Alan Murray
Alan Murray
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The Wealth of Choices: How the New Economy Puts Power in Your Hand & Money in Your Pocket
ISBN: 0812932668
The Wealth of Choices
It's Not Your Father's Economy . . .

If Adam Smith were to visit the United States today, he would be a very happy man. That invisible hand he made famous in The Wealth of Nations two centuries ago is more limber and supple than ever. Indeed, competition in the New Economy is so intense and uncompromising that everyone, even Fortune 500 giants, must bend to it. All of this competition has lead to a wealth of choices about every aspect of our lives—and a huge shift in how society works and who gets rewarded.

Alan Murray, the Washington bureau chief of The Wall Street Journal, shows how all of us can not only live in the New Economy, but thrive in it. The New Economy isn't just another buzz phrase, but an important change in our economic system, one that has meaning for everyone, not just the economic elite. It's creating a world in which all prices are fuzzy and everything is negotiable. If you know what you're doing, there are great gains to be made and great bargains to be had.

Starting with a thoughtful overview of how the New Economy works, Murray shows, chapter by chapter, what all of us can do to take advantage of the changes taking place in everything from health care to education to the workplace. The rules have changed—and Murray's smart advice may surprise you:

Health Care: The most potentially traumatic change in the New Economy will be in the relationship between you and your doctor. Murray explains what you need to know to be an effective consumer in this ever-changing market.

Education: The price of a good education has gone sky high. But your mind is your most important investment. Murray shows how to cut costs and cut deals that will help you grow.

Your Job: The revolution in the workplace means that you have to think of yourself as a brand. Murray shows how to compete and excel.

Personal Finance: Your father said avoid credit cards, but he never saw rates of 3.9 percent! Murray shows how you can turn the tables and use the insane competition between credit card companies to your advantage.

Investing: "Professional money manager" is an oxymoron. They don't know much more than you! Murray provides easy-to-use rules that will let you get great returns on your own.

Retirement: Old age isn't what it used to be. Murray explains why the traditional three-legged stool (social security, private pension, personal saving) is rickety—and what to do about it.

And much more, including websites that can help you navigate the wealth of choices, inside information on where the economy will go next, and a treasure trove of straightforward, concrete advice on thriving in a world where the consumer is king.

Anyone can talk about the New Economy. Alan Murray shows how to live in it. The Wealth of Choices is the first book that combines the big picture and the street-smart tactics that will help you to profit and live well.
—from the publisher's website

TRANSCRIPT
The Wealth of Choices
Program Air Date: September 17, 2000

BRIAN LAMB, HOST: Alan Murray, where did you get this idea to write a book called "The Wealth of Choices"?
Mr. ALAN MURRAY (Author, "The Wealth of Choices"): Well, Brian, two things came together at the same time. One was I recognized that we were in a period of economic changes, really, probably more dramatic than anything we've experienced in--in more than 100 years, since the ind--industrial revolution. But the other thing was I was in a bookstore one day, and I was looking at personal finance books and flipping through them, and I realized that none of them took int--into account the fact that we were in a period of such remarkable change.

They were, basically, saying the same things that they said 20 years ago, and it was so clear to me that this is not my father's economy; that my father's personal finance advice doesn't work anymore; that there needed to be some new rules, some new suggestions for the new economy..
LAMB: I want to show you and the audience, this is a thing called: A Quiz, Are You Ready for the New Economy? And you'll notice, right next to it, there is the number 150 with the circle around it.
Mr. MURRAY: That was your score?
LAMB: That was my score. We'll get it...
Mr. MURRAY: That's very good, Brian.
LAMB: We'll put it on the screen. Yeah. What does that mean?
Mr. MURRAY: That means that--that means that you are--you're--you get it; that--that 150 was a passing grade in my--in my calculation.
LAMB: You say, `If you score over 150 points, you're off to a good start. Score under 50, you'll need to read this book twice.'
Mr. MURRAY: Twice, yeah.
LAMB: So you want most people not to do well on that...
Mr. MURRAY: I--I--well, I'd like people to read it at least once. I think there are a few things in there that they'd pick up that would be helpful.
LAMB: How many questions? Do you remember?
Mr. MURRAY: I don't remember. You've got it in front of you.
LAMB: Well, let me read the first one.
Mr. MURRAY: OK, go ahead.
LAMB: The last time you--you--everybody should take this quiz, you say.
Mr. MURRAY: Yeah.
LAMB: `The last time you bought a car, where did you go first for information: A, Consumer Reports; B, a car broker; C, the Internet; or D, the local car dealer?'
Mr. MURRAY: All right, this is a--this is a perfect example that gets to the key of the new economy. It's all about information. And if you think about it, hierarchies have been built on control of information. The powerful people, the elite, the lucky ones had information the rest of us didn't. Today that's all been democratized; you have information. A--and the car-buying experience is a great way to look at how this has changed because 10 years ago, you went to buy a car, you were sitting across from a salesman or a saleswoman who had all the information, and you had very little. And they're talking about rust-proofing and undercoating, and--and you were pretty much at their mercy.

Today if you spend 15, 20 minutes doing your research, and it's very easy to do on the Internet, you go to that car dealer knowing what the dealer paid for the car, having some sense of what you're willing to pay for the car, what extras you want, what extras you don't want. You go with a lot more information, and that means you have more power.
LAMB: What's a guy who writes and talks about politics all the time doing writing a--a kind of a self-help book on how to make money?
Mr. MURRAY: Well, it's an interesting thing because a lot of journalists--i--implicit in your question, a lot of journalists may look down their noses a little bit at--at kind of self-help or `news you can use,' we call it. And--and--and that's really--that gets back to what we were talking about a minute ago. I mean, I had spent all this time writing about the economy, thinking about the economy, studying the economy. I had never done anything like this before. But it seemed to me that if--if--if the--if it was clear that the new economy a--empowered people, if--if it was clear that all the new sources of information--the Internet and so forth--gave you the power to be on a par with the elite, that--that--that I ought to take a stab at writing a book that showed people how to do that; that just laid out some simple rules here that said, `OK, here's how you can take advantage of this new world.'

