(00:00:00) It's my pleasure now to introduce to you Kenneth (00:00:03) aachen class editor of Newsweek International and managing editor of newsweek's domestic (00:00:07) Edition will tell you a little bit more about our panelists. Mr. Hawkin class join Newsweek in 1966 as a writer for the international section and was subsequently a writer for National Affairs the (00:00:18) editor of national Affairs and the executive editor of Newsweek (00:00:22) magazine. It's now my pleasure to present to you the (00:00:24) Newsweek editorial panel. Mr. Arkin class. (00:00:38) Thank you, Ron. Well, this is your chance to turn the tables on us journalists are used to answering the questions or asking the questions today. We will attempt to answer them. May I just reiterate what Ron said, please continue your question cards coming up to the podium even after the panel has begun they are the fuel for these sessions the questions. I've already gotten our excellent. We love more. Let me briefly introduce Our Gang of four here. John McCormick is our bureau chief in Chicago covers this area for Newsweek Eleanor Clift covers Capitol Hill for congress. She she covered the White House for many years and then decided that it was time to change sides of the Field and now she's up on Capitol Hill John Barry covers the defense department National Security questions for us and Rich Thomas is our chief economic correspondent and has is virtually the dean. I would say of the Washington economic journalism for these people are an opinionated and contentious lat. And I should emphasize perhaps that there are speaking only for themselves. Not for Newsweek. If there is any if there is any message, I would like you to take away from this program. It's that Newsweek has absolutely no party line that we feel quite comfortable and contradicting ourselves from week to week and even from story to story and these for correspondents are are living proof of how that (00:02:59) works (00:03:01) return immediately to the questions. The Soviet elections, what are the likely result and the longer term significance John Barry. You want to take a crack at there? (00:03:17) The likely result is that the Communist Party of the Soviet Union remains firmly in control of the Soviet Union, but the slightly longer term results are more interesting and more complicated. What what Gorbachev is done, I think and this is why he is trying to move in this direction is to establish what amounts to an alternative to the party as a power structure? He's trying to change the role of the of the Communist Party within the Soviet Union and the reason he has to do that is because essentially if he is to construct anything approaching any kind of economic miracle in his country and I have to say the chances of his success of Slender, but at least he's trying that he cause he has to establish a different path for careers and for Success other than the party machine. I mean he has to make it possible for successful businessmen and entrepreneurs to to rise by virtue of their success if he doesn't establish that alternative power structure, then he's failed. And so what he's trying to do is to establish different institutions within which businessman and other groups within the society can function and that's really what these elections are about which is the beginning of the establishment of a structure which is not wholly distinct from the Communist party but is but is parallel to it but is a different career path. Yeah. I think one of the interesting things can is freedom is part of a standard of living to and he can deliver certain freedoms initially very quickly. Whereas he can't do a thing very quickly about the economic living standards in the country. One of the one of the immediate results though. I think he's going to be I mean simply an upsurge of rather unusual Russian nationalism as an electrical force Yeltsin a Boris Yeltsin in Moscow is is kind of a hero of the moment because he is the anti-establishment candidate but George Abbott off the sort of Soviet spokesman who's on your television screens, very frequently was saying while the gloomily not long ago to some friends of mine that if there were elections in the Soviet Union tomorrow the party that would win said about off was not the Communist party but was a party called Pammy at now Pam iati is is essentially nationalist rather thuggish. Neo-fascist is an overworked phrase but I going to overwork it more. I mean, that's the path that they're traveling down in Panama had and yell I can see Yeltsin or someone like guilt seen being a significant political Challenger to go which off on the basis of Russian nationalism. If unless Gorbachev manages to pull off some economic reforms and as ritual saying increase the standard of living fairly rapidly. So I think that we could be in for some considerable political turmoil in the Soviet Union with challenges to communist Orthodoxy from directions. We haven't really thought about (00:06:10) if even though there's no question of the Communist party still maintaining can control after after this election. If Yeltsin beats the head of the sill Factory party unit and if in the Baltic republics the local communist bosses are knocked off by heads of some of the national organizations. This will be the first Practical example of the apparatus cheeks the Communist Party establishment losing some of the Privileges and some of the position that they've had as a direct result of Gorbachev's (00:06:50) reforms can they've unleash the forces of Charisma. Yeah Soviet Union and we all know where that can (00:06:56) lead Ellen ER it's been said particularly by members of the press that the Bush Administration has hit the ground crawling. Is that a fair assessment or to the Press simply need something to complain about (00:07:15) well reporters are never happy that's sort of A congenital condition. But I think that the White House Press Corps assumed with a new