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MEMORANDUM
TO:
ToM FREEDMAN, MARY L. SMITH
FROM:
DREW HANSEN
RE:
ISSUES FROM WEEKLY AND MONTHLY MAGAZINES
DATE:
AUGUST 12, 1997
MAGAZINES CONSULTED: Business Week (August 11), The Economist (August 9), Fortune
(August 18), The New Republic (August 25), Newsweek (August 18), Time (August 18), U.S.
News & World Report (August 18/25).
ATTACHMENTS: tables of contents for all of the above; "Hostility in America," James Q.
Wilson, The New Republic, August 25, pp. 38-41 (review of Crime is Not the Problem: Lethal
Violence in America, Franklin E. Zimring and Gordon Hawkins); "Off the Dole and On the Job,"
Time, August 18, pp. 42-44; "Fast Food and Welfare Reform," U.S. News & World Report,
August 18/25, pp. 16-19 (with companion article, "Few On Welfare Will Be Forced to Work," p.
18).
CHILD CARE
"Minding the Kids--On the Net," Business Week, August 11, p. 97.
WorldWide Access in Chicago is testing a system called KidCam that lets parents
with Internet access observe their child's day-care room on their PCS, and (if they
have a video camera) have a teleconference with their children.
CITIES
"City Boosters," Time, August 18, pp. 20-24.
"New pragmatist" city mayors are pioneering innovative programs and following a
"flexible, post-ideological approach to politics," (p. 21). (A companion article
called "Disaster on the Potomac: How Not to Run a City" blasts Washington, D.C.
city management.)
Mayors have been forced to innovate by declines in federal aid and the loss of their
tax base to the suburbs.
In Indianapolis, "competing out" (privatizing formerly public services) is saving the
city money.
In Cleveland, a 60-page "People's Budget" has set priorities for the city, such as
improved removal of dead trees and increased lead poisoning screening for
children. Cleveland also has a $72 million light rail line and a new sports arena.
The city now has a balanced budget and has accumulated a $25 million
contingency fund.
In Philadelphia, Edward Rendell is widely credited with "saving" Philadelphia by
facing down a strike by the public-employee unions.
Yet critics charge that privatization is only a new form of patronage, as some
mayors accept campaign contributions from companies who reaped the benefits of
privatization. Also, few mayors are focusing on anti-poverty programs.
CRIME
"Kinder Cut," The New Republic, August 25, pp. 12-13.
Last year's California law mandating chemical castration for several classes of
convicted sexual predators will most likely be struck down by a California court
next year.
But chemical castration can be effective in circumstances more limited than those
in which it is used in California; states should consider tailoring their laws to
specific categories of offenders who are likely to be helped by chemical castration.
"Hostility in America," James Q. Wilson, The New Republic, August 25, pp. 38-41 (review of
Crime is not the Problem: Lethal Violence in America, by Franklin E. Zimring and Gordon
Hawkins). *article attached.
Zimring and Hawkins use World Health Organization data to argue that people kill
each other more often in America than in other countries largely because
Americans are more heavily armed than residents of other countries.
Zimring and Hawkins also point to the frequency and violence of personal conflicts
as an explanation for crime in America. They reject explanations based on the
media and on drugs.
Wilson contends that homicide rates in the African-American community are
largely driving the high rates of crime in America, and explains high homicide rates
in the African-American community by the "legacy of slavery, lynching, and past
failure to enforce the law when blacks harmed other blacks," (p. 39).
Possible solutions for gun-driven violence: identifying and questioning carriers of
concealed weapons, making homicide sentences longer, early intervention in the
lives of at-risk children and their mothers and fathers.
EDUCATION
"The Class of Boxcutter High," Business Week, August 11, p. 24.
A new research paper by economist Jeffrey Grogger of UCLA finds that minor
levels of school violence (faced by about two-thirds of public school students)
reduce students' chances of graduation by 1% and chances of going to a four-year
college by 4%. Moderate levels of violence (faced by about 9% of students)
reduce students' chances of graduation by 5% and college attendance by 7%.
"Defining Disability Down," Ruth Shalit, The New Republic, August 25, pp. 16-22 (cover story).
An investigative piece arguing that current legal protection of some kinds of
learning disabilities (LD) is a "subversive challenge to basic notions of fair play,
professionalism, and equal protection under the law," (p. 17).
Learning disabilities are vaguely defined in statutes such as the Rehabilitation Act
of 1973 and the Americans with Disabilities Act (ADA).
Even though the ADA is not supposed to lower educational or vocational
standards, the Department of Education's Office of Civil Rights regularly rebukes
school districts who do not exempt LD children from educational requirements.
The author of the article argues that under current law "The fact that one displays
a marked lack of aptitude for a particular intellectual discipline or profession
establishes one's legal right to ensure at least a degree of success in that discipline
or profession." Example: in 1993, a would-be attorney filed a lawsuit after failing
the bar three times, charging that she was reading disabled and had not been
provided with adequate accommodation for her disability. On July 3, 1997, the
court ruled in the plaintiff's favor, arguing that the plaintiff's skills were impaired
not when compared to an "average person in the general population" but when
compared to her fellow would-be lawyers, setting up a legal protection for a
plaintiff who apparently lacked some of the requisite skills of lawyering.
There are few adequate tests to determine whether an individual has a certain
learning disability or not. The Boston University Office of Learning Disabilites
Support Services had, until a recent audit, never turned down a student's request
for special dispensation on the grounds that he or she had not presented enough
evidence.
The number of learning disabled cases is significant and increasing: only 14% of
ADA lawsuits are filed by persons with physical disabilities (being in a wheelchair,
being deaf or blind). The Department of Education estimates that about half of the
5.3 million disabled children in Individual Education Programs are learning
disabled. About 300,000 LD students are currently enrolled in college.
Protections for LD students on SAT tests has led to scores that considerably
overpredict their college grades.
The lack of standards for determining LD cases and the special protections granted
to LD individuals under the law has led to an explosion in so-called "boutique"
diagnoses, such as "dyscalculia" (inability to learn math) and "Oppositional Defiant
Disorder" (a disability signaled by a child's "recurrent pattern of negativistic,
defiant, disobedient, and hostile behavior"). "Boutique" therapies have been
keeping pace: in Orange County, parents are demanding that school districts pay
for horseback riding to help their children who have "executive function disorder"
(difficulty initiating, organizing, and planning behavior).
FCC
"Memo to the FCC: Make Deregulation Work," Business Week, August 11, p. 33.
Deregulation efforts have been generally unsuccessful in opening up all phone
markets to competition.
The FCC should do the following: codify anti-monopoly standards currently in
effect, pre-empt anti-competitive rules at the state and local levels, and publicly
name companies that stymie competition.
HEALTH CARE
"Guess Who's in the Waiting Room?," Business Week, August 11, p. 32.
Investigations into health care fraud are increasing: the FBI initiated 2,300 health
care probes in the first half of 1997, up from 591 in 1992.
Big fraud cases besides Columbia/HCA: SmithKline Beecham Clinical
Laboratories reached a $325 million settlement with the Department of Justice
earlier this year because of false billing for lab tests; the University of Pennsylvania
agreed to pay $30 million last year after being accused of billing Medicare for
services of teaching doctors when residents performed the work.
Significant fraud probes are currently underway in the hospital industry, and
managed care probes are expected.
"Should the FDA Lower the Threshold?," Business Week, August 11, pp. 94-95.
Controversy over approval of Myotrophin, a drug for Lou Gehrig's disease. The
drug's manufacturer (Cephalon) argues that the drug has worked and that further
research is too expensive, while the FDA argues that there is not enough evidence
to justify approval (FDA advisers voted 6-3 not to approve the drug, with only
non-physicians voting for approval).
Cephalon argued that the FDA should suspend its rules, as it did with some AIDS
and Alzheimer's drugs, to allow interim treatment with the drug while Cephalon
continued research into the drug's effectiveness
"Little Baby Steps," U.S. News & World Report, August 18/25, p. 22.
The recent expansion of child health insurance will probably only cover under 20%
of the nation's 10 million uninsured children because some currently insured
children will be dropped from private coverage and switched into the government
system.
But safeguards in the plan similar to those adopted by Florida and Minnesota could
minimize this "switching" effect.
"Peppermint Prozac," Arianna Huffington, U.S. News & World Report, August 18/25, p. 28.
580,000 children nationwide are being prescribed anti-depressants such as Prozac.
Yet diagnoses for depression among children are often vague, leading to
overprescription as a quick remedy for common childhood problems such as being
"unusually sad or irritable" or finding it "hard to concentrate."
MARRIAGE/DIVORCE
"Do You Mean It?," The Economist, August 9, pp. 20-21.
On August 15, a Louisiana law creating "covenant marriages" (an optional form of
marriage that requires pre-marital counseling and allows divorce only under certain
strict conditions) goes into effect.
Critics worry that the law might encourage the types of destructive behavior that
are grounds for a divorce (i.e. abuse or infidelity as a quick way to get a divorce
from a covenant marriage), that the law does not cover all destructive behaviors
(certain kinds of emotional domestic violence), and that the law might encourage
long, loveless marriages.
"The Ties that Bind," Time, August 18, pp. 48-50.
Current backlash against the anti-divorce movement of the early 1990s. Critics
charge that a national crusade against divorce is a "think-tank inspired
pseudoissue."
Some debates: whether divorce helps or hurts children, whether the anti-divorce
movement is a backlash against feminism or not, whether divorce is a praiseworthy
expression of personal growth or a narcissistic movement of the middle class,
whether divorce is a movement of self-indulgent individuals or whether it is driven
by social forces such as the economic independence of women.
Divorce might be self-correcting: trend in cohabitation combined with rising
divorce rate encourages couples to marry less hastily and take marriage more
seriously, hence the divorce rate might decrease in time.
WELFARE
"Off the Dole and On the Job," Time, August 18, pp. 42-44. *article attached.
Marriott's Pathways to Independence program boasts a 71% retention rate after
two years for its 500 graduates, compared to a 60% retention rate for regular
hires. But half of a special class of homeless participants failed earlier this year,
and.
Packard Bell NEC relied on a city job program in Sacramento to screen and refer
applicants. Of the 4,000 workers the company hired, nearly 1,200 had been on
federal aid or were unemployed or underemployed.
Since 1995, Smith Barney has hired 27 single parents in entry positions at salaries
of up to $28,000. Participants get 16 weeks of preparation at Wildcat Services, a
New York nonprofit, and then spend 16 weeks as interns.
A partnership between Cablevision and the South Bronx Overall development
Corporation has led to placement of 130 cable installers, 82% of whom are still
working.
The Chicago Manufacturing Institute, a federally financed training program, has a
90% success rate in initial placement.
The Center for Employment Training, a training program financed by government
and private agencies, placed 3,141 graduates last year.
United Airlines plans to hire 400 welfare recipients this year.
"Fast Food and Welfare Reform," U.S. News & World Report, August 18/25, pp. 16-19. *article
attached.
The restaurant industry is a crucial provider for jobs for welfare recipients --
15.5% of Burger King's new hires in the past ten months were welfare recipients.
Restaurant jobs stress skills such as punctuality and attitude, as opposed to the
specific job skills often developed by government-sponsored training programs.
Critics worry that there are not enough fast-food jobs to go around, that fast-food
jobs may only help younger people to go off welfare, and that the stigma attached
to such jobs might limit their usefulness as welfare-to-work routes.
"Few on Welfare Will be Forced to Work," U.S. News & World Report, August 18/25, p. 18.
*article attached.
A new Urban Institute study argues that fewer than 200,000 of the 3.3 million
adults on welfare will be forced into work by the new welfare law.
The reasons: many exemptions for states, Labor Department ruling that welfare
recipients who work for their benefits must be subject to labor laws.
State spending per welfare recipient is increasing, allowing more money for
transportation and child care services, because state block grant levels were based
on larger caseloads of earlier years.
AUGUST 18-25, 1997 / VOLUME 123 / NUMBER 7
U.S. NEWS ONLINE
http://www.usnews.com
U.S.News
ssue
MYSTERIES OF SCIENCE
32.
The wonder of science is that the more we know, the more we know there is to know.
6 UPDATE
23 LINGERIE LOCKED HIM
38 IS THERE LIFE ON OTHER
New Columbia/HCA boss
UP. Sexual paranoia, one
PLANETS? The hunt for life
orders radical surgery
more block to Mideast peace
elsewhere begins on Earth
7 OUTLOOK
28 ON CULTURE
40 WERE DINOSAURS COLD
66 HOW DOES ANESTHESIA
Bug munchies; the game of
Arianna Huffington worries
BLOODED? The laws of phys-
WORK? A cellular riddle
Magic; high-speed ferries
about putting kids on Prozac
ics may have the final word
68 HOW MANY PEOPLE
9 PEOPLE
31 IN BRIEF
48 WHAT IS SLEEP FOR?
WERE HERE BEFORE COLUM-
Jeanne Calment; William
Teamsters; teens and drugs;
Rest, infection fighting, cool-
BUS? 1 million? 10 million?
Burroughs; Allen Iverson
divorce; plane crashes
ing the brain, learning, un-
71 WHAT IS A MEMORY?
11 WHISPERS
learning, or none of the above
Nothing like a computer's
White House bars nonessen-
SPECIAL REPORT:
52 WHY SHOULD MALES
74 HOW DO GENES SWITCH
tial staff from Air Force One
WHAT SCIENCE STILL
EXIST? According to evolu-
ON? Or: How did evolution
SEEKS TO DISCOVER
tionary biology, they
craft new body designs?
U.S. NEWS
32 COVER STORY: NO END
shouldn't
78 HOW MANY SPECIES ARE
16 FAST FOOD AND WEL-
OF MYSTERIES. Nineteen un-
55 WHY DO WE AGE? Is it
THERE? Biology's black hole
FARE. Lasting reform may
answered questions in sci-
wear and tear or a molecular
83 HOW STRANGE IS THE
hinge on burger flipping
ence's never-ending quest to
time bomb in our cells?
UNIVERSE? Theories collide
19 FRESH APPLE. Will Mac-
get at the truth
58 WHAT CAUSES ICE AGES?
86 EVERYDAY MYSTERIES.
intosh lovers ever sleep with
34 HOW OLD IS THE
Blame it on the Himalayas-
Barking dogs; hot peppers;
the enemy?
UNIVERSE? An answer may
or the evolution of grasses
violins; noise; hiccups
22 ON POLITICS
be close-but it raises new
63 CAN A COMPUTER BE
Matthew Miller says kids'
questions about the origins of
CONSCIOUS? Steven Pinker
92 EDITORIAL
health coverage won't go far
the cosmos
on the nature of awareness
Attention must be paid
COVER: Digital photo montage by James Porto for USN&WR
Copyright © 1997. by U.S. News & World Report Inc. All rights reserved. U.S. News & World Report (ISSN 0041-5537) is published weekly, except for one combined issue mailed in August and a second combined issue mailed in De-
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H
PHOTOGRAPHS (FROM LEFT): LOUIS PSIHOYOS-MATRIX HOWARD SCHATZ FOR USN&WA; CHIP SIMONS FOR USN≀
U.S.NEWS & WORLD REPORT, AUGUST 18 / AUGUST 25, 1997
3
MICHAEL ELINS FOR USN&WR: MAX AGUILERA-HELLWEG FOR USN&WR: JOSEPH PLUCHINO FOR USN&WR
(ATOM) JAMES PORTO FOR USN≀ (INDIAN) JOHN WHITE MICHAEL HOLFORD
become even more empty and self-
contradictory than usual. García Már-
quez's most recent stunt was to depart
for self-imposed exile from Colombia
once again, proclaiming that he could
Hostility In America
no longer abide the corrupt rule of
President Ernesto Samper, a man whom
he had previously defended from gringo
BY JAMES Q. WILSON
charges of narco-democracy. His refuge?
That great drug-free zone, Mexico. (It'is
just a matter of time before we hear
Crime Is Not the Problem:
about his intense friendship with, and
Lethal Violence in America
the Herculean work habits of, Cuauh-
témoc Cárdenas.)
by Franklin E. Zimring and Gordon Hawkins
arcía Márquez's advice to
(Oxford University Press, 259 pp., $35)
G
young journalists is very,
ne of the more frustrating
lem, and that the main goal of public
very strange. At his semi-
O
difficulties facing students
policy ought to be to reduce violence.
nar in Cartagena last year,
of crime is our inability to
To do that, we must first understand
a dozen of Latin America's most promis-
compare crime rates across
why our rate of violence is so much high-
ing reporters heard him declare that
countries. Interpol gathers crime data
er than in England, Australia, France or
"journalism is not a job, it's a gland."
from national police agencies, but it does
Germany. The answer given by Zimring
Picking up the morning Cartagena
so in a way that make its reports next to.
and Hawkins is that we kill each other
paper, he turned to the classified ads.
worthless. The agency fails to assess the
more often (and engage in property
A woman was selling her brand-new
quality of the accounts that it receives,
crimes, such as robbery, that often have
stove, still in pieces. "Why is the stove
and it presents them in a way bound to
fatal outcomes) in large part because
unassembled?" García Márquez won-
cause confusion. Thus, not long ago,
Americans are more heavily armed than
dered. "This could be a story. Should
someone published an op-ed essay in
are other societies. Opponents of gun
we call?" No one at the table knew quite
which the author claimed that the
control will reflexively object to this con-
what to say.
Netherlands had a higher murder rate
clusion, but, if they are to prevail, they
But if that non-story qualifies for Gar-
than did the United States. That is, to
will have tough going against the argu-
cía Márquez's front page, his own part-
put it mildly, an implausible idea. In his
ments made here. Using data from the
nership with Castro is not necessarily
defense, however, he displayed the Inter-
World Health Organization, a group
the news. "This is not an interview," he
pol report. At first glance, the document
that counts dead bodies instead of mere-
barked when a member of the seminar
seemed to confirm his view, until one
ly repeating police reports, and gather-
broached the subject. "If I want to ex-
noticed that every homicide reported
ing facts from big-city police depart-
press my opinion on Fidel, I'll write it
for the United States was completed-
ments abroad, Zimring and Hawkins
myself, and believe me, I'll do a better
that is, there was a dead body-but the
show that American cities are not very
job." (Besides, this professor of jour-
homicides reported for the Nether-
different from foreign ones of similar
nalistic ethics charges up to $10,000
lands included both completed and
size with respect to theft or burglary, but
for an interview, using the proceeds to
attempted (no dead body) homicides.
they are vastly higher with respect to rob-
finance his film institute in Havana.)
The attempts, of course, far outnum-
bery and homicide. New York City has
"Fidel is one of the people I love most in
bered the actual murders, and there was
less theft and burglary than London but
the world," he explained. "A dictator,"
no explanation of how the Netherlands
vastly more robberies and homicides.
someone muttered. The writer shot
decided which actions were attempted
The same difference exists between Syd-
back: "To have elections is not the only
murders and which were just everyday
ney, Australia, and Los Angeles.
way to be democratic." But a Venezuelan
assaults. We do not know very much, in
Robbery involves the threat of vio-
member of the seminar persisted: "No
short, about how the characteristics of
lence; burglary need not involve vio-
one has elected you to office. You don't
nations or their various criminal justice
lence, though violence may occur if the
have'a public office, why do you act as
policies affect crime rates.
dwelling is occupied when the burglar
Fidel Castro's honorary chancellor?"
Franklin Zimring and Gordon Haw-
enters. In neither crime is death likely.
"I will not respond to a question asked
kins, two members of the Earl Warren
But thefts in American cities are more
in bad faith," García Márquez huffed. "I
Legal Institute at the University of Cali-
likely to lead to death than are thefts in
do it because he is my friend, and I
fornia at Berkeley, have plunged into
other nations. In 1992, there were seven
believe one must do everything for one's
this thicket, fully aware of the snags that
deaths in London resulting from a bur-
friends. I am always running errands for
it contains, to sort out how American
glary or robbery; in New York City, there
my friends."
crime rates differ from those of compa-
were 378, even though New York has
Only a few months after this remark-
rably industrialized nations. No one will
fewer such crimes than does London.
able exchange, the author of News of a
be surprised to learn that the United
American property crimes are much
Kidnapping stood before the Inter-Ameri-
States has a far higher rate of violent
more deadly than English ones, in large
can Press Association and denounced
crime, especially homicide, than West-
measure because our thieves are armed.
"bad journalists [who] cherish their
ern Europe or Australia. But some may
And much the same story can be told
source as their own life, especially if it is
be astonished to learn that the rate of
about assault. When one Londoner
an official source, and endow it with a
property crime here is similar to the
attacks another, death occurs in less than
mythical quality, protect it, nurture it,
rate of property crime elsewhere, and in
one-half of 1 percent of the cases, but
and ultimately develop a dangerous com-
many cases it is much lower. Zimring and
when one New Yorker attacks another,
plicity
with
it.
The errand-runner
Hawkins conclude that what is often
death is the result in over 3 percent of
lacks a sense of irony. He also lacks a
described as the American "crime prob-
the cases. The reason in part is that
sense of decency.
lem" is in reality a lethal violence prob-
firearms are used in 26 percent of all
38 THE NEW REPUBLIC AUGUST 25, 1997
New York assaults but in only 1 percent
as in Los Angeles, and yet those places
ure to enforce the law when blacks
of assaults in London.
differ dramatically in lethal behavior.
harmed other blacks. Oddly, Zimring
When all cities are exposed to the same
and Hawkins write as if the explanation
till, the use of guns is not the
media, it is hard to see how the media
S
is either unimportant or obvious. It is, in
whole story. If one looks
can explain differences in violence. No
fact, neither. If African American mur-
only at robberies in which
doubt there are copy-cat killers, but their
der rates were the same as white murder
no gun was involved, the
numbers are too small to explain why
rates,' the national murder rate would
death rate in New York City is still three
people in Tokyo almost never kill and
drop substantially. The effect of lowering
times as high as it is in London. Even
those in Atlanta often do.
the black murder rate to equal the white
in murder cases, guns are not essential:-
Violence also accompanies drug deal-
one would not make America as safe as
30 percent of all American homicides
ing, but the proportion of murders that
other industrialized nations, but it prob-
did not involve a gun. This means that
are connected to the drug trade is too
ably would have at least as big an effect
New Yorkers without a gun kill one an-
small to make much of a difference. The
as banning the existence of all hand-
other more often than do Londoners
best estimates are that no more than 10
guns. Non-gun homicides in New York
however armed. Obviously something
percent of all killings are connected to
more than weaponry makes New York
the drug trade, though from time to
a more lethal environment than Lon-
time the percentage is much higher in a
don.
few cities. Moreover, the laws on drug-
Since guns are not the whole story, we
dealing are about as tough in Australia
Facing Prostate
have extraordinary differences among
as they are here, but drug-connected
our states in how frequently people are
deaths are about sixty times more com-
Cancer?
killed. Maine and North Dakota have the
mon in Los Angeles than in Sydney. In
lowest homicide rates in the country, less
the United States, drug dealing on a
than one-tenth of the rates in Louisiana
large scale has probably created an
and Mississippi, but the reason cannot
array of armed gangs that make violent.
call
be that no one in Maine or North
encounters, and thus lethal ones, more
Theragenics Cancer
Dakota owns a gun. Rural states are
likely. But why? That is like asking why
Information Center,
probably armed to the teeth, as anyone
the vast majority of drug users are in
knows who has visited them during deer
this country even though almost every
I-800-458-4372
hunting season. The answer must be that
country has similar laws.
personal encounters in rural states are
more law-abiding and less productive of
here is another contribut-
personal violence. North Dakota not
T
ing factor that the authors
GOVERNMENT FORECLOSED
only has the second-lowest murder rate,
confront, but not, I think,
HOMES FROM
it has the second-lowest property crime
quite adequately. They ask
pennies on $1. Delinquent Tax,
rate.
whether the very high rate of violence
Repo's, REO's. Your Area.