It's a totally different world than the world you and I grew up in, and you do have to sort of have your head up and you do have to pay attention in order to make the most of it, but anybody can do it.
LAMB: Because you allude to it in the book, I'm going to ask you what do you think of Jim Glassman's book, "Dow 36,000." He sat right there and told us all about it.
Mr. MURRAY: Well, Jim Glassman is a good friend, but I'm not going to hold my breath until the Dow gets to 36,000. Look, it's a remarkable economy we're in. It's growing much faster than anyone even thought was possible a few years ago. Remember, only five years ago economists would say that you couldn't get unemployment below 6 percent without causing inflation, and here we are at 4 percent. We've been there for some time, and inflation's not going up.

So it's a--it--it's clearly a very different world, and that different world is reflected in higher stock prices already. But to think that we can get from 10,000 or 11,000 to 36,000 in four years is--is, I think, overdoing it. There's a natural human tendency, when times are good, to think that the good times are going to last indefinitely, and while I think the economy has changed, human nature hasn't.
LAMB: What's your full-time job?
Mr. MURRAY: My full-time job is the Washington bureau chief for The Wall Street Journal. I--I coordinate all our coverage out of Washington. We've got--as you know, we've got about 40 reporters here in Washington, who cover the waterfront.
LAMB: How long have you done it?
Mr. MURRAY: I've been doing it for seven years.
LAMB: What's the job itself like?
Mr. MURRAY: A lot of time talking to very talented reporters about how to focus stories, how to go after stories. It's the nature of The Wall Street Journal, because most of our readers get news from other sources before they get to us--most of them subscribe to a big, metro paper. Most of them may watch you, watch other news on television. They may hear the news on the radio. By the time they get to us, they've got the basic who, what, when, where of the news. And what we have to do is really work on making sure we're providing some kind of added value in terms of analysis, in terms of the way we approach a story. And so a lot of time is spent thinking about how you go after the news. And what is the approach we want to take, and what is the analysis we want to provide? And that's what I do.
LAMB: One of the things you point out in the book is that The Wall Street Journal has done pretty well with their Internet business, compared to The New York Times, which is all ad supported. Explain that.
Mr. MURRAY: Sure.
LAMB: And why do you think--how many subscribers does The Wall Street Journal have right now?
Mr. MURRAY: Well, we have around 400,000 subscribers. The New York Times claims--jeez, I--the last numbers I saw, they were over seven million, eight million registered users. But the difference is--and--and it really points out an interesting facet of the Internet. The difference is our subscribers pay to sup--to--to get news over the Internet.
LAMB: Do you remember how much that is?
Mr. MURRAY: It's somewhere around $60 a year. So they pay. We're probably the only news organization that is actually requiring people to pay, but there are 400,000 people who've been willing to turn over their credit card numbers and do it. The New York Times is taking more of the traditional Internet approach, which is the--the--the key to success on the Internet is getting lots of eyeballs, so they're very proud of the fact that they have these seven million or eight million users, although I have to say I know I personally am at least eight of those users because every time I go, I register again because I can't remember my password.

But the i--the idea of Web sites like The Times is that by getting lots of users, they will become a popular place on the Internet, and they can eventually monetize that by selling other services, ads--ads or whatever. So it's--it's two very different models of how you use the Internet. Ours is much more traditional; you still pay for the information. Theirs is much more of a new Internet model that you--you ho--you--you provide it free, but hope that you can eventually, through advertising and other means, convert it into revenue.
LAMB: Near the end of your book, you say you bought 200 shares of MicroStrategies. You know why I'm asking you this.
Mr. MURRAY: You must have been--you invested in it yourself.
LAMB: I--I did not. But what did you pay for them?
Mr. MURRAY: I bought--this was when I was working on the book. I was doing some research, and I--I--I met Mike Saylor, who runs MicroStrategies--struck me that that was a very interesting company, right on the cutting edge of where Internet businesses were going, because what he does is provide software that can--that can mine these giant databases and pull up useful information, which is exactly what most Internet companies now need. So--and I thought he was a smart guy, and so I bought 200 shares of the stock at $30 apiece, and five months later they had split, so I had 400 shares of stock and they were worth $300 apiece for a very brief time.
LAMB: And today--I don't know what it is today...
Mr. MURRAY: Today they're...
LAMB: ...but they went down to $21 at one point.
Mr. MURRAY: Yeah. Today they're pretty much back down to where they were when I bought them last August. So I think it's a...
LAMB: What does that say about the new economy?
Mr. MURRAY: I think it tells you a couple of things. One is that even though we are in a revolutionary economic period, it doesn't justify ridiculous stock values. MicroStrategy stock never had any business b--being at $300 a share, although I'm happy to say I sold some of my shares at that price. So I--I--I think that the enthusiasm about the new economy clearly got out of hand in some of these stock prices that you saw.
LAMB: What do you think about the--I know one of your chapters in here is on privacy, and people constantly need help to say, `I'm tired of getting those phone calls at 7:00 at night pitching me something, right in the middle of dinner.'
Mr. MURRAY: Right.
LAMB: What do you do about those things?
Mr. MURRAY: Well, as you know, I--in the book, I suggest several steps that you can take to protect yourself from--from those concerns. But I think it's a big issue, and I--I think it's going to be a--an issue that Congress is going to have to deal with in the next couple of years. I mean, the amount of...
LAMB: Well, what can you do?
Mr. MURRAY: Well, there are a couple of things you could do. On the telephone calls, you can actually write to the Direct Marketing Association, and I have the address in the book. You can ask that you be taken off the list. When you get a call, you can also demand that you be taken off their call list. In most cases, they are required by law to do so when you ask.

