Current Events - January 1997

Roger Lande

THIRTY-THREE  CLUB CURRENT EVENT - JANUARY 21, 1997

We have celebrated Christmas and passed into another year since we met on December 17, 1996. This evening's Current Event will comment on the stock market and on two individuals who have been subject of much news in the past month:  Congressman Gingrich and President Clinton. I'll leave the subjects of blizzard, flood, assisted suicide and many other newsworthy items to your dinner discussion.

STOCK MARKET

On Tuesday, December 17, The Wall Street Journal noted that stock prices, bond prices and the dollar all fell the previously day and Barton Biggs, chief global strategist at Morgan Stanley, predicted a market correction of anywhere from 10 percent to 30 percent "pretty soon," likely triggered by earnings disappoint-ments. (He cited his acrophobia as driving his recommendation to lower stock investments and increase cash.) Biggs noticed that overseas markets were just as responsive as domestic markets to Federal Reserve Chairman Allen Greenspan's musings about "irra-tional exuberance" in by investors and were not a haven to hide from upheaval in the U.S. stock market.

The Dow Jones closed that day at 6,268 and the NASDAQ was at 1,261. Allen Greenspan was to address Congress today and the.· Wall Street said unease surrounded the wait to hear what he had to say.

Today the Dow Jones closed at 6,884 up 40      points on volume of 500 million shares, and the NASDAQ at 1,376, both records are

up 10 percent and 9 percent respectively from last month. Greenspan's remarks apparently didn't frighten investors.

GINGRICH

Congressman Newton Gingrich has been charged with the misuse of tax deductible funds, misstatements to Congress, receiving improper contributions and gifts from GOPAC (the Republican Political Action Committee) and funneling of political money through a charity.

Tax experts disagree about whether there was misuse of tax deductible funds and the House Ethics Committee did not accuse him of violating any laws. Gingrich admits the funding was questionable, but blames lack of good legal advice. Gingrich's attempt to plead ignorance of the law rings hollow from someone in his position. Gingrich told the Congress his college course was non-partisan and denied that GOPAC was involved in its planning. The Committee found his statements to be "inaccurate, incomplete and unreliable" and said he should have known they were so. His defenders have blamed his attorney for the inaccu-rate statements and said that Newt did not intend to mislead.

His attorney said last month that Gingrich had personally re-viewed all statements to the Committee and announced he would no longer represent Newt.

The charges about improper contributions and gifts were made in a complaint made by five House Democrats in January of 1996 and are still pending. Ging=ich has dismissed these accusations

as ''baseless, politically motivated charges." As a non-federal political committee, GOPAC was barred from giving to the House races. The allegations are that Gingrich received illegal campaign funds from GOPAC and $250,000 in "Newt support" ranging from aides travel expenses to credit card fees.

The charges concerning money directed through a charity involved primarily the tax-exempt Abraham Lincoln Opportunity Foundation, a charity originally established by a Gingrich supporter to help poor kids. It funded cable TV shows and other parts of the Gingrich program.  Republicans say the Foundation was only a conduit for funds for his TV efforts and donors knew that the money would not go to poor children. Even if no laws were broken, the use of the charity for disadvantaged children as a "shell" account for political activities contributes to an image of mean-spiritless and cynicism that has damaged Gingrich's standing in public opinion polls.

This was the background of events leading up to the vote concerning his candidacy for Speaker of the House. He was elected easily, but nine Republicans voted for other candidates or merely "present" on January 7. Their hometown papers treated them like saints. The Seattle Times said Linda Smith "deserves undiluted admiration". The San Jose Mercury News said Tom Campbell took the high road "making the direct, ethical argument against Gingrich, not the political, tactical one." The Des Moines Register said Jim Leach "has a moral compass and follows its directions when it would be far easier to be blown along by

political winds."  William Kristal counseled in "The Weekly

Standard" that the House Republicans closed ranks because their leader was under an unfair and vicious attack and said it was precisely what they should have done. He said Republicans should treat the Gingrich case as settled and the core of the ethics charges as ludicrous because Gingrich's course was no more parti-san than most college courses and that his alleged misrepresentations are trivial.

Following the vote, pundits wrote and some politicians predicted retribution against the nay-sayers. They proved wrong. Gingrich chose not to make martyrs out of the nine renegades by punishing them publicly, both because of precedent which showed it wasn't politically wise and because he needed their support.

Newt had earlier refused to attend a Representative Mark Souder of Indiana fund raiser expected to reap $60,000 because during the 1995 budget battle, Souder refused to go along with the decision to re-open the federal government. With the fanfare over his independence from Gingrich, Souder's stature in Indiana soared and the fund raiser brought in $250,000.

Further complicating things is Gingrich's continuing wooing of moderates on substantive votes. That effort would suffer if a moderate like Leach were deposed as Chairman of the Banking Committee. Gingrich especially blames Representative Michael Forbes of New York for being the first to declare he would vote against Gingrich and broke the ice. Forbes voted for Leach for Speaker. Representative Linda Smith (Washington) and Representa-tive Tom Campbell (New York) are faulted, she because of a belief

she had promised to inform them first of how she would vote, but instead announced her decision on television, and Campbell because Gingrich forces had pumped two million dollars into his House race in a special election in 1995. There is less animosi-ty towards Leach because he departed from a Republican vote previously on matters of conscience.  A Republican leader told the Weekly Standard "Leach is Leach".

It seems clear that whatever else Gingrich has done or has not done, the public faults him most for the apparent attempts to mislead or cover up. It seems the enormous political and practical value of ready candor and admission of error continues to be unappreciated by Washington politicians.

CLINTON

Who is Bill Clinton? As quickly as he is defined, he is something inconsistent with that definition. He is said to be seeking what he calls the "vital center" at a time when others say there is no center and the stage is occupied by two extremes.

Is he liberal or conservative? Is he confrontational or compromising? Does he like big government or small government? Is he partisan or bi-partisan? The answer to all these questions is: Yes.

Over his career, he has moved so nimbly from position to position that there may be no single, over-arching explanation for who he is and what he does. Gerald F. Seib writing in the Wall Street Journal ascribes it all to the fact that the Presi-dent is a baby boomer, in fact, at the leading edge of the baby

boomers. Their mothers and fathers grew up faster than average because of depression and war. Their children grew up in the contented SO's, then the revolutionary 60's, then the discon-tented 70's to the booming 80's. They went to school longer, married later, started families older, and settled down deeper into life than any generation before them.

When baby boomers' parents tried to keep them away from the sexual revolution, the boomers responded by making love, not war. But now that they have their own sexually awakened children, they are worried about the destructive influence of modern cultures so the President responds by endorsing V-chips.

When American society tried to put baby boomers into its uniforms of gray flannel suits and house dresses, they responded by wearing jeans with holes in the knees and tie-dyed shirts.

Now that they have teenage children of their own, they are bothered by the disquieting statements made by unconventional clothing so the President responds by extolling the virtues of uniforms in public schools.

Baby boomers' fathers were company men who often expected to spend four full decades with the same employer, but boomers find themselves in an era of corporate downsizing and midlife career changes. So Mr. Clinton responds by promoting a "GI bill for American workers" to help retrain those who have lost work and health insurance portability to let them keep their health insurance when switching jobs.

When baby boomers were going to school, they clamored for fewer required courses, more classroom experimentation, and greater control over their own curriculum. Now that they have children in school, they want the basics stressed so Mr. Clinton responds by promising to promote national education standards for kindergarten through high school. Peter Hart, a Democratic pollster, says "Baby boomers have done it all and they don't want their children to do any of it." Because of the way life has changed, baby boomers find themselves simultaneously confronting two of the biggest economic challenges America offers. Baby boomers bore children later and most of those children are only now approaching college age and they find big college bills staring them in the face while worrying about the well-being of their retired parents who live longer and longer. Again, Mr. Clinton is responding.

The President has pledged to give American families access to a $1,500 year tax credit for the first two years of college and a $10,000 tax deduction for college costs thereafter while at the same time pledging steps to save and extend Medicare.

Boomers care a lot about Medicare and social security not only because their parents are now on those programs, but because as they round SO, they suddenly see themselves as tomorrow's beneficiaries.  This potent mix of education and entitlement leads to the kind of results under a recent NBC News/ Wall Street Journal poll where Americans were asked to sort through a list of 14 possible agenda items for the new Congress and assign a

priority to each. Those in the heart of the baby boom genera-tions - 35 to 49 - ranked improving public education as the top, protecting social security ranked third, protecting Medicare sixth. Protecting the environment and cleaning up the campaign finance system which might be expected to have warmed their hearts in more carefree and idealistic days ranked at the very bottom of the list of 14 items.

Boomers are more likely than any group of Americans younger or older to put a high priority on reforming social security and not just protecting it. They have nagging doubts about its solvency so they want it strengthened. And well they might, for they are likely to live longer than any of us who pass before them.

So if Mr. Clinton seems torn and inconsistent, he isn't alone.