Zimring and Hawkins suggest that
among African Americans explains the
Call Toll Free: 1-800-218-9000
many American communities are more
American homicide rate. There is no
dangerous not only because guns are
Ext. H-4377 for current listings
denying the core facts. Blacks are five
more available, but also because per-
times as likely to kill as are whites; black
sonal conflicts are more frequent and
males are six times as likely to kill as are
The ancient realists were Epicureans,
more violent. In their words, firearms
white males. Homicide is the leading
and they were regarded as dangerous to
are "neither a necessary nor a sufficient
cause of death among young black
civilization by Roman leaders, who
cause of violent death," but they are a
males, but it is the tenth cause for Ameri-
favored the idealistic philosophies of
contributing factor. If two men meet in a
cans as a whole. Zimring and Hawkins do
Platonism, Aristotelianism, and Stoicism.
bar or on a street corner and have an
not have much to say about why this is
Epicureans denied Providence, viewed
argument, the result of that quarrel will
true, except to argue that it is probably
man as an evolved animal, saw virtues
depend heavily on what weapons might
because African Americans live dispro-
and laws as manmade, avoided
be available with which to manage any
portionately in urban "slum neighbor-
involvement with government, spurned
communism, and welcomed women and
escalating violence. If there are only fists,
hoods" and because less violent middle-
slaves as fellows. Jews abhorred
only a fist fight can ensue; if there are
class blacks live in "racial zones" that put
Epicureans. Nevertheless, evidence exists
guns, there may be a fatal shootout.
them in close proximity to poor blacks.
that Jesus based his teaching on
Many years ago Zimring published arti-
This is not much of an explanation.
Epicureanism, only changing its theory of
cles suggesting that murder was often
Just limiting ourselves to big-city resi-
how immortal gods are made into a
the consequence of an ambiguously
dents reduces the black-white difference
theory of how immortal human beings
motivated assault: at the outset, nobody
in homicide. from eight times nationally
are made. This evidence is in the recently
intended the death of the other, but, as
to only (only!) four times at the big-city
discovered Gospel of Thomas, a collection
the fight progressed and a gun was at
level. Moreover, other equally poor and
of 113 sayings of Jesus which radically
hand, death was the result. To reduce
geographically isolated urban groups
differ from the Bible's. They are demon-
deaths one must either reduce the likeli-
strably notes taken while Jesus taught, for
have much lower crime rates. Koreans,
they match chronologically the vestiges of
hood of fights or disarm the fighters.
Vietnamese and Chinese are often poor,
history that underly the Markan myth.
In their new book, Zimring, and
and recent arrivals, and many of them
They reveal the historical Jesus and his
Hawkins largely reject other popular
live in similar "racial zones," but they kill
recurring use of Epicurean tenets.
explanations for violencé. They have lit-
at a far lower rate than do African Amer-
You Will Not Taste Death
tle use for studies of the impact of the
icans.
media, and I think that their rebuttals
JESUS AND EPICUREANISM
Now, explaining these differences is
are essentially correct. Violence in the
not easy. I am not certain what it is, but I
by Jack Hannah, 321pp.pbk. $12 postpaid.
media is everywhere, in London as
expect that it has much to do with the
Frank Publishing, 1816 Springmill Road,
Mansfield, OH 44903-8907
much as in New York, in Sydney as much
legacy of slavery, lynching and past fail-
AUGUST 25, 1997 THE NEW REPUBLIC 39
on the great increase in juvenile
y this point the reader
homicide rates that took place
between 1985 and 1992. Young
B
expects that Zimring and
Four Corners, Vermont
Hawkins will offer some
people, white and black, were be-
remedies for murder. Giv-
October sun, blue sky
coming much more lethal in the
en their analysis, there are only two
burning the fields sienna,
late 1980s, probably owing to
such remedies: reduce the availability of
even the governor upstate
the spread of gangs, their in-
guns or lower the frequency of hostile
raking a lawn, his kingdom
volvement in drug trafficking,
encounters. But they suggest neither.
of this world. That afternoon
and easier access to guns. The
Though they devote two long chap-
on Main Street, at the four
increase was greater for blacks.
ters to "Prevention," reading them re-
corners, the cop was trying
In the last few years, that rate
minds me of watching Mike Hargrove
to push a small bat with
has declined a bit, and this prob-
getting ready to bat. He comes to the
the butt of his pistol from
ably helps to explain why the
plate. He stretches his shirt, tugs at his
the window-box by the door
homicide rate generally in the
glove, pulls at his pants, shifts his cap.
of the Putnam Hotel, an
country has experienced so
adjusts his grip. He gets in place. Then
unused window-box
sharp a dip.
he backs out and does this all over again.
where the bat, mistaken, caught
But this dip may prove to be
To watch Hargrove at bat was like killing
by daylight, had fluttered down
short-lived. Census figures show
time during a rain delay. Will this ever
like a fallen leaf. Three
that there will be an increase in
end?
townsmen, not doing much
the proportion of young people
In this book, no. Zimring and Haw-
but holding their own, keeping
on the streets in the next few
kins write that a "book of this kind would
up on the news, kept watch.
years, and there is no reason yet
be a terrible place to posit a detailed and
The policeman laughed, tucking
to suppose that those who now
comprehensive program of loss preven-
his pistol back in its
lead a life of no fathers, gangs
tion from violence
A
terrible
place?
holster. The teenage bellhop
for friends and easy dollars in
Franklin Zimring has devoted much of
so far with nothing to do
the drug trade have decided
the last thirty years of his professional
to abandon that life. Rescuing
career to studying the impact of guns on
has pitched the bat out now.
It quavers to the walk
young people from those condi-
violence, and he still has nothing to say
by the rail of the hotel stairs.
tions, a frightfully difficult and
about what we should do? If not now,
The bellhop and a man
expensive proposition, may be as
when?
wearing a jack shirt, worn
effective as figuring out a way
Of course, he does have a few things
and too small for his arms,
(none now exists) to deny them
to say, but mostly by way of criticiz-
stomp at it, grinding their heels
access to the knives and guns
ing other people's ideas. Zimring and
between the palings. The boy
with which they can kill others.
Hawkins dislike many of our prison poli-
runs back inside. It is
Zimring and Hawkins neglect
cies because they think that, under the
Norman Rockwell-ish, this
almost all of these issues in their
impact of those policies, we send too
tableau the passers-by
desire to reassure us that there is
many nonviolent offenders to prison.
are watching. Soon the boy
no "black problem" in crime.
They argue that, in California, the
I'm sorry, but there is. It is cer-
"three strikes" law has had no connec-
is back and kneeling with
a fork. The leaves have fallen
tainly not the whole problem,
tion to the recent reduction in the rate
but the day is warm; even
and solving it would certainly
of violent crime, but they leave the
the governor tidies his lawn.
not solve America's violence
explanation of this controversial judg-
problem; Zimring and Hawkins
ment to a document that they do not
The boy will jab at the black
are right to point out that equal-
bother to summarize. (You will have to
remnant, the tines will ring
out, hitting the pavement
izing racial differences in mur-
look it up. But I warn you, it will be a
again; again. Everyone
der, desirable as that may be,
waste of your time.) They attack people
in the land must know his place,
would still leave America's homi-
who support various popular anti-crime
any beast
cide rate at least twice as high
programs for making absurd predictions
of the field his lair, his own.
as the rate in other major indus-
and failing to evaluate the results.
trialized nations. An all-white
They are probably right about this.
STEPHEN SANDY
America would be much more
But what programs do they favor, and
lethal than Italy, Canada, France,
how should we evaluate them? They
Germany and England, and
speculate about regulating handguns,
vastly more lethal than Japan.
but they offer no idea as to how it might
City are three times as common as all
But that is not the end of the story. It is
be done better. They ruminate about
homicides in London, a number that is
impossible to deny that very high rates
violent encounters, but they suggest no
only a bit smaller than the difference in
of violence among African Americans
way to reduce their frequency except to
white-only homicide rates between the
(rates that may have been coming down
suggest that victims be "as cooperative as
two countries.
of late among black adults) not only con-
possible" if they are threatened by a rob-
In fact, Arnold Barnett of MIT has
tribute mightily to the problem of life in
ber. They note that some people are try-
made some calculations that suggest that
our cities, they also disfigure and polar-
ing to teach violence avoidance in the
the homicide rate of adult black males
ize any effort to deal with our most seri-
schools, but they conclude that there are
has in fact been coming down much
ous domestic problem. The authors at
"insufficient data to form a judgment" as
faster than the white homicide rate. No
least acknowledge this effect. As long as
to whether these plans work.
one is quite certain why this has oc-
black violence is at so high a level, they
Perhaps Zimring and Hawkins are
curred, though certain possible explana-
observe, it will reinforce "white fear in
vague because they do not have any
tions-social progress, residential relo-
ways that palpably contribute to the
good ideas. That is not an embarrassing
cation-are obvious enough. We tend to
exclusion of blacks from the social main-
predicament. Very few people have good
forget these trends and to dwell instead
stream."
ideas about this subject, and for good
40 THE NEW REPUBLIC AUGUST 25, 1997
reason. Eric Monkkonen, after years of
afford to say that, while it is having its
PROTECT YOUR COPIES OF
careful digging in historical records, has
own trouble protecting people against
THE
been able to show that the homicide rate
crime, it wants to deprive these 65,000
NEW
REPUBLIC
in New York City has exceeded that of
people of the means to protect them-
These custom-
VO
London by a factor of at least five for the
selves. Under such conditions, you don't
made titled cases
of
last two hundred years. Similarly, Roger
need the National Rifle Association to
are ideal to protect
Lane has shown that in the early
defeat a government effort to disarm
your valuable
nineteenth-century Philadelphia had a
Americans.
copies of The New
high homicide rate. Big-city Americans
There are more desirable and less
Republic from dam-
were killing each other at a far higher
controversial forms of gun control. The
age. They're designed
rate than were Londoners long before
most important is to reduce the chances
to hold a year's issues
the invention of radio and television,
that a person will carry concealed on his
(may vary with issue sizes), constructed
and. long before the introduction of
person an unlicensed weapon while he
with reinforced board, and covered with
semi-automatic weapons (and automatic
walks about town. With a bit of new tech-
durable leather-like material in flag blue.
ones) or the sale of any drugs (other
nology that is now being developed, it
Title is hot-stamped in silver and cases are
may become much easier for the police
V-notched for easy access.
than alcohol). It is very hard, I think, to
1-$8.95
3-$24.95
devise an easy way to reduce a homicide
to spot and to question such gun carri-
6-$45.95
rate that has been so high for so long.
ers. Doing this may reduce the rate at
The New Republic
The hostility of American encounters is
which guns will cause angry encounters
Jesse Jones Industries, Dept. 95TNR
at least as important as the presence of
to escalate into lethal violence.
499 East Erie Ave., Philadelphia, PA 19134
American guns. If New York City can
We also might wonder a bit about the
magnitude of our penalties for homicide.
Enclosed is $
for
have a non-gun homicide rate that is
cases. Add
three times larger than the total homi-
They are about the same here as in
$1.50 per case for postage and handling.
Outside USA $3.50 per case (US funds only).
cide rate in London, then removing all
Europe-that is to say, they are short in
PA residents add 7% sales tax.
guns from the United States (which is
both places. Nationally, the median
impossible) would still leave us in a trou-
homicide inmate is released from prison
Please Print
bling condition.
after only about six years, while in Cali-
Name
fornia the release comes after about
Address
uppose we take Zimring's
three-and-a-half years. Even many offend-
(No P.O. Box Numbers Please)
S
City
State
Zip
and Hawkins's analysis of
ers sentenced to prison "for life" spend
the problem as correct, and
much less time there. Some inmates, of
CHARGE ORDERS (Minimum $15): AmEx, Visa,
then try to imagine what
course, spend a lot of time in prison. But
MC, DC accepted. Send card name, #, Exp. date.
might be done. We must begin with the
the small number of years the median
Call Toll Free 7 days, 24 hrs, 1-800-825-6690
Allow 4-6 weeks for delivery
fact that the private ownership of guns
(and the average) offender serves sug-
cannot be substantially reduced. There
gests the low price that we generally place
are no point-of-sale restrictions that will
on the average victim's life. These sen-
reduce this huge stock by very much.
tences should be made longer.
Moreover, point-of-sale restrictions over-
And much remains to be done, finally,
look the fact that most guns used in
to lead children away from a life on the
crimes are stolen or borrowed. And no
street. We are still trying to learn how
government can do very much when peo-
best to do this, but a growing body of evi-
ple believe, with some empirical support,
dence suggests that early intervention in
that having a gun makes you safer.
the lives of very young, at-risk children
Using the data compiled by the Na-
and their mothers (often there is no
tional Crime Victimization Survey (NCVS)
father) can make a lasting difference. It
of 56,000 families, scholars have esti-
will take another, generation to learn
MOVING?
mated that there are, at a minimum, be-
whether these plausible guesses will bear
Don't forget to let US know so you won't
tween 65,000 and 80,000 defensive gun
lasting results for large number of chil-
miss a single issue of THE NEW REPUBLIC.
uses per year. Some estimates based on
dren, but the nation's perpetually high
Just attach your old address label in the
private polls suggest much higher defen-
homicide rate suggests that it might be
first space provided and write your new
sive uses, ranging up to 1.5 or even 2.5
time well spent.
address in the second space reserved below.
million. The data supplied by private
Above all, we will have to learn to
Old Address (Affix label from this issue.)
polls are controversial, since so much
think about our crime problem histori-
depends on inferring society-wide effects
cally, It took England several centuries
Name
from the answers of a tiny number of
of tough rule, brutal punishment and
respondents. (If, to take a recent study,
the inculcation of class-based values to
Address
only 54 people out of 2,500 surveyed said
achieve a low homicide rate. America has
City
State
they used a gun to defend themselves,
spent less time at the task, and it has
Zip
then each of the 54 represents 68;000
sought to inculcate different values. As
New Address
Americans. Reporting errors-lies, exag-
someone once said, the low murder rate
Name
gerations, poor memory-on the part of
in England is produced the same way you
just a few people can have huge effects
produce good lawns: plant good seed
Address
on the total number of defensive gun
and then roll it for three hundred years.
uses.) So consider instead the much
City
State
Zip
Zimring and Hawkins offer some sensi-
larger and more reliable NCVS, con-
ble data on violent crime rates, but they
Mail to:
ducted by the Census Bureau, according
plant no seeds and they roll no lawns.
THE NEW REPUBLIC
to which defensive gun uses in America
PO Box 37298
are not trivial: 65,000 to 80,000 uses each
JAMES Q. WILSON is the author most re-
Boone, IA 50037-0298
year. No democratic government can
cently of Moral Judgment (Basic Books).
Allow 4-6 weeks for change of address to go into effect.
AUGUST 25, 1997 THE NEW REPUBLIC 41
OFF THE DOLE AN
Trailblazing companies
like Marriott and Smith
FOR,TIME
Barney show how to
turn welfare recipients
into valued employees
By JOHN GREENWALD
WANT TO MOVE UP THE CORPORATE
ladder." That's not a remarkable state-
ment for a career-oriented person-un-
til you consider the speaker. Michael
Bradford, 38, battled drugs and alcohol-
ism throughout his adult life and eight
months ago was homeless on Washington's
streets. His résumé includes a six-month jail
term for burglary. Born into a welfare fami-
ly, Bradford fully expected to die in one.
No longer. Today Bradford is a poster
boy for the barely begun-and some would
say doomed-effort to move most welfare
clients off the dole and into decent jobs. As
a graduate of a six-week welfare-to-work
program sponsored by Marriott Corp.,
Bradford has a foot on the ladder at the
company's Crystal Gateway Hotel in Ar-
lington, Va., where he cleans and sets up
conference rooms for $7.60 an hour (vs.
the current minimum wage of $4.75). He
gets health insurance and profit sharing
and will be eligible for stock options next
year. "In the beginning I was doubtful,"
Bradford recalls. "I had started other train-
ing programs but never finished them. I
wasn't sure this would end any differently."
Bradford isn't the only one with mis-
MICHAEL BRADFORD HOTEL HOUSEMAN
givings. "The history of job training is dis-
AGE 38, ON WEL FARE "off and on sinc el was born." NOW,WORKING FOR Marriott's
mal," says Mark Wilson, labor expert at the
Crystal Gateway Hotel. After years of aimless drifting and a six-month stint In prison,
conservative Heritage Foundation. Yet the
completed the Marriott Pathways training program and currently earns $7.60 an how
Welfare Reform Act will make training
with full health-Insurance benefits
more necessary than ever: at least 1.5 mil-
lion adults now receiving aid will have to
The magnitude of the task has come
prepare welfare recipients to fill them.
find work by 2002. The vibrant economy
home to President Clinton, who has been
That's precisely what trailblazing com-
has already scooped up the top prospects,
pleading with corporate America to hire
panies like Marriott and nonprofit outfits
leaving many who may be burdened by
welfare recipients. This week he takes his
like the California-based Center for Em-
drug addiction, physical abuse, too many
case to St Louis to meet with leaders of
ployment Training have been demonstrat-
children or too little education. Lots of
many of the more than 500 companies-
ing-albeit to a still relatively tiny degree.
these folks would prefer to be working. But
from Boeing to Anheuser-Busch-that be-
Under their tutelage, tens of thousands of
the more cynical think they never will.
long to the Welfare to Work Partnership,
former welfare recipients now hold down
"The scale of the challenges is so much
organized by the White House in May to
positions ranging from executive secretary
grander than the scale of the remedies that
employ people on public assistance. "There
to shop-floor inspector to assistant hotel
one can't be euphoric," says former Labor
are jobs open in every city and community
manager. Importantly, the programs are
Secretary Robert Reich, who is less than
in this nation," says Eli Segal, who heads
market driven, providing truly qualified
thrilled with the reform legislation.
the corporate partnership. "Our task is to
workers for companies with real needs.
42
TIME, AUGUST 18, 1997
washed out earlier this year. The company
NI ON THE JOB
says it will no longer try to work with the
homeless in separate groups.
FROM MEAN STREETS TO MEGABYTES.
Laptop-computer maker Packard Bell NEC
took full advantage of the usual lush incen-
tives to set up its headquarters in Sacra-
mento, Calif., in 1994 in an abandoned
Army depot. But of the 4,000 workers the
CHRISTINE
company hired, nearly 1,200 had been on
CRABTREE
federal aid or were unemployed or under-
employed. Packard Bell NEC relied on a
ADMINISTRATIVE
city job program that screened and re-
ASSISTANT
ferred applicants. Then it trained the new
AGI 28, ON WELFARE
arrivals in everything from team building to
on and off since 1991
English as a second language.
NOW WORKING FOR
The new facility has meant a new life
Packard Bell NEC. A
for workers like Christine Crabtree, 28, a
single mother who was
former welfare recipient and the single
referred to the
company by a training
mother of a five-year-old daughter. Crab-
program called START,
tree parlàyed a one-day assignment as a file
she parlayed a one-day
clerk into a series of promotions that led to
assignment as a file
her current position as administrative as-
clerk Into a position that
sistant to two senior, vice presidents at a
pays between $25,000
salary of between $25,000 and $30,000 a
and $30,000 a year.
"I've had to fight hard,
year. Her secret, she says, was to help peo-
but I'm here to make a
ple around the company with whatever
better life for my
they needed, "so I could learn everything"
daughter and myself
about the business. But before that, Crab-
tree had found it hard simply "to go out and
MARISELA CASTRO
find a job when you haven't been working
(RIGHT), STUDENT
for months. It really does something to
MEDICAL
your self-esteem."
SEND HELP IMMEDIATELY! Some welfare-
ASSISTANT
to-work programs have proved so success-
AGE 22, ON WELFARE
ful that the demand for workers has begun
10 months. TRAINING
to outstrip the supply. At stockbroker
AT CET. A'high school
Smith Barney, which since 1995 has hired
(dropout, she receives
27 single parents in entry positions at
$595 a month In
salaries of up to $28,000, executives have
welfare and food-stamp
benefits for herself and
been screaming for another 10 trainees to
her 10-month-old
start right away. Such newcomers get 16
daughter. After
weeks of preparation at Wildcat Services, a
completing an
nonprofit group in New York City, and then
eight-month course of
spend 16 weeks as interns under the
training in everything
from drawing blood to
watchful eye of mentors at Smith Barney.
growing cultures In a
If the brokerage firm doesn't hire them, the
ott's
Petri dish, she hopes
interns can use their training to help land
prison,
to land a job at a
other jobs. "This started out as a search for
an hour
starting pay rate of at
new employees," says Barbara Silvan, a
least $10 an hour
Smith Barney director of human resources
who runs the jobs program. "It had nothing
them.
lere is a look at some of the leading efforts:
are still on the payroll after two years with
to do with charity."
ng com-
TIES THAT BIND. "We are doing a good
the company, compared with a 60% reten-
Executives of Cablevision were like-
t outfits
thing, but if the grand gesture doesn't
tion rate for regular hires.
wise searching for good workers when they
or Em-
make economic sense, it won't last," says
The six-week program combines voca-
hooked up with a community group called
onstrat-
Janet Tulley, the developer of Marriott's
tional skills, such as housekeeping and
the South Bronx Overall Development
degree.
Pathways to Independence program. For
front-desk management, with life-style
Corporation. "Our biggest problem is turn-
ands of
Marriott, the price has definitely been
lessons in everything from grooming to
over," says Brian Douglas, a spokesman for
I down
right. Not only do federal programs and
getting to work on time. Welfare recipients
Cablevision. "We bring someone in and
cretary
private charities pick up $3,000 of the
"accept failure as part of their lives," Tulley
train them, and two months later, they're
t hotel
$5,000 cost of training each welfare recip-
says. "So, if the bus doesn't show up, they
gone." But of the 130 cable installers that
ns are
ient, but graduates have also been a loyal lot
just walk away." Marriott discovered that
street-savvy SOBRO has placed at starting
alified
IT a relatively low-paying industry plagued
the program has its limitations when half
wages of $8 to $10 an hour over the past
needs.
by turnover. Fully 71% of the 500 graduates
of a special class of homeless participants
four years, 82% are still on the job. As part
TIME, AUGUST 18, 1997
43
las!
BUSINESS
MONEY IN MOTION
of its training, SOBRO teaches its charges to
change their "street" attitudes-the sur-
Daniel Kadlec
vival posture in the tough neighborhoods
they live in-to more consumer-friendly
faces when they make service calls.
Elsewhere, machine shops in the Mid-
Capital Gain=Market Pain?
west are chronically short of skilled labor.
Enter the Chicago Manufacturing Insti-
The rate's lower, but Wall Street hasn't noticed
tute, a largely federally financed training
center that each year graduates up to 300
machine operators and industrial inspec-
H
OORAY, THE LONG-TERM CAPITAL-GAINS TAX RATE HAS BEEN CUT. THAT'S
good news-if you know how to use it. The last two times the rate fell, in
tors, many of them former welfare recipi-
1978 and 1981, some distinct patterns emerged: the stock market sank but
ents. More than 90% of the graduates
ultimately staged a powerful recovery. There was also a noticeable flow
swiftly land jobs at $8 to $11 an hour.
into the stocks of small companies. The problem is that in this so-called new-era
MASTER OF THE GAME. Perhaps no pro-
economy, historical benchmarks have been about as useful as an abacus in Sili-
gram has moved more students into skilled
con Valley. To borrow a phrase from the new-era crowd, it's different this time.
jobs than the Center for Employment
The tax bill that President Clinton signed into law last week lowers the rate
Training. Run on a $40 million annual bud-
on long-term capital gains from 28% to 20%. The gains-rate cut in 1978 was from
get provided by government and private
35% to 28%, and in 1981, from 28% to 20%. The '81 cut was rolled back in '86. Af-
grants, CET last year placed 3,141 graduates
ter the '78 tax act, the Standard & Poor's 500 dropped 11% in six weeks as investors
in jobs ranging from graphic artists to med-
sold stocks in order to record gains that would be
ical assistants. Among the recent hires was
taxed at the new low rate. In '81, the S&P 500
Pauline Flores, 29, a single mother of five
plunged 15% in six weeks. Later the
who began work for a Silicon Valley pedia-
Cashing Out?
markets took off as investors sought
trician in May after seven months of med-
In the past, when tal
low-tax opportunities. The 78 sell-off
ical training (cost: nearly $6,500). Today
has led to capital
paved the way for a two-year runup that
Flores earns $8.75 an hour answering
reductions, the stock THE
enabled the S&P 500 to snap out of a 14-
phones, drawing blood, doing labwork and
suffered. WIII there
year funk. The '81 sell-off set the stage for
assisting physician Katherine Wong. "God, it
similar. sell- off this time?
the mother of all bull markets in 1982.
feels good," Flores says of her job. "I wake up
S&P 500 INDEX
Clearly, the Clinton Administration
in the morning and want to come to work."
expects a repeat of sorts. It projects $1.2
WINGING IT. United Airlines plans to hire
Oct. 15, 1978
Tax bill passed
billion of tax revenue this year and $6.3
400 welfare recipients in slots from reserva-
billion next year from the sale of stock and
tion clerks to cabin cleaners this year. The
other assets triggered by the lower rate.