But then there's some other very simple things you can do that I suggest in the book--for instance--to protect your privacy more generally. For instance, when you buy a new product, you get a product registration card. You're made to feel like you'd better fill that card out, or something bad will happen. Well, the truth is that's just one more method of data collection by the company. If you don't want them to have that data, just don't fill it out, don't send the card in. And there are a number--number of other--there are a couple of services, one provided by a company called Anonymizer, that can help you protect yourself on the Web. There are a lot of things you can do, but I think, ultimately, that there's probably going to have to be some--some legislation as well.
LAMB: Now you d--brought some of your friends in on this. I mean, Ken Bacon, who's the spokesman over at the Pentagon, we now know what he made on a house. How did you do that? And, tell me, why did you do it?
Mr. MURRAY: Well, one of the reasons I wrote this book was because this new economy that we are in developed over the last 20 years, a--a period during which I was spending my time writing about, researching, thinking about the economy. And I decided the best way to describe what had happened over the last 20 years was to--was to use my own experiences over that period: the people I had met, I had interviewed or people who I just knew, friends, who had--who had--who had lived through some of that. So it is a very personal book, which made it fun for me to write; I hope makes it fun to read as well.
LAMB: Did you have to get Ken Bacon's permission?
Mr. MURRAY: Oh, I--yeah, sure. I talked to Ken. Ken was very helpful.
LAMB: And what did you tell us about Ken Bacon in your book?
Mr. MURRAY: Well, Ken w--one of the points I make in the book: One of the things that is different today about the world that many of us grew up in is the lack of inflation. If you pick up almost any personal finance book on the shelves today and--and go to the section on home mortgages, it--they--it will tell you, `Get a big home mortgage,' you know. Mortgage--get the biggest mortgage you can carry because it's a great deal because you get to write off the interest.

Well, in fact, that was good advice 10, 15 years ago when inflation was running at high rates because inflation boosted the value of the house, and at the same time you got to write off the interest on your taxes. And I used Ken Bacon as--as an example of that. He bought a house in--in Washington in the early 1970s and watched--over that period of inflation, watched this remarkable rise in the value of that house, which--which made the--the mortgage justified many times over. That's not the world we live in today. It's a very different world. You have to think about home buying differently. You can't assume that inflation is going to bail you out the way it did in the '70s and even in the '80s.
LAMB: You tell us your wife used to work for Nancy Kassebaum.
Mr. MURRAY: Mm-hmm. Eight years she worked for Nancy Kassebaum.
LAMB: What'd she do for her?
Mr. MURRAY: She d--was her foreign policy adviser, did all her foreign policy work; was the only person on Nancy Kassebaum's staff who didn't come from the state of Kansas, but she didn't--she didn't tell too many of the constituents that.
LAMB: Where did you meet her, your wife?
Mr. MURRAY: I met her here.
LAMB: And then that led to Nancy Kassebaum inviting you to speak to a group?
Mr. MURRAY: There was a--I tell the story in the book of speaking to a--the US-Turkish Business Council, and it was a--which Nancy Kassebaum asked me to speak to. This was about a year and a half ago. I sh--I showed up at this dinner; there were about 600 people there. And it was probably the noisiest dinner I had ever been at. And when the master of ceremonies started to speak, the people at the dinner continued to talk and clank their dishes. And I thought, `Oh, my gosh, what have I gotten myself into?'

But then I stood up, and I started to talk about this new economy and--and how it had changed so much from 10 or 15 years ago. And I used the metaphor of the Istanbul bazaar. Have you ever been at the bazaar in Istanbul? I mean, in a way, that's what the world has become. It's become a global version of that bazaar, where you have this wonderful cornucopia of--of goods and services available to you, and you have the power to choose. You have to have to haggle. You have to take care of yourself. You can't assume that the person who's selling you something is going to give you a good price. But if you don't like the price, you can step to the next booth and find somebody else to tell it--to sell it to you, and that's what the world's become like.

It--just let me give you one little example. It--it is remarkable--one of the things I learned researching this book is that prices in today's world are no longer fixed anywhere. You walk into a store on the streets here in Washington, they know that the--the watches they sell or the cameras they sell are available on the Internet at much lower prices, and if you push them, more often than not they will negotiate with you. That's a big change from 10 years ago or 15 years ago. Hotels--if you go into a hotel, you should just make it a practice to always say--when they tell you that the room rate's $150, say, `Hey, can't you give me a better rate than that? Don't you have some sort of a better deal?' More often than not, they will be able to come up with some sort of a discount or some sort of a special program you--you qualify for.

The key for businesses in this new economy is price discrimination. You get the most you can get from people who are willing to pay, but if people insist on a bargain, you give it to them because you know they have choices, you know they can go someplace else and find somebody who will--who will sell to them at that lower price.
LAMB: Has all this changed journalism? Has it changed...
Mr. MURRAY: Sure.
LAMB: ...the way journalists themselves live with all this?
Mr. MURRAY: Oh, su...
LAMB: I mean, are they more interested in money than they used to be?
Mr. MURRAY: Oh, well, I--I was y--probably. Probably so. I mean, what--one of the--what's happened here is that more and more aspects of our lives have been subject to the marketplace. The marketplace permeates everything, e--even things like health care. Health care didn't--health-care services did not used to be something you consumed. You simply went to your doctor, your doctor told you what was wrong, you did what he or she told you to. Today you--you make choices about what health plan you're going to be in. If you're going to have a major operation, you should research the hosp--potential hospitals. So all of us have been forced to become much more conscious of the marketplace because it affects so many more parts of our lives.

