Democrats: Losing Capitol?
Who was most spooked by the Dow's wild ride last week? Not corporate executives with stock options in their compensation packages. (The CEO of Mattel lost $24 million in a single day.) Not college presidents whose endowment funds shrank, or even individual baby boomers whose retirement plans tanked. The most nervous American of all, by law, doesn't even know what he has invested in stocks. Thus President Clinton's worries were more political than financial. With scandal at home and unrest abroad, it seems the only thing keeping his approval ratings high has been a strong economy. If that's the case, a sustained market downturn would almost certainly mean the same for his administration. With half the voting public invested in stocks, Democratic hopes of recapturing the House may also be tied to the market. The lesson is clear: Scandal and terrorism aside, in the minds of many voters, it's still the economy, stupid.
After the fall
Ask the operational head of one of America's most successful brokerage firms what's wrong with the stock market, and he's as likely to mention an impaired U.S. president as he is the financial turmoil in Russia and Asia. Robert Avis, vice chairman of A.G. Edwards and Sons, headquartered in St. Louis, told WORLD that last week's highly volatile stock market was almost certainly not "an indication of something that is problematic in the economy to come." "Interest rates are low, have been low, and are probably going to go lower," said Mr. Avis. "Inflation is so low we probably ought to worry more about deflation than inflation. The precursors to a recession just simply aren't on the scene." Mr. Avis called the market's huge 512-point drop on Aug. 31 a "painful cleansing," but wasn't particularly alarmed by it. "What we're looking at today is a very sound economy, with almost no external reasons for slipping into recession." Did the Clinton scandals help fuel the market roller-coaster? "I don't think there's any question about it," Mr. Avis said. He explained that "follow-the-leader fear" gave the day its downward momentum-but "some of that initial fear clearly came about by virtue of concern over the presidency. Who's in control? People naturally tend to ask that question right now.... The perception that Washington is distracted destroys investor confidence faster than anything else." At the same time, he pointed out that before the big price drops of the last couple of weeks, there had been five similar gigantic adjustments since World War II. "The 1973-74 decline was a horrendous 42.6 percent. The other four were 21.8, 22.3, 29.3, and 29.5." By comparison, the 1,000-point correction of the last several weeks amounted to just over 10 percent of the Dow's value. Stressing that he's not a professional analyst, Mr. Avis nevertheless predicted: "It will take a while to heal these wounds, but I think before the year ends, you'll see us back up at least at the level where all this started." Not all stock-watchers are so sanguine, of course. Some, concerned about the international situation and Y2K on the horizon, are predicting an extended downturn. But everyone agrees the markets are volatile; both bulls and bears are hanging on for a wild ride.
Chemistry 101: alcohol is poison
Metal detectors and see-through backpacks will not be common as college students head back to campus, but some university presidents may want to borrow a breath analyzer from a nearby high school principal. Louisiana State University received a public relations black eye last week when one of its fraternities, Sigma Alpha Epsilon, was ordered to pay almost $23,000 in fines stemming from 86 counts of underage drinking. In August of 1997, 12 revelers were found unconscious on the floor of the SAE house after an evening of celebrating the new pledge class. One of those new pledges, 20-year-old Benjamin Wynne, was rushed to the hospital with a blood alcohol content six times the legal standard for intoxication. He died the next morning. "There's no admission of guilt," stressed Hillar Moore, an attorney for the fraternity's president. Mr. Moore argued that the victim, though not quite of legal drinking age, was nevertheless an adult responsible for his own actions. But the court found plenty of responsibility to go around. In addition to SAE's fine-which will go to support binge-drinking education programs-the fraternity has been kicked off campus for three years. The bar that served the alcohol faces the same 86 counts and high fines. And LSU is trying to avoid a repeat this fall by sponsoring non-alcoholic events on campus and moving fraternity bids to Sunday, when bars in Louisiana are closed.
The rash of shootings in public schools last year has given a whole new meaning to the term "back-to-school supplies." As parents invest in notebooks, rulers, and calculators, principals are stocking up on metal detectors, breathalyzers, and police officers. This fall, such urban-style security measures are finding their way into rural and suburban schools, following violence in quiet towns like Paducah, Ky., and Pearl, Miss. In Marshall County, which borders Paducah, traditional backpacks have been banned this year. Instead, elementary students will be required to carry see-through totes or mesh bags approved by the principal. Middle and high school students will have to tote their books without the benefit of bags, period. In Evansville, Ind., principals will be armed with hand-held metal detectors to frisk students they suspect of carrying weapons. They'll also have breath analyzers on hand to weed out those who have been drinking. Photo ID cards will be required dress in a few school districts across the country, while others are adding anonymous, toll-free hotlines to allow students to report classmates they suspect are planning to commit violence.