100
carrier has been, using a nonprofit agency
Somebody should explain the new era to
called GAIN (Greater Avenues to Indepen-
Washington: nobody is a net seller of stocks
dence) to recruit and train the newcomers,
July 7,
Jan. 26,
anymore. Since the tax act cleared Congress
who earn from $5 to $10 an hour to start. To
1978
1979
Aug 1981
on July 28, the market has held up fine. We
help smooth any turbulence, United assigns
Tax bill passed
aren't interested in some piddling tax con-
mentors to welfare hires for their first 60
Nov. 30,
sideration while stocks are rising 30% a
days on the job. "Mentoring is the key to the
1981.130
year. Some selling may materialize this
whole welfare-to-work program," says Ta-
125
week as the deadline passes for a line-item
lani Wilson, 23, a new personnel clerk and
May
198D
120
veto. But so far the response to this tax cut
single mother who had been spending six
115
has been nothing like the previous two.
hours a day commuting from her Chicago
O.K. So there's no immediate pattern
apartment to O'Hare International Airport
of selling. Shouldn't the lower rate pave
before a co-worker found a car pool that cut
the way for another bull stampede by en-
the time to two hours. "She's really showed
couraging more investment? Not neces-
me the ropes," a grateful Wilson says.
sarily. Unlike the previous two reductions, this
Experts are worried that the easy part
one comes amid a sizzling love affair with the market. There is no need to rekindle
of welfare to work is already over. "We'll
our passion for stocks; we're hopelessly obsessed. "This market needed a stimulus
see what happens when we get to some of
like Einstein needed a higher education," notes Tom McManus, strategist at
the harder groups in the case loads," says
NatWest Securities.
David Ellwood, a professor of public pol-
Another departure from the past has to do with the stocks of small compa-
icy at Harvard's Kennedy School of Gov-
nies. They typically do not pay a dividend-the payoff is in price appreciation.
ernment and a former adviser to Bill
That makes them more desirable when the cap-gains rate falls because dividends
Clinton on welfare matters. "The jury is
get taxed as ordinary income-a higher rate for most investors. Yet big stocks have
still very much out." True enough. But
been rising fastest all year, and that could persist. Why? Big stocks, as defined by
companies like Marriott are showing that
the S&P 500, now have a measly 1.6% dividend yield, VS. 6% in the early '80s. In
the welfare rolls can be a source of valued
short, they're also being managed for growth instead of income. Of course, the
workers who know how to use a fighting
market reacts to many things in the economy, not just tax changes. So nothing is
chance.
-Reported by William Dowell/
certain, except that the old tools just don't work the way they used to.
New York, Chandrani Ghosh and Bruce van.
Voorst/Washington, Rachele Kanigel/San Jose
Daniel Kadlec is TIME'S Wall Street columnist. Reach him at [email protected]
and Jeanne McDowell/Los Angeles
44
TIME, AUGUST 18, 1997
U.S. NEWS
Fast food and
welfare reform
Success of the effort may hinge on
'dead-end' burger-flipping jobs
BY JOSEPH SHAPIRO AND BARBRA MURRAY
customer when he comes in and looking
Taylor, who makes $15 an hour driving a
m:
him straight in the eye." He can tell from
UPS truck in Jacksonville, Fla: "Don't let it
WC
t the welfare office in Jackson,
the sprightliness of the greeting, Walker
affect my job." Meanwhile, some other
an
A
Miss., caseworkers regularly hear
says, whether someone is going to make it.
corporations that President Clinton had
me
aid recipients say they would be
August 22 marks the one-year anniver-
touted as models, such as Sprint, have
shi
happy to get a job-as long as it's
sary of when welfare reform became law,
brought on far fewer welfare recipients
ad
not "flipping burgers" at some
so the nature of burger flipping-and oth-
than anticipated.
WC
fast-food joint. It's a sentiment echoed by
er low-wage jobs-has become an issue of
But the success of welfare reform will
mc
many liberal policy makers. Some argue
some importance. The law requires that
more likely be determined by individual
WC
it's better to get low-income mothers into
hundreds of thousands of welfare recipi-
restaurant franchises than by large corpo-
an
job-training programs than into menial
ents, most with little education and few
rations. The restaurant industry employs
na
jobs. Former Secretary of Labor Robert
skills, move into jobs. Their entry into the
10 million workers, 3 million in fast food
he
Reich often complained that such "dead-
work force has already led to a number of
alone. And many of the jobs require mini-
OV
end" jobs don't lead to upward mobility.
controversies. In launching its nationwide
mal education. Burger King says that in
frc
Across town in Jackson, though, Mc-
strike against the United Parcel Service
the past 10 months, 15.5 percent of its new
-
Donald's owner LeRoy Walker argues that
this month, the Teamsters Union cited the
hires have been welfare recipients. The
sh
there are few better places for a welfare
prevalence of part-time workers as the
question is whether these fast-food restau-
we
mom to be working. He says even the low-
reason. But many employees had come to
rants provide real opportunity or dead-
an-
liest tasks-cooking fries or ringing the
believe that UPS's effort to bring on wel-
end jobs.
tec
cash register-teach attention to detail,
fare recipients-now about 15 percent of
There is some evidence that such work
on
communication skills, and other work
their work force-was keeping wages,
has a positive effect on those with little
per
habits that can build success at any job. It
down. "If you want to help people on wel-
education or work experience. Harvard
on
all starts, Walker says, with "greeting a
fare, stop giving them welfare," says David
public policy professor Katherine New-
far
16
U.S.NEWS & WORLD REPORT, AUGUST 18 / AUGUST 25, 1997
CHARLIE ARCHAMBAULT FOR USN&WR (2)
a
man, for example, studied 200 fast-food
CAREER LADDER. Chris Russell mops the floor in
sored job training programs are ef-
it
workers in New York's central Harlem
Jackson, Miss. Welfare reform may hinge on low-
fective because they stress job-spe-
and found that these jobs were among the
wage, low-skill jobs like these. Above left, owner
cific skills-only to find out that
ad
most important and positive experiences
those jobs have vanished or the
LeRoy Walker demonstrates how to greet the public.
ave
shaping the workers' adolescent and early
trainees lack basic work habits. Ac-
adult lives. She found that teenagers who
cording to Herbert Northrup, pro-
worked at fast-food restaurants were
before she applied to work at the McDon-
fessor emeritus at the Wharton School of
vill
more likely to hang out with others in the
ald's near her house. Before starting there
Business, low-paying jobs are often better
work force than with the unemployed,
last year, Dent says, she did not get out of
than training programs at teaching em-
and more likely to manage their own fi-
bed until 9 or 10 in the morning; now
ployees "how to conduct themselves in
nances conscientiously. "Older managers
she's up at 4 a.m. to open the restaurant
business and [behave] like an adult."
od
help kids understand they have crossed
an hour later. Dent's mother, who re-
Part of the reason may be that such jobs
over a dignity line that separates them
ceives welfare, looks after her daughters,
allow for the progressive mastery of skills
in
from ones not working," she says.
ages 5 and 2. Tara Ervin, another single
that may be useful in themselves but, more
Comprehensive studies on welfare have
mother who had spent five months on
important, show the employees that ad-
he
shown that the likelihood of making it off
welfare, says working at McDonald's in-
vancement is possible. Workers at Mc-
welfare depends as much on punctuality
spired her to train for a job as a deputy
Donald's are expected to climb a hierarchy
d-
and attitude as on education levels or
sheriff. Ervin, who has some college edu-
of jobs, starting from one of the four grill
technical skills. Only 4 percent of those
cation, says dealing with rowdy teenage
slots and moving toward one of six mana-
on welfare have four or more years of ex-
customers taught her how to be "authori-
gerial positions. Reviews and promotions
perience in the work world, according to
tative but still nice," a skill she suspects
can come as often as once a month.
d
one study. Ethel Dent, 30, a former wel-
will be "helpful around the jailhouse."
Even when fast-food workers don't see
fare recipient in Jackson, never held a job
By contrast, few government-spon-
the prospect for direct advancement, they
U.S.NEWS & WORLD REPORT. AUGUST 18 / AUGUST 25, 1997
17
COVER STORY
WANTED: A FEW
GOOD CEOs
Why picking the
next occupant of
the corner office is
so tough, and what
companies ought
to do about it
page 64
Business\ Neek
AUGUST 11, 1997
Cover Story
33 COMMENTARY
48 COMMENTARY
If the FCC wants to stay relevant, it had
Bitter medicine is the only medicine for
64 WANTED: A FEW GOOD CEOs
better untangle local telecom monopolies
East Asia
The vital issue of who will lead a
while it still can
57 BRITAIN
company in the future gets too little
34 BATTLE STATIONS! BATTLE STATIONS!
attention in Corporate America's
The City is getting a financial watchdog:
Armed with new chip and software
Howard Davies
executive suites and boardrooms. If the
technology, PC makers are gaining in the
messy melodramas recently played out
59 INTERNATIONAL OUTLOOK
$15 billion workstation market
at Apple and AT&T are to be avoided, a
Hong Kong's pro-democracy activists
34 SILICON GRAPHICS: A TURNAROUND?
succession plan, developed by the board,
are bucking Tung's reforms
should be in place at all companies, and
June-quarter earnings show that it still
insiders should be groomed for the top
has some of its old magic
Economic Analysis
job. That's how to avoid ugly surprises
35 ADS FOR GENERATION X
20 ECONOMIC VIEWPOINT
These new spots aimed at hard-bitten
69 THE TOP 20 HEADS TO HUNT
Dornbusch: Why this recovery won't fall
kids and young adults push and shove
A BUSINESS WEEK poll of rising CEOS
off the track soon
the envelope
24 ECONOMIC TRENDS
News: Analysis & Commentary
38 IS GREG MURPHY TOAST?
Major League Baseball appoints a new
Debunking a stock market crash
28 A BUDGET FULL OF GOODIES
chief operating officer, and the
scenario, violent schools, strong U.S.
While the deal could end the deficit as
marketing czar's future is in doubt
auto sales, incarceration rates
BY TED MORRISON
early as next year, there is more
25 BUSINESS OUTLOOK
42 IN BUSINESS THIS WEEK
spending in it than there is reform
Consumers have money to burn, but
30 SIZING UP THE TAX DEAL
International Business
employers may feel a pinch soon
Figuring the winners and losers in the
46 INDIA
$94 billion, five-year pact
Government
Foreign companies see vast market
32 GUESS WHO'S IN THE WAITING ROOM
potential on the subcontinent-but
43 WASHINGTON OUTLOOK
The feds widen their crackdown on
many have been tripped up. Here are
The GOP could brawl itself out of power
Medicare billing fraud
some lessons for investors
unless its factions can compromise
2 BUSINESS WEEK / AUGUST 11, 1997
SPEED SELLS
THE BREAKS
Suddenly, the auto-racing
Taxes: Who winds
business is sizzling page
86
up ahead
page 30
DONORGATE
PTOT
To.4570
XEROX' BIG HIRE
Meet Ted
CA
Thoman will pare
Sioeng-and
and refocus page 81
his very open
wallet
page 84
SOUR DEAL
The catch in Avis'
IPO
page 61
INDIA'S PITFALLS
It a land full of traps
for investors page 46
84 MAN IN THE MIDDLE
78 DEFENSE DEALS ARE FAR FROM OVER
Science & Technology
for
OF DONORGATE
Smaller contractors are linking up like
Was Ted Sioeng a conduit for Chinese
crazy-and many are undervalued
94 THE FDA: TOO HIGH A THRESHOLD?
money or just an overreaching
Cephalon wants testing standards eased
80 INSIDE WALL STREET
entrepreneur?
97 DEVELOPMENTS TO WATCH
atchdog:
103 INVESTMENT FIGURES OF THE WEEK
Day care and the Net, snoring, chemical
Entertainment
Information Processing
weapons, high-tech metal designs
60 MOVIE CRAZY ON WALL STREET
16 TECHNOLOGY & YOU
Personal Business
Investors and banks are lining up to
A Canon printer that scans color images
98 ONLINE: Auctions on the Net
back Hollywood-though they're likely
80A BITS & BYTES
SMART MONEY: Reverse mortgages
to be the last to see any profits
Hacking insights, monitors for traders,
fast-food PCS, a mouse called Cat
Features
The Corporation
fall
81 XEROX' REPAIRMAN?
4 UP FRONT
61 AVIS' IPO: BUYER BEWARE
Richard Thoman's roll-up-the-sleeves
10 READERS REPORT
The upcoming rent-a-car offering won't
style was widely hailed at IBM. Now
10 CORRECTIONS & CLARIFICATIONS
give investors the same dreamy ride
he's taking his act to the copier giant
11 BOOKS
that Hertz's recent deal did
Freedman and Mann: @Large
U.S.
Sports Business
12 BOOK BRIEF
Finance
101 BUSINESS WEEK INDEX
86 THE VROOM IN AUTO RACING
74 BAD DEBTS, SWEET PROFITS
102 INDEX TO COMPANIES
Superspeedways are springing up as
but
Tulsa-based CFS earns eye-popping
104 EDITORIALS
U.S. entrepreneurs tap Wall Street. In.
profits as it buys and sells delinquent
The budget deal: A lost opportunity
Europe, a multibillion-dollar IPO?
credit-card loans
How to pick the right CEO
90 A GAMBLE AS BIG AS TEXAS
Headed for India? Learn the ropes
76 IS KKR GETTING KICKED AROUND?
Bruton Smith's new speedway has
The firm says a Russian client company
150,000 seats-and 76 trackside condos
INDUSTRIAL/TECHNOLOGY EDITION
power
is reneging on millions of dollars it owes
KKR in expenses, fees, and équity
BUSINESS WEEK ONLINE: Internet: www.businessweek.com America Online: Keyword: BW
BUSINESS WEEK / AUGUST 11. 1997 3
AUGUST 9TH 1997
The
Economist
SUMMARIES
BUSINESS
4 Politics this week
53 Jardines faces Superman
5. Business this week
54 Labelling gene food
55 Management focus: Health care
LETTERS
56 UPS fails to deliver
6 On Turkey, French firms, currencies,
56 Advertising drugs
Basque terrorism, Kashmir, Lebanon,
59 Apple and Microsoft
logging in British Columbia, virtual
60 Face value: Halsey Minor
manufacturing, film stars, Versace
FINANCE AND ECONOMICS
LEADERS
61 Stockmarkets at giddy heights
13 Lovely while it lasts
62 Russia's thriving investment banks
14 The battle of Russia's capitalisms
63 The rebased rouble
15 Thailand on the mend
64 Reluctant Turkish shareholders
15 Remaking Kenya
ON THE COVER
64 Shaking up German insurance
16 Reforming corporate governance
It is easier to say why share prices should
17 Labour's fair honeymoon
now sag, especially in America; than it is
65 Battling banks in Belgium
to explain why they still have further to
66
munificent ones in Italy
UNITED STATES
climb: leader, page 13; a world tour of
68 Economics focus: Cartels
the markets, page 61
19 California is working again
SCIENCE AND TECHNOLOGY
20 Making marriage work again
EUROPE
69 100 years of aspirin
21 Mayor Barry sidelined
21 A fading dream in Oregon
41 Germany's dismal year ahead
70 The genome of Helicobacter pylori
70 Embarrassing statistics
22 The CIA comes quarter-clean
42
and its EU budget moan
71 Ultraviolet vision in birds
26 Lexington: The soldiers' lot
42 Russia's feuding businessmen
72 Reviving LPs with lasers
THE AMERICAS
43 Movement in Bosnia
MOREOVER
27 Argentina's opposition gets together
44 Albania's shaky future
73 Chris Patten's inside story
27 Mexico's drug-sullied army
44 France's durable elite
74 Cape Town's Olympic bid
28 General strike in Venezuela
46 The puzzle of Spain's prince
75 Milan's museum of shaving
29 Four years of Bolivian reform
75 The art of Harlem
ASIA
BRITAIN
76 Letter from Odessa
31 Thailand after the IMF deal
47 From business to politics
OBITUARY
32 What the IMF wanted
48 The church versus the prince
77 William Burroughs, scatological
33 China strives to feed itself
writer
34 and North Korea starves
48 Not-so-green Britain
34 Japan and Russia make friends
49 Sporting imports
INDICATORS
36 Freedom of speech erodes in India
88 Economic and financial statistics on
TV. Thes
15 OECD countries, plus closer looks
Economist
INTERNATIONAL
at commodities, economic forecasts,
FIRST PUBLISHED IN SEPTEMBER 1843
37 Can Arafat take on Hamas?
to take part in "a severe contest
and savings
38 The IMF cuts Kenya off
between intelligence, which presses forward
90 Economic and financial statistics on
and an unworthy; timed ignorance
38 Murmurs from Oman
obstructing our progress
25 emerging markets, plus a closer
40 Piracy, alive and threatening
look at poverty
WEB EDITION www.economist.com
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VOLUME 344 NUMBER 8029
careful planning
"The for in-
we've fulfilled our
c e, estate, and
d
I of retiring
"My view is that
succ ti can
with a summer
we're at the very
actually go to
home. And if we
tag end of a super-
125%, but Uncle
could do it with-
bull market," says
Sam is only author-
out the millions
Barton Biggs of
ized to take 100%
movie stars pay,
Morgan Stanley. 68
of your assets.' 132
anybody can." 154
Index
10
Editor's Desk
16
Letters
20
FORTUNE
Archive
230
AUGUST 18, 1997
VOL. 136, NO. 4
First:
1997 RETIREMENT GUIDE
26 What Ever Happened
Introduction
56
To the Asian Miracle?
Almost every economy in Asia will
How to Beat the Boomer Rush
59
feel ripples from the summer's wave
Get your retirement plans set ahead of the biggest demographic wave in Ameri-
of devaluations. by Paul Krugman
can history, a mammoth market craving the same things. by Geoffrey Colvin
INVESTING
28 Malone Tightens His Grip on TCI
Can Stocks Still Rise?
68
That the bulk of the founder's
Barton Biggs of Morgan Stanley and Robert Farrell of Merrill Lynch contem-
shares ended up in Malone's hands
plate the future of stocks and where to put your money. by Lawrence A. Armour
shows him at his best-and worst.
Getting a Fix on Bonds
77
29 Who Gets What
Three Ways to Win in Mutual Funds
84
In the Star Wars Toy Deal
Beating the market even one year is hard; only a few funds have done it for a
Hasbro and Galoob joust over
decade. How? The managers we profile have just one thing in common: success.
licenses for the next Star Wars toys..
The Best Mutual Funds for Your Retirement
94
36 GET REAL
YOUR RETIREMENT CHECK
Lessons of the Great Depression
It's Time for a Peek
108
The new view among economists is
Don't panic: Social Security will be there for you
109
Unraveling the mys-
that it was caused by adherence to
teries of your pension plan
110
Tomorrow's taxes-retirement may be more
the gold standard. by Rob Norton
expensive than you think
121
A worksheet to help you with the tally
122
PLANNING
42 Univision: The Real Fifth Network
Tuition Terror
126
The Spanish-language broadcaster,
You may have to save fast for old age and the kids' college. It won't be easy, but
based in Los Angeles, is beginning
you still have time to save and keep the health club memberships. by Anne Field
to challenge the big four networks.
Estate Planning: You'd Be Amazed!
132
44 The Cult of the Astro Van
Mistakes even sophisticated people make-and the millions it costs them.
Chevrolet's boxy, low-tech van has
Should You Build an IRA?
139
developed a passionate following
Conventional wisdom says retirement money should go where the tax deferrals
among Japanese yuppies.
are-in nondeductible IRAs, for example. Wrong. by Jeffrey H. Birnbaum
They're Out to Steal Your Money
142
48 o DEMOCRACY!
Today's con artist is more sophisticated than ever, using every trick from phantom
Hey! Look! The Trough Is Full!
securities to the Internet to crack your retirement nest egg. by Erick Schonfeld
The politics of a budget surplus
The Whole Life Pitch
149
prove as contentious as the politics
of the deficit. by David Shribman
What to know about whole life insurance-before you sign up. by Marcia Vickers
LIVING
49 BING!
"What I've Learned"
154
Hello, I Must Be Going
Three retirees relate their experiences-and prove that retirement can be as
Low mirth weight, spasms of
rewarding as any other time of life. by Ed Brown
false decisiveness, brain seepage:
In Search of Shangri-La
160
We've seen these symptoms
If you hunt hard enough, you can still find sun-soaked retirement havens that
before. by Stanley Bing
are lively, charming-and even affordable. by Justin Martin
Cover: Photograph by Brian Smith.
6
FORTUNE August 18, 1997
anning,
our
retiring
mmer
if
we
with-
Ilions
pay,
an." 154
NO. 4
56
59
8
MICHAEL MELFORD
Making the right decisions today will determine whether the sweetest parts of your retirement dream can become reality.
4.
Features
Smart Managing
Emerging Markets
168
214 Microsoft: First America,
Investors may never have heard of Thimphu or Muscat, but they could be putting
Now the World
money in their stock exchanges by century's end. A photo essay. by Eileen P. Gunn
Bill Gates believes he can tap into
untold wealth in overseas markets.
Adidas: Back in the Game
176
Here's how his plan works.
The venerable German shoemaker has pulled its financial socks up. Now it's scoring
by Brent Schlender
some points in the U.S. market. by Charles P. Wallace
221 THE LEADING EDGE
Will Uncle Bud Sell Hollywood?
185
Yikes! Deadwood
Lowell Paxson, of Home Shopping Network fame, has quietly assembled TV stations in
Is Creeping Back
most of the big markets. His crusade: create a seventh network by renting out airtime,
To save money, CEOs have been
now.filled by infomercials, to the Tinseltown studios. by Marc Gunther
firing their headquarters staff. Now
it turns out that many of these
Digital Watch
208 NETS AT WORK
costly jobs are simply ending up
Intranets Reach the Factory Floor
elsewhere in the organization.
200 Is Intuit Headed for a Meltdown?
Motorola needed to produce com-
by Thomas A. Stewart
As new technology offers consu-
plex modem assembly instructions
mers more options, Quicken is los-
fast. Its solution: Post them on an
224 BOOKS
ing its market niche. by Eryn Brown
intranet. by Mary J. Cronin
Hire a Consultant-
And Start Praying
205 Secrets of a High-Tech Talent Scout
211 ALSOP ON INFOTECH
You may get the advice you
An interview with David Beirne,
I Should Have Blamed Microsoft!
desperately need when you bring
big-time infotech headhunter.
Forget those complaints about
in consultants, point out the
digital products built by consumer
authors. You also may spend
206 Voice Recognition Grows Up
electronics companies. Even
a lot of money on useless blather.
NaturallySpeaking is music to the
worse is hardware designed by a
by Ronald B. Lieber
ears of those who hate to type.
software company with a monopoly.
by Michael J. Himowitz
by Stewart Alsop
227 ASK ANNIE
Will a Career Switch Mean Less
FORTUNE
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From Readers
Post your opinion on our forum at http://pathfinder.com/boards/fortune
by Anne Fisher
August 18, 1997 F O R T U NE
7
NEW THE REPUBLIC
A Weekly Journal of Opinion
Editor-in-Chief and Chairman
AUGUST 25, 1997
FOUNDED 1914
MARTIN PERETZ
WASHINGTON, D.C.
Editor
MICHAEL KELLY
ISSUE 4,310
Literary Editor
LEON WIESELTIER
Executive Editor
JONATHAN COHN
Senior Editors
PETER BEINART JOHN B. JUDIS. CHARLES LANE.
WILL IAM POWERS. HANNA ROSIN.
ANDREW SULLIVAN, MARGARET TALBOT,
JAMES WOOD
Legal Affairs
JEFFREY ROSEN
Cover by Tika Buchanan for THE
Managing Editor
NEW REPUBLIC. Illustration by
DAVID GRANN
Guy Billout. Article on page 16.