But you asked about journalists. I mean, you're a--a great example of this. Look at television. You know, when--when I was growing up--when I was growing up, you had the--the--the--I mean, the choice in television was VHF or UHF, That was pretty much it. Now you have all these cable channels that give you s--a much wider variety of choice; many more ways to receive your news, whether you want to receive it from radio, radio talk shows, television, whether you want to experience the--the debate on the floor of--of the House of Representatives firsthand through C-SPAN. It's just a--a--a multiplication of the choices you have as an individual, and--and that's a metaphor for what's happened in every area.
LAMB: What year did you--well, first of all, where--what town did you grow up in?
Mr. MURRAY: I grew up in--in Tennessee on Lookout Mountain; Lookout Mountain, Tennessee.
LAMB: Chattanooga.
Mr. MURRAY: Uh-huh, right outside of Chattanooga.
LAMB: And what were your parents doing then?
Mr. MURRAY: My father, at that time, was a--he moved to Ch--he worked for Westinghouse for many years, moved to Chattanooga as a sales representative for We--Westinghouse, left his job and--and went into business for himself as a--a industrial representative selling electrical goods to big utility companies.
LAMB: And your mom.
Mr. MURRAY: She was not working when I was young, but then went--later went back to work as a--as a teacher, a guidance counselor, in the city's schools, something she still does.
LAMB: Is your father still alive?
Mr. MURRAY: No. My father died two years ago.
LAMB: You mentioned your brother, Lee, in the book.
Mr. MURRAY: Uh-huh.
LAMB: Where is he?
Mr. MURRAY: He's in Tennessee as well. He works for the Chamber of Commerce in Chattanooga.
LAMB: And you left Chattanooga--What?--early '70s to go to the University of North Carolina.
Mr. MURRAY: That's right, 19...
LAMB: Why? Why North Carolina?
Mr. MURRAY: I--actually I went to North Carolina because there's a wonderful scholarship program called the Moorehead Scholarship that--that takes people to the University of North Carolina on a full scholarship. It's a wonderful program set up by John Motley Moorehead, designed to attract people to the University of North Carolina, and that was enough to--to get me there.
LAMB: Studied what?
Mr. MURRAY: I studied English, literature; didn't study any economics as an undergraduate at all, just--just literature.
LAMB: What year did you get out of UNC?
Mr. MURRAY: 1977.
LAMB: Then did what?
Mr. MURRAY: Then I went back to Chattanooga and worked for the Chattanooga Times for a couple of years, before going off to graduate school, then in economics.
LAMB: Who owned the Times then?
Mr. MURRAY: It was owned by the s--the Sulzberger family, which is the family that also owns The New York Times. It wasn't actually owned by The New York Times Co., but takes great pride--or took great pride in the fact that it was the parent paper of The New York Times. Adolph Ochs, back in the--in the 19th century, ran the Chattanooga Times, then left Chattanooga, moved to New York, bought The New York Times and refashioned it in the model of the Chattanooga paper.
LAMB: Do you remember what your education cost you back then?
Mr. MURRAY: Well, it didn't cost me anything, thanks to John Motley Moorehead, but...
LAMB: What would it have cost?
Mr. MURRAY: ...but out-of-state tuition at the University of North Carolina than was maybe a couple thousand dollars a year.
LAMB: 'Cause you refer to one school on here that today would--I think you put a figure of something like $65,000 a year that it would cost for everything.
Mr. MURRAY: It's a--it's a huge expense, and it's a real paradox. One of the things that's clear about this new economy is that education and knowledge are more valuable than ever before. The returns to education--if--if you're a--if you're a woman in today's society, for instance, with a college education, you will, on average, make double what women without college educations make. So it's an enormous difference, bigger than it's ever been before. And so you cannot--you cannot go wrong by investing in your own education, but having said that, it's not easy to come up with $65,000 a year to put yourself or your children through college. And so I devote a substantial part of that book--I have a chapter in the book about some of the new--new methods that are available to try and help finance that.
LAMB: Amanda and Lucy Anne, your daughters are how old?
Mr. MURRAY: They are eight and 10.
LAMB: Be--because you discussed it in there, are you doing anything for their college education now?
Mr. MURRAY: I have saving--savings accounts for both of them, which I contribute to--I contribute to regularly.
LAMB: What are your options if you're a parent?
Mr. MURRAY: Well, one of the most interesting new options, and I think this will be expanding in the years to come, are these tax-preferred state savings accounts. A lot of states have them. You can put money into an account--in some cases, the account is run by Fidelity or a big investment house--can put money in it, you can escape state taxes and you can save towards tuition at any college in the state. Very attractive--very attractive programs. And there's some talk in Congress, as I'm--I'm sure you know, about expanding those so they also apply to private schools as well.

So I think--I think one of the things that we are likely to see happen over the next few years is an expansion of these tax-preferred savings accounts for education, precisely because it's so expensive, on the one hand, but so important on the other.
LAMB: Three women in your family and you?
Mr. MURRAY: Well, and that's--you're not counting the dog and the turtle. The--the dog is definitely female. The turtle, I assume, is a female, although I haven't quite figured out how you'd...
LAMB: What are your daughters like? What do--what--what--are they different in any way?
Mr. MURRAY: Oh, yeah. They're--they're--they are--are--are both voracious readers. They look--they look a lot alike, but they're remarkably different in some other ways. They're...
LAMB: What is your wife doing now?
Mr. MURRAY: She's doing some consulting with the Pentagon, but mostly is at home--home--at home with the kids.
LAMB: Are your daughters on the Internet?
Mr. MURRAY: My oldest daughter particularly likes to send e-mail to her friends, and they spend some time on the--on the Internet. We don't encourage them to spend a lot of time on the Internet. I mean, one of the--one of the--and I have a chapter about this in the book as well. I mean, one of the problems with the Internet is that it's totally unfiltered, unscreened. I mean, there's a lot of stuff out there that you really don't want to expose little kids to. Now there's some--there's some ways to deal with that. America Online has a very good family-friendly filter that you can use, and there's some other methods of--of doing that as well.
LAMB: As you sit here today and think about the book and--and the Internet and all this new economy, does the government have a role to play? Is there things that you think need to be done by the Congress, by the president?
Mr. MURRAY: Yeah. I--in fact, one of the things, when you're dealing with an issue like privacy, for instance, you realize that it has to be dealt with in Washington. It ca--the--it--it's an issue that cannot be dealt with by the individual businesses because the whole--the whole problem is--is not dealing with the vast majority of firms that you know are going to act or respect your privacy, but how you deal with the outlier. It can't be dealt wi--dealt with on a state-by-state basis because you're talking about a world where information is just flowing across state borders and, really, even national borders sort of at a phenomenal rate.