Administration, you know, they'd be leading the network news and making the front pages and in fact, George Bush has drifted to page 13A rather quickly and it is The the the ninth year of an old Administration in some respects and George Bush is I think was elected to preserve the status quo and to be more of a caretaker president kind of an Eisenhower and I think that's what's happening in the Press Corps is putting in longer hours because he is a man who might like to go out in the evening to buy some bagels or get a Chinese meal and reporters have this this it's called the body watch and while the major news organization staff The Press Room until there's a lid in the evening. Ronald Reagan's lid came around 4:30 in the afternoon. He spent most evenings watching television in the Mansion. George Bush is an activist president personally. He likes to jog, he likes to shop he likes to go out for a meal and this has kept the Press Corps sort of anchored at the White House so longer than they would like and for stories that that don't really get Much mileage one reporter said it was it was delightful at first that this was a man who was so kind of ordinary who did things like the rest of us, but it's lost its charm. (00:08:47) We will leave it to you in Minnesota to decide how things would have gone had you gotten your way last November Rich Thomas will the federal budget deficit be reduced by Bush and Congress cooperation, or will it be done with smoke and mirrors or will it be done at all? I should add. (00:09:10) The answer is yes. It's actually a little bit of all three is really the interested answer to that interesting question. The budget will be prevented from deficit will be prevented by the time the dust has settled on them on the so-called budget package that they will negotiate it looks now, the earliest tenth time for a settlement would be in the middle of August at which point the federal government runs up against its debt ceiling for borrowing and that will be an action-forcing devised a Congress has to pass a new law saying we can go out and borrow another hundred and fifty billion dollars for the coming year and in process of doing it, that's probably when they'll hang the budget thing together, at least that looks like it now and what they will do they will meet gramm-rudman which is a smoke and mirrors Pete alleged piece of legislation in the first place because it's based on a number of assumptions that increasingly are less and less real in terms of the actual outflows of funds from the government for instance in the current year. We have a budget deficit that In to be a hundred and seventy billion dollars, that's physical 89 the year that ends in October a part of me September 30th. Just five months ago when this deficit was estimated. It was estimated to be a hundred and thirty six billion dollars. So magically in the last five months. It's sort of tacked on for thirty four billion dollars. This has been par for the course. They will produce a budget in other words that will be estimated in August at a hundred and ten billion dollars or less in deficit. In fact when the dust has settled a year, hence, it will be about a hundred and fifty billion dollars the this is bad news, of course in one sense because there was very little existential reason. We should be running budget deficits this size. Where's the war on the other hand is good news in the sense that the budget deficit is not rising and relative to everything else as the economy expands and so forth. It shrinks relative to that and our ability to carry that debts little bit better. I think that's going to probably be good enough for the foreseeable future. And that's about the best we can hope for in any case. (00:11:14) Chicago question for John McCormick, what's Jesse Jackson up to these days? That is an interesting question. Jesse Jackson just came in late February came off a second failed attempt to be the mayoral kingmaker in his adopted Hometown on the 4th of April barring cataclysmic change of events. He will get his third rejection. When his endorsed Third Party candidate loses to Richard M daily. I am not really quite sure what mr. Jackson's agenda is this year part of it is to get quite involved in local races like these and that's a very perilous business indeed. He's intending to get involved on behalf of a candidate named David Dinkins in the New York Mayoral race, and I'm not sure that anyone would consider that a guaranteed Victory. He is definitely I think planning is given every signal. He's planning to run for 1992 and and a close friend of his Told us a couple of weeks about three weeks ago that that Jesse had privately considered himself to be in a Pathfinder role and that the 1988 campaign taught him something different, which is that he really might win someday, but I think the I think the question is would several years of losing efforts on behalf of local politicians who have backed him. In other words his notion of he's using the word reciprocity a lot these days which basically boils down to a few scratched my back. I will I will come out and campaign for you and it's a allowable technique and and and most politicians abide by it. But I think he also runs the risk of being trivialised or of moving backward in the perception of a lot of Americans who who were very impressed by his 1988 campaign. (00:13:16) Want to know what other option of course he has which he certainly keeping in place to become mayor of Washington DC which wouldn't be boring. (00:13:24) But Bill Bennett is gone already. We have lots of (00:13:30) medals in Washington DC but it does look increasingly as if the business community in Washington is going to dump the drugs and terrorism candidate Marion Barry and and therefore look for somebody else and the assumption is that if Jackson wish to have it he could have it the problem with Jesse Jackson, of course, he's never run anything and there's no reason why he