Assistant Managing Editor
DEBRA DUROCHER
Films
Theater
4 CORRESPONDENCE A failed assassin begs to differ &c.
STANLEY KAUFFMANN
ROBERT BRUSTEIN
Poetry
Dance
MARK STRAND
MINDY ALOFF
6 MICHAEL KELLY TRB: THE FREELANCE William Weld goes tilting at a windbag. Why?
Art
JED PERI.
7 THE EDITORS UNFEARLESS LEADER It's time to hold Arafat accountable.
New Republic Books (Basic Books)
PAUL GOLOB
New Republic Online (Electronic Newsstand)
8 NOTEBOOK Resurrection for DeConcini, redemption for Packwood &c.
BRIAN HECHT
Contributing Editors
FOUAD AJAMI. ELJOT A. COHEN, STANLEY CROUCH,
10 ED HENRY ON THE HILL: DODD MAN OUT In the campaign finance hearings, Senator
JEAN BETHKE ELSHTAIN, NATHAN GLAZER.
Christopher Dodd has the next best thing to immunity: he's a member of the club.
ANN HULBERT, MICKEYKAUS. MICHAEL KINSLEY,
CHARLE KRAUTHAMMER. VINT LAWRENCE
MICHAEL LEWIS, GLENN LOURY.
11 JOHN B. JUDIS RUBIN SANDWICH Robert Rubin won the battle over tax details. Too bad
DOUGLAS McGRATH, LOUIS MENAND. DAVID RIEFF,
ROGER ROSENBLATT. MICHAEL SANDEL.
Bill Archer won the war over the budget.
MAGGIE SCARE. ROBERT SHAPIRO. RONALD STEEL,
E.V. THAW, TOM TOLES, TATYANA TOISTAYA,
12 CRAIG TURK KINDER CUT. Two cheers for chemical castration. In moderation.
MICHAEL WALZER, JACOB WEISBERG. SEAN WILENTZ
ALAN WOLFE, C. VANN WOODWARD ROBERT WRIGHT
Special Correspondent
14 CINQUE HENDERSON MYTHS OF THE UNLOVED Why do so many blacks believe that white
ANNA HUSARSKA
America seeks to destroy them? Because it's less painful than believing that white
Associate Editors
JACOB HEILBRUNN. RUTH SHALIT
America doesn't care about their destruction.
Design Consultant
ERIC BAKER
16 RUTH SHALIT DEFINING DISABILITY DOWN Bad at math? Can't sit still or stay awake in
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INC.
TOP THE WEEK
SPECIAL REPORT
The Cover: Apple's Big Brother?
by Steven Levy
22
Steve Jobs: 'Like Nixon to China'
26
CEOs: Who'd Want This Job?
30
Microsoft: Bill Does What's Good
for Bill by Allan Sloan
31
about
NATIONAL AFFAIRS
a
New York City: We'll Take Manhattan
hology
to
by Jerry Adler
32
that
The Mayor's Marriage
Why Vanity Fair Should Have Said
No by Jonathan Alter
38
tech-
Senate: Helms's Summer Squall
human
'INTERNATIONAL
Korean Air 801: Fly the Risky Skies by
Mark Hosenball and Russell Watson
40
Montserrat: Another Paradise Lost
by Brook Larmer
43
Clinton: Looking for a Legacy?
46
PHOTO ILLUSTRATION JOBS BY
BUSINESS
Focus Groups: Enough Talk
by Leslie Kaufman
48
UPS: Big Brown's Union Blues
'Capital Gains': Dividing the Tax-Cut
Pie by Jane Bryant Quinn
51
ifiable
and
THE ARTS
THE COVER: Is Bill Gates good for Apple? Inside his unlikely high-tech
Music: Elvis Lives
52
alliance with Steve Jobs-and what it means for the Mac faithful. Page 22
Good Rockin' by David Gates
54
Burning Love by Karen Schoemer
Takin' Care of Elvis Inc.
62
SOCIETY
The Community: Coach or Cult Leader?
by Daniel Glick and Andrew Murr
64
MICHAEL A. MEYERS-U.S. NAVY-REUTERS
Medicine: Aspirin at 100
66
TV: Hip-Hop Talk Shows
67
Media: No Magazines for the '90s
by Richard Turner
EVERETT COLLECTION
Internet: The Gossipy Drudge Report 69
DEPARTMENTS
Periscope
6 Perspectives
THE ARTS: Twenty years after
INTERNATIONAL: More
Cyberscope
10 Newsmakers
47
his death, the King lives on. Page 52
doubts about Korean Air. Page 40
Millennium
12 'The Last Word' by
COVER: Photo illustration by Michael Elins and Todd Reublin-@neo.
My Turn
14 George F. Will
70
Letters
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AUGUST 18, 1997
TIME
VOL. 150
THE WEEKLY NEWSMAGAZINE
BROOKS KRAFT-SYGMA FOR TIME
DIANA WALKER FOR TIME
DAVID FRITTS-TONY STONE IMAGES INC
His Honor: Mayor White and others
Operation Apple: Can Steve Jobs save the
Storm Signals: This year El Niño may
making a difference (see NATION)
company he co-founded? (see COVER)
be truly bratty (see SCIENCE)
AMERICAN SCENE: Don Orlando buries the mules
2 EMPLOYMENT: Welfare to Work
42
TO OUR READERS
4 Training is the key to success when hiring people on the dole
LETTERS
7
MONEY IN MOTION: Capital Gains and Wall Street
44
NOTEBOOK
11 Daniel Kadlec on why the tax cut won't mean a market drop
WASHINGTON DIARY: Margaret Carlson on sex and politics 18
19
SOCIETY AND SCIENCE
STONES
DIVORCE: Saving Marriages-at What Cost?
48
NATION
Is breaking up getting to be too hard to do? The debate that
once focused on preserving families is turning to the question
MAYORS: The New Breed
20
of the quality of married life
Indianapolis, Milwaukee, Cleveland and other cities that
Alienated Affection: A startling North Carolina judgment
50
were once nearly moribund are being nursed back to health
by an innovative generation of leadership
SPORT: Gen X on the Tee
52
Washington: Can it ever be fixed?
22 Tiger is not the only young golfer at the forefront
VIEWPOINT: Robin Hood in Reverse
24
SCIENCE: Tempest in the Pacific
56
Why do the poor have to pay for George Church's retirement?
Climatologists see evidence of a major El Niño in the making
WORLD
SPACE: Sending for the Repairmen
59
A new team of cosmonauts tackles Mir's recurring problems
CAMBODIA: Memories of Pol Pot
26
Roger Rosenblatt remembers a visit to a refugee camp and
THE ARTS
talks with the children of war, who are now in their 20s
CINEMA: In the Company of Men, compelling in a repelling
BUSINESS
way, is shaking up women and some men too
60
Pretty Julia copes with goofy Mel's Conspiracy Theory
62
COVER: Steve and Bill to the Rescue
28
ART: Cambodia's grand, imperiled sculptural heritage
64
Once upon a time; one was Luke Skywalker and the other
MUSIC: Garth Brooks gallops into New York City
66
was Darth Vader, both of cyberlegend. Now they are
improbable allies in the fight to save a Silicon Valley legend:
SHOW BUSINESS: Tarantino is back in the director's chair 70
Apple Computer. TIME followed the company's "adviser,"
BOOKS: Biographies of two '50s masters of the drama
72
Steve Jobs, whose day job is running Pixar Animation Studios,
TELEVISION: South Park's cartoon kids aren't for kids
74
during an amazing week of corporate intrigue that led him to
The new late-night question: Is it live, or is it Arsenio?
77
a deal with Microsoft titan Bill Gates
THE OUTLOOK: Sleeping with the Enemy
35 PEOPLE: Donny and Marie redux; Travolta as President 79
The bailout will keep Apple whole, but for how long?
LABOR: Crunch Time for Ron Carey
41
The Teamsters boss puts his fate on the line in the UPS strike
COVER: Photograph for TIME by Diana Walker
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U.S. NEWS
often benefit from the relationships with
Walker, 47, refers to his 573 employees
At one of Walker's franchises, Lawanda
four
managers and co-workers. "The fast-food
as "my children." Most of them, even
Ghoston, the manager, talks of the time
$8,
industry is one of the few employers that
those in their 30s and 40s, call him "Dad-
she blew her savings at a riverboat casino.
pov
stay in urban areas," says Bryna Shore
dy." Many have little contact with their
Walker gave her an advance to turn her
fast
Fraser, deputy director of the National
own fathers. An imposing, broad-shoul-
electricity back on-but not before getting
ins:
Institute for Work and Learning. New-
dered man, Walker visits his 10 stores
her to design a savings plan.
plo
man agrees fast-food managers often
daily and often probes the lives of the em-
Stripping off uniforms. It's important not
for
make good role models. "In some neigh-
ployees, asking questions like: "How are
to overromanticize fast-food jobs, though.
borhoods, kids don't know a lawyer or a
your grades? What kind of friends are
The wages are often at or near the $4.75
fro
doctor," says Newman, "but they could
you hanging out with? Why are you wear-
minimum wage, which may not be
get
know a manager at McDonald's."
ing shoes like that?"
enough to support children. Newman
die
REFORM PARADOXES
to various labor laws. Conser-
to
vative analysts say that com-
Few on welfare will be forced to work
panies could be forced to pay
payroll taxes, making them
less likely to offer such
"workfare" slots
B
But the news isn't all bad.
R
Many experts had predicted
P
that politicians wouldn't be
willing to spend more in the
h
short term to fund the child
d
care and transportation
needed to keep welfare
moms on the job. But states
have managed to increase
spending per family because
the law based federal block
grants to states on the larger
caseloads of earlier years
The result: more money for
fewer families. Federal
spending per family is up 27
percent since 1995, a wind-
fall states are using partly to
fund new welfare-related
vices.
Even if published work re-
quirements are often tooth
less, experts add, casework-
Saul Mercado sweeps a street in the Bronx as part of New York City's welfare-to-work program.
ers and welfare recipients are
treating them as if they were
n the popular view, last
sult of the booming economy.
do pregnant women nor
real. In that sense, the law
year's controversial wel-
According to a new study
those in job readiness" ac
may be prodding welfare re-
fare reform had three big
by the Urban Institute, the
tivities (like resume writing)
cipients to seek jobs
aims: Get people to work,
bill's "tough" work mandates
These loopholes were pushed
The real test, though, will
save the government money,
will compel fewer than
especially by Republican gov
come when the next reces-
and transform the culture of
200,000 of the 3.3 million
ernors, who know that mov-
sion hits. While the number
poverty. With caseloads
adults on welfare to go to
ing welfare recipients into
of people seeking help will
down 10 percent on the bill's
work each year. Why? In the
jobs is expensive
increase, the money provided
first anniversary this month
ory, the states are supposed
Pressure from unions. New
by the federal government
(23 percent since their 1994
to get a quarter of their case-
regulations, meanwhile, may
won't. Eventually, too, limits
peak), there appears to be a
loads working now, and half
make it hard for states to run
on the number of years that
good start. But in reality, ex
by 2002. But there are a host
real work programs. Bowing
people can receive welfare
perts say, relatively few wel
of exemptions: States whose
to pressure from unions,
will take effect. Finally, it's
fare recipients will be re
rolls had been shrinking al
which fear competition for
unclear whether low-wage
quired to work, the
ready don't have to push as
members jobs, the Clinton
jobs will pay enough for wel-
government is spending
many current recipients into
Labor Department ruled in
fare mothers to support their
more per recipient than ever
the work force Teenage
May that welfare recipients
families. If they don't, wel
before, and most of the drop
mothers who stay in school
who are forced to work for
fare reform will likely fail.
in the welfare rolls is just a re-
don't have to work. Neither
their benefits must be subject
Matthew Miller
18
U.S.NEWS & WORLD REPORT, AUGUST 18 / AUGUST 25, 1997
U.S. NEWS
anda
found full-time workers earning about
time
$8,840, far below the $16,050-per-year
poverty line for a family of four. Many
her
fast-food operations do not offer health
Why Bill Gates and
insurance (Walker does for full-time em-
ployees but not part-timers, who account
not
for two thirds of his workers).
ugh.
Newman found that those who came
Steve Jobs made up
4.75
from households on welfare had less luck
be
getting fast-food jobs than those who
didn't. There were generally 14 people ap-
Both Apple and Microsoft stand to gain, big
plying for each job opening in Harlem's
JIM
restaurants, showing that there's a limit
to how many welfare mothers fast-food
restaurants can absorb. And while there
is some upward mobility for McDonald's
workers, there are far fewer management
jobs than there are applicants. Gordon
Berlin of the Manpower Demonstration
Research Corp., which evaluates social
programs, says while there is evidence
that fast-food or other restaurant jobs
help younger people get off welfare, he
doubts it will work for "someone who's al-
ready 30 years old and is being forced
into the work force by welfare reform."
And there is still a stigma. Newman
found that some other businesses refuse
to hire former fast-food workers, dispar-
aging their work experience. Embar-
rassed workers in Harlem often stripped
off their telltale uniforms the minute
work was over. Others took jobs outside
their neighborhoods so they wouldn't be
spotted by friends. "People like to down
me like [this job] wasn't anything, like it
was a low job," one 20-year-old McDon-
ald's employee told Newman.
"Horrible and demeaning." Indeed, some
argue that it is unfair to force people into
Macworld was the setting, Apple chief Steve Jobs the deal maker, Bill Gates the savior.
menial jobs. At a town hall meeting in
Harlem this year, one woman on welfare
BY SUSAN GREGORY THOMAS
desktop. Quite possibly, Microsoft also
drew applause when she described to
gains an ally in its campaign against Sun's
President Clinton a friend who had been
or Macintosh loyalists, it was at
and Oracle's efforts to convert corporate
hired as a receptionist and was then given
F
once a dream come true and a night-
users (and ultimately consumers) to
janitorial duties. "I've seen the woman
mare. There was old friend Steve
networked computers based on the pro-
clean the toilets, and it's horrible and de-
Jobs, again at the helm of the com-
gramming language Java rather than on
meaning," said the woman, Nilda Roman.
pany he cofounded, giving a tough but op-
Microsoft Windows. Apple earned re-
But Ethel Dent told her friends in Jack-
timistic speech about Apple's future at
newed industry confidence, Microsoft
son something different. She went back to
the Macworld trade show in Boston. But
software support, and a new board-one
her inner-city neighborhood and told her
looming above on a gigantic screen was
of whose members, Oracle CEO Larry Elli-
two closest friends, both welfare mothers,
Bill Gates, offering cash and industry
son, is sure to resist Microsoft's pressure.
that they should try jobs at McDonald's.
support to help secure that future. Was
Common good. But the markets saw the
So far she hasn't convinced them. "They
the longtime foe turning savior?
deal as good for Apple, too. After the an-
say they don't want to flip burgers and
As the details emerged, benevolent des-
nouncement, Apple's stock rocketed
stuff. I say, well, it's your choice." Dent,
pot seemed more like it. Gates's an-
more than 47 percent to a yearly high of
however, is satisfied. "I'm making a little
nouncement last Wednesday that Micro-
$29.19 last Thursday. The company need-
bit more than on welfare. But I'm doing it
soft will pay $150 million for a minority
ed good news. After losing $816 million
myself." And this spring, Dent did have
nonvoting stake in Apple this quarter
last year, Apple lost $884 million more in
success recruiting another welfare mother
clearly was in the best interests of his own
the first nine months of this fiscal year.
who had never worked before. Working
company. The deal will permit Microsoft
Total sales fell 20 percent in the latest
alongside her at the breakfast grill now is
to maintain its dominance as the No. 1
quarter over the year-ago quarter and 27
Dent's sister, Cathy.
supplier of business software to Apple cus-
percent for the latest nine months.
tomers and to continue to advance its Web
Besides a cash infusion, Apple received
With William J. Holstein
strategy of pushing its browser onto every
an undisclosed sum-which some sources
NEWS & WORLD REPORT, AUGUST 18 / AUGUST 25, 1997
19
ted IRS
prizers
Texas
latings
filture softure
Ismofed And
Fre
BUSINESS
MARKETING
Enough Talk
Focus groups are old
news. Today's
marketers prefer
Crayolas, collages
and surveillance.
BY LESLIE KAUFMAN
SKED TO REVAMP UNITED
A
Airlines' ad campaign, the
Minneapolis agency Fallon
McElligott turned to its secret
weapon for probing the con-
sumer psyche: crayons. Fre-
quent fliers got eight colors and a map
showing the different stages in a long-dis-
tance airline trip and were told to let their
emotions do the drawing-hot colors for
stress and anger, cool ones for satisfaction
and calm. When the travelers had complet-
ed their artwork, ticket counters burned or-
ange, airport waiting rooms radiated fire-
engine red and-to the surprise of those
conducting the exercise-jet cabins at
35,000 feet were awash in a serene aqua.
For Fallon exec John Gerzema, it was an
epiphany. "Clearly United's slogan 'Some-
thing Special in the Air' didn't fully address
the concerns of consumers," he says. The
research led Gerzema and the airline to a
tag line they felt would play to the weary
travelers' desire for an overall improve-
ment in operations: "United Rising."
The gurus of marketing have never ex-
actly been scientific in trying to divine our
innermost desires-but Crayolas? Yep,
You for a day:
and while you're at it add collages, home
surveillance and "ambushing" to the list of
Marketers actually
unconventional tools being used these
live in your home,
days to extract precious insights into the
do what you do,
go where you go,
habits of the American consumer. Focus
to gain insights into
groups-where half a dozen ordinary folks
how you talk about
Focus groups
are assembled to discuss Brand X while
lem-when one highly opinionated person
and use categories
were. avant-garde
observers busily scribble notes behind a
of products
drowns out the rest of the group. Tom
in the 1980s, but
Hollerbach, executive vice president for the
one-way mirror-may still dominate re-
years of experi-
search into selling everything from dish
ad firm BBDO West, complains that someo
ence with them have now taught ad execs
these voluble bullies have even become fö
soap to politicians, but they are slowly los-
their drawbacks. Consumers have been so
ing cachet. Explains Jim Spaeth, president
cus-group regulars, signing up rep edly
bombarded with ads that they unconscious-
of the Advertising Research Council, the
because they like the idea of dictating ad
ly (or, perhaps, cynically) parrot back what
race is on to find methods that dig beyond
campaigns. For them, he says, "it's like be
they've heard in commercials instead of re-
what consumers can articulate to what's
ing boss of the boss for a day."
acting to products spontaneously. Even
"deeper in their mind."
To dodge such problems, marketers are
more troublesome is the "loudmouth" prob-
finding ways to make people shut up and
48
NEWSWEEK AUGUST 18, 1997
LEFT TO RIGHT: MICHELE LAURITA, BLAIR JENSEN. HOUSE CALLS INC
Fallon's use of crayons is just one
with Scope, the company hired House Calls.
seat room to the 1998 Accord. BBDOWest
Ention on the theme. Jeff DeJoseph of the
The Manhattan-based firm paid 37 families
sent Tom Donovan, its account executive
Walter Thompson ad agency asks sub-
to let it set up cameras in their bathrooms
in charge of Pioneer Stereo, to Austin,
to collect small personal items from
and film their routines around the sink.
Texas, to drive around with the kind of
homes that remind them of the brand
Users of both brands said they rinsed with
guys Pioneer hopes will buy its car stereos.
is
testing. Catherine De Thorne of
mouthwash to make their breath smell
He incorporated their lingo-"My car is
bacago-based Leo Burnett encourages
good, but they treated the products very dif-
my holy temple, my love shack, my donut
exple to describe their feelings about
ferently. Scopies gave the green stuff a swish
maker, my drag racer of doom" - into an ad
ducts like sunglasses by cutting pic-
and spit it out. Devotees of the new Lister-
campaign that has helped catapult Pioneer
from magazines and pasting them into
ine felt obliged to keep the wash in their
ahead of rival Sony. Political consultants
a collage. "People are just
mouth for a lot longer. One subject went so
have also picked up on such "natural envi-
far as to hold on to the Listerine after he left
ronment" research. When President Clin-
home and got into the car. Only when he
ton's adviser Mark Penn wanted to test a
new message during the 1996
campaign, for example, he of-
ten skipped the usual focus
groups and instead went
straight to shopping malls,
where he quizzed voters in a
more relaxing setting.
Andy Greenfield, presi-
dent of Greenfield Consult-
ing, takes such methods one
step further in something he
calls "ambush research." It
works like this: a beer com-
pany, for instance, wants to
test a new product it's
launching to compete with
upscale
microbrews.
Greenfield goes to a bar
frequented by the target
group, male Yuppies 21 to
26, pays the bartender and
waitress to play along, se-
lects his man (hopefully
on a date) and approach-
es. Telling the guy that
he's researching some-
thing totally unrelated to
beer-ocean pollution or
animal rights-he offers
to buy the couple a drink
in return for a few min-
utes of their time. As
arranged beforehand,
the waitress brings the
brand Greenfield is re-
searching instead of the
chic beer Mr. Yuppie or-
Collaging:
01
dered. Mr. Yup-
Instead of talking
09
Home surveillance:
pie gets angry, so
about a product,
For a fee, participants
the waitress
research subjects are
agree to allow mar-
apologizes and
asked to cut pictures
keters to film them in
says the beer is
from magazines and
d person
their homes engaging
on the house. 'If
baste them into a
better visually
reached a sewer a block away did he expel it.
in personal activities,
the subject won't
ip. Tom
collage that repre-
than verbally,"
The message to Warner-Lambert was clear:
like their morning
take the freebie,
t for the
sents their feelings
she explains.
though Listerine needs to seem user-friend-
bathroom routine
Greenfield starts
some of
Another
fa-
ly to take on Scope, it hasn't yet shaken its
gathering heat-
ome fo-
vored method for ferreting out the true
mediciney image.
of-the-moment information on why he
eatedly
tastes of consumers comes straight from cul-
If marketers can't film you at home,
won't even try the new beer. Pretty clever
ting ad
tural anthropology: observing the natives in
sometimes they' just move in with you.
tactics, but it's enough to make you think
ike be-
their natural setting. When Warner-Lam-
Both Honda and Toyota have sent staff to
twice the next time a stranger serves up a
bert wanted to find out what customers
live with families and observe how they
bit of hospitality.
ers are
thought of Fresh Burst Listerine, a new
use their vehicles-a tactic that Honda
With DANIEL McGINN in Detroit and
p and
mint-flavored product designed to compete
says confirmed its decision to add back-
JENNIFER TANAKA in Chicago
INC.
AUGUST 18, 1997 NEWSWEEK
49
Economic Trends
BY GENE KORETZ
1986 through early 1996 indicates that
the impact is extremely weak. Further,
STILL NO GLUT
they find that funds investing in growth
stocks, which usually lead the pack in
OF NEW WHEELS
DEBUNKING A
market swings, are less sensitive to
U.S. auto sales should stay strong
price shifts than income funds, suggest-
CRASH SCENARIO
ing that growth fund investors aren't
W
ith sales of new cars and other
spooked by price volatility.
light vehicles averaging close to
Could fund outflows sink stocks?
What of the big market declines in
15 million units a year in recent years,
October, 1987, and October, 1989? In the
some experts think the U.S. new car
T
he stock market vaults ever higher,
first, as growth stock prices plunged by
market is finally
and cash continues to pour into eq-
an average 37.7%, net outflows from
approaching satu-
NOT EVERYONE
uity mutual funds. It doesn't take a ge-
growth funds hit 4.6% of assets, com-
ration and an in-
HAS A 'NEW' CAR
nius to figure out that these trends may
pared with average fund liquidity levels
evitable downturn
be connected. And therein, notes a
of 9.4%. In the second, growth stocks
lies ahead.
study in the Federal Reserve Bank of
fell by 6.2% and growth funds suffered
Not analysts at
New York's current Economic Policy
outflows of just 1.3% of assets.