So privacy is an example of the kind of issue that's going to have to be sorted out in--in Washington. I think the taxation issue is another one. As you know, it's an issue over whether you collect sales taxes over the Internet. Eventually states either have to be able to collect sales taxes over the Internet, or they'll have to come up with a new way of financing themselves, maybe property taxes or income taxes or something. If we are going to collect sales taxes over the Internet, then there has to be some sort of national standard because you can't expect little Internet companies to deal with 50 different state tax regimes. So I think you can see a number of--of places where the new economy is posing big policy issues for Washington.
LAMB: After the Chattanooga Times, you went where and in what year?
Mr. MURRAY: Well, I--I--I went to graduate school at the London School of Economics in 1979 and got my masters degree in economics there.
LAMB: Is there a philosophy that they teach you, a political philosophy, at the London School?
Mr. MURRAY: Well, it was--I was there at an interesting time because the economics program itself has traditionally been a pretty conservative program. It was the--it was the antidote to Keynes at Cambridge. This was sort of classical economics. But surrounding that economics program is a very active political program, which is--ha--was then very left-leaning and, among many of the students, really radical. You know, I came from the University of North Carolina, where--which is a very social school, a lot of clubs--a lot of fraternities, clubs, where people got together for a good time.

At the London School of Economics, there was something like 50 clubs, all of them political, and they started--the most conservative was a "Labor Party" club, and then they shot off to the left from there. There were--there were--I saw the signs in the hallways of--of three groups that would gather each year to celebrate Stalin's birthday, and there was another group that was devoted to the recognition of Albania. So it was a--a, politically, very radical, charged place. But in the midst of all that torment was this economics program that was based in classical, pre-Keynesian economics.
LAMB: What impact did all that have on you?
Mr. MURRAY: Oh, well, it was a very difficult year and a very rigorous education in classical economics, and--and it--it's really where I began to understand the extraordinary power of--of the marketplace, how markets can be applied to deal with many different human situations.
LAMB: And where was Margaret Thatcher when you were over there?
Mr. MURRAY: Margaret Thatcher had just taken over. She wasn't very popular at the London School of Economics because she had cut a lot of the subsidies--a lot of the subsidies to the schools. And I don't think anyone at that point understood the degree to which she was the front end of this revolution that we're talking about. It's really Margaret Thatcher's policies followed by Ronald Reagan that--that put into place the kind of market-oriented policies that allowed this economic revolution to take place.
LAMB: In '79, you were how old?
Mr. MURRAY: I would been about 24.
LAMB: So you have your master's from London School of Economics.
Mr. MURRAY: That's right.
LAMB: And then you went where?
Mr. MURRAY: I came back h--here to Washington and went to work for the Congressional Quarterly covering Congress.
LAMB: What's your goal at that point?
Mr. MURRAY: I was in--I was interested in journalism; was planning to stay in journalism; was in interested in--in writing about economics, the economy and how the economy affected--affected people. I don't think I quite had it in my head that The Wall Street Journal was the only place to be, but I had certainly thought about it.
LAMB: Did you have an economic point of view at that point?
Mr. MURRAY: I don't think so. I don't think I had a strong economic point of view. I wa--was certainly interested in economics as a way of looking at social issues and social problems. I didn't come at this as a business reporter. I was not--that was not first and foremost my interest. I was interested in how markets and economics could be used to affect society and--and living standards and people.
LAMB: You name the number one person in this town for a good quote in the economics world back there when you were a reporter.
Mr. MURRAY: The number one person in town for a good quote. It was not Alan Greenspan.
LAMB: Well, no, you said it. He was always the--the...
Mr. MURRAY: He was...
LAMB: He was the man to talk to, though.
Mr. MURRAY: I--I used to talk to Alan Greenspan all the time for wisdom.
LAMB: That's what I meant, not quote, and I said...
Mr. MURRAY: For wisdom. Green...
LAMB: What was he doing then?
Mr. MURRAY: He was--he had his own consulting firm, Townsend-Greenspan. And I--when I first joined The Wall Street Journal, which would have been in 1983, I had to write all the little economic reports that came out of the government: Durable goods went up; consumer spending went down. And I was handed a list of economists to call to talk to and to get quotes. And what I discovered was most of them were very ready and willing to give me a--a quick quote if that's what I needed, but if I was really confused about what was going on in the economy, Alan Greenspan, by far, was the best person to go to.
LAMB: By the way, where did you get this picture taken?
Mr. MURRAY: It was in New York at a--a--a long session at a studio. I don't know if you've ever been through one of those photography sessions, but it was an unusual experience.
LAMB: And back to the--the Alan Greenspan days, did you know at the time that he would play such a role in the country?
Mr. MURRAY: No, no. I had no idea. I--I mean, he had--of course, had already been the chairman of the--of President Ford's Council of Economic Advisors, and he was, even then, a very close adviser to--to the Reagan administration; was frequently brought in to discuss policy issues and so forth. But I--I did know--certainly didn't know that he was going to become chairman of the Federal Reserve, and I don't think anyone then could have imagined the remarkable period of economic growth that his chairmanship would bring about.

I mean, remember--remember, Brian, you know, 10 years ago, we were reading books like Paul Kennedy's "The Rise and Fall of Great Nations" that was predicting that the United States was on the backside of the power curve; that we were somehow in an inevitable period of decline and that Japan was going to take our place. There was another book called "Japan as Number One." Or later, people would say China was going to be the economic powerhouse of the next century.

Well, here we are in the next century, and it's clear, more than ever before, that the rest of the world is looking to us to see where the economy of the future is going.
LAMB: What's the difference between what we did as a country and what the others did?
Mr. MURRAY: I think it was an un--it was a--a understanding or a system that allowed not just for technological development, but for entrepreneurship that allowed for individual human beings to develop ideas into businesses. That's really the hallmark of the American economy, and that's a--that's a neat thing. I mean, think about all the science fiction that has been written over the last two centuries suggesting that technology was going to somehow be dehumanizing.

I--I reread not long ago "Brave New World," by Huxley or Fahren--remember the movie "Fahrenheit 451," "1984" by Orwell? All the--all this fiction which suggested that somehow technology was going to dehumanize us, that we were going to become slaves to technology, that it was going to become the mechanism by which human beings are devalued.

