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The Conference Board Review® Article
Worth Noting
King of the Club
Richard Grasso and the Survival of the New York Stock Exchange
By Charles Gasparino
Collins, $27.95
Will the Little Guy in the Dark Suit be remembered for his extraordinary efforts in putting the New York Stock Exchange back in business after 9/11, or for a compensation package that became a scandal? You'll likely find an answer in King of the Club, in which business journalist Gasparino profiles the rise and fall of NYSE chairman Richard Grasso. In many ways, it is a rags-to-riches tale. A kid from Queens, N.Y., who took a job as a lowly clerk with the Exchange after failing the eye exam for New York's police department, Grasso never wavered in his upward climb until he reached the pinnacle in 1994.
Grasso was nothing if not a powerful leader, and unafraid of tangling with the high and mighty. He fought for the specialist system, in which human traders match buy and sell orders; that stance put him in opposition to Hank Paulson, then CEO of Goldman Sachs (now U.S. Treasury secretary), who favored electronic trading.
But it was the attacks of Sept. 11, 2001, that made Grasso's reputation, as they did New York Mayor Rudy Giuliani's. Grasso became something of a national hero for speedily reopening the Exchange and offering a reassuring presence. But only a year later, he tried to get his hands on nearly $140 million of deferred retirement compensation, and when details of his pay arrangement were revealed — to vociferous discussion and dismay — members of his board professed to be stunned to learn that he was making more than some of Wall Street's top CEOs.
Whatever one feels about the money, the reader can't help feeling sorry for Grasso and his ignominious end. Battered by both enemies and friends whom he felt failed to support him or who exacerbated the crisis, he overcame his initial depression and fought back — too little, too late.
Gasparino has done his homework. He has talked to the people who matter, and King of the Club is rich with their recollection of their roles in Grasso's rise and fall.
Caught in the Middle
America's Heartland in the Age of Globalism
By Richard C. Longworth
Bloomsbury, $25.95
Would you go to Cleveland or Dayton or St. Louis if you didn't have to? "You might go to see a game or hear a concert," Longworth concedes. "But would you stay, walk around, window-gaze, eat a leisurely meal, spend the night?" His answer is an emphatic no, which seems especially harsh considering the author is a Midwesterner, a former Chicago Tribune editor, and now a fellow at the Chicago Council on Global Affairs. Longworth offers little comfort to struggling Midwesterners, whom he says live in a state of denial, of "social nostalgia," still trying to maintain a "historical myth" based on the small-town values of a Lake Wobegon.
And yet, he argues, it is these often-dreary cities — rather than small towns — that, in a global era, must shoulder the burden of the region's efforts to recover its economic vitality and relevance.
What, if anything, can be done to revive the Midwest? Among other things, Longworth says, it's necessary to tell the truth: that the region's "golden era" is over. He recommends investing public money where it will do the most good, which means letting certain cities and towns die if the economic reason for their existence vanishes. He also argues that, instead of states competing with each other for trade and investment, the Midwest must speak with one voice nationally and globally.
He lays out an ambitious agenda, but adopting it will not come easy for a region known for its resistance to change. You may not agree with Longworth's proposals, but as a report from the front lines, Caught in the Middle can't be bettered.
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Return to the January/February 2008 The Conference Board Review® issue.
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