DRI/McGraw Hill,
VEHICLES
3 YEARS OLD
Review, lies the basis of a recurrent
"At least up to now," says: Remolona,
who predict sales
OR LESS
nightmare haunting Wall Street
"the evidence suggests that the impact
will escalate from
For, as authors Eli M. Remolona,
of stock-price movements on equity-fund
15.2 million units
Paul Kleiman, and Debbie Gruenstein
this year to a 15.5
30
flows is not strong enough to sustain a
point out, if surging stock prices are
downward market spiral."
million-unit clip
sparking strong mutual-fund inflows that
from 1998 through
PROJECTED
tend to push up prices even more, then
2001. For one
2001
it's possible that a sharp drop in prices
THE CLASS OF
thing, DRI econo-
PERCENT OF TOTAL LIGHT
could reverse the process, setting off a
mist Ezra Green-
VEHICLES ON THE ROAD
cascade of redemptions by fund in-
vestors that could escalate into a market
BOXCUTTER HIGH
berg points out
DATA: DRI/McGRAW-
that relatively new cars (three years
crash. To assess the likelihood of such a
Violent schools mean fewer grads
old or less) currently account for only
scenario, the researchers review the his-
about 30.3% of vehicles on the road.
torical record-and particularly the in-
fluence of short-term shifts in stock
S
tudies of the effect of school charac-
That's significantly below the 37% peak
teristics on students' educational
reached a decade ago (chart).
prices on fund flows.
progress have traditionally focused on
Moreover, notes Greenberg, even in
The study comes up with several re-
such things as class size, per-pupil ex-
the wake of strong sales since 1994, the
assuring omens. One is that directly
penditures, and teacher education. In a
share of such nearly new vehicles has
owned stock funds represent only 5.5%
new research paper, economist Jeffrey
started slipping recently. And despite
or SO of household financial assets (an ad-
Grogger of the University of California
the 15.5 million-unit sales pace that DRI
at Los Angeles looks at a factor that
sees ahead, it expects the percentage
EQUITY FUNDS ARE
has received relatively little attention:
of vehicles in the three-years-old-or-less
school violence.
age group to ease down to 29% by 2001.
RIDING THE BULL MARKET
Using nationwide public high school
250
survey data from the 1980s, Grogger
NET INFLOW OF
$200
MONEY INTO EQUITY
finds that minor levels of violence-a
MUTUAL FUNDS
problem faced by nearly two-thirds of
DOING TIME
150
public school students-lowered the
100
chances of students' graduating from
IN THE USA
high school by about a percentage point
It's in the cards for 5% of Americans
50,
to 78% and their chance of going to á
0
four-year college by four percentage
'95
W
hat are the odds of an American
'90
BILLIONS OF DOLLARS
points to 27%. And moderate levels of
born today winding up in jail
ANNUAL RATE BASED ON $111 BILLION THROUGH JUNE
violence (faced by 9% of students in the
sometime during his or her lifetime?
DATA: INVESTMENT COMPANY INSTITUTE, BW
sample) reduced the likelihood of high
According to a Justice Dept. study
ditional 2.4% is held in pension plans,
school graduation by about 5 percentage
based on 1991 incarceration rates in fed-
which tend to take a long view of stock
points and of college attendance by 7
eral and state prisons, the answer is
market performance). Moreover, ovèr
percentage points. The effects of serious
about one in twenty or 5.1%.
half of equity-fund assets are held in
violence were even greater.
The risks of jail time are greater for
funds charging an up-front sales fee, and
It's no secret that school violence can
men than for women (9% vs. 1.1%) and
such "loads" inhibit short-run selling.
impede education in a variety of ways-
particularly high for black and Hispanic
And since mutual funds still account for
by disrupting classrooms, for example,
men: 28.5% and 16% vs. 4.4% for white
only 14.9% of equity market capitaliza-
or causing students who fear attack at
men. These odds are undoubtedly un-
tion, outflows alone seem unlikely to
school to stay at home and risk falling
derstated, since the study doesn't- in-
CHARTS BY LISA STAPLETON
cause a sharp market decline.
behind, or interfering with student con-
clude the likelihood of being incarcerat-
But the key question is whether sud-
centration. Grogger's findings underscore
ed in a local jail or juvenile facility, and
den shifts in market returns significant-
the negative impact on students' future
the annual rate of admissions to local
ly affect fund flows. And here the econ-
educational attainment and thus on their
jails is nearly 30 times the pace of ad-
omists' statistical analysis of data from
lifetime earnings potential.
missions to state and federal prisons.
24 BUSINESS WEEK / AUGUST 11, 1997
News: Analysis & Commentary
HEALTH CARE
seeing it as a way to make a fast buck,"
says Michael F. Mangano, principal
deputy inspector general of HHS.
GUESS WHO'S
While investigators used to focus on
small operators, they're now looking at
IN THE WAITING ROOM
bigger players in all Medicare programs.
In addition to the Columbia/HCA probe,
SmithKline Beecham Clinical Laborato-
The feds widen their crackdown on Medicare overbilling
ries Inc., accused of false billings for
laboratory tests in a crackdown called
T
he letter from the Justice Dept.
has increased funding for health-care
"Labscam," reached a $325 million set-
shocked President James W. Var-
investigators. And thanks to new
tlement with Justice earlier this year.
num of Mary Hitchcock Memorial
and more sophisticated auditing sys-
And last year, the University of Penn-
Hospital. Alleging that his Lebanon
tems, the probers are finding it easier
sylvania agreed to pay $30 million after
(N. H.) hospital committed fraud in the
to spot unusual billing patterns. Health-
being accused of civil fraud by billing
way it billed Medicare in the early
care probes by the Federal Bureau
Medicare for services of teaching doctors
1990s, the feds demanded $1 million in
of Investigation, mean-
when residents per-
their January letter, mostly in civil fraud
while, are rising fast- GROWING CLAIMS: The feds
formed the work.
penalties. Varnum says that the over-
to 2,300 in the first half face a mountain of paper
The hospital industry
payments resulted from
alone is under three
a mistake-prone billing
separate HHS and Justice
system. Still, in May,
civil-fraud investigations.
rather than litigate, he
In the largest, enforcers
settled with, Justice by
are accusing 4,600 hos-
paying $100,000. "When-
pitals of violating a rule
ever there is any error,
banning them from
the government says it's
billing Medicare for out-
fraud and abuse," Var-
patient services if the
num fumes. "It's not
patient is admitted for
right."
the same condition with-
Health-care providers
in three days. So far,
such as Varnum had
2,000 hospitals, including
better get used to it. In
Varnum's Mary Hitch-
the past 10 months, Jus-
cock, have paid $47 mil-
tice and the Inspector
lion, and the government
General of the Health &
expects to collect $55
Human Services Dept.
million more.
recouped $1.1 billion
Hospitals are irked
from Medicare provid-
by the probe. "Our folks
ers, compared with $250
THE MEDICARE MONEY TRAIL
are trying to take care
million collected over the
HOSPITALS Federal investigators are probing 4,600 hospitals for
of people, not trying to
previous 12 months.
MORE GUMSHOES. That's
possible violation of a Medicare rule barring hospitals from submit
defraud the govern-
ting bills for outpatient services if the patient is admitted for inpa
ment," says Richard
just the beginning. A
tient care within three days. Feds also investigate 33 teaching hos-
J. Davidson, president
new report by the HHS
inspector general gives
pitals for billing Medicare for attending physician fees when
of the American Hospi-
investigators a huge
residents perform services
tal Assn. But prosecu-
tors counter that hospi-
new target: an estimat-
CLINICAL LABS "Labscam, a multiyear probe, netted $830 mil-
tals have long ignored
ed $23 billion in
lion Abuses included running specimens through equipment that
warnings about their
Medicare overpay-
performs numerous tests simultaneously, then billing Medicare
billing procedures.
ments-through fraud
separately for each test. In February, SmithKline Beecham Clinical
"They were put on
or error. On July 28,
Laboratories settled with the feds for $325 million:
notice, and they did not
HHS released another
correct their systems,"
audit in which analysts
HOME HEALTH CARE Federal investigators estimate 40% of the
says Donald K. Stern,
estimate that 40% of all
$16.9 billion spent on home health care under: Medicare is unnec-
the U.S. Attorney for
home health-care pay-
essary. Medicare places no limits on home health-aide visits, and
Massachusetts.
ments by Medicare may
regulators don't check backgrounds of home-care. agency operators.
The feds' next target
be unjústified. Two days
is managed care. In-
later, a federal grand jury unsealed in-
of 1997, up from 591 in all of 1992.
spectors will look at whether managed-
dictments against three Columbia/HCA
One huge target is home health care.
care providers, which get a flat per-
Healthcare Corp. executives as part of
Since 1990, annual Medicare payments
patient fee, are providing appropriate
a sweeping probe of the chain: They're
to home-care agencies have quintupled,
care. Their advice to health-care
accused of filing inflated Medicare
to $16.9 billion. Regulators don't check
providers of all kinds: Take two as-
billings that led to $1.8 million in over-
the backgrounds of home-care agency
pirin, and expect a house call from fed-
payments to one hospital.
operators, and Medicare allows unlimit-
eral agents in the morning.
PORTER
Expect more of the same. Congress
ed home health-aide visits. "People are
By Susan B. Garland in Washington
32 BUSINESS WEEK ! AUGUST 11. 1997
COMMENTA Y
By Catherine Yang
buck,"
principal
MEMO TO THE FCC: MAKE DEREGULATION WORK
focus
on
oking
at
T
his could be the defining moment
that would make it as easy to change
for the Federal Communications
service providers as it is now in long
rograms.
Commission-and for the $150
distance. The FCC should also pass
A
probe,
aborato-
billion U.S. phone industry it over-
regulations to stop the Bells from
sees. The White House must name a
imposing small inconveniences on
for
chairman and, over the next few
customers who decide to switch ser-
called
months, fill four vacancies on the
vice, such as not letting customers
set-
his
agency's five-member board, just
easily take their old phone numbers
year.
of
Penn-
when the industry's painful lurch to
to a new carrier.
after
ward opening up competition appears
BULLY PULPIT. Meanwhile, the agency
billing
to be stalling.
must exercise its prerogative under
doctors
As things stand, the FCC is flirting
the new reform law to preempt anti-
with irrelevance. The agency was
AI&T Digital PCS.
competitive rules at the state and lo-
per-
given broad powers to carry out the
cal levels. The FCC should overrule a
intent of the Telecommunications Act
Only from
industry
of 1996, a measure aimed at opening
ART
Wirdess
Service
1995 Texas law requiring the big
three
three long-distance companies-AT&T,
all phone markets to greater compe-
MCI Communications, and Sprint-to
Justice
tition. Long-distance carriers haven't
build their own local-calling facilities
ligations.
nforcers
broken into. local-calling, and the
The 1996 act says long-distance com
hos-
Baby Bells haven't launched long-dis-
panies needn't lay their own fiber ca
a
rule
tance service. Instead, the two sides
ble and copper wires a costly
from
snipe in publici and battle it out in
proposition. They can choose to lease
court. Giants such as Bell Atlantic
for
WIRELESS: Changing technology and
these components at a reasonable
out-
if
the
Corp. and Nynex Corp. have decided
new products challenge the FCC
price from the Bells to get started in
for
to merge rather than compete with
local business.
with-
one another. And on July 18, a féder-
Bells entry into the long-distance
Kennard, if confirmed, should use
So
far,
al appeals court stripped the FCC of
market until they open up their local
his bully pulpit, too. Publicly naming
ncluding
one important tool: its authority to
monopolies to rivals:
companies that stymie competition or
Hitch-
regulate the prices charged by local
Taking that kind of action is just
threaten to is anteffective way of
mil-
phone companies for "interconnec
what the FCC should now, do.: A use-
keeping telecom deregulation on the
tions" to their networks
ernment
ful precedent: holding the Bells to
right track. Outgoing FCC Chairman
$55
WHOSE RULES? That's why the next
the same conditions imposed on July
Reed Hundt decried the very idea of
chairman; most likely William Ken-
$19 in the FCC's approval of the Bell
AT&TS merging with SBC Communica
irked
nard, now the FCC'S general counsel,
Atlantic-Nynex.merger There, the
tions Inc. instead of trying to com-
folks
must move very quickly to prevent
two companies agreed to refrain
pete with the Baby Bell in local ser-
deregulation from devolving into a
from some of the games monopolists
vice. AT&T and SBC scotched the plan
care
to
balkanization of the U. S. telephone
play to block new entrants They
While Kennard will stay busy
system. Under the appeals court rul-
also agreed to help local-service-ri-
tackling a large agenda it will span
govern-
Richard
ing, each state can fashion its own
vals by granting access to phone
wireless services, digital television,
resident
rules to set the speed at which com-
company computers so that the up
and cable TV-the first order of the
Hospi-
petition comes to local calling. That
starts can easily switch service for
day is the phone system He will be
could create an inefficient patchwork
new customers.
judged on his ability to restore the
prosecu-
of 50 different rules rather than one
hospi-
The FCC could codify these and
promise of the Telecom Act Ameri
federal standard.
other standards in across the board
ignored
can consumers are counting on just
their
The FCC still has ways to pry open
rules. It should set up federal stan-
that-and should expect nothing less:
dures.
amarkets across the U.S., despite the
dards and deadlines by which the
July 18 ruling Under the Telecom
Bells would have to provide new ri-
Yang covers telecommunications
on
did
not
Act, it has the power to deny the
vals with electronic ordering systems
policy from Washington.
stems,"
Stern,
THE FCC'S FULL PLATE
for
As/chairman, Kennard would face a daunting must-do list.
target
DEREGULATION The FCC must find
the wireless spectrum Auction winners
In-
creative ways to open up competition in
who are facing default are looking for debt
anaged-
the local exchange market, or face
forgiveness
per-
criticism that the 1996 Telecommunica
TELEVISION The FCC will have to deal?
ropriate
tions Act is failing.
with consumer complaints about high
WIRELESS The agency has yet. to overhaul
cable:bills And will have to write rules
two
as-
KENNARD
fed-
the botched results of last year stauction of governing the budding digital TV industry
(TOP) BY LES STONE/SYGMA
shington
BUSINESS WEEK / AUGUST 11, 1997 33
Science & Technology
DRUG TESTING
fail to provide enough evidence to jus-
tify approval for such drugs. However,
critics charge that regulators set too
high a bar for drugs targeted at poorly
understood diseases by applying the
SHOULD THE FDA
same tough standards used for routine
medications, such as preferring two
LOWER THE THRESHOLD?
studies showing the same results.
Lou Gehrig's sufferers are caught in
the middle. "I want the opportunity to
For some drugs, says Cephalon, testing standards are too high
see if it would work for me," says Shel-
bie M. Oppenheimer, a 30-year-old for-
F
or Dr. Patricia K. Coyle, the testi-
proved its case. "There was no way you
mer day-care center director from New
mony was wrenching. Speaker
could review that data and say un-
Hope, Pa., who was diagnosed with Lou
after speaker described how para-
equivocally that this agent worked," says
Gehrig's disease in 1996. "I'm not an
lyzing Lou Gehrig's disease had relent-
Coyle, a professor at the State Univer-
idiot. If it doesn't work, I'm not going to
lessly robbed them or their loved ones
sity of New York at Stony Brook. The
keep taking it."
of the ability to walk, feed themselves,
vote against the drug was 6-3, with only
Precedent may be on her side. The
or even hold a pencil. Tearfully, they
nonphysicians dissenting. By Aug. 11,
FDA has broken with tradition to ap-
pleaded in May with Coyle and five oth-
the FDA is expected to decide whether to
prove some AIDS medicines on the basis
er neurologists on a Food & Drug Ad-
approve the drug-with the panel's
of one trial. They've gone on to become
ministration advisory committee to clear
thumbs-down weighing heavily.
life savers. And the agency eventually
the way for approval of a new drug,
Whether the panel acted correctly is
approved Warner-Lambert's Cognex
Myotrophin-a genetically engineered,
a matter of heated dispute. Myotrophin
medicine for Alzheimer's sufferers, even
insulinlike growth factor that might slow
is a case study in how well-meaning
though three studies showed the drug
the disease's advance.
regulators and companies with little cap-
offered only marginal, if any, improve-
But for Coyle and the other panel
ital can err when dealing with diseases
ments from some of the fatal disease's
members, the facts were less persua-
for which there is little or no treatment.
symptoms.
sive. The drug's manufacturer, biotech
Startups such as Cephalon may be aim-
Five years ago, Myotrophin's future
startup Cephalon Inc., simply hadn't
ing too low in designing studies that
seemed bright. Researchers at Cephalon,
DANUTA OTFINOWSKI
NEW HOPE? Afflicted with Lou Gehrig's disease, Oppenheimer wants to try an unapproved drug
94 BUSINESS WEEK / AUGUST 11, 1997
cience & Technology
to
jus
based in West Chester, Pa., began re-
pany and its partner, Chiron
cient data and says the pa-
However
search in 1992 to see if the drug, which
Corp., filed with the FDA for
tients testified without com-
set
too
promotes nerve growth, could stymie a
approval to sell Myotrophin.
pany encouragement.
at
poorly
disease that afflicts up to 30,000 Amer-
Baldino told regulators that
Now comes the FDA. The
olying the
icans. Scientifically dubbed amyotrophic
Cephalon had spent $180 mil-
agency could overrule its ad-
or routine
lateral sclerosis (ALS), its cause is most-
lion on research and would
visers and approve the drug,
rring two
unknown-though its consequences
have a tough time justifying
a rare move. It could grant
ults.
clear: irreversible wasting of mus-
further investment. "It's al-
conditional approval, reserv-
caught in
les, usually leading to death from res-
most impossible for us to idly
ing the right to order with-
rtunity to
piratory failure in less than five years.
throw $20 million or $30 mil-
drawal if future studies prove
says Shel-
After initial tests determined the
lion at another study," Baldino
disappointing. Or it could say
ar-old for-
drug was safe, Cephalon had to prove
told regulators.
no-a decision likely to meet
from New
that it worked. But that was trickier.
Instead, Cephalon offered a
[We can't]
with opposition from congres-
with Lou
Soon after researchers launched their
deal. If regulators let it start
sional members pressing for
m not an
studies-on 266 patients in North Amer-
selling the drug-some ana-
idly throw
approval. Senator Orrin G.
going to
ica in early 1993, and on 183 Europeans
lysts say Myotrophin could
$20 million
Hatch (R-Utah) wrote to the
later that year-they found that any
fetch up to $10,000 a year per
agency: "There is an occasion
side. The
improvement was modest. Some had
patient-Cephalon would do
or $30 million
here to provide patients with
on to ap-
better muscle tone or more ease in
further research. It proposed
the basis
swallowing, for instance, and a measur-
combining Myotrophin with
at another
a drug they need at no risk
to public health, and I hope
0 become
able slowing of some patients' decline
the only approved ALS medi-
study.
"
the FDA will be able to seize
ventually
was reported. Still, in mid-1995, based
cine, Rilutek, SO that doctors
that opportunity."
Cognex
on the North American results, Ceph-
could see the drug's useful-
FRANK BALDINO
Doctors who treat ALS also
ers, even
alon claimed "highly statistically signifi-
ness in the field. Rilutek, a
Cephalon Inc.
urged a speedy O.K. at the
the drug
cant effects" with patients showing 26%
Rhône-Poulenc Rorer drug ap-
hearings. Even the slightest
improve-
"less deterioration" than those on a
proved in December, 1995, extends life
benefit is better than nothing, they said,
disease's
placebo. Chief Executive and company
for ALS sufferers by an average of three
and the typical two-study demand may
founder Frank Baldino Jr. heralded
months but offers no improvement in
be too high a hurdle. "We're not talking
future
"good news for a lot of people."
physical functions. Backers theorized a
false hope. We're talking modest hope,"
Cephalon,
Soon came the bad news. In October,
combination of the two drugs could do
says California Pacific Medical Center
1995, Cephalon reported that in the Eu-
both modestly.
neurologist Dr. Deborah F. Gelinas.
ropean trial, Myotrophin fell
But the advisory
HARD LESSONS. Whatever the outcome,
short of treatment
the case offers drugmakers hard lessons.
goals. More disturbing,
Lesson one: Large trials,
the European death
rate was notably higher
Rx
though costly, may
AND AGAINST
pay off. "I'm quite
on Myotrophin than on
CASE FOR MYOTROPHIN....
sure it would have
the placebo-14.5% vs.
THE
been statistically sig-
8.5%. "I wouldn't even
nificant if they had
conclude that it is a mar-
ginal drug," says Dr. Sid
Gilman, head of the FDA
Myotrophin cle
an improved reported to
drugs sponsor shoud a not resolve made. FDA the The
two times as many
patients," says Johns
tone Physicians have in the rate
Hopkins University
advisory committee. "I sus-
swallow. measurable slowing medicine if
neurologist Dr. Ralph
pect that it is ineffective."
W. Kuncl. Lesson two:
LET'S MAKE A DEAL. Why
a deterioration. The effective
of even more recently
FDA drug-and that : whose pricedest that-whose Pricey that ave barly would becherwise, clearing one a the
all with
Heed advisory commit-
the difference between the
tee requests for more
might combined the diseasers be with that another extends life
for
two studies? Cephalon exec-
data, even if you believe
utives say the European pa-
sufferers.
been a at
you've done enough.
tients were sicker than Amer-
For regulators, the case
ican counterparts. But the FDA
raises troubling questions.
could not overlook the Euro-
Should standards be lower
pean results, particularly since
for deadly diseases that lack
the agency generally wants to see two
panel had a narrow
treatments? Even now, the
studies before it will approve a new
charge-to determine whether the
Senate is weighing a bill that
drug. With one study showing some ef-
drug showed "substantial" effectiveness.
makes it clear the FDA has the authority
fectiveness, however, the regulators
Without two convincing trials, it had-
to approve drugs based on a single trial.
wanted to keep the drug available as
n't. What's more, Cephalon's approach
And when should compassion override
tests continued. So in mid-1996, the ad-
irked committee members. "I thought
rules? Says University of Pennsylvania
visory committee ruled that a limited
their presentation was a bit on the slop-
bioethicist Arthur Caplan: "It is morally
number of patients outside the formal
py side," says Coyle. One committee
relevant not only what the evidence is,
studies could receive the drug until a fi-
member charges that "Rather than do-
but what the plight is of the people who
nal decision is made. However, the com-
ing the science
the company wanted
might be helped." With an admittedly
mittee insisted that Cephalon provide
to call in the most pitiful cases and use
weak treatment and a horrific ailment
PHOTOGRAPH BY DAVID FIELDS; GRAPHIC BY ALBERTO MENA/BW
convincing new data.
the emotional pressure of people with a
before it, the FDA now must decide what
By last February, though, Cephalon
very bad disease." Baldino insists the
makes for the smartest medicine.
decided it had done enough. The com-
company already had presented suffi-
By Joseph Weber in Philadelphia
BUSINESS WEEK / AUGUST 11, 1997 95
Developments to Watch
EDITED BY NEIL GROSS
finished object materializes
before your eyes, layer by
IGH-TECH DESIGNS:
layer," says Clinton L. At-
MINDING THE
BEYOND
wood, Sandia's team leader
KIDS-ON THE NET
PLASTIC MODELS
for rapid prototyping. The
process eliminates several
PARENTS WHO WORRY
IN THE MID-1980S, WHIZZES
manufacturing steps, he says,
about their kids in day
in manufacturing melded
and the result is "a dense
care may soon find reas-
computer-aided design (CAD)
metal part with excellent
surance at the click of a
metallurgical properties."
mouse. WorldWide Access
software with plastic model-
ing equipment. The result,
Initially, industry may use
in Chicago is testing a
called stereolithography, lets
the technology to create
system called KidCam
product designers create fin-
metal tools or templates for
that lets parents with
ished physical models from
plastic injection molding. But
Internet access observe
their computer screens. Now,
LASER BURN: Metal magic
ultimately, factories could
their child's day-care
engineers at Sandia Nation-
employ the same process to
room on their PCS-and
al Laboratories have gone a
molten pool measuring about
produce auto parts or to re-
even enjoy a scheduled
step further, actually manu-
thirty-thousandths of an inch
pair worn tips on turbine
teleconference
facturing metal parts direct-
in diameter (photo). Metallic
blades in aircraft engines.