should spoil that spotless record at this time. (00:13:57) John Berry, what kind of secretary of defense will Dick Cheney be is he up to the job and if you were Secretary of Defense and secretly that's what Barry thinks he already is how would you know bring spending well below 300 billion dollars. Would you choose the rail mobile MX the Midget Man or (00:14:19) both? Well, if I was sick of Defense, I know what I'd be doing now, I'd be praying because Cheney has inherited the most awful mess eccentric made worse by the fact that we are three months into the new Administration and no significant decisions have been made in the Department of Defense. I won't walk you through all the grizzly figures, but if you assume that the best that Congress is likely to vote the defense department for this year and the succeeding years. If you assume that the best is likely to be an absolutely static defense budget at about two hundred ninety billion dollars a year without taking account of inflation what we in the trade call 0 nominal Then essentially the defense department has to cut 213 billion dollars from its last published five year plan. So you're losing almost one year in five now may not be as bad as that. But but you know if I was a betting man, that's the way I bet and so whatever Cheney does is within the framework of procrastination budget decisions. Very very tough ones. And all of the immediate prospects look Bleak if we get a start dealer strategic arms deal. It's going to cost us money. Why because the price of getting a strategic arms deal is going to be to go for some form of mobile missile system, which gets me to the second part of the question, which is do you go for Midget Man rmx, the answer is you go for both in some mixture or other that you think you could afford because the Congressional forces on the Hill are going to push you that direction and that's going to cost us 30 billion dollars or so over the next five years. You could try to cut conventional forces. You could hope the mr. Gorbachev will make it easy for you to do. So John Tower. I know had he been confirmed as Secretary of Defense was going to pin a great deal of faith. It was to go with shafts desire to cut conventional forces as a way of saving American money two or three years down the track. But until then what you have to do is to essentially whack at some very big programs and that is cause what chain is going to do its what anybody would have to do you you lay out two aircraft carriers, you will most certainly don't proceed with the SSN 21 attack submarine. You keep the B-2 stealth bomber in its present suspended animation of advanced development you Stave off the C-17 Transport Aircraft, you can save a lot of money, but you're going to cause a lot of grief and a lot of pain to manufacturers all over the country have to tell you and the where to put your money is in electronic upgrades of existing platforms existing Weapons Systems. Don't put your money and any faith. Any idea that they were going to be big new defense projects actually getting the dollars required to go into full-scale production in the near future because the dollars simply ain't there. (00:17:14) A Newt Gingrich question. Will Congressman Gingrich being named Republican? Whip help George Bush or hinder him? Will Gingrich make the republicans in Congress more effective (00:17:25) l&r? Well Newt Gingrich symbolizes the clenched Fist and not the extended hand of bipartisanship. So I think we're going to have a little dissonance between Capitol Hill and the white house but Gingrich is going to want to sort of smooth over his image as a Statesman for a while. Someone described him as a pit bull on a leash. So I think he's going to tone down his tactics a little but this is a man who was who was hatched to the television Studio. He is a C-SPAN baby if it wasn't for C-SPAN, he would not have achieved his prominence C-SPAN and Jim right? Because it's Newt Gingrich who brought the ethics charges against Jim Wright, and he really rode a wave of anti right sentiment again to his his current prominence the problem there. Publicans have is this is the the eternal battle for the soul of the party the right wing versus the moderates. And what's interesting this time is that moderate Republicans on Capitol Hill actually voted for Gingrich because they're tired of being in the minority. It's been this is the 35th year of being in the political Wilderness and I think they've decided that getting along with Democrats and helping a president passes program is not fulfilling and they want to you know, set off a few hand-grenades themselves and this could spell trouble for George Bush obviously. (00:18:52) What actions by the Bush Administration do you see to advise a tour support American businessman to counter the possible competitive problems expected from the European economic Community policies. This is in after 1992 when the common market is supposed to become unified wretch (00:19:18) nothing out of the ordinary and that's not putting it down. It's sort of an accurate description of their efforts early late and often to prevent the common market in making its Arrangements leveling out if there are external barriers to third-party countries such as ours or Japan or the for the Brazilians preventing them from Raising those markets where the markets are now open and free up to the levels of countries where the markets are now relatively closed or have restraints upon them. But rather to force them to get the protected countries to bring their as down so that there would be a net increase in access to the unified Common Market at the end of the show to third parties as well. As of course complete access within the common market in other words to try to force them to negotiate a reduction of external barriers while they're doing their homogenisation in them inside the market. Will fail to do that. The question is can they will they succeed in preventing