Instead, what's happened is the exact opposite. We live in a world where the thing of highest value is a creative, supple, human intelligence, where a smart person with a good idea can go out in this country and raise millions of dollars to create a new business. That's what Silicon Valley is all about. That's--that's a very exciting--a very exciting thing, and that's what we have.
LAMB: You say in the book that you got to know or become friends with Janet Yellen and Joseph Stiglitz and Larry Summers. How did that happen? What were the circumstances?
Mr. MURRAY: When I was at The Wall Street Journal in--in the mid-1980s, one of my editors said that we needed to write more about academic economists and that I should go out and find a story to do on academic economists. And so I talked to people in economics, people I knew. I said, `Point me to the--the best and the brightest, you know, the young--the rising young stars.' And those were--were three of the people who I ended up talking to and doing a--a front-page story on. And, of course...
LAMB: And they are?
Mr. MURRAY: Larry Summers is now the secretary of the Treasury in the Clinton administration. Janet Yellen was head of the--the Council of Economic Advisors, and Joe Stiglitz recently left his job as chief economist for the World Bank. None of them were involved in public policy at the time, but all of them have gotten involved since then.
LAMB: On the surface--and Alan Greenspan and a Larry Summers and a Janet Yellen and a Joe Stiglitz would be on opposite sides, certainly opposite sides to--to a Milton Friedman, as you talk about in your book a little bit. What's happened over the years to their theory of economics?
Mr. MURRAY: I--I--I think one of the things that's happened over the last 20 years is that all economists and all people, really, have come to recognize the power o--of free markets. You--you go back to the 1970s, and there was really still some ambivalence about our economic system vs., say, the Soviet economic system.

I--I read--in working on this book, I read John Kenneth Galbraith's book--I'm having a lapse here, Brian. What's--"The New Industrial"--"The New Industrial State," which was one of the most important books of the 1960s and 1970s, widely read, widely quoted. And it's--and it's interesting to see what Galbraith argues in that book. He argues that--that there really isn't a hu--wasn't a huge difference between the American economy and the Soviet economy; that the Soviet economy was a centrally planned, government-run economy, but that the American economy, he argued, had become a corporate planned economy--that big companies, like Ford, would decide what cars they were going to produce, would put them into train years in advance and then would advertise in order to make sure that the consumer demand was there for the cars that they wanted to buy. And he said, `Over time, we're going to recognize that these two things are really very similar and that there'll be some sort of a new synthesis.'

Well, it was a persuasive thesis at the time. In retrospect, it looks ridiculous. Now that's not what happened at all. What happened was that--that the American economy developed into a much more supple, much more of a real market economy.

You know, today--today the--the--the signals that go back and forth between the consumer and the producer have become so sophisticated--this shirt I have on is a good example. I designed this shirt myself. I went on the Internet, a place called Shirtcreations.com, I told them what kind of fabric I liked, I told them what kind of cuff I like, what kind of color I like, I--I put in my exact measurements and they made the shirt to order for me. That kind of power for the consumer is go--we're going to be doing that with cars soon, where you will go directly to Ford and you'll say, `This is the car I want, and these are the options I want and these are the options I don't want.' And they will make your car for you. That capability exists today.

So--so instead of moving towards a kind of a cumbersome, centrally planned economy, which is what Galbraith imagined, what has happened is that we've--we've--we've done Adam Smith one better. We've become a much more supple, sophisticated, flexible market, where consumers really can say, `This is what I want. This is what I'm willing to pay,' and they get it.
LAMB: One of the things you do in your book is name places, like Shirtcreations.com and other Web sites, where people can go and order things. Did you think that through? Are you worried about putting your name and kind of imprimatur on those organizations?
Mr. MURRAY: Well, I was very careful in who I sou--in who I selected to put--to put in the book. One of the problems of this information-rich society we live in is that not all information is created equal; that there's good information, and there's bad information. And I cite in the book a--a place called the National Vaccine Information Center, which sounds like a government site. It sounds--you know, if you go there, it looks like a very solid, respectable site. But, in fact, it was created by a group of people who--whose children had adverse reactions to childhood vaccinations and who are now on a campaign to convince people not to have their kids vaccinated.

And what--what, of course, you won't find anywhere on that site is--is the fact that the vast majority of doctors in today's world believe that vaccin--that the--that the benefits of vaccination far outweigh the costs. So there's sites like that that are clearly designed to misinform, and you do have to be careful where you get your information from. An--and I think I was pretty careful in deciding which places to put in the book.
LAMB: Who do you think's the best kind of person to read a book like this?
Mr. MURRAY: This book is--i--there are a lot of books that have been written for the experts, OK, the professional and new economy investor, the businessman. This book is not for the expert. This book is for the average person out there who understands that something revolutionary is happening in our economy and wants to know what it is and wants to know how to take advantage of it.
LAMB: There's a bunch of--on the back, some blurbs complimenting you on your book. One of them comes from Dave Gardner of the Motley Fool. You say some nice things in there about the Motley Fool. Tell their story. What came first, the story or the blurb?
Mr. MURRAY: Oh, the s--the story came first. All those blurbs came after the book was completed, and I sent them out to those people and asked them if they had something they'd be willing to say about the book.
LAMB: What's the Motley Fool story?
Mr. MURRAY: Motley Fool is a good example of the new economy because they're--what--what they--they're an investment service online, but what they are saying is you don't need a broker, you don't need a--a--you don't need to--a highly paid money manager or a mutual fund manager to handle your money; that you can do it yourself, and it's not that hard. It doesn't take that much effort. You just need to follow a few simple rules. And that's really what their service is all about, and that's also more broadly the point I make in this book.
LAMB: Where did they come from?
Mr. MURRAY: They--they came from--well, David Gardner, who was the--one of the Gardner brothers I knew, also went to the University of North Carolina, although about 10 years after I did. And when he first started this business, it was a--a newsletter, which he sent unsolicited to a number of people, including me. And so I saw the--the original Motley Fool newsletters, which were a combination of--of humor, criticism an--and investment advice. But then they discovered very quickly that they could take it online and made a deal with America Online, an--and the rest of it is--is history. They're a very successful online investment service, and a good one, too.
LAMB: What book is this for you?
Mr. MURRAY: This is my second.
LAMB: The first one?
Mr. MURRAY: First one is a book called "Showdown at Gucci Gulch," which is the story of the 1986 Tax Act and a look at how Congress operates or at least operated in 1986.
LAMB: Is that book still selling?
Mr. MURRAY: It's still selling quite well in university bookstores mostly. A lot of political science professors use it as an introduction to the legislative process.
LAMB: What's changed in those--all those years?
Mr. MURRAY: Oh, a lot's changed. Most of the--the--of course, most of the Tax Reform Act itself has been undone in the 14 years since then. But I guess the biggest and most disturbing change has been the way that partisanship has taken over everything in this--in Washington. You know, in 1986 you had strong partisans involved in the debate. Ronald Reagan was president. The Democrats controlled the House of Representatives. Dan Rostenkowski was the head of the Ways and Means Committee.