For security reasons,
ly from CAD.
powder is then sprayed at
Sandia is completing a tech-
parents at participating
Following specifications
the focus of the beam while a
nology-transfer agreement
day-care centers are asked
from off-the-shelf design soft-
stage moves the substrate
with manufacturing giants
to register and use mem-
ware, a laser burns a pit in a
back and forth. As the ma-
Eastman Kodak Co., 3M, and
bership numbers and
metal substrate to create a
terial melts and cools, "the
others.
words. Once that's set up,
they log on to the center's
Web site remotely and
body with electrodes, inserts a needle into
navigate to their child's
SILENCING SNORERS
the palate's soft tissue, and pipes in radio
room. If the parent's PC
WITH RADIO WAVES
waves These agitate ions in the tissue, re
has a video camera, a fea
sulting in heat that kills the excess cells
ture called Kid Chat per-
TIRED,OF LISTENING TO YOUR PARTNER
During the half hour outpatient proce
mits videoconferencing
snore? Somnus Medical Technologies in
dure, the patient feels a slight warmth
Kathleen Vrona, vice
Sunnyvale, Calif, has received Food &
and, for a few days afterward, a.scratchy
president for marketing
Drug Administration clearance for atech
throat. But in a few weeks time, the body
and sales and a co-founder
nique that emolds the palates of snorers,
flushes out dead cells and the palate re-
of WorldWide Access, says
removing the excess tissue that obstructs
tracts to permit easy breathing. Somnus
the system has received
breathing and causes all the clatter.
says the treatment will cost about $2,500
good reviews in trial cen-
The technique, called 'somnoplasty, is an
in the U. S. It has enlisted Medtronic Inc.
ters such as Rainbow
alternative to surgery After applying a lo-
of Minneapolis to help export the proce
Child Care & Learning
cal anesthetic, aidoctor wires the patient
dure to Europe and Asia. Stephen Baker
Center in Naperville, Ill.
In addition, as many com-
panies that offer. on-site
the University of Pittsburgh's
tive only in a liquid environ-
day care have discovered,
chemical and petroleum en-
ment, while most chemical
parents who are resting
AN ENZYME
gineering department. It
weapons are not soluble in
easy about their children's
CAN KNOCK OUT
makes use of an enzyme
water.
well-being tend to be more
NERVE GAS
called phosphotriesterase that
To solve this problem,
productive at work, Vrona
was discovered by scientists
Russell stabilizes the enzyme
says
Elizabeth Veomett
DEACTIVATING THE 200,000
at Texas A&M University. De-
in foam, which is then suf-
tons of chemical weapons
scribed by Russell as "one of
fused with the noxious chem-
currently stored at muni-
the most efficient enzyme cat-
icals. In its sponge form, the
Birthday.
tions sites worldwide is a
alysts ever discovered for any
enzyme can be stored for
daunting task. But research-
reaction," the enzyme breaks
months at room temperature,
ers at the University of
oxygen-to-phosphorous bonds
he says. The German De-
Pittsburgh have a promising
in dangerous chemicals, leav-
fense Ministry is considering
technique that uses a long-
ing harmless byproducts that
testing the enzyme in the
lasting, easily storable en-
can be safely burned. A drop
decontamination of real
zyme stabilized in polyure-
of the enzyme will cause one
chemical weapons. And the
thane foam.
ton of nerve gas to biode-
U.S. Army may use the
The method was developed
grade within a year, he says.
technology in protective
ON VIDEO: KidCam kids
by Alan Russell, director of
Unfortunately, though, it's ac-
suits. Johanna Knapschaefer
FOR FURTHER INFORMATION: Go to Business Week Online at America Online or E-mail [email protected]
BUSINESS WEEK / AUGUST 11, 1997 97
become even more empty and self-
contradictory than usual. García Már-
quez's most recent stunt was to depart
for self-imposed exile from Colombia
once again. proclaiming that he could
Hostility In America
no longer abide the corrupt rule of
President Ernesto Samper, a man whom
he had previously defended from gringo
BY JAMES Q. WILSON
charges of narco-democracy. His refuge?
That great drug-free zone. Mexico. (It is
just a matter of time before we hear
Crime Is Not the Problem:
about his intense friendship with, and
Lethal Violence in America
the Herculean work habits of, Cuauh-
témoc Cárdenas.)
by Franklin E. Zimring and Gordon Hawkins
arcía Márquez's advice to
(Oxford University Press, 259 pp., $35)
G
young journalists is very,
ne of the more frustrating
O
lem, and that the main goal of public
very strange. At his semi-
difficulties facing students
policy ought to be to reduce violence.
nar in Cartagena last year,
of crime is our inability to
To do that, we must first understand
a dozen of Latin America's most promis-
compare crime rates across
why our rate of violence is so much high.
ing reporters heard him declare that
countries. Interpol gathers crime data
er than in England, Australia, France or
"journalism is not a job, it's a gland."
from national police agencies, but it does
Germany. The answer given by Zimring
Picking up the morning Cartagena
so in a way that make its reports next to
and Hawkins is that we kill each other
paper, he turned to the classified ads.
worthless. The agency fails to assess the
more often (and engage in property
A woman was selling her brand-new
quality of the accounts that it receives,
crimes, such as robbery, that often have
stove, still in pieces. "Why is the stove
and it presents them in a way bound to
fatal outcomes) in large part because
unassembled? García Márquez won-
cause confusion. Thus, not long ago,
Americans are more heavily armed than
dered. "This could be a story. Should
someone published an op-ed essay in
are other societies. Opponents of gun
we call?" No one at the table knew quite
which the author claimed that the
control will reflexively object to this con-
what to say.
Netherlands had a higher murder rate
clusion, but, if they are to prevail, they
But if that non-story qualifies for Gar-
than did the United States. That is, to
will have tough going against the argu-
cía Márquez's front page, his own part-
put it mildly, an implausible idea. In his
ments made here. Using data from the
nership with Castro is not necessarily
defense, however, he displayed the Inter-
World Health Organization, a group
the news. "This is not an interview," he
pol report. At first glance, the document
that counts dead bodies instead of mere-
barked when a member of the seminar
seemed to confirm his view, until one
ly repeating police reports, and gather-
broached the subject. "If I want to ex-
noticed that every homicide reported
ing facts from big-city police depart-
press my opinion on Fidel, I'll write it
for the United States was completed-
ments abroad; Zimring and Hawkins
myself, and believe me, I'll do a better
that is, there was a dead body-but the
show that American cities are not very
job." (Besides, this professor of jour-
homicides reported for the Nether-
different from foreign ones of similar
nalistic ethics charges up to -$10,000
lands included both completed and
size with respect to theft or burglary, but
for an interview, using the proceeds to
attempted (no dead body) homicides.
they are vastly higher with respect to rob-
finance his film institute in Havana.)
The attempts, of course, far outnum-
bery and homicide. New York City has
"Fidel is one of the people I love most in
bered the actual murders, and there was
less theft and burglary than London but
the world," he explained. "A dictator,"
no explanation of how the Netherlands
vastly more robberies and homicides.
someone muttered. The writer shot
decided which actions were attempted
The same difference exists between Syd-
back: "To have elections is not the only
murders and which were just everyday,
ney, Australia, and Los Angeles.
way to be democratic." But a Venezuelan
assaults. We do not know very much, in
Robbery involves the threat of vio-
member of the seminar persisted: "No
short, about how the characteristics of
lence; burglary need not involve vio-
one has elected you to office. You don't
nations or their various criminal justice
lence, though violence may occur if the
have a public office, why do you act as
policies affect crime rates.
dwelling is occupied when the burglar
Fidel Castro's honorary chancellor?"
Franklin Zimring and Gordon Haw-
enters. In neither crime is death likely.
"I will not respond to a question asked
kins, two members of the Earl Warren
But thefts in American cities are more
in bad faith," García Márquez huffed. "I
Legal Institute at the University of Cali-
likely to lead to death than are thefts in
do it because he is my friend, and I
fornia at Berkeley, have plunged into
other nations. In 1992, there were seven
believe one must do everything for one's
this thicket, fully aware of the snags that
deaths in London' resulting from a bur-
friends. I am always running errands for
it contains, to sort out how American
glary or robbery; in New York City, there
my friends."
crime rates differ from those of compa-
were 378, even though New York has
Only a few months after this remark-
rably industrialized nations. No one will
fewer such crimes than does London.
able exchange, the author of News of a
be surprised to learn that the United
American property crimes. are much
Kidnapping stood before the Inter-Ameri-
States has a far higher rate of violent
more deadly than English ones, in large
can Press Association and denounced
crime, especially homicide, than West-
measure because our thieves are armed.
"bad journalists [who] cherish their
ern Europe or Australia. But some may
And much the same story can be told
source as their own life, especially. if it is
be astonished to learn that the rate of
about assault. When one Londoner
an official source, and endow it with a
property crime here is similar to the
attacks another, death occurs in less than
mythical quality, protect it, nurture it,
rate of property crime elsewhere, and in
one-half of 1 percent of the cases, but
and ultimately develop a dangerous com-
many cases it is much lower. Zimring and
when one New Yorker attacks another,
plicity
with
it.
The
errand-runner
Hawkins conclude that what is often
death is the result in over 3 percent of
lacks a sense of irony. He also lacks a
described as the American "crime prob-
the cases. The reason in part is that
sense of decency.
lem" is in reality a lethal violence prob-
firearms are used in 26 percent of all
38 THE NEW REPUBLIC AUGUST 25, 1997
assaults but in only l' percent
as in Los Angeles, and yet those places
ure to enforce the law when blacks,
London.
differ dramatically in lethal behavior.
harmed other blacks. Oddly, Zimring
When all cities are exposed to the same
and Hawkins write as if the explanation
fill. the use of guns is not the
media, it is hard to see how the media
is either unimportant or obvious: It is, in
S
whole story. If one looks
can explain differences in violence. No
fact, neither. If African American mur-
at robberies in which
doubt there are copy-cat killers, but their
der rates were the same as white murder
gun was involved, the
numbers are too small to explain why
rates, the national murder rate would
New York City is still three
people in Tokyo almost never kill and
drop substantially. The effect of lowering
high as it is in London. Even
those in Atlanta often do.
the black murder rate to equal the white
niet cases. guns are not essential:
Violence also accompanies drug deal-
one would not make America as safe as
. acnt of all American homicides
ing, but the proportion of murders that
other industrialized nations, but it prob-
involve a gun. This means that
are connected to the drug trade is too
ably would have at least as big an effect
torkers without a gun kill one an-
small to make much of a difference. The
as banning the existence of all hand-
more often than do Londoners
best estimates are that no more than 10
guns. Non-gun homicides in New York
armed. Obviously something
percent of all killings are connected to
than weaponry makes New York
the drug trade, though from time to
of
environment than Lon-
public
time the percentage is much higher in a
violence.
few cities. Moreover, the laws on drug-
understand
are not the whole story, we
dealing are about as tough in Australia
Facing Prostate
much
high.
extraordinary differences among
as they are here, but drug-connected
France
in how frequently people are
deaths are about sixty times-more com-
Cancer?
3
by Zimring
Maine and North Dakota have the
mon in Los Angeles than in Sydney. In
homicide rates in the country, less
the United States, drug dealing on a
in
property
one-tenth of the rates in Louisiana
large scale has probably created an
often
have
Mississippi, but the reason cannot
array of armed gangs that make violent
because
that no one in Maine or North
encounters, and thus lethal ones, more
Theragenics Cancer
than
owns a gun. Rural states are
likely. But why? That is like asking why
Information Center,
of
gun
liably armed to the teeth, as anyone
the vast majority of drug users are in
to
this
con.
has visited them during deer
this country even though almost every
1-800-458-4372
they
cason. The answer must be that
country has similar laws.
the
argu-
encounters in rural states are
from
the
law-abiding and less productive of
here is another contribut-
a
group
ersonal violence. North Dakota not
of
T
ing factor that the authors
GOVERNMENT FORECLOSED
mere-
has the second-lowest murder rate,
confront, but not, I think,
HOMES FROM
gather-
has the second-lowest property crime
quite adequately. They ask
pennies on $1. Delinquent
depart-
whether the very high rate of violence
Repo's, REO's. Your Area.
Hawkins
Zimring and Hawkins suggest that
among African Americans explains the
not
Call Toll Free: 1-800-218-9000
very
many American communities are more
American homicide rate. There is no
of
similar
Ext. H-4377 for current listings
imgerous not only because guns are
denying the core facts. Blacks are five
bui
more vailable, but also because per-
times as likely to kill as are whites; black
to
rob-
onflicts are more frequent and
males are six times as likely to kill as are
City
The ancient realists were Epicureans,
has
more violent. In their words, firearms
white males. Homicide is the leading
and they were regarded as dangerous to
but
"neither a necessary nor a sufficient
cause of death among young. black
civilization by Roman leaders, who
micides.
ause of violent death," but they are a
males, but it is the tenth cause for Ameri-
favored the idealistic philosophies of
Syd-
ontributing factor. If two men meet in a
cans as a whole. Zimring and Hawkins do
Platonism, Aristotelianism, and Stoicism.
bar or on a street corner and have an
not have much to say about why this is
Epicureans denied Providence, viewed
of
vio-
argument, the result of that quarrel will
true, except to argue that it is probably
man as an evolved animal, saw virtues
vio-
depend heavily on what weapons might
because African Americans live dispro-
and laws as manmade, avoided
if
the
be available with which to manage any
involvement with government, spurned
portionately in urban "slum neighbor-
burglar
communism, and welcomed women and
escalating violence. If there are only fists,
hoods" and because less violent middle-
likely.
slaves as fellows. Jews abhorred
onl a fist fight can ensue; if there are
class blacks live in "racial zones" that put
Epicureans. Nevertheless, evidence exists
more
2011. there may be a fatal shootout.
them in close proximity to poor blacks.
that Jesus based his teaching. on
in
Many years ago Zimring published arti-
This is not much of an explanation.
Epicureanism, only changing its theory of
seven
des suggesting that murder was often
Just limiting ourselves to big-city resi-
how immortal gods are made into a
a
bur-
the consequence of an ambiguously
dents reduces the black-white difference
theory of how immortal human beings
there
motivated assault: at the outset, nobody
in homicide from eight times nationally
are made. This evidence is in the recently
has
intended the death of the other, but, as
to only (only!) four times at the big-city
discovered Gospel of Thomas, a collection
the fight progressed and a gun was at
level. Moreover, other equally poor and
of 113 sayings of Jesus which radically
much
hand, death was the result. To reduce
differ from the Bible's. They are demon-
geographically isolated urban groups
large
strably notes taken while Jesus taught, for
deaths one must either reduce the likeli-
have much lower crime rates. Koreans,
they match chronologically the vestiges of
hood of fights or disarm the fighters.
Vietnamese and Chinese are often poor,
history that underly the Markan myth:
told
In their new book, Zimring and
and recent arrivals, and many of them
They reveal the historical Jesus and his
wkins largely reject other popular
live in similar "racial zones," but they kill
recurring use of Epicurean tenets.
than
explanations for violence. They have lit-
at a far lower fate than do African Amer-
You Will Not Taste Death
but
de use for studies of the impact of the
icans.
JESUS AND EPICUREANISM
media, and I think that their rebuttals
Now, explaining these differences is
of
are essentially correct. Violence in the
not easy. I am not certain what it is, but I
by Jack Hannah, 321pp.pbk. $12 postpaid.
that
Frank Publishing, 1816 Springmill Road,
media is everwhere. in London as
expect that it has much to do with the
Mansfield, OH 44903-8907
all
much as in New York. in Sydney as inuch
legacy of slavery. lynching and past fail-
on the great increase in juvenile
B
y this point the
homicide rates that took place
Four Corners, Vermont
between 1985 and 1992. Young
expects that Zimring and
people, white and black, were be-
Hawkins will offer some
October sun, blue sky
coming much more lethal in the
remedies for murder. Ch.
late 1980s, probably owing to
en their analysis, there are only two
burning the fields sienna,
the spread of gangs, their in-
such remedies: reduce the availability of
even the governor upstate
volvement in drug trafficking,
guns or lower the frequency of hostile
raking a lawn, his kingdom
of this world. That afternoon
and easier access to guns. The
encounters. But they suggest neither.
on Main Street, at the four
increase was greater for blacks.
Though they devote two long chap.
ters to "Prevention," reading them re-
corners, the cop was trying
In the last few years, that rate
minds me of watching Mike Hargrove
to push a small bat with
has declined a bit, and this prob-
getting ready to bat. He comes to the
the butt of his pistol from
ably helps to explain why the
plate. He stretches his shirt, tugs at his
the window-box by the door
homicide rate generally in the
glove, pulls at his pants, shifts his cap.
of the Putnam Hotel, an
country has experienced so
adjusts his grip. He gets in place. Then
unused window-box
sharp a dip.
he backs out and does this all over again.
where the bat, mistaken, caught
But this dip may prove to be
To watch Hargrove at bat was like killing
by daylight, had fluttered down
short-lived. Census figures show
time during a rain delay. Will this ever
like a fallen leaf. Three
that there will be an increase in
end?
townsmen, not doing much
the proportion of young people
In this book, no. Zimring and Haw.
but holding their own, keeping
on the streets in the next few
kins write that a "book of this kind would
up on the news, kept watch.
years, and there is no reason yet
be a terrible place. to posit a detailed and
The policeman laughed, tucking
to suppose that those who now
comprehensive program of loss preven-
his pistol back in its
lead a life of no fathers, gangs
tion
from
violence
A
terrible
place?
holster. The teenage bellhop
for friends and easy dollars in
Franklin Zimring has devoted much of
so far with nothing to do
the drug trade have decided
the last thirty years of his professional
has pitched the bat out now.
to abandon that life. Rescuing
career to studying the impact of guns on
It quavers to the walk
young people from those condi-
violence, and he still has nothing to say
by the rail of the hotel stairs.
tions, a frightfully difficult and
about what we should do? If not now,
The bellhop and a man
expensive proposition, may be as
when?
wearing a jack shirt, worn
effective as figuring out a way
Of course, he does have a few things
and too small for his arms,
(none now exists) to deny them
to say, but mostly by way of criticiz-
stomp it, grinding their heels
access to the knives and guns
ing other people's ideas. Zimring and
between the palings. The boy
with which they can kill others.
Hawkins dislike many of our prison poli-
runs back inside. It is
Zimring and Hawkins neglect
cies because they think that, under the
Norman Rockwell-ish, this
almost all of these issues in their
impact of those policies, we send too
tableau the passers-by
desire to reassure us that there is
many nonviolent offenders to prison.
are watching. Soon the boy
no "black problem" in crime.
They argue that, in California, the
is back and kneeling with
I'm sorry, but there is. It is cer-
"three strikes" law has had no connec-
a fork. The leaves have fallen
tainly not the whole problem,
tion to the recent reduction in the rate
but the day is warm; even
and solving it would certainly
of violent crime, but they leave the
the governor tidies his lawn.
not solve America's violence
explanation of this controversial judg-
The boy will jab at the black
problem; Zimring and Hawkins
ment to a document that they do not
remnant, the tines will ring
are right to point out that equal-
bother to summarize. (You will have to
out, hitting the pavement
izing racial differences in mur-
look it up. But I warn you, it will be a
again; again. Everyone
der, desirable as that may be,
waste of your time.) They attack people
in the land must know his place,
would still leave America's homi-
who support various popular anti-crime
any beast
cide rate at least twice as high
programs for making absurd predictions
of the field his lair, his own.
as the rate in other major indus-
and failing to evaluate the results.
trialized nations. An all-white
They are probably right about this.
STEPHEN SANDY
America would be much more
But what programs do they favor, and
lethal than Italy, Canada, France,
how should we evaluate them? They
Germany and England, and
speculate about regulating handguns,
vastly more lethal than Japan.
but they offer no idea as to how it might
City are three times as common as all
But that is not the end of the story. It is
be done better. They ruminate about
homicides in London, a number that is
impossible to deny that very high rates
violent encounters, but they suggest no
only a bit smaller than the difference in
of violence among African Americans
way to reduce their frequency except to
white-only homicide rates between the
(rates that may have been coming down
suggest that victims be "as cooperative as
two countries.
of late among black adults) not only con-
possible" if they are threatened by a rob-
In fact, Arnold Barnett of MIT has
tribute mightily to the problem of life in
ber. They note that some people are try-
made some calculations that suggest that
our cities, they also disfigure and polar-
ing to teach violence avoidance in the
the homicide rate of adult black males
ize any effort to deal with our most seri-
schools, but they conclude that there are
has in fact been coming down much
ous domestic problem. The authors at
"insufficient data to form a judgment' as
faster than the white homicide rate. No
least acknowledge this effect. As long as
to whether these plans work.
one is quite certain why this has oc-
black violence is at so high a level, they
Perhaps Zimring and Hawkins are
curred, though certain possible explana-
observe, it will reinforce "white fear in
vague because they do not have any
tions-social progress, residential relo-
ways that palpably contribute to the
good ideas. That is not an embarrassing
cation-are obvious enough. We tend to
exclusion of blacks from the social main-
predicament. Very few people have good
forget these trends and to dwell instead
stream."
ideas about this subject, and for good
40 THE NEW REPUBLIC AUGUST 25, 1997
Eric
Monkkonen, after years of
afford to say that, while it is having its
PROTECT YOUR COPIES OF
in
historical records, has
own trouble protecting people against
that the homicide rate
crime, it wants to deprive these 65,000,
NEW REPUBLIC
offer
lillin factor of at least five for the
City has exceeded that of
people of the means to protect them-
These custom-
f
selves. Under such conditions, you don't
made titled cases
/
hundred years. Similarly, Roger
need the National Rifle Association to
are ideal to protect
shown that in the early
defeat a government effort to disarm
your valuable-
of
/
has Philadelphia had a
Americans.
copies of The New
lung
I
comicide rate. Big-city Americans
There are more desirable and less
Republic from dam-
T
!
each other at a far higher
controversial forms of gun control. The
age. They're designed
Haripum
were Londoners long before
most important is to reduce the chances
to hold a year's issues
of radio and television,
that a person will carry concealed on his
(may vary with issue sizes), constructed
3
1
#
the introduction of
person an unlicensed weapon while he
with reinforced board, and covered with
his
be
weapons (and automatic
walks about town. With a bit of new tech-
durable leather-like material in flag blue.
place.
!
the sale of any drugs (other
nology that is now being developed, it
Title is hot-stamped in silver and cases are
Table
over
It is very hard, I think, to
may become much easier for the police
V-notched for easy access.
1-$8.95
3-$24.95
6-$45.95
III easy way to reduce a homicide
to spot and to question such gun carri-
that has been so high for so long.
ers. Doing this may reduce the rate at
?
The New Republic
of American encounters is
which guns will cause angry encounters
Jesse Jones Industries, Dept. 95TNR
and
160
as important as the presence of
to escalate into lethal violence.
499 East Erie Ave., Philadelphia, PA 19134
kind
PERSON
guns. If New York City can
We also might wonder a bit about the
and
non-gun homicide rate that is
magnitude of our penalties for homicide.
Enclosed is $
for
cases. Add
loss
prevent
larger than the total homi-
They are about the same here as in
$1.50 per case for postage and handling.
places
in London, then removing all
Europe-that is to say, they are short in
Outside USA $3.50 per case (US funds only).
PA residents add 7% sales tax.
much
the United States (which is
both places. Nationally, the median
professional
would still leave us in a trou-
homicide inmate is released from prison
Please Print
of
guns
in
condition.
after only about six years, while in Cali-
Name
to
fornia the release comes after about
Address
If
5
not
uppose we take Zimring's
three-and-a-half years. Even many offend-
(No P.O. Box Numbers Please)
now,
few
S
City
State
Zip
and Hawkins's analysis of
ers sentenced to prison "for life" spend
of
things
the problem as correct, and
much less time there. Some inmates, of
CHARGE ORDERS (Minimum $15): AmEx, Visa,
criticis
then try to imagine what
course, spend a lot of time in prison. But
MC, DC accepted. Send card name, #, Exp. date.
and
be done. We must begin with the
the small number of years the median
Call Toll Free 7 days, 24 hrs, 1-800-825-6690
poll
that the private ownership of guns
(and the average) offender serves sug-
Allow 4-6 weeks for delivery
under
the
ano be substantially reduced. There
gests the low price that we generally place
send
too
no point-of-sale restrictions that will
on the average victim's life. These sen-
to
prison.
duce this huge stock by very much.
tences should be made longer.
the
Moreover, point-of-sale restrictions over-
And much remains to be done, finally,
connec-
ok the fact that most guns used in
to lead children away from a life on the
the
rate
times are stolen or borrowed. And no
leave
street. We are still trying to learn how
the
owernment can do very much when peo-
best to do this, but a growing body of evi-
judg.
do
de believe, with some empirical support,
dence suggests that early intervention in
not
have
that having a gun makes you safer.
the lives of very young, at-risk children
to
Using the data compiled by the Na-
and their mothers (often there is no
will
be
a
tonal Crime Victimization Survey (NCVS)
father) can make a lasting difference. It
people
55.000 families, scholars have esti-
will' take another generation to learn
MOVING?
iti-crime
dictions
mare d that there are, at a minimum, be-
whether these plausible guesses will bear
Don't forget to let US know so you won't
sween 65,000 and 80,000 defensive gun
lasting results for large number of chil-
miss a single issue of THE NEW REPUBLIC.
this.
uses per year. Some estimates based on
dren, but the nation's perpetually high
Just attach your old address label in the
private polls suggest much higher defen-
homicide rate suggests that it might be
or,
and
first space provided and write your new
sive uses, ranging up to 1.5 or even 2.5
time well spent.
