Dispatches > The Buzz

The Buzz

Issue: "Something's rotten," Sept. 30, 2000

High oil prices, taxes threaten global economy
Fueling discontent
Roads jammed. Supermarket shelves bare of bread. Gas stations running dry. That's Britain's nightmare as sky-high gasoline prices put farmers and truckers on strike. Protesters blocked fuel shipments out of the 10 refineries that serve the country. Truckers clogged major arteries. Throughout Europe, the volatile combination of soaring oil prices and high fuel taxes has people up and down the supply chain worried that they'll go out of business. Even though the UK is more computerized than it was during the 1970s energy crisis, the New Economy isn't holding back all the pain. "Because of the just-in-time method of supply and distribution, this is having a major impact. Companies simply do not have the supplies on hand that they used to," said Vincent Burke, a spokesman for the London Chamber of Commerce. Mr. Burke estimated that the protest cost $1.5 billion, about 10 percent of gross domestic product over four days. Oil prices have more than tripled since December 1998. They hit a new 10-year-high in mid-September as OPEC's promise to increase output met heavy skepticism. The cartel blames the high prices on refining bottlenecks, booming bull market speculation, and high taxes. The taxes are particularly cruel in Britain-well over $3 per gallon. Representatives from member oil states headed to Caracas, Venezuela, for a Sept. 26 summit to discuss how to handle the situation. If prices hit the painful $40-a-barrel mark, they might increase production. Maybe. To make matters worse, tensions between Iraq and Kuwait are escalating; Iraq flew a jet fighter over Saudi airspace for the first time in more than a decade. Here in the United States, observers predict that it will cost more to keep warm this winter. This may be a good time to add insulation, install weather-stripping, and do other home improvements. The Department of Energy expects heating oil prices nationally to spike up about 30 percent from last year. Natural gas prices are expected to rise by 25 percent. Olympics on TV: ratings fall far short of hype
No gold, no silver, not even bronze
The Olympics is the most-hyped sports event in the world-and this year it can't beat regular football games on TV. The first three days' ratings were down 32 percent from the 1996 Atlanta extravaganza. Sydney is 14 hours ahead of New York, so NBC decided to run the competition on tape, with events running from two to 20 hours after they take place. Thanks to the Internet, what airs on TV is already old news. People know the results. Small wonder ratings were approximately 10 percent lower than what the network promised its advertisers. "Not as many people are tuning in as was projected," NBC Sports vice president Kevin Sullivan said. At least the Olympics kept Who Wants to Be a Millionaire? from the top of the heap. The buzzword for delayed sports is "plausibly live." Networks treat taped material as if it were live, withholding results to heighten the suspense. To build an audience, they package events as entertainment, with endless features thrown in to generate drama. The emphasis is on "glamour sports" like swimming and gymnastics. NBC Sports chairman Dick Ebersol said that such a plan was the only way to attract a mass audience to sports about which they usually couldn't care less. "The results of the Olympics are not what truly matter to the vast majority of the audience. They're interested in the story." The Peacock network shelled out $705 million for the U.S. TV rights and $100 million in production costs to cover the Sydney Games. Low ratings may make the Olympics less of a showpiece (and cash cow), especially when they aren't hosted in North America. FDA scientists vote to retain homosexual blood donor ban
Bad blood
The Food and Drug Administration (FDA) asked its scientific advisers whether it should ease its ban on homosexual male blood donors. They voted no by a narrow 7-6 tally, saying there's not enough evidence about how the risk of AIDS contamination might be affected. Nobody knows exactly how many homosexual men want to donate and how many have HIV, but critics claim that HIV is easier to detect now than when the ban started in 1985. Today, all donated blood undergoes strict testing for blood-borne diseases. But tragic errors still happen. Of the nation's 12 million units of donated blood, about 10 HIV-infected units slip through each year, causing about two to three HIV infections a year, said Michael Busch of the University of California, San Francisco. The Red Cross says that changing the policy could require HIV tests to catch an additional 1,200 infected units of blood. The result would be a big strain on the system. "We cannot change our procedures in a way that would result in increased numbers of infectious donation in our blood supply," said Rebecca Haley, the Red Cross' chief medical officer. Currently the FDA bars blood donations from homosexual men, intravenous drug users, prostitutes, and people who have engaged in risky behavior, such as having sex with a prostitute, within the previous year. Congress urges abortifacent ban
The morning after
Pro-life lawmakers last week pushed through a proposal aimed at eliminating tax funding for "morning-after pills" distributed at school-based health clinics. According to the Congressional Research Service, 180 public-school clinics distribute the abortifacient pill. The House, led by Rep. Tom Coburn (R-Okla.), voted 250 to 170 to encourage House negotiators, in conference with Senate negotiators, to reinstate a proposal that prohibits the use of federal funds to distribute the abortion pill. Earlier this summer, Sen. Jesse Helms (R-N.C.) had sponsored a provision to the education spending bill that would have done just that. The measure was adopted by the full Senate, but was later scuttled by Sens. Arlen Specter (R-Pa.) and Tom Harkin (D-Iowa) during a closed-door meeting. Rep. Coburn's non-binding resolution again places the issue on the backs of House Democrats, who are said to be skittish about how issues that interfere with parental rights will play in the November elections. Mr. Coburn noted that "a child in school can't get an aspirin without a parent being involved but we can give them a prescription pill." Antitrust chief Klein quits; calls for global control of market mergers
Today, Redmond; tomorrow, the world
They're cheering in Redmond, Wash., hometown of software titan Microsoft. Joel Klein, chief free-market foe at the Justice Department, announced last week that he would leave the government at the end of September. "I have done what I set out to do here, and our work is on the right track," said Mr. Klein, head of the Department's antitrust division since 1996. Among his deeds: convincing a federal judge that Microsoft hurt consumers by giving away its Web browser and blocking or altering nearly 170 business mergers. Toward the end of his tenure, Mr. Klein expressed hope that antitrust enforcement would go global. He urged the World Trade Organization, the World Bank, the United Nations, and the OECD to establish an international antitrust agency. Washington warmly welcomes India's P.M.-despite human-rights questions
Indian summer
A Hindu priest opened a joint session of Congress with prayer Sept. 14, in just one of many signs of deference to visiting Indian Prime Minister Atal Behari Vajpayee. The prime minister told House and Senate lawmakers that "security issues have cast a shadow on our relationship. I believe this is unnecessary." Intent on soothing congressional concerns about a nuclear arms race between India and Pakistan, the prime minister said India "does not wish to unravel your non-proliferation efforts." The warming relations-which follow President Clinton's visit to India earlier this year and included the largest dinner for a head of state ever hosted at the Clinton White House Sept. 17-signal isolation for Pakistan and its current leader, General Pervez Musharraf, who took power in a military coup last October. Security issues and trade overshadowed India's abysmal record on religious freedom under Mr. Vajpayee's Hindu nationalist government. Outside the Capitol, hundreds of Christians protested the visit. They pointed to increasing violence against Christians and Muslims, directed by Hindu extremists with links to the prime minister's Bharatiya Janata Party. On Sept. 12, unidentified assailants beheaded Yesu Dasu, a 52-year-old Christian preacher in Karimnagar. Last July, Catholic priest Victor Crasta was shot to death by militants in Tripura. It was not a good week for Pakistan's Gen. Musharraf. While India's prime minister was feted in a four-day visit to Washington, Pakistan's head of state had to settle for a five-minute chat with President Clinton at a reception in New York during the UN's Millennium Summit. A bomb threat then forced Gen. Musharraf's Pakistan-bound plane back to New York. That delayed his return home until the eve of a bomb blast in the capital, Islamabad. Two dozen people died when a bomb packed in a box of grapes exploded in a crowded fruit market. The other blast for Pakistan's military ruler came in a World Bank report. It said poverty and severe economic hardship in Pakistan are on the rise again, after a decade of declining poverty trends. Will troubled Fujimori avoid Peruvians' political wrath?
