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Memo To: Paul Volcker, former chairman, Federal Reserve Board

From: Jude Wanniski

Re: Top of the mountain

I’ve been thinking about the day I sat in your office at the Fed and you told me I was a visionary. Maybe you were kidding, but it was 1983, and I had just helped you find your way through the deflation of 1981-82, so I thought you were serious. But I didn’t really know anything about “visionaries” back then and did not feel comfortable with the idea. To me a “visionary” was someone who did not have his feet on the ground, but floated about in the stratosphere making off-the-wall predictions of things that would never happen. Don Quixote.

A few years later, I had my last one-on-one dinner with Bob Bartley, who you know just the other day retired as editorial-page editor of The Wall Street Journal, and he said something similar. Not that I was a “visionary,” but that my ideas on where he had to be were too far ahead of where he could take the editorial page. In other words, I might be absolutely correct, but the Journal was like a giant aircraft carrier that could not move and maneuver like a speedboat.

It was only then that I began to seriously think of how I was a visionary – a dreamer of impractical dreams – and what a difficult job it was going to be. I’d first had the sense that I could see further than anyone else in a narrow sector of political economics in May of 1974, after a relatively short meeting with Bob Mundell at his Georgetown hotel suite. I could see “2″ over here and “2″ over there and knew they would add to “4.” I was almost 38 years old at the time, and had spent most of those years trying to learn how the world worked – I was getting close, but I was still uncertain.

Mundell had added a few pieces to that jigsaw puzzle and I remember walking back to my hotel realizing that I probably knew more about the future of the world economy than anyone else, excepting Mundell. I had the exalted feeling that I had climbed to the mountain top and could look in every direction and see it all, knowing that everyone else in the world had a lower vantage point and could not see in every direction. For them, there would always be one little slice to obscure a total vision. In the 27 years that followed, Paul, I have to admit it has gotten harder and harder to fill that role, knowing I’ve climbed higher still and left others below who seem mystified at my predictions – including Mundell, who began to relax way back then, perhaps happy to have me carry the vision forward.

In every field of endeavor, there is someone at the top. Did you play “king of the mountain” when you were a kid? For a while, Michael Milken was on top of his mountain, seeing things nobody else could see. Ted Forstmann and Warren Buffett took their turns on top of the financial mountain. George Gilder is closest to being my kind of visionary, the first man to understand what was going on in the telecosm, not as an inventor, but as an analyst of all those who were in the process of inventing. He could see further than Bill Gates, for example, because he was determined to know what everyone in the business was doing in the infancy of this new technology, while Gates and all the others were single-mindedly pursuing their own sectoral ideas.

My quixotic training began, I’m certain, because my father was a conservative, a Catholic and a Democrat, and my mother’s father was an atheist and a communist. They were both generalists, though, “jacks of all trades,” who taught me the same lesson: That I could learn half of everything there is to learn of anything or anyone in one month but, if I wanted to learn the other half, I would have to spend the rest of my life on that one thing. Boring, huh? So I decided to learn half of everything in brief spurts of experience.

I had no idea when I set out on this path that it would make me a visionary. I just wanted to put all the pieces together to satisfy myself. I could see the deflation before you or anyone else could back in 1981 – and I was also alone in seeing it unfold beginning in 1997, first with the Asian crisis. But in the last several years, it was no longer 2+2=4. By wedding classical political theories with classical economic theories, I could see the future of civilization as being contingent upon a golden dollar standard as an anchor for world commerce and peace in the Middle East between Muslims and Jews. I told Jesse Helms in 1998 that he had to make an effort to understand why Muslim madmen were trying to blow up the World Trade Center, or others would come and bring down the towers. To me, it was 2+2=4, not a wild guess. I’m writing to you, Paul, because I think you are closer now to seeing that vision I had in your office almost 20 years ago. You may also see that if we could now fix the world’s money, it would in a serious way help pacify the political furies now loose on the planet.


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