They
address in the second space reserved below.
million. The data supplied by private
Above all, we will have to learn to
dguns,
polls are controversial, since so much
think about our crime problem histori-
Old Address (Affix label from this issue.)
might
about
depends on inferring society-wide effects
cally. It took England several centuries
Name
from the answers of a tiny number of
of tough rule, brutal punishment and
no
respondents. (If, to take a recent study,
the inculcation of class-based values to
Address
to
54 people out of 2,500 surveyed said
achieve a low homicide rate. America has
tive
as
Say used a gun to defend themselves,
spent less time at the task, and it has
City
State
Zip
rob-
then each of the 54 represents 68,000
sought to inculcate different values. As
New Address
try-
Americans. Reporting errors-lies, exag-
someone once said, the low murder rate
the
Name
gerations, poor memory-on the part of
in England is produced the same way you
are
just a few people can have huge effects
produce good lawns: plant good seed
Address
as
on the total number of defensive gun
and then roll it for three hundred years.
uses.) So consider instead the much
City
State
Zimring and Hawkins offer some sensi-
Zip
are
larger and more reliable NCVS, con-
ble data on violent crime rates, but they
any
Mail to:
ducted by the Census Bureau, according
plant no seeds and they roll no lawns.
THE NEW REPUBLIC
to which defensive gun uses in America
PO Box 37298
od
are not trivial: 65,000 to 80,000 uses each
od
JAMES Q. WILSON is the author most re-
Boone, IA 50037-0298
year. No democratic government can
cently of Moral Judgment (Basic Books).
Allow 4-6 weeks for change of address to go into effect.
AUGUST 25, 1997 THE NEW REPUBLIC 41
UNITED STATES
Los Angeles, 26% more than in 1990.
farming and light industry means that (un-
necessary to wait even that long. These
The revival of Los Angeles is part of a
like New York, for example) the state has
laws, say the critics, further erode the idea
bigger story-California's apparent success
jobs for less-skilled workers. To be sure, ab-
of marriage as a commitment for life. Now
in eliminating, at long last, the things that
sorbing the 700,000 people likely to be
Louisiana is trying to check the erosion.
have been holding back its recovery. Aero-
thrown on to the labour market by welfare
On August 15th, a law creating "cove-
space manufacturing, which shed about
reform will be difficult. But the expanding
nant marriages", passed overwhelmingly
200,000 jobs in 1990-95, is starting to re-
San Diego economy, which now provides
by the state's legislature, goes into effect. A
vive. Employment in navigation instru-
sophisticated services for industry over the
"covenant marriage" is an optional form of
ments increased by 8% in the year ending
border in Mexico, combined with LA'S re-
marriage which is harder to enter and
in March, and in the missile and space sec-
covery, means that the Bay Area is no longer
harder to leave than the usual late-1990s
tors by 2.7%. Tom Lieser, of the University of
the only job-generator in the state. Mr
sort. It requires pre-marital counselling,
California in Los Angeles, predicts that the
Lieser predicts that California will add an-
and it allows divorce only under one of a
growth in this sector will continue until the
other 1.2m jobs before the end of the cen-
number of fairly tight conditions: aban-
turn of the century. The financial services
tury, many of them highly paid.
donment, two years' separation, adultery,
and telecommunications sectors, both rav-
There are problems to come, no doubt.
physical or sexual abuse, or if a spouse gets
aged by mergers and downsizing over the
Silicon Valley has severe shortages of space
sentenced in court to hard labour or death.
past decade, are also beginning to add jobs.
and talent. Anti-growth activists are begin-
The law is a rare legislative triumph for
With growth spreading throughout the
ning to flex their muscles, particularly in
religious conservatives, argues Represen-
state, the property market has turned
the Bay Area. An expanding population is
tative Tony Perkins, the law's chief author.
around. Non-residential spending in-
putting strains on an already fragile school
These people, he says, spend too much of
creased by 17.5% in 1996, to $9.6 billion,
system. But, all in all, California is beaming
their time opposing things-abortion,
and by a further 28.2% in the first six
down on the rest of the country again.
same-sex marriages, subsidies for what they
months of 1997. A study by California's
consider immoral works of art. The concept
real-estate research councils shows that, be-
of covenant marriage gives them an oppor-
tween April 1996 and April 1997, the aver-
Strengthening marriage
tunity to put their weight behind some-
age price of existing houses increased in 13
thing constructive.
out of 20 counties surveyed, the first time
Do you mean it?
For many Louisiana clergymen, this is
increases had predominated since 1990. A
excellent news. When the Reverend John
year earlier only four of the 20 counties re-
Lancaster performs weddings at the First
NEW ORLEANS
corded increases, with the rest continuing a
Baptist Church of Kenner, he often won-
long string of declines.
AN
EXPERIMENT begins next week in
ders how long the unions will last. Now he
The biggest increases are in the Bay
Louisiana that may interest quite a lot
will require any couple who want him to
Area; Santa Clara County leads the way,
of other Americans. Almost half of all
escort them into wedlock to accept a cove-
with a 12% increase in the year to April. But
American marriages now end in divorce,
nant marriage. "Those few extra steps may
even in Los Angeles, where house prices
even though many of them begin with a
save a lot of marriages, help a lot of kids,
had fallen by a quarter since 1990, they
promise by the two partners to hold to-
and that's worth it." The new law has also
have now begun to rise. Howard Roth, of
gether "until death do us part". This is, of
given Louisiana the unusual experience of
Bank of America, thinks the turnaround in
course, partly the result of a radical change
looking, for once, like a moral guidepost. It
the housing market will add the last miss-
of sexual mores in the West. But many
has brought many inquiries from other
ing piece to the Californian recovery, boost-
Americans say the figures would not be so
states, some of which may now introduce
ing consumer confidence, spurring spend-
bad were it not for the spread of "no-fault"
similar legislation of their own.
ing on cars, furniture and consumer
divorce laws. In Louisiana, a couple can le-
But other local clergymen, and not a
electronics, and stimulating house build-
gally split after six months' separation, with
few marriage-guidance counsellors, fear
ing, which remains at less than half the av-
no questions asked; in some states, it is not
the law may work in ways its originators
erage rate of the 1980s.
did not intend. John Shalett, programme
director at a counselling agency, Family
The lessons learned
Service of Greater New Orleans, thinks it
The recovery goes on, and reaches so wide,
could be used as a way of learning how to
because California made itself use the mis-
bring your marriage to an end. Want a di-
erable years of recession to reorganise its
vorce without waiting through two years of
economy. The state weaned itself off its de-
separation? Just have an affair, or thump
pendence on military expenditure and re-
your spouse. "It could possibly force one or
directed its energies into a myriad of civil-
the other of the couple into destructive be-
ian activities. Growth in a wide range of
haviour they otherwise might have never
industries-with computers, films, biotech-
thought about," he says.
nology and multimedia in the lead-
Nor does the new law take into account
means that California now has 460,000
every kind of destructive behaviour, com-
more jobs than it had before the recession
plains Geraldine Levy, who looks after bat-
began, many of them high-paying. (The av-
tered women at the New Orleans YWCA.
erage annual salary in those four industries
There is more to domestic violence than
is more than $60,000.) The state has also di-
physical battery; you can damage your
minished its dependence on big- compa-
partner by the language you use, or by the
nies. More than half (407,000) of the
way you exploit an exchange of emotions.
736,000 businesses identified by the Cen-
Yet, in a covenant marriage, neither is a
sus Bureau in California have seven em-
ground for immediate divorce.
ployees apiece or fewer.
Despite these criticisms, many people
The result is the most balanced econ-
in Louisiana believe that when the law
omy in California's history. The success of
Until hard labour do us part
takes effect covenant marriages will be a
20
THE ECONOMIST AUGUST 9TH 1997
UNITED STATES
The lady who shamed Marion Barry
and is therefore tax-exempt) and the need
to provide health and prison services that
for other cities would be underwritten by
WASHINGTON, DC
a state or county. Most people blame the
demonstrators, a false bomb
armed robbery, rape-this city is either
mayor, a master of the political machine,
a handful of arrests: Washing-
worst or near-worst in the nation. The
who won successive elections in 1978,
ton's political theatre, after months of
streets have potholes worthy of tropical
1982 and 1986 and was re-elected in 1994
numbing budget-balancing, is suddenly
Africa; the water supply (it had to be taken
despite a spell in prison after being
vivid, loud and local.
out of the city council's direct control a
filmed in 1990 smoking crack cocaine.
At issue is what Mayor Marion Barry
year ago) was once officially considered
Fortunately, there is one local actor
calls "the rape of democracy"-the deci-
dangerous to HIV-carriers and others with
with a blameless reputation: Eleanor
sion by Congress and the president to res-
low immune systems. The city's popula-
Holmes Norton, for the past seven years
cue the nation's capital from impending
tion has slumped by a tenth since 1990.
the District's non-voting delegate to Con-
bankruptcy and self-inflicted adminis-
The mayor has consistently blamed
gress. At least some of the rescue package's
trative chaos while stripping its elected
the "federal burden" (some 40% of the
generosity-the federal assumption of the
officials of most of their powers for at
city's property-is owned by the govern-
city's prison costs and its $5 billion pen-
least the next four years. The first step
ment and by non-profit organisations
sion liability, cuts in its Medicaid con-
(hence the demonstrations
tributions, tax breaks for home-
about the loss of "home rule")
buyers and investors-is due to
came on August 5th. Hours after
Mrs Norton's tireless advocacy
President Clinton had signed
to a sceptical Congress.
his new powers into law, An-
Such are the obsessions of
drew Brimmer, chairman of the
local activists that they accuse
District of Columbia financial
Mrs Norton of "selling out" the
control board and the city's
home rule-the right to elect a
new de facto dictator, an-
mayor and council-that Wash-
nounced the replacement of
ington achieved only in 1974.
four department heads. Mr
Her reply is that she got the best
Barry had not witnessed the
deal possible from a Congress
Clinton signature: "It's like go-
that might otherwise have ap-
ing to watch your own death."
pointed a city manager (shades
Metaphorically at least, a lot
of the colonial commissioner)
of Washingtonians would wel-
and taken away all the func-
come that death. By almost any
tions of the mayor and his
yardstick of urban horror-in-
council. She is too polite to add
fant mortality, AIDS, drug ad-
that the real betrayer of home
diction, single-parent families,
Mrs Norton should be gesturing at him
rule is the mayor himself.
popular choice among young couples.
heading for a favoured spot on the Willam-
managed city in the country, in Portland it-
What bride and groom do not think their
ette river, in the heart of the city. "That",
self a severe case of self-doubt is setting in.
love will last forever? Yes, passions fade,
says Mr Seltzer, "is what we're trying to pro-
At the heart of the debate is the region's Ur-
dreary reality forces itself upon the scene.
tect-the image of a guy going fishing while
ban Growth Boundary, its UGB.
Mr Shalett says that most people do not
people in suits sit here eating lunch."
Since 1979, the UGB has drawn firm
truly know who they are, or what they want
Mr Seltzer is an urban-planning aca-
lines around Portland and nearby towns
from life, until they have reached their thir-
demic whose subject is Portland. He could
such as Beaverton, Gresham and Oregon
ties. He worries that the law may lengthen
hardly ask for a better one. In the past 20
City. Those lines, once generous-looking,
the duration of marriages at the cost of
years Portland has evolved from a snoozy
feel throttling now. Since they were drawn,
making many of them emotionally bar-
riverside town best known for its wet win-
some 700,000 people have moved into the
ren-which is good neither for the married
ters and nine bridges over the Willamette
region, attracted by Portland's benign cli-
pair nor for their children. Well, Louisiana
into the nation's darling of urban correct-
mate and the nearby mountains and
now has a chance to find out whether the
ness. Its strict planning, which sets tight
beaches, not to mention the thousands of
optimists or the pessimists are right.
limits on freeways and building sprawl in
jobs offered by high-tech companies in a
favour of green belts, high-density housing
booming "Silicon Forest" that has seen the
and mass-transit systems, draws admirers
region switch from a logs-and-farming
City planning
from as far away as Botswana and South
economy to one driven by brains and mi-
Paradise dimmed
Korea. Its compact downtown area is
crochips. Another 700,000 newcomers are
praised for its lively shopping projects and
expected in the next two decades.
attention to pedestrians. And a 20-minute
The population explosion is straining
drive from the city centre lands you in a
the UGB, since just about every available
PORTLAND, OREGON
still-rural landscape of farms, hazelnut or-
acre of land within it has now been devel-
B
AGUETTE sandwich in hand, Ethan
chards and vineyards. Portland, it seems,
oped for housing, offices or the retail trade.
Seltzer pauses in mid-bite to watch a
has faced the bugbears of the 20th-century
The lack of land hits the housing market
young man with a fishing rod saunter by a
American city-congestion, urban decay,
hardest. Ernie Platt, a vice-president of a
street-side café. Nothing unusual in that,
sprawl-and defeated them.
home-construction firm, recalls the devices
perhaps. But this is downtown Portland,
Or has it? Although many Americans
he used-including the assignation of a
Oregon, and the prospective fisherman is
think of Portland as the best-planned, best-
dummy buyer, in the hope that his manner
THE ECONOMIST AUGUST 9TH 1997
21
RETIREMENT GUIDE / PLANNING
THEY'RE OUT
TO STEAL
YOUR MONEY
Today's con artist is more sophisticated than ever,
employing every trick from phantom securities to the
Internet to crack into your retirement nest egg.
By Erick Schonfeld
NVESTMENT SCAMS come in all stripes and
his deal in 32 seconds over a cup of coffee at Penn
sizes. The phony sweepstakes promising free trips to Hawaii, the
Station in the middle of a blizzard," says Errickson.
eel farm offering outrageous returns, and the Florida real estate
It wasn't that the financier was stupid, adds Errick-
that turns out to be a swamp are easy enough to spot. But grift-
son, rather that "he allowed greed to cloud his judg-
ers are becoming more sophisticated, and so are the stories that
ment." The best protection anyone can have against
they weave. It is not just the trusting little old lady in Boca Ra-
being swindled is simply to remove that cloud.
ton who is being taken by today's swindlers, but doctors, lawyers,
Here is a look at some of the latest scams that are
accountants, and even CEOs.
cruelly separating investors from their money. Those
What's going on? Some people have fallen behind on their re-
who try to become familiar with as many different
tirement savings and are looking for magic potions to make up for
schemes as possible will be better equipped to avoid
lost ground. Other investors have simply developed an insatiable
other people's costly mistakes.
appetite for high returns in this seemingly endless bull market.
In either case, they keep reaching for the extra-plump returns,
A $700 MILLION PONZI SCHEME?
and the armies of sinister con men out there are only too willing
to play on that greed.
Sometimes an investment sounds so reasonable and enticing that no
New kinds of scams are popping up every day. Some of the
matter how careful you are, its fraudulent nature is nearly impossi-
more clever ones involve phony securities or investments sold
ble to detect. Such appears to be the case with the Bennett Fund-
over the Internet. Others are twists on old-fashioned frauds like
ing scandal, which duped 12,000 individuals and 245 banks in what
Ponzi schemes or selling interests in worthless businesses. Even
the SEC calls America's most massive Ponzi scheme. How did it
the most astute investors are liable to get taken by these new
work? These people lost their retirement nest eggs and college sav-
cons if they think they can get a, free ride. Lee Errickson, an in-
ings by investing in supposedly safe office-equipment leases, which
vestigative investment analyst at Coopers & Lybrand, relates
were for the most part innocently peddled by their brokers.
how once, while snowed in at a train station, he struck up a con-
If anything can be learned from this, it's to diversify your in-
versation with an international financier. The financier was
vestments. That's something Anthony Capriglione, 73, a former
about to loan several million dollars to an Arab in a complicated
CEO of a small New Jersey bank, wishes he had done. Repeat-
deal that was supposedly going to pay him 14% interest, when
edly over the years, he transferred all of his IRA and pension
the normal rate at the time was closer to 6%. "I found holes in
funds into Bennett leases and persuaded family and friends to do
142
FORTUNE August 18, 1997
Patrick Bennett is
Department of Defense
charged with bilking
and, ironically, the
investors of some
FBI). Some even had an
$700 million in
insurance component
a leasing scam.
that seemed to guaran-
tee the returns. The
catch for so many of the victims was exactly
that-guaranteed high returns with no more
risk.
Investors received a check every month up
until the private, family-controlled company
filed for Chapter 11. Other than the fact that
they were not registered securities (and thus not
filed with the SEC), there was nothing obviously
outlandish about the leases. Their returns of
around 8% to 12% were better than an average
municipal bond's.
It's not that the Bennett operations were a
complete fraud. There was a real business
around which the alleged sham was built.
"Around this core of reality," explains bank-
ruptcy trustee (and former SEC chief) Richard
Breeden, "was spun a web of imaginary activi-
ties, with the result that people could be shown
things that were real, but they had no way of
evaluating the magnitude of claims against
those things." The problem, he says, was that
DICK BLUME-THE SYRACUSE NEWSPAPERS
Bennett sold the same leases multiple times to
different investors. Some of the leases were
pooled together, with the same ones repre-
sented in different pools. Others were entirely
fictitious or were pledged as collateral to banks
before being sold to investors who were un-
aware that what they had bought had already
been pledged to someone else. By the end of the
the same until their stake totaled $1.4 million. "I put all my eggs
game, Bennett was paying out over $30 million a month to inves-
in one basket," he says, "because it was doing so well." Before he
tors but was collecting only about $13 million from actual leases.
invested, he took a trip on behalf of his bank to the Bennett of-
On June 26, U.S. Attorney Mary Jo White indicted former chief
no
fices in Syracuse, N.Y., and was impressed with the strong un-
financial officer Patrick Bennett on 37 counts that include con-
derwriting guidelines he saw enforced. All that due diligence was
spiracy, securities and bank fraud, lying to the SEC, money laun-
d-
worthless, though, on the day the money dried up.
dering, and concealing assets. His brother Michael and two others
at
When the Bennett Funding Group went bankrupt last year,
were charged with conspiracy to obstruct an SEC investigation. All
it
there were about $1 billion worth of claims against assets valued
pled not guilty. Patrick's lawyer says the company was not a Ponzi
IV-
at $300 million, meaning investors are short some $700 million. Its
scheme, nor was it run for Patrick's "personal enrichment."
list of creditors include lawyers, doctors, a former judge, accoun-
Court documents, however, paint a different picture-one of
tants, a risk assessor for an insurance company, and many suc-
Patrick Bennett running amok in the company's finance depart-
n-
cessful entrepreneurs. Bennett purchased leases for office equip-
ment from 1990 to 1996, fraudulently overstating income in finan-
ment such as copiers, faxes, phones, and computers, then resold
cial statements to make it appear that the company was profitable
them to investors. The leases were marketed as tax-free and safe
when it had actually suffered losses. (One red flag for investors:
n
investments, since the payments for the office equipment gener-
The company changed auditors in 1991, from Arthur Andersen to
ally came from municipalities or federal agencies (including the
a smaller, less well-known firm.)
August 18, 1997 FORTUNE
143
RETIREMENT GUIDE / PLANNING
Patrick and his brother also allegedly diverted hundreds of
GET YOUR "SPECIAL" BANK NOTES
millions of dollars to accounts that he controlled, and spent tens
of millions on speculative ventures such as hotels, a horse race-
The Internet, a place filled mostly with trusting people, is be-
track, failed casinos, and a mall project meant to attract a horde
coming a bonanza for the greedy grifter. The SEC now receives
of Canadians to northern Maine (they never came). The most ex-
close to 40 complaints a day about Internet scams. Never make
orbitant waste of money, however, was probably the construction
an investment decision based solely on what someone tells you on
of a $14 million replica of a side-wheeler casino boat called
the Web. For one thing, you can never be sure whom you are talk-
The Speculator.
ing to online. A smalltime con artist can give himself some cred-
Breeden has already distributed $110 million to secured
ibility by building a Website that looks better than those run by
creditors such as banks, and another $133 million is awaiting
large corporations. Behind that posted message or E-mail from
the court's decision on who is entitled to it. But that's small
a company officer could really be a shortseller who wants to scare
consolation for all-the individual investors who have yet to see
you into unloading a perfectly good stock. Stock promoters can
a dime. "I think the bankruptcy laws are cruel toward investors
lurk clandestinely in popular investment chat rooms trying to
today," complains Henry Schaeffer, 78, who leads a small splin-
create a buzz and pump up their shares; sometimes they go so far
ter group of displeased victims. "Professionals suck out so
as to set up their own fake "investment newsletter" sites that are
much money while investors sit on the sidelines." Without pros
really just tout pages.
working on the case, though, it is doubtful anyone would
One recent and particularly pernicious Internet scam in-
volved fake securities called prime
KEN
bank notes. John Finnerty, an expert
on bogus securities at Coopers &
Lybrand, explains that imaginary in-
vestments like prime bank notes
look "similar to something people
have seen before but with a little
twist that justifies the higher returns
promised." Of course there is no
such thing as higher returns without
higher risk.
Traditionally targeted at portfolio
managers and wealthy individuals
able to put up millions, these prime
bank note scams are wending their
way down to the general investing
public. In one instance the SEC
brought a case against a trio who
used CompuServe and the Internet
to solicit investments ranging from
$12,000 to $240,000. The m.o.: A
promoter promises to get you into
an exclusive circle of investors who
are pooling their resources to par-
ticipate in a secret market carried on
among the top 100 "prime" banks in
Anthony Capriglione
see any money at all. Breeden in-
the world. These banks transfer billions of dollars-among them-
failed to diversify and
tends to recover at least 25 cents for
selves every day and are sometimes willing to pay extremely
lost his retirement sav-
every dollar that individual victims
high interest rates, you are told, to temporarily park their funds
ings to a clever fraud.
invested.
in special holding accounts. Your money supposedly goes to
It is easy to say investors could have
open up one of these accounts and is guaranteed to at least dou-
avoided much grief if they had exhibited more caution. But no one
ble or triple.
could reasonably have expected to know much about Bennett
In his pitch the crooked promoter strings together jargon
Funding-a private company without an independent board of di-
from all sorts of legitimate financial instruments, such as de-
rectors, answerable to no one but the Bennett family. There were
rivatives. Upon close inspection his spiel is actually nonsensical,
warning signs. The fact that the securities they bought were not reg-
but many people who think they are financially sophisticated
istered with the SEC should have made investors automatically.
are too embarrassed to admit they don't understand exactly
wary, as should the company's change of auditors. But the real
how the prime bank notes are supposed to work.
question is, Are complex investments like these appropriate for the
"It's easy to get taken in by the atmospherics," says SEC en-
little guy? Probably not. Apparently, though, the coaxing of be-
forcer Paul Huey-Burns. While most conventional frauds in-
nighted brokers coupled with the lure of handsome guaranteed re-
volve something investors can inspect, "in the case of prime
turns was too hard to resist. "It's like kids playing with firecrack-
bank notes," he cautions, "there is nothing there except pieces
ers," reflects Breeden. "They do blow off their fingers sometimes."
of paper. They're tailor-made for the Internet."
continued
144
FORTUNE August 18, 1997
RETIREMENT GUIDE / PLANNING
THERE'S GOLD
stones. Investors are told, for instance,
IN THEM THAR HILLS
that they can buy gemstones at below-
THE ONLY THING WORSE
market rates and, through the pro-
What investor can resist getting in
moter's brokerage services, later sell
on the ground floor of an exciting
THAN TRYING TO RECOVER
them on the open market. The dupes
new high-tech industry, whether it's
are sent gems and receive periodic up-
the Internet, wireless cable, or inter-
FROM A SWINDLER'S SUCKER
dates about their supposed value.
active video data services? The trou-
Then they are offered a chance to cash
ble is, most investors don't under-
PUNCH IS TO GET SLUGGED
in their "appreciated" stones for credit
stand these businesses and are
against more expensive ones. Here's
therefore juicy targets for a con.