Escape artist
Peru's President Alberto Fujimori showed yet another way to avoid political disaster after his top aide was caught in a bribery scandal. On Sept. 15 Mr. Fujimori announced an end to his 10-year-old administration and called for new elections after a videotape caught Vladimiro Montesinos, head of Peru's intelligence service and de facto head of the military, bribing a congressman. The tape eroded Mr. Fujimori's credibility and supported the claims of his opponents that the government used bribery and blackmail to obtain a congressional majority it did not legitimately win at the ballot box. Mr. Fujimori was reelected last May amid fraud allegations and international isolation. The president violated the constitution in seeking repeat terms of office, a move supported by Mr. Montesinos, and fired judges who ruled his decision unconstitutional. Now Mr. Fujimori has fired Mr. Montesinos, but he remains a free man. While Peruvians are demanding swift new elections and the spy chief's arrest, Mr. Fujimori says elections will likely not be held until next year. At a public appearance, he also indicated that, while he plans to step down by then, he may run again in 2006. The United States has been slow to criticize Mr. Fujimori because he has been successful in cracking down on cocaine trafficking in Latin America and in halting guerrilla activity in Peru. Analog criminal hacks a key computer-by stealing it
Low-tech hacking
The biggest heist of the year may not have been stolen rare jewels, fine art, or gold bars. It might have been a laptop computer, stolen from a hotel ballroom. Local police might not have grasped the potential significance of the crime. "We took it as a straight laptop theft, which is pretty typical for a hotel," said Irvine, Calif., police desk officer Sgt. Tim Smith. But it was more than that: The stolen computer-containing all sorts of crucial business information-belonged to the chief executive officer at one of the biggest companies traded on the NASDAQ. After Irwin Jacobs, CEO of wireless giant Qualcomm, gave a speech at the Hyatt Regency-Irvine ballroom, he stepped down from the podium to talk to a small group of people. He left his IBM ThinkPad that held his presentation sitting there. He chatted for 15-20 minutes, never stepping more than 25-30 feet from his PC. Still, it vanished. The laptop itself was expensive, but the real loot was stored on the hard drive: It included copies of valuable secrets about the company's technology, which pulled in $3.9 billion in revenue last year. Plenty of people would want to know what's on the mind of Irwin Jacobs. Qualcomm is in a battle royal with other telecommunications players, notably Nokia and AT&T, trying to conquer the world of wireless communication. The San Diego company is developing a technology that can allow high-speed Internet connections through cell phones and handheld computers. Those who worry about computer hacking may want to consider the threat of old-fashioned robbery. Even in the new economy, a simple theft can have big ramifications. Survive this
Reality TV's next frontier
Just when you thought reality TV had been burned into the ground, NBC announces it plans to send somebody into space for prime-time viewing. The Peacock network missed out on the Millionaire and Survivor crazes, but now plans the most outlandish thing yet: Destination Mir. NBC plans to debut the show sometime next year, with millions expected to watch some Joe Sixpack put through astronaut training and a rocket shot to rendezvous with the Russian space station Mir. To add to the fun, the show will follow a group of contestants from which one lucky winner gets the big bang at the end. "With every network buying reality shows, including us, this was something that took (the genre) to the next level," NBC Entertainment President Garth Ancier bragged to Variety, Hollywood's trade paper. "It's a completely original idea. Nobody else is going to do another space shot." This commercial spectacle is possible thanks to a privatized space program that once belonged to the Soviet Union. NBC will shell out $35-40 million for the show; nearly $20 million goes to rent the space station. The Destination Mir winner will get to ride in a real space capsule for a 10-day round trip. -Chris Stamper Celebrity lesbian couple calls it quits
Etheridge de-Cyphered
Pop star Melissa Etheridge last week broke up with her lesbian girlfriend and promised to act "in the best interest" of their two kids, who were fathered by classic rocker David Crosby via sperm donation. Julie Cypher gave birth to the couple's 3-year-old daughter and 1-year-old son. The announcement came via PR statement from Miss Etheridge's record company: "With the utmost of love and respect for one another, we have decided to separate," they announced. No comment was made on the future of little Bailey and Beckett. Theirs is the second celebrity lesbian relationship to go bust this summer. Ellen DeGeneres and Ann Heche announced their breakup last month after spending months milking the press for publicity. Miss Etheridge and Miss Cypher, who had been together 12 years, gained a gaggle of attention earlier last winter after they gave Rolling Stone the David Crosby story. Film director Cypher was married to actor Lou Diamond Phillips in the 1980s. Lionel trains make a comeback
Toy trains engine on
Choo Choo! Joshua Lionel Cowen thought a battery-powered train would lure shoppers to his store back in 1900. What resulted were Lionel trains, which have had an on-again, off-again relationship with both children and adults ever since. Cowen hit the jackpot when he convinced his friend Walt Disney to let him sell a train with Mickey and Minnie Mouse on board. He sold over 200,000, and by 1953, with reported revenues of more than $33 million, Lionel became the world's biggest toy company. Then the bottom fell out. In the 1960s, Cowen died and kids were more concerned with cars, planes, and eventually video games. Lionel passed through various owners, and devoted collectors wondered if the company would survive. Now model trains are making a comeback, with Lionel's sales up 20 percent this year. Today's Lionel trains try to keep their attraction with longtime collectors, but the toys have new features for the 21st century: stereo sound, cruise control, and remote maneuvering. According to Lionel researcher Todd Wagner, the company aims to make models now as realistic as possible-absolutely to scale and with dozens of moving and separate parts.

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