a net increase externally every business in this room that's represented in this room will have to have its own committee industry watching like a hawk the negotiations and the quid pro Pros that are being swapped out in Brussels. There's just no alternative to that and bringing pressures when you see things happening through the ustr and so forth to try to set a backfire my own judgment is that contrary to a lot of the opinion that now exists that we will be in general largely successful that when the dust has settled the common market will be a net plus for all world trade as well. As of course becoming a place for themselves inside the market. I think there will that being said there will be Industries in this country which in order to preserve the markets that they now have and gain access should be looking to go to opening a Pied-à-terre Factory in the Iberian Peninsula. Probably Italy Spain. Portugal with a labor costs are Louis because there will be some Industries inevitably that will get shortchanged and you'll have to you'll have to simply be there but on balance I think the big and strongly organized countries of this world such as the United States will get a pretty good deal out of it. Yeah, it's going to amount to a I mean Mike. I agree with Rich. It's going to amount to a what's going to happen between across the Atlantic is going to be sort of piecemeal Kennedy round instead of everyone sitting down and negotiating over the whole range. It's going to be done industry by industry and bit by bit because something like a third of us Imports by value are protected in some form or other and the Europeans are going to ask for a large quid pro quos. There's nothing much you can do about agriculture everyone protects agriculture. It's very expensive. We think it's silly but like we can do about it because of the voting strength of the Agricultural Lobby so forget agriculture, but everything else. Yes, I agree with Rich. No, I disagree with that channel. I think there's going to be not specifically vis-à-vis the common market in eec 1992, but in terms of the of the Uruguay run absolutely everybody is going to be moving away from from the current quotas and their current subsidy levels because every government around the world is going broke on these things and particularly those in the common market they do you think they'll do it. You think they'll pull back? We're not going to eliminate them. That was the American proposal but a reduction at some point in the level of subsidy. All around is in everybody's interest in can be done because the government the consumers at home. The respective markets will have a little lower price. The taxpayers will pay a little lower subsidy and the farmers will get along they really well. You're right maybe not by 1992, but we are headed in that direction because the especially European Community their subsidy levels are unbelievable there. They're just huge and they're producing. He's ever more grotesques after the surpluses and they already have agreed to in several areas and grain production otherwise some reductions. (00:23:19) One of the big phenomena that 1992 I think is creating is has really nothing to do with tariff barriers or trade barriers. It is the the magnetic power. It's creating for foreign firms to move into the common market area and set up shop there. It seems to me you already have a lot of American firms established in the common market countries. You'll have the Japanese wanting to do that more and in fact in areas where the common market does not apply. You already have that happening and I think that will grow a pace. I think Japan is already setting up shop in southern Asia and Malaysia Indonesia. I think American firms will be doing that too. And I think that in a way some of the trade questions of the decade of the 90s may involve that kind of trade setting Subsidiaries within a different trading area within a different (00:24:25) one of I mean there are going to be big problems over this agree with Ken. It's interesting to see that there has been a surge over the last year of American Investment of us firms going into Europe getting out of the wire and my my guess is that that will increase it's going to cause a problem. However, particularly the defense area. Which is going to be the problem that the Europeans are not going to let us firms investing European Defence Industries. And as the United States that's European firms invest in American defense Industries, and that has so far been a no no significant, you know, there have been significant knockbacks of European plans to buy some CG subsidiaries of American defense firms and I can see some very difficult bargaining on the issue of sovereignty technology protection secrecy and so on coming in that area because clearly the European Defence Market is a very big market for the United States currently and will be bigger in the (00:25:19) future. This leads into the question of the famous tf-x fighter plane that the Japanese want to build John why why doesn't the Bush Administration just cancel this whole (00:25:30) program? Because it would just be too catastrophic for our relations with Japan to unscramble it at this point. So what Bush he's trying to do is to is to get a bit more out of it by way of Technology transfer from the Japanese is to say well. Gee will do this better in future won't we it seems like that (00:25:54) inherited a (00:25:55) Yeah, so there is there is an interesting issue an argument the root of the FSX debate. The FSX debate is about whether or not it is it is in the United States interest to sell the technology of the F-16 fighter to Japan for 440 million dollars in return for first the promise of transferred to the u.s. Of certain Japanese Technologies, which the Japanese say they possess but which we haven't quite seen yet firstly and secondly in exchange for a promise that we will share in the code development of and then hopefully