AGAIN WHILE STILL WINDED.
how it works. First you pay, say, $300
"One thing that is impressive," notes
for a stone that's really worth only
Huey-Burns "is the extent to which
$100. Then after a few months you're
fairly sophisticated people can be taken. People read about
told that the gem is now worth $500 and you can put that amount
Craig McCaw, and the pitch is, "You could be like Craig
toward one worth $700. You like the quick returns, so you go for
McCaw." These high-tech scams, which typically involve part-
it. When it finally comes time to sell, the grifters can't be reached,
nerships in phony businesses, have been pulled off hundreds of
and the price the stones fetch at a jeweler ends up being only
times by various con men who snare investors with a much older
about half what you paid for it. How can people fall for something
technology: the telephone.
like this? FTC attorney Robert Friedman explains, "People get
A series of schemes investigated by the Federal Trade Com-
sucked in because they think they have made money already."
mission started with an offer to invest in a 900-number dating ser-
The only thing worse than trying to recover from a swindler's
vice and psychic hot line. The scam evolved to an Internet shop-
sucker punch is to get slugged again while still winded. This is what
ping mall and Internet service providers that were going to set up
happens in recovery-room operations, where a con man contacts
operations in cities like Seattle, Chicago, and Detroit. All of these
victims of previous scams (their names are circulated on "mooch"
investments, says the FTC, were promoted by the same group of
lists) and says he'll help them get back the money they lost. Inves-
alleged tele-swindlers working mostly out of boiler rooms in Los
tors gladly pay a "processing" fee and are thus double-duped. In one
Angeles.
1994 case in Atlanta, alleges the FTC, some investors who had al-
According to the
ready been rooked into buying practically worthless mobile-radio li-
FTC, the con men
censes were called by a person pos-
would call poten-
ing as a telecom-license broker. For
tial investors and
a fee, he told the hapless investors,
ask them to pony up
DON'T BE A SAP
he would help them recover their
between $10,000 and $20,000 for
stake. Investors anted up and never
partnership shares. The promoters
RENEE KLEIN
Ten ways to avoid being ripped off
saw their money again. Ouch.
would then hold a partnership
What's your likelihood of get-
INVESTORS should never put their money into any
meeting and distribute about 15%
ting ripped off? Most of today's
scheme or company they don't really understand.
of the proceeds to investors, pocket
brokers and financial planners are
the rest, and wash their hands of
IF SOMEONE is pressuring you too-much, chances
honest people who want to help
any further involvement. By the
are he is not your friend.
you prosper. But your chances of
time the investors would figure out
GOOD INVESTMENTS usually don't have long
becoming a victim are increasing.
what was going on, they'd be left
stories attached; 12-minute tales should scare you.
Investors are targeted by swin-
with shares in companies that had
dlers the same way they are by
THE MORE PEOPLE you get involved in your de-
littlé infrastructure and no money.
run-of-the-mill marketers. "Peò-
cision to invest, the better; talk to your accountant, lawyer,
The addresses listed as headquar-
ple get on lists," says Susan Grant,
even your broker.
ters were just mail drops, and the
a director of the National Consu-
phone numbers were answering
MAKE SURE you get proof of ownership for what you
mers League. "Demographic in-
services. Meanwhile, the promot-
are buying. You may need it in court someday.
formation is available from gov-
ers were busy rolling out their next
BE EXTRA CAREFUL when investing in financial
ernment agencies, and it is
operation.
instruments that are not registered with the SEC.
possible to get names of retirees
Business investment scams are
LOOK AT THE COMPANY and make sure it has
or people who have invested heav-
not limited to high tech. The FTC
adequate oversight from securities analysts, independent
ily," she adds.
and SEC have brought actions
directors, and regulatory agencies.
The best defense is knowing
against operations selling everything
whom you're dealing with and
NEVER MAKE investment decisions based solely on
from shares in oil-drilling concerns
what you're buying. It's a pity to
what you see on the Internet.
and silver mines to movie produc-
live in a world where fear and sus-
tion companies-even a coconut-
IF ENTRY into an exclusive circle of investors is part
picion reign, but if you understand
chip distributor in Costa Rica.
of the deal, search elsewhere. Chances are, you're really not
some of the ways the criminal
Another favorite racket involves
that special.
mind works, you can save yourself
investments in goods such as rare
THERE'S NO SUCH THING as high returns
not only a lot of money but a lot of
stamps and semiprecious 'gem-
without high risk.
pain.
146
FORTUNE
But while Rubin can muse about his modest contribu-
they would include the money invested in an IRA in
tion to the Republican fratricide, that doesn't change
their current taxable income, but would not pay taxes
the fact that the administration has signed off on a seri-
when they pull money out. In effect, the interest they
ously flawed tax bill-a bill that defies every standard by
make would be tax-free. That will cost the Treasury bil-
which tax bills have been judged. Tax bills, it is often
lions over the next few decades.
argued, should simplify an already rococo code. This
There are, in fact, very few redeeming features of this
one adds incredible new gewgaws and curlicues. There
tax bill. Rubin- may have prevented a massacre of the tax
are now at least six different rates at which capital gains
code, but he settled for a rout. The major beneficiaries
are taxed. There are four different tax strategies that par-
of this bill are not Americans as a whole but the indi-
ents can use to help send their children to college. Any
viduals who live in the affluent suburbs of Archer's
middle-class parent who wants to take advantage of these
Houston and Gingrich's Atlanta and who now vote
credits and deductions will need to hire an accountant.
Republican. They will take this bill to the bank, while
Tax bills are also supposed to be fair, and, while the
the rest of us pay for it.
definition of fairness varies depending on who you ask,
this one satisfies none of them. After two decades in
which the private market has created wide disparities
between income classes, this bill gives the wealthiest
A limited defense of chemical castration.
20 percent over 75 percent of the benefits, according to
Citizens for Tax Justice. In addition, people/who have
equal incomes will face spectacularly different tax bills,
depending on everything from how they make their
money to whether their children are in school. It will be
a bonanza for accountants-and a new liability to any-
KINDER CUT
one who can't afford one.
Tax bills are also supposed to help the economy by
encouraging stable growth. Yet, while the education cred-
By Craig Turk
its President Clinton so desperately sought might help a
little to create a more competitive work force in the next
ast year, the California legislature became the
century, nothing else in the bill will have a beneficial im-
pact. Credible economists have yet to demonstrate that
L
first state to mandate "chemical castration"-the
temporary and reversible suppression of sex
cutting capital gains tax rates spurs economic growth. In
drive through hormone shots-for several
testimony this spring before the Senate Finance Com-
classes of convicted sexual predators. And sometime
mittee, former Federal Reserve Chairman Paul Volcker
next year, a California court will almost certainly strike
remarked, "I'm not going to argue cause and effect, that
down the law., The court will likely say that the law is too
the high capital gains taxes actually caused a good econ-
vague, that the treatment may not always work and that
omy. But it's very hard to argue, I think, that a reduction
the measure as written is "cruel and unusual punish-
in capital gains tax is vital to economic activity."
ment." In all of this, the court will be absolutely correct.
Even. Rubin's scheme to force longer-term invest-
But lawmakers in Florida, Michigan, Massachusetts,
ments can't redeem the capital gains break. In fact,
Missouri, Texas and Washington should not abandon
Rubin's plan to encourage patient capital-while popu-
their efforts to pass similar laws just yet. In at least some
lar in the early 1990s-no longer wins support from
cases, injections of medroxyprogesterone acetate (more
most tax experts. Jane Gravelle and Donald Kiefer from
commonly called Depo-Provera) can function as a sex-
the Congressional Research Service and Margaret Blair
ual appetite suppressant, keeping convicted molesters
and William Gale at the Brookings Institution all doubt
from harming again. Moreover, when administered as
that getting people to hold stock longer will necessarily
part of a broader psychological treatment regimen, the
affect whether corporate managers undertake long-
shots can actually help in rehabilitation. California
term investments. And if corporate managers, whose
erred mainly by passing a law that applied the treat-
investment patterns directly affect economic perfor-
ment so indiscriminately. A more carefully tailored mea-
mance, don't change their behavior, then the economic
sure-one that invoked chemical castration in more
benefit Rubin promised will be negligible. This whole
limited circumstances-would not only be an effective
argument, Gale says, is just "another disguised reason to
crime deterrent and rehabilitation tool, it is also more
give a capital gains tax cut."
likely to pass constitutional muster.
Meanwhile, the tax provisions could have a disastrous
Under California's law, which took effect in January,
effect on the deficit after 2002. Many of them are "back-
state courts can force anyone convicted of molesting
loaded" to take effect after that. Some of the capital
children younger than 13 to undergo, as a condition of
gains cuts won't begin drawing out revenue until 2006.
parole, Depo-Provera shots, which reduce testosterone
The bill also creates new "backloaded IRAs." In the past,
to prepuberty levels and are supposed to prevent sex
taxpayers got to deduct from their current tax bill the
offenders from molesting again. After a second convic-
money they put into IRAs, but would have to pay taxes
tion, injections are mandatory. The concept of chemi-
on it when they finally withdrew it. Under the new plan,
cal castration is not new. Though not quite as effective
12 THE NEW REPUBLIC AUGUST 25, 1997
as surgical castration-an option California graciously
by a story of a child rape in Texas. The courts, however,
offers, presumably for felons who really hate needles—
will probably see things differently. There is, first, the
physicians have used drugs like Depo-Provera for over
question of whether chemical castration amounts to
twenty years. Published data strongly indicate that very
"cruel and unusual punishment," as prohibited by the
low testosterone levels correlate with low sexual libido
Eighth Amendment. Although jurisprudence in this
for men, and several studies have shown such treatment
area is somewhat muddled, it generally involves evalua-
works in controlling the sexual behavior of certain types
tions of how a punishment was viewed historically and
of pedophiles. Some of the most striking results, fre-
how it meets modern standards of decency.
quently touted by proponents of the California legisla-
tion, come from studies in Denmark and Switzerland,
iven the nature of the crimes at issue, the high-
where voluntary chemical castration reduced recidivism
rates from 50 percent or higher to substantially less
G
tech elegance of the procedure and its consid-
erable political popularity, courts are unlikely
than 10 percent. In a widely cited statement, one Dan-
to strike down Depo-Provera injections as cruel
ish sex offender raved, "My sex fantasies, which once
and unusual-if they are used in cases in which the
made me a criminal, are gone. Watching a porno-
treatment works. But, because the California law applies
graphic movie is like watching the evening news."
the punishment indiscriminately, it is constitutionally
But if California had bothered to check the details of
vulnerable: it may seem like we cannot be cruel enough
these studies, it would have known better than to man-
to child molesters, but the Constitution makes no
date chemical castration for such a broad class of sexual
allowances for pure vindictiveness. Forcing weekly injec-
criminals. For starters, the European studies used small
tions of a hormone-particularly one not FDA-
samples and lacked adequate control groups. Everyone
approved for such purposes-on criminals who will not
who underwent the treatment did so voluntarily, which
be controlled or rehabilitated by it is precisely the kind
suggests the participants at least wanted to be treated
of severe and random punishment the Eighth Amend-
and raises questions about whether Depo-Provera would
ment sought to prohibit.
work for offenders less eager to be reformed.
Another legal issue concerns the Fourteenth Amend-
What's more, sex offenders are not a homogeneous
ment, which prohibits deprivation of life, liberty or
group: even among those who prey only upon children,
property without due process. Although the Supreme
there are numerous types. Some individuals cannot
Court has not recognized a right to a libido, it has
attain sexual or emotional satisfaction with adults at all;
declared-in a 1942 decision striking down involuntary
others, such as the mentally retarded, sometimes turn
sterilization for habitual felons-that procreation is a
to children because they cannot deal successfully or
"basic civil right of man." While chemical castration is
maturely with adults. There are those whose crimes are
reversible, and while it does not necessarily impair func-
the product of impaired judgment-one study recently
tioning to the point of making intercourse or procre-
concluded that as many as 76 percent of sex. offenders
ation impossible for men, it does make procreation
abuse alcohol, and that half of their crimes are commit-
temporarily impossible for women. Indeed, for women
ted while the offender is intoxicated. And there are also
Depo-Provera is a form of birth control-and it does
sadistic offenders motivated by malice.
not dampen their libidos.
To justify this infringement upon a fundamental
epo-Provera may help control the trenchcoat-
right-the right to procreate-the state must show that it
D
wearing, candy-toting playground stalker, yet
has a compelling interest, "narrowly tailored" to the situ-
the evidence suggests it will do little to prevent
ation involved. Controlling convicted child molesters
crimes against children by predators who act
through hormone suppression is likely to satisfy the
for reasons other than sexual gratification, who harm
"compelling state interest" test: sex crimés against chil-
children out of rage and emotional imbalance, or
dren are a serious public problem, and Depo-Provera
whose gratification for their crimes may not be wholly
treatments can help redress it in some cases. But Califor-
sexual. The only way to keep these criminals from
nia's program fails the "narrowly tailored" test: Depo-
molesting again, experts say, is to keep them in prison,
Provera's temporary sterilization of women has nothing
or through intensive treatment and counseling. The
to do with the professed goal of lowering offenders' sex
California Psychiatric Association, which like most med-
drives. And, even if it had been limited to men, the Cali-
ical groups has opposed the California law, concluded:
fornia law does not ensure that only those. who can be
"While we support efforts in finding effective methods
helped by the process are chemically castrated.
of stopping sex offenders from reoffending, psychia-
This is not a case of unjustified public rage, but of
trists fundamentally believe that not all offenders would
legislative pandering subverting a potentially effective
necessarily benefit from this type of treatment interven-
solution to a barbaric problem. Proponents of Califor-
tion and that treatment is most effective when the per-
nia's law claim their measure is better than nothing, but
son agrees to try to change their behavior."
lawmakers elsewhere should realize that nothing is not
For practical purposes, this might not seem like a fatal
the only alternative.
flaw, given that the safety of children is at stake. "Noth-
ing's 100 percent," says Assemblyman Bill Hoge of
CRAIG TURK is a law student and former managing edi-
Pasadena, who introduced the bill after being sickened
tor of The Public Interest.
AUGUST 25, 1997 THE NEW REPUBLIC 13
Why Johnny can't read, write or sit still.
DEFINING DISABILITY DOWN
By Ruth Shalit
n July of 1995, Jon Westling, the provost of Boston
medical proof that students with learning disabilities are
I
University, traveled to Australia to attend the
unable to learn these subjects. Henceforth, he declared,
Winter Conversazione on Culture and Society, a
all requests for learning-disabled accommodations
highbrow tête-à-tête for globetrotting pundits and
would be routed through his office. Westling then made
savants. Westling, a protégé of former B.U. President
a final announcement. In 1996, he said, he would
John Silber, is an avowed conservative; and the subtitle
become president of the university.
of his speech, "The Culture Wars Go to School," seemed
The learning-disability establishment was dumb-
to portend the usual helping of red meat for the faith-
founded. "Here was someone coming in with no knowl-
ful. But instead of decrying deconstruction, or punctur-
edge, taking the national model and destroying it," says
ing the pretensions of tenured radicals, Westling took
Anne Schneider, the Park Avenue fund-raising doyenne
aim at an unexpected target-the learning-disabled. He
who spearheaded the creation of B.U.'s program a
told the story of a shy yet assertive undergrad, "Somno-
decade ago, after her learning-disabled daughter Andrea
lent Samantha," who had approached him one day after
nearly washed out of the university-due, Schneider says,
class and presented him with a letter from the Office of
to a lack of services. Schneider, whose personal fund-rais-
Disability Services. The letter explained that Samantha
ing efforts have kept the office flush with cash, sees West-
had a learning disability "in the area of aúditory pro-
ling's assault on her brainchild as analogous to "taking a
cessing" and would require certain "accommodations,"
seeing-eye dog away from a blind person." Janet Cahaley,
including time-and-a-half on quizzes, double time on the
mother of learning-disabled sophomore Michael, agrees:
midterm, examinations administered in a room separate
"These kids are the most vulnerable people on campus.
from all other students, copies of Westling's lecture
Before, they were treated with humanity and decency and
notes and a reserved seat at the front of the class.
kindness. Now, they're hopeless and helpless."
Samantha also notified Westling that she might doze off
Well, maybe not so helpless. Westling's putsch brought
in class, and that he should fill her in on any material
howls from disabled-rights advocates and from the
she missed while snoozing.
media, which pounced upon the revelation that Somno-
The somnolent undergrad, Westling contended, was
lent Samantha was a fictitious composite-a "rhetorical-
not alone. A new, learning-disabled generation was com-
trope," as Westling somewhat sheepishly admitted. And
ing of age in America, a generation "trained to the trel-
on July 15, 1996, ten students filed a lawsuit against West-
lis of dependency on their special status and the
ling, claiming his unkind words and arduous new
accommodations that are made to it." Citing a Depart-
requirements amounted to illegal discrimination under
ment of Education estimate that up to 20 percent of
the 1990 Americans With Disabilities Act. In their com-
Americans may be learning-disabled, Westling mused on
plaint, the students alleged that Westling's new standard
the evolutionary ramifications of such a diagnosis.
for documentation-requiring applicants to submit an
"There may be as many as 50 million Americans," he
evaluation that is less than three years old and prepared
observed. "What happened? Did America suffer some
by a physician or licensed psychologist-amounted to an
silent genetic catastrophe?"
"unduly burdensome prerequisite" that would screen out
Westling's speech, it turns out, was a prelude to action.
learning-disabled students from receiving their legally
Shortly after returning from Melbourne, the aggrieved
mandated accommodations. Also unlawful, the students
provost took, a cleaver to B.U.'s bloated Office of Learn-
contended, was Westling's prohibition on waivers of aca-
ing Disabilities Support Services, a half-million dollar
demic requirements. Finally, in their most enterprising
fiefdom whose policies had, in the words of The New York
claim, the students accused Westling of creating a "hos-
Times, earned B.U. a "national reputation" as a haven of
tile learning environment" for the disabled, inflicting
support for the learning-impaired. He stepped up stan-
needless "emotional distress" and crushing their hopes
dards for documentation, and he issued a blanket prohi-
of collective advancement. A ruling by Judge Patti B.
bition on waivers of the school's math and foreign
Saris of Boston Federal District Court is expected by the
language requirements, contending that there was no
end of August.
16 THE NEW REPUBLIC AUGUST 25, 1997
Recent rulings by other judges suggest that the
this grand aspiration was framed in the fuzziest of terms.
learning-disabled students may well prevail in court. But
The statutory framework for modern disability law was
even then the questions begged by Somnolent Samantha
established in the Rehabilitation Act of 1973, which man-
will remain. Westling and B.U.'s new guard insist that
dated assistance measures for the disabled in federal
they have no animus against those with "genuine" learn-
facilities. Here is how Section 504 of the act defined a
ing impairments; they simply want to weed out the
learning disability: "a disorder in one or more of the
impostors. Yet, in holding up a trendy diagnosis to the
basic psychological processes involved in understanding
bright light of public scrutiny, B.U. officials have raised
or in using language, spoken or written
[which]
may
issues that go to the core of a debate that has grown as
manifest itself in imperfect ability to listen, think, speak,
civil rights law. has expanded to cover not merely the
read, write, spell or do mathematical calculations. This
halt, the lame and the blind, but the dysfunctional, the
remarkably broad definition is echoed in all subsequent
debilitatéd and the drowsy.
disability laws, notably the 1975 Individuals With Disabil-
ities Education Act, which mandated an array of services
hould "learning-disabled" even be a protected
for disabled public school students, and the 1990 Ameri-
S
category under federal law? What, exactly, is a
cans With Disabilities Act, which extended the-protec-
learning disability? Are the B.U. plaintiffs at the
tions of the Rehabilitation Act into the private sector. All
vanguard of a new generation of civil rights war-
three laws are equally vague in their description of how
as
riors, as their supporters contend? Or is their lawsuit the
people with disabilities must be treated. As the ADA puts
reductio ad absurdum of identity politics and tort mad-
it, in the case of any individual possessing a "disability"
d
ness-Harrison Bergeron meets Perry Mason in The
that results in "substantial impairment" of a "major life
Case of the Litigious Lollygaggers?
activity," schools and employers cannot "discriminate"
The recent announcement by the Equal Employment
and must provide "reasonable accommodation." The
Opportunity Commission that the Americans With Dis-
meaning of these legal appelations, as interpreted by the
abilities Act covers not only physically but mentally
courts and the regulatory agencies, would turn out to be
handicapped individuals has occasioned a flurry of
remarkably expansive.
a
hand-wringing editorials. Worried employers have
painted a scary scenario of a law that will coddle mur-
here were some limits written into the disability
derous lunatics, endanger the welfare of unsuspecting
customers and transform America's factories and
T
laws. For instance, only "otherwise qualified"
individuals are entitled to protection; accommo-
foundries into dystopias of dementia. In some ways, how-
dations are only mandated if they do not result in
a
ever, it is the entrenchment of learning disability-
"undue hardship." But recently a number of rulings by
a comparatively undersung, and seemingly more
federal courts and government enforcement agencies
benign, "hidden impairment"-that poses the more sub-
have revealed how flimsy these limits are.
versive challenge to basic notions of fair play, profession-
Although compliance with federal disability law is not
alism and equal protection under the law.
supposed to come at the expense of education or job
No one would deny that an individual who is unfortu-
performance standards, the Department of Education's
nate enough to be afflicted with one of the classically
Office of Civil Rights has delivered stinging rebukes to
defined mental disorders-schizophrenia, paranoia,
schools that refuse to exempt learning-disabled students
manic depression, and so on-suffers from a clearly
from academic requirements. Last May, a student
defined and clearly recognizable infirmity, one that is
afflicted with dyscalculia-math disability-filed a com-
likely to impair significantly her educational achieve-
plaint with the San Francisco Office for Civil Rights after
ments and career prospects. (Whether employers should
her college declined to waive the math course required
be legally compelled to overlook these mental disabili-
of all business majors in paralegal studies. Despite the
ties is another matter.) The diagnosis of a learning dis-
college's earnest attempts to accommodate her impair-
ability, in contrast, is a far more subjective matter. For
ment-the student would receive extensive tutoring and
many of the more recently discovered learning mal-
extra time on tests-OCR issued a finding of discrimina-
adies-math disability, foreign-language disability, "dys-
tion anyway, writing on May 30 that bsolute rules
rationalia"-there are no standard tests. To be sure, real
against any particular form of academic adjustment or
and debilitating learning disabilities do exist. But there
accommodation are disfavored by the law." When the
are no good scientific grounds to believe that some of
school asked if they could require learning-disabled stu-
the more exotic diagnoses have any basis in reality. Yet,
dents to at least try to pass a required course, OCR said
thanks to the interlocking protections of three powerful
no way, arguing that "it is discriminatory to require the
federal disability laws, refusal to accommodate even the
student to consume his or her time and jeopardize his
most dubious claims of learning impairment is now
or her grade point average taking a particular mathe-
treated by the courts and by the federal government as
matics course when the person qualified to administer
the persecution of a protected minority class.
and/or interpret the psychometric data has determined
Modern disability law was inspired by the most hu-
that the student, due to his or her disability, is highly
mane of motives, to protect the disabled from prejudices
unlikely to pass the course with any of the accommoda-
that deprived them of equal opportunities in the work-
tions the institution can identify and/or deliver." OCR
place and in the classroom. From the outset, however,
added that this rule should apply even to borderline
AUGUST 25, 1997 THE NEW REPUBLIC 17
dyscalculics, