic. He’d like to see more action by Congress, however, as well as less money in politics and real action on the deficit.
He ended his talk by addressing media mogul Rupert Murdoch’s 2007 acquisition of the Wall Street Journal. Despite fears of editorial meddling by the staff, Murdoch’s stewardship of the paper has been “a whole lot better than I feared,” Wessel said, adding, “I hope that’s true of the economy as well.”