the co-production of a more advanced fighter to be derived from the F16 some seven or eight or nine years down the line. Now route that deal was done by the Pentagon. Who forced the Japanese into it because the Pentagon believes that the pace of Japanese technological advancement in the defense areas Electronics Aerospace composite Material Handling those sorts of things the pace of Japanese Advance is so great. That the technological momentum is with them are not with us. In other words. It was an essentially defeatist judgment, which they were making I don't know. What's right or wrong. I'm like, I don't have access to the kind of knowledge that the guys and depending on who made that judgment have access to but I find it an interesting judgment. What's happening? However on Cotton in Congress was Congress considers the FSX deal is that everyone in Congress is saying Hey whenever we're number one sure course, why are we giving this technology to the Japanese? So there is at root. There is two quite different perceptions of the Japanese technological strength vis-à-vis the us and that is the debate which which now needs to be had the FSX deal will go ahead in some modified form, but the real debate needs to be whether it is any longer sensible for the United States to sell not merely products, but also manufacturing technology technological know-how the crown jewels. To other countries in any form my guess is it's not but it's a large topic. (00:27:59) I want to Clift. How would you rate the performance thus far of John sununu Dan Quayle and Jack Kemp. What a (00:28:07) trio. How about Millie? The the English Spaniel. Can I start with her? She's been real productive John sununu the Long Knives are out for John sununu because he was an outsider everybody assumed he was this rube from New Hampshire and there's just been everybody's lying in wait for him to fail plus. There are a couple of people on the fringes who think they'd make good cheap a good Chief of Staff. So they'd like for him to fail George Bush is unfailingly unfailingly loyal to John sununu. So I think he's not going anywhere anytime soon, but you'll notice he's not on the Sunday talk shows with the regularity. He was at the outset. He's keeping a lower profile and I hope he's Consulting with some other people because with the White House sadly lacks, is any strategic sense, they make decisions sort of ad hoc. And that plays right into George Bush's personality failing. He's very much of an ad hoc person and they don't have any Long View or what George Bush would call The Vision thing II of the Troika is Dan Quayle who is a busily trying to rebuild his reputation. I should say build it since he never really had very much one to start with he is still a favorite Target on the on the comedian circuit. And in fact, when when the dog Millie was giving birth one of the late night talk shows joke that when she went into labor her powers were transferred to Dan Quayle. Quail is trying to put himself in the middle of substantive things. He's now planning a trip to Africa and he did Lobby on the hill for John Tower. In fact, he was one of John Towers staunchest Defenders see where that got him. So he is he too is keeping a fairly low profile. Although there's a bit of a good cop bad cop emerging it was Dan Quayle who came out and accuse the press and the senators of moral McCarthyism in the wake of the the tower debate. I think Quail has about 18 months to to resurrect himself if Republicans around the country are not clamoring for him to campaign for them in the 90 elections. I think George Bush may look elsewhere for a running mate in in 92, Jack Kemp has a has stolen everyone's heart. I mean here he is. He's an activist and an area that badly needs attention. He seems to be trying to take the problem of housing in the homeless. Beyond just the rhetorical stage and I think everyone is expecting big things of Jack Kim liberals conservatives alike. I mean, I think he could he wins a popularity contest hands down in Washington today second only made it may be to build Bennett. (00:31:09) If Kemp is popular a year from now, I'll be astonished however, because the issue he's attacking is intractable and ee attractive but with no funds and he hasn't got to have a lot of items (00:31:21) available. I think you're wrong. There was a meeting about two months ago of public housing authority Chiefs from around the country who started off their meeting on the the standard diatribe. Why won't Washington give us more money and by the end of it, they realized that that they don't think they need all that much money in order to make a dent in some of their problems. What they need is someone to come out hold their hand. Listen to them Pat them on the back when they do well someone to raise the profile of the constituency. Represent which is poor and it was desperately poor and often single parent families and so on. My hunch would be that that someone in official Republican ranks will figure out that this that for not very much money like that the Republican the GOP could build a tremendous number of friends and could move toward the softly state of stated goal of getting a larger percentage of the black vote in future years and by showing by spending not that many compassionate dollars as these as these things are measured that the GOP could could could then look back and say look look at what 30 years of Democrats did for you. Look at what three or four years of Republicans (00:32:42) did You know just add a point on The Dan Quayle thing. Actually George Bush has a cabinet full of vice presidents in Waiting Jack Kemp being one of the Bill Bennett Elizabeth Dole another one. So he has his lots of choices if he decides to choose someone else. (00:33:00) Someone in the audience is has realized that rich Thomas is the one person who knows what interest rates will be 12 months from now. And wants his opinion. (00:33:12) I'm not telling that