Stock investors were disappointed by Alan Greenspan’s hedged remarks on the economy's near-term prospects. The Fed chairman is worried that consumer spending, which has held up throughout the downturn, could falter as interest rates rise and the unemployment rate marches steadily higher. He also doesn't see an upturn in business investment anytime soon.

Still, the evidence is mounting that the economy is on the mend. And a close read of the chairman's talk shows that he remains a firm believer in the optimistic promise of the new economy. Greenspan emphasizes that business is only starting to exploit the productivity potential of networking and other information technologies. He also highlights the surprising resilience in the productivity numbers throughout the recession. That robust performance gives him confidence that the near doubling in productivity during the latter half of the 1990s is sustainable.

Greenspan is right to keep the faith in America’s productivity revival. But the recent inflation numbers—or should I say lack of inflation—suggests the forecasting fraternity—including the nation's chief prognosticator—are too downbeat about business investment.

Here's why: The consumer price index is up a mere 1.6% over the past year. And inflation typically declines in the early stage of a recovery. In other words, companies can't make money the old-fashioned way—raising prices to boost profits.

So what is management doing? They're burning the midnight oil looking for ways to cut costs, increase efficiency, and reduce prices. High-tech gear is one of the most powerful tools management has for improving business productivity. If I'm right, the recovery may unfold faster than expected.