Where's Daddy? ...And who cares?
Are love and marriage as obsolete as the horse and carriage? For the first time in 60 years of data collection, a Census Bureau study found that a majority of firstborn children in America are now born out of wedlock. Back in the 1930s the figure was 18 percent. While teen pregnancy skyrocketed in the late 1980s and early 1990s, today's explosion in out-of-wedlock births is mostly among women in their 20s and 30s. These women are old enough to marry, but choose to be single mothers. "There are no scripts for people living in the kinds of relationships people are living in," says NYU sociologist Arlene Skolnick. But there are plenty of glamorous role models, with celebrities like Madonna, Jodie Foster, and Rosie O'Donnell proudly raising their children alone. Yet even as unwed motherhood seems to be escalating out of control, younger people say they long for a return to traditional families, according to a study by the service group Public Allies. The study found that young people cited their generation's No. 1 problem as "the increase in divorce and single-parent families." Survey respondents, a group of 728 young adults aged 18 to 30, even picked "having a strong family" as their most important goal-above even money and career. Economists theorize that marriages are less alluring because men and women have similar roles. Since the husband no longer acts primarily as breadwinner and the wife as child-rearer, the partners depend less upon one another. "As you lose the economic reasons to marry, the reasons are about love and romance and being with the person you most enjoy," says Barbara Risman, author of Gender Vertigo: American Families in Transition. "That kind of a connection is a lot less strong glue than obligation and dependency and social rules."
Thanks to an FDA ruling last week, the so-called "morning-after pill" will be in drug stores everywhere by the end of the month. The contraceptives, sold under the name PREVEN, are said to be 75 percent effective at preventing pregnancy when taken within three days of unprotected sex. The new pills delay or prevent ovulation, keeping a woman's eggs from entering the uterus to be fertilized. PREVEN also alters the uterine lining, preventing the implantation of an already fertilized egg. Gynetics, the N.J.-based company that will market the pill, says it differs from the French abortion pill RU-486 in that it has no effect on eggs already implanted and growing in the uterus. Not surprisingly, the biggest customer for morning-after pills is Planned Parenthood, which dispenses them in their clinics. The pro-abortion group has launched a year-long publicity campaign promoting "emergency contraception," while Gynetics plans to advertise on radio and in magazines such as People and Soap Opera Digest.
Gee thanks, Mom
Deborah Gaines picked the wrong day for an abortion in 1994. John Salvi opened fire at the clinic that day, killing two receptionists. Ms. Gaines, who fled for her life, says she was too traumatized by the killings to have the abortion later, so she gave birth to a daughter instead. Now she's suing the clinic for "wrongful birth." Ms. Gaines, 31, says she loves her little girl, but is so poor that the clinic should help support the child. The almost-aborted baby was Ms. Gaines's fourth. She says she was treated for post-traumatic stress disorder after the incident, but the clinic insists that does not make it responsible for Ms. Gaines's daughter. A defense attorney compared Ms. Gaines to a person too afraid to fly to a distant hospital for medical treatment because she once saw a plane crash. "That doesn't give you the right to sue Pan Am because you chose not to do something," James Franchek said. In 1996, Mr. Salvi apparently killed himself in prison while serving a life sentence for the murders.
Cash for the crash
Everybody hopes the millennium bug will pass quietly, letting the calendar roll over with nary a ripple of disturbance. But what if ATMs go haywire and credit cards don't work? The Federal Reserve Board figures that scenario has gotten enough publicity that people may start hoarding cash, just in case. The government's answer: Print more. Today, $460 billion in green paper money is circulating and another $150 billion is held in reserve. The Bureau of Engraving and Printing has been ordered to print an extra $50 billion that will be stored in government vaults until it is needed. "It's purely a precautionary measure," said Clyde Farnsworth, a Fed official. "We want to be able to meet increased demand from commercial banks should private consumers request more currency." To make up for all the extra greenbacks coming off the presses in 1999, less money will be printed in the year 2000. "It just means we're printing the currency earlier than we normally would," Mr. Farnsworth said. The bug has forced schedule-juggling in other areas as well. Medicare was scheduled to correct a computer glitch that was charging seniors a 50 percent co-pay instead of the required 20 percent-a $570 million overcharge. But those fixes have been pushed back in order to focus on the more urgent Y2K problem. "Medicare must deal with year 2000 compliance aggressively to ensure no interruption in our services in claim payments," said administrator Nancy-Ann Min DeParle. Meanwhile, House Majority Leader Dick Armey is taking a closer look at the 2000 bug. He put up a Y2K page on his Web site (http://www.freedom.gov) that focuses on efforts to fix the federal government's computers. If Washington's built-by-the-lowest-bidder computer systems can't understand the year 2000, everything from national defense to mail delivery to air traffic control could have problems. Mr. Armey warns that government computers are behind schedule on an immovable deadline, leaving America at risk. "Recently just one wayward satellite wreaked havoc on millions who didn't even know that they depended upon it," he points out on his site.
Flood of bad news
Mexico's Popocatépetl volcano shuddered and sent a fountain of steam 3,000 feet into the air last week. Experts worried about the implications of increased activity at the volcano just 50 miles southeast of Mexico City, one of the world's most populous urban centers. Meanwhile, Bangladesh continued to suffer through the most prolonged flooding on record. More than 400 people have died, and 60 percent of the country is now under water. And in China, flooding along the Yangtze River has killed 3,000 this summer, creating a political firestorm in the normally tight-lipped media. Environmentalist Dai Qing is criticizing one of China's top officials, Li Peng, for promoting the outsized Three Gorges Dam. She said money spent on the $29 billion project could have instead been used to reinforce existing dams along the flood-prone lower reaches of the Yangtze.
World in brief
Not everyone in Sudan is angry about last month's U.S. cruise missile attack. Televised protests over the air strike were "very much orchestrated and unspontaneous affairs," according to a Religion Today report. Students and "more educated members of society," the report said, hope to see the Islamic fundamentalist government in Khartoum ousted. One European diplomat who called a Sudanese friend to apologize for the U.S. attack was told, "I'm not sorry at all. They should have hit much harder." Embassy alert
The American embassy in Lome, the capital of Togo, was closed Aug. 31 after renewed threats against U.S. facilities in Africa. The State Department advised Americans to "avoid all U.S. facilities" there. A similar notice was issued to American citizens in Ghana, where the embassy was closed Aug. 31- Sept. 3. The State Department also issued a warning to Americans in South Korea. It said U.S. officials "received unconfirmed information that terrorist action may possibly be taken against official U.S. Government installations and/or personnel." Serb insecurity
U.S. envoy David Scheffer, seeking to investigate reports of mass graves in Kosovo, was denied a visa by Serbian officials. Mr. Scheffer said on Radio Free Europe that the denial reflects the Serb government's "insecurity about its own accountability under international law."
IMF: New World welfare
Blame-layers at the Kremlin accused the International Monetary Fund of precipitating Russia's financial crisis because the lending agency did not come through with funds in time to avoid a stock market crash and rapid devaluation of Russia's currency, the ruble. In reality, however, the Communist leadership in the Duma, Russia's lower house of parliament, refused to accede to stringent economic reform measures tied to the IMF bailout, and now the Communists are looking for cover. More dollars may be coming. The U.S. Senate passed, 90-3, a measure to replenish IMF coffers, depleted by bail-outs attributed to "Asian flu" markets from Jakarta to Japan. The measure authorized an additional $18 billion in U.S. contributions to the IMF. A less extensive measure is pending in the House, where pro-life Republicans have held up further funding of IMF without restrictions on overseas population-control programs. A House vote is expected later this month. Russia has already received $50 billion from past IMF "loan" packages. With food supplies in serious question, Russians appeared to pay little attention to a three-day summit meeting between Presidents Boris Yeltsin and Bill Clinton. Economic pep talks and nuclear arms treaties notwithstanding, press and pundits were free to focus on the embattled tenures of both leaders. Russian ultranationalist leader Vladimir Zhirinovsky said, in reference to Mr. Clinton, that Russians had no business meeting "with a man who cannot settle his relations with a secretary." Missionary and journalist Beverly Nichols said not all Russians find it so simple. "They look at the strong economy and standard of living in America under Clinton's presidency, and then the state of their country under Yeltsin, and decide they would be happy to trade," she said.