question makes me suggesting I should call my broker first. Well, the question really is seems what's the entry? What is the inflation rate going to be like between now and the end of this year? I believe the inflation rate is going to settle in at about 5% per annum that is unmeasured as measured by the CPI, which is about six tenths of a point or half a point above what it was on average for all of last year. That's bad news, which could be a lot worse. If that's the case the interest long term interest rate is going to be within a point of where it is now. I think it may in the interim go up modestly but that mean only like two tenths of a point or as they say 20 basis points. Not much more than that. And I think there's a chance that if Greenspan does Duty and the economy is slowing as much as I think is it may slow. I think that that that will be at about this current level maybe a point below and softening a year from now the long rate the short rate will be wherever Alan Greenspan feels. It has to be to keep the long rate where I've just said it is because Greenspan's putting the short rate wherever he thinks it has to be to assure the long-term bond market the long-term investors that he's going to fight inflation as long as the people the bond market feels that the inflation is going to be fought against an opposed and it's not going to get worse that the long rates and general interest rates today about where they are or if they think that's going to go down. There's a good deal of downside potential. (00:34:54) John Berry, why can't we free the hostages in the Middle East either covertly or overtly? Yeah, (00:35:02) good idea John. Well, we've tried asking the yes, we tried most things you may recall. We have a we I say granted the United States government bits of United States government have known from time to time where individual hostages are and at various times several of the hostages one is told have been in the same building in and about Beirut, but they've never been enough of them in one place to be able to rescue the whole lot. I mean the assumption is if you rescue some the others get executed. They tried buying them that wasn't stupid. It was illegal, but it wasn't stupid and they have tried putting pressure on Iran via every number of intermediaries including most recently the Soviet Union, but at least intrusive a little you can do about it part of the problem. Of course, this is this is cold-blooded, but he's true part of the problem. Is that by talking about them you raise their value? As long as the Hezbollah whoever think they have valuable hostages, they're going to hold them for some bargain. If you say well tough. We told him to get out of Beirut. Sorry, they didn't it's up to you. You've got him you have to feed a look after them their value drops because we don't do that because where we pick away we pick away at our problems on prime-time television and we persuade the Hezbollah either that they were something and that's that's our problem. The French are more sensible. They write them off and then buy them back. (00:36:44) John McCormack Will there be any real move to tackle the problem of acid rain and environmental issues? Well, that's a good Minnesota question. If I were if I were a Midwest politician, I would look at at a small array of fax number one. Look what the Midwest did for George Bush last year versus what New England did for him. It was New Hampshire. You'll remember that started his campaign not Iowa and not Minnesota. I would also look at the fact that people like John sununu George Mitchell main Bush himself is I'm you may know whether he's from Maine or Texas or some other place. But at least on occasion, he's from Maine. I think the clamor and that part of the country is is this year finally going to have some impact on those of us who live in the states that we live in not that Minnesota is as huge a contributor as some others to this problem. It's interesting. That should come up now because we learned late last week that there's an effort. By one Midwestern governor who has already caught a couple of allies in this in this Gambit to try and tie the acid rain problem to of all things the Savings and Loan crisis. And the the goal is to go to Washington this summer if the plan is as follows if acid rain begins to Bubble up as an issue in Congress, or if the White House appears to be pushing acid rain to a to a higher level of public attention that then the midwesterners would rush in and say, okay look if we had to pay for an SNL problem that was based in Texas, Florida and California for the most part apologies to your own contribution, but it which is principally based in three states. Then the rest of the country ought to help us installing the scrubbers and paying whatever the penalties are. Of an exceedingly costly acid rain resolution. It's a it is a problem that is not intractable. But it's going to take an awful lot of dollars to make it not be intractable. And that is the Gambit know whether that will work or not. We'll (00:39:13) see if they do it John. They've got a strike. It sounds to me clever than it might first appear, but they have to do it real quick because the Fizz like the Savings and Loan bailout legislation is going to be passed in about well, I don't know 40 more days, probably 35 or 40 more days. And so they have to get their black male in on the thing get the Northeast Midwest Coalition organized to vote against that until they get their quid pro quo. (00:39:40) Rich has corporate merger Mania takeover syndrome gone beyond public or stockholder greed and is anything going to be done about it in the way of legislation from Washington? (00:39:53) Yes, and regrettably. No the Congress remains basically hung up on the this problem. They want very much the populists trained in both the Republican and Democratic parties wants very much to deal with the issue, but when they get down to particular as they don't know what the Dickens to do that would not enshrined forever all the worst and slows the sleepiest Management's every place in the country and they all know in their heart of hearts that the real solution to the problem as far as legislation is concerned is to eliminate the double taxation of dividends so that interest expense and dividend payments are on the same. Taxation class and you eliminate there by the possibility of leveraging as most of you in the audience know the situation into taking the net worth of a corporation and replacing whatever the equity is there with debt which is interested. Dr. Bull and thereby reducing the the tax payments of the corporation and pocketing those tax payments essentially by doing the deal yourself Congress. However is unwilling to even think about this because dividend deductibility was is would be a benefit to the quote Rich unquote and we all know the Democrats control the Congress and they don't want benefits to the rich also the Republican Administration the Bush Administration doesn't want to push it hard because no new taxes means no new tax changes. They would be if they can't afford the revenue laws if they lost that Revenue by getting an actual dividend deduction, they'd have to raise taxes someplace else in the Doesn't want to touch that thing in the meantime, you will have hearing after hearing after hearing but they keep bumping up against this thing. How do you protect decent corporation, which is under leveraged if you will which is a high net worth and I equity in the market from a takeover without protecting every corporation in the country. It just doesn't lend itself to a legislative fix very well. And and as far as I can see despite the head of steam a had in January, it's all sort of fizzling out once more. Nobody can figure out what to do. (00:42:12) John Berry politically is Germany leading to leaning to neutrality and moving away from backing u.s. Foreign policy. (00:42:25) Yes, and yes, (00:42:26) we're in modified form. I must I hesitate to say anything about situation in Europe or NATO with us distinguishing figures Holland Cleveland sitting right in front of me, but The truth is that there has been a sea change in German politics. It's the successive generation question the successive generation who came of age after Vietnam for whom America was the villain and who I used to a situation of Peace in Central Europe like that, but now do not like the mechanisms by which that piece has been achieved. That's one element. The second element is a perception of waning American power that plays into a feeling in Germany that it is about time Germany stepped up and began to take its rightful place in the concert of Nations and so on they are less bashful than their Elders were in a certain the German foreign policy role that German economic strength would entitle Germany to do and so I think you will see not arise in neutralism as such because I think that the days of being the honest broker between East and West I mean the the visions of the 30s and the rapallo packed and so and I think are gone, but I do think that they respond to Gorbachev. And increasingly will do so and the reason they will do so is it go with your peers to stand for change in Europe? The problem with NATO at the moment is that on the west as a whole is that we appear to be standing for the status quo in Western Europe and that seems to be to be an unstable political situation and I take it there for that over the next two years or so. The Bush Administration has to come up with some proposals for political resolution of the conflict in Central Europe, which will sufficiently appeal to the needs of the Germans who after all are the Frontline that at least some of the march to the left is halted or at least slowed. One of the things that seems to me stems from that his we're wasting our time if we go on talking about the modernization of missile nuclear missiles in Europe. It ain't gonna happen. It's quite clear that James Bacon secretary of state was taken by surprise when he went to Germany for instance and Chancellor Kohl simply said I could be cannot modernize the missiles. I can't monetize land. And so they agreed to put it off till after 1990. But the truth is when the elections are held in Germany, but the truth is not going to happen after 1990 because Chancellor Kohl is going to be asked on the platform in the elections. Will you pledge not to modernize the missiles? He's gonna say yes, like any sensible politician would who wants to win votes? It needs to be rethought some and I think that is going to be one of the major foreign policy task of this Administration. Can I think incidentally that the same considerations apply versus Japan Japan is becoming more assertive. There's a more independent a desire to be more independent younger generation. Is it once more relaxed and Its Behavior towards all the west but simultaneously more assertive of its own interest which came back to this fist FSX deal. It seems to me we have to become accustomed as a as a nation to a collegium of interests rather than a u.s. LED directorate of interest. And if Japan is going to go off by itself and build itself, it's brand new high-tech weapons. And so Earth they should without buying with the cheap making the sensible thing which would be to buy our F-16 in the first place in modify. It would cost them about a third as much they're going to do it. We should say go with our blessing but not with our technology. We simply shouldn't try to hold together and Status Quo that can't be held. (00:46:10) There's certainly a Harmony of interests that one can imagine taking place in both Europe and the Far East the Soviets clearly need to economize their unilaterally disarming the Germans as John said would like very much to to reduce reduce the not only the nuclear presence on their soil. But all those noisy tanks that carve ruts in their Farmers Fields every time there's a NATO maneuver and the noisy planes that break sound barriers over their heads. And we too would like to save the dough. We don't have that much. We have a negative amount in the budgetary terms one question. I think for the Bush Administration is to figure out all right, if the United States pulls back from its military role in Europe if it'll even brings some of the troops back home from from Germany from from Korea. What exactly is the nature of American leadership in the next decade and if ever since World War Two we have almost identified our world leadership as head of NATO as the Bastion and the Far East. That may be changing and I'm not surprised that the Bush Administration is taking a little time. She'll in working out a policy to respond to Gorbachev that sort of stock phrase that you hear so much right now. It's a very delicate thing that they're wrestling with. (00:48:00) Yes. I agree. Totally with that the the there isn't a rush. I mean people were talking about in the early days of the Bush Administration things going to hell in a handcart because we didn't have a secretary of state or secular defense that's nonsense. I mean life doesn't move that fast in great International matters. And sure we have time. I think the main impulse for some speed is American domestic pressure Congressional pressure to cut roots in Europe to save money on the budget that seems to be to be to be the main generator of some requirement for all deliberate speed but he did it (00:48:37) smiled is the rush is also in public relations terms though, isn't it? That Gorbachev is the commanding figure in the world stage and you know, George Bush is not and I think this country is not used to taking a back seat to a Soviet leader my goodness sake so I mean, I think there is a you know a public relations price that's being paid after our own psyche and terms of leadership around the world. (00:49:02) Several questions on abortion. What do you think? The Supreme Court will do about Roe versus Wade, and now that he's in office will George Bush modify his position on abortion to more closely parallel his original position. What does the panel think John what let's take everyone in order? I think what I think the Supreme Court probably will modify but not not overthrow the Roe versus Wade decision. I think you can look forward to this. It's interesting. This is in very basic terms an incredibly hot potato and has been for quite a few years and it's all been in the the courts have taken all the Heat and I think this is a court that not because it wants to get rid of the Hot Potato but for its own internal reasons probably will modify that ruling that has the effect however of tossing the Hot Potato in 250 different venues, which are the state capitals and I'm not sure which legislators are going to want to run out and grab that one. It strikes me as the the guaranteed way to get thrown out of office is to vote on abortion one way or another in an awful lot of States. I also think that it would be mr. Bush's change his rhetoric. During the eighty eight campaign suggest a little more of a commitment on that topic than this as the question knows then he previously shown and I think the last thing on earth to George Bush wants is for abortion to become an issue in 50 state capitals around the country where people are going to be dragging out his quotes from this year in his quotes from that year and local Republicans are going to be trying to haul him out to Saint Paul to say this and say that and I don't think he wants anything to do with (00:50:51) it better than 50 states and in the nation's capital from Bush. He didn't have a choice does he? I think states rights is what they're going to do whether or not George Bush likes it or not. They're going to they're going to modify it and say this is not a come fundamentally a constitutional issue, but they're not going to get back (00:51:07) entirely to the states. I mean state legislatures are already cringing at the thought of you know, having you know fetuses and bottles and roses and all of that reopening that whole debate when in fact abortion is not going to be outlawed in this country. I think they may make it more difficult to get one after four months. But those are those are in a minority already. I mean to me it's a pyrrhic victory for the the pro-life movement of time. (00:51:35) I looked I look I Look to technology to solve the problem coming from the defense department you would expect that. But but in fact the French pill the morning after pill made by phone call russello Clef is still at stage one of its of its development. It requires two pills of the moment rather than one but within five years they say they will have it. One pill which you take once a month and you never know if you were pregnant or not. That seems to me to be the solution to the problem. (00:52:03) We've saved the most important question for last who will carry the Sam Donaldson function during the next four or eight years. And what are his her critical qualifications Eleanor (00:52:18) see there is no Sam Donaldson. That's what's different about this Administration. The Sam Donaldson was created because Ronald Reagan did not want to sit down and endure sustained questioning. His Forte was the one liner back and forth Sam happen to have the loudest lungs and you know that everybody thinks that that Sam was an example of the boorish press. In fact, the Reagan would have had to create Sam Donaldson if he didn't exist, it did more for Reagan's image than almost anything else George Bush is terrible at the one-liner back and forth. He puts his foot in his mouth invariably he likes press Frances he is killing the Press Corps with kindness lots of access. You don't have to shout everyone gets recognized. So there is no Sam Donaldson. It's a really gentleman's press Corps. (00:53:08) You have killed us with your kindness and bearing with us for the last hour. Thank you very much.