But you had a--a--a bunch of people working at the staff level who were actually always trying to bring those extremes together to a middle ground solution. And you had an amazing degree of comedy between Dan Rostenkowski and Ronald Reagan and Ronald Reagan's people. And a lot of that's broken down since then. I--it's become a much--much more partisan place. Republican staffs don't talk regularly to Democratic staffs. I mean, you know this better than I do. You watch it day after day after day. But it's a very different--it's a very different city than it was in 1986.
LAMB: Do you have any sense--and this is not an endorsement of one side or the other--I'm looking for--but any sense of which individual, George W. Bush or Al Gore, would be better for partisanship in the town?
Mr. MURRAY: If you listen to these two men, George W. Bush talks a lot more about the need to get over partisanship, the need to find bipartisan solutions, the need to change the culture of Washington. Now some of that is because he's the outsider. It's a little difficult for Al Gore to talk about changing the culture of Wa--Washington since he's been so much a part of that culture for the last 20 years. But at least in their rhetoric, George Bush is talking more about returning to an era of--of more comedy and more bipartisan cooperation.
LAMB: So going back to your book, if--somebody to buy this book, you know, take a...
Mr. MURRAY: Which I recommend.
LAMB: Yeah, I know. But take a couple of minutes to tell--tell--tell the audience what's in it that will be of use to them other than your views on the world.
Mr. MURRAY: OK. It's two things. First of all, a--a--a fairly compact, easy-to-read explanation of what the new economy is and how we got here. But then second are some very basic rules of the road that help you operate in that economy, whether you're talking about buying a--an education, health care, buying a car or a digital camera, a--saving for retirement. It addresses all those issues one by one and says, `Here's how the rules have changed. It's a new economy. You need new rules. Here they are.'
LAMB: But there are a lot of lists.
Mr. MURRAY: A lot of lists.
LAMB: Was that an idea--I mean, did you think about that s--specifically to make it easy to read?
Mr. MURRAY: Well, I talked it through with the publisher, an--and we felt that that was what people were looking for. If you're--if you were facing a major medical procedure, you can go to this book an--and say, `OK, here are the eight questions you need to ask yourself to make sure you're making the right choice.' If you are--as--as a consumer, you know, trying to decide whether you're--you're being taken advantage of or not in this new economy, you know, seven or eight simple questions you can ask yourself before making a major purchase that helped you know that you are doing the right thing.
LAMB: Go down...
Mr. MURRAY: Choices are...
LAMB: ...a number of things that you talk about. Now what would you recommend on retirement?
Mr. MURRAY: Retirement--the main thing you have to remember is that we are living longer than ever before, and as a result, you have to be pre--prepared for a much longer retirement. What does that mean? It means, first of all, you've got to save. You can't count on Social Security alone, and you should take advantage of every tax-preferred savings vehicle that is available to you. Amazing how few people do that. It--Brian, if--if--if somebody walks up to you on the street and offers you $500, the correct answer is, `Yes, thank you very much. I'll take that.' Well, the same thing is happening in the world of savings, and it's--it's almost criminal the number of people who aren't taking advantage of those savings opportunities which you will need when you retire.
LAMB: You talk about education. You say that 5 1/2 million people are in community colleges.
Mr. MURRAY: Community college...
LAMB: What's that--what are community colleges in the new economy?
Mr. MURRAY: Community colleges are actually one of the most interesting areas of the new economy because in many communities, they have worked closely with the local businesses to try and figure out what are the skill sets that are most valued by those businesses. They're more responsive to the marketplace, an--and so a lot of times, community colleges can be a wonderful place to--to improve--improve your skills.

An--and by the way, Brian, that is one of the--I talk about improving your skills. One of the key points--this is in chapter eight of this book--is that you really have to change the way you think about your career; that in the new economy, you constantly have to be working on upgrading your skills, upgrading your attractiveness, upgrading your value in the--in the marketplace.
LAMB: Buying stocks, what would you do?
Mr. MURRAY: Bu--buying stocks--first of all, it depends on how much time and energy you want to invest in it. If you don't want to invest a lot of time and energy, stock index funds are a good way to go. More often than not, you'll do better than the money managers by doing that.
LAMB: What about savings? You--you have some figures in here about how little Americans save.
Mr. MURRAY: It's--they're astonishing figures, and I also provide a link to SmartMoney.com, which has a little savings count--a little savings calculator that can help you figure out how much you need to save to achieve your goals in--in retirement.
LAMB: When you wrote this, there were 250 billionaires. I've seen a list somewhere. There's over 300 billionaires in the United States and 4 million millionaires in 1998. What impact does that have on it?
Mr. MURRAY: I--an amazing creation of wealth in a very--in a very short time. And one of the disturbing aspects of the new economy--I believe strongly on balance that the new economy is a good thing for the vast majority of people. But one of the disturbing aspects, as there has been a growing gap between the rich and the poor, both in this country and worldwide, rich nations and poor nations are farther apart than they were 20 or 30 years ago. I don't think that has to be so. I think there's some signs that it's starting to turn around in this country. But I think it is one of the di--dis--very disturbing side effects of what's been going on for the last couple of years.
LAMB: Did you change your mind about anything during this--writing of this book about how you live your own life?
Mr. MURRAY: Oh, yeah. Oh, yeah. I--I--I changed a lot of things. As I told you earlier, one of the things that I wasn't prepared for was the degree to which all prices have gone flexible in this economy, that you never pay the sticker price. I didn't know that. I wasn't aware of that. And it's changed--that has certainly changed the way I operate. I--I'm also increasingly convinced at the value of spending just a little bit of time using the Internet to do research before making any kind of a major purchase or an investment decision. It's just an awful lot of information out--available out there that can be incredibly useful.
LAMB: Early in your career, you took two trips--at least two. You took three basically. You went--one to Russia, one to Poland, one to Japan. What did--what were those about?
Mr. MURRAY: Well, the Russian trip--I went right after the collapse of the Communist Party. And, you know, I--I grew up at a time when we were still doing civil defense drills under our desks in elementary school because of the fear of the Russians. And it was an amazing thing to see what a basket case the centrally planned Russian economy was, to realize what a total failure the system had ultimately provided.

There was a joke in Moscow at the time I was there about the guy whose car broke down and he needed a new car, and he--so he called up and they said, `Yes, sir. We can bring you a--a car but it'll be on May the 5th of the year 2004.' And the guy says, `Well, could you make it in the afternoon? I have a plumber coming that morning.' It was sort of a--a sign of just the total collapse of--of that economy.

The Japanese experience was very different. Again, remember 10 years ago, there was a sense that maybe the Japanese had found the third way, that maybe the Japanese had discovered how you combine the ability of the government to direct an economy with the power of the marketplace in order to do something better than a more market-oriented system like ours could do.
LAMB: What about Poland?
Mr. MURRAY: And--and, of course, let me just say in the end it turned out to be wrong. The Japanese economy collapsed, and the Asian model was largely discredited in the late 1990s.

Poland--I was at Poland at the time when Poland was again trying to figure out how you take an economy that had been run as a Communist centrally planned economy for four decades and turn it into a capitalist economy. I thought before I went there that the Poles might be looking for a third way as well. Maybe there was some kind of a Swedish model that combined the--the bi--the--the power of the marketplace with some sort of more directed government role. But, in fact, I got there--Balcerowicz was--as finance minister--was leading the reform charge, and he said, quite bluntly to this delegation of American government officials, `There is no third way, and we're not interested in experimenting with a third way. We want capitalism.'
LAMB: What is your hunch? Everything that goes up's got to come down. So this thing isn't going to go on forever here in the United States. Or is it?
Mr. MURRAY: No, no, it won't go on forever. I mean, I--I--the market system has proven itself to be more powerful and more beneficial than any other alternatives, but that doesn't mean it's perfect.
LAMB: What's your hunch, though, that somebody will do--what will happen to change it?
Mr. MURRAY: I think what is--what may happen is that you begin to see the kind of reaction that you're seeing just the very begi--little stirrings of in the protests that went on at the Democratic convention in Los Angeles or at the Republican convention in Philadelphia or at the WTO meeting in Seattle. People saying, `Hey, folks, there are important things out there, whether it's the environment or whether it's human values, that can't be subjected to the marketplace,' and say, `Don't take this marketplace stuff too far.'

Every action has its reaction, and I think in those protests, you're seeing the very beginnings of a reaction to this intense market focus that--that we are now--now living in. But--but--but, boy, right now it's just very nascent and new, and most people are just coming to grips with the--the enormous benefits that this new economy is providing.
LAMB: In the back of your book in the--you thank a lot of people but Keith--is it Perine (pronounced Pur-rine)?
Mr. MURRAY: Perine (pronounced Pur-reen).
LAMB: Perine.
Mr. MURRAY: Yeah.
LAMB: Who you said wrote a considerable part of this book.
Mr. MURRAY: Yeah. He was my research assistant, worked on this for--for about a year, did a lot of the research, did the initial drafts of--of several of the chapters. He now works for The Industry Standard. He's a reporter for The Industry Standard. But he's--he's a very smart man.
LAMB: And who is the Neil Freeman that taught you the difference between the big picture and practical advice...
Mr. MURRAY: Neil Freeman is a television producer who put together a show in the late 1980s that I was involved in called "Money Politics." That was a--a talk show effort to deal with economic issues that arose in Washington. And he was really the first person who I talked to about trying to--to get across this barrier between those of us in journalism who wrote about the big picture and those who provided useful advice, news you could use; that there--there's no reason for there to be such a gulf between those two types of journalism; you ought to be able to do both in one place, as I've attempted to do in this book.
LAMB: Where can we see your writing now?
Mr. MURRAY: Well, I write--I write every month for SmartMoney magazine. I have a column that I co-author with Al Hunt. And I do the Outlook column in The Wall Street Journal periodically, every couple of months or so. But--but I spend most of my time--an awful lot of my time managing rather than writing.
LAMB: And when can we see you on television?
Mr. MURRAY: I am on CNBC twice a day, 6:15 in the morning and 10:50 in the morning. And then I also am regularly on PBS' "Washington Week in Review" on Friday evenings at 8:00.
LAMB: And to do the 6:15 in the morning on CNBC, what time do you get up?
Mr. MURRAY: Well, I get up at about 5 normally. When I was out in Los Angeles at the Democratic convention, I was getting up at 2 because of the time change. But I usually get up at about 5. I'm able to go to a studio--the NBC studio is just 10 minutes from my house, so I go there and I do my morning spot, and then I go home and get my little girls up and take them to school.
LAMB: And going to write another book?
Mr. MURRAY: I'm not going to do it right away. It's a--it's a lot of work to do that and do a full-time job at the same time. But--but--but I'm sure someday I will. It's fun. It's a nice--a nice opportunity.
LAMB: Washington bureau chief, The Wall Street Journal, Alan Murray, our guest. The book is called "The Wealth of Choices." Thank you very much.
Mr. MURRAY: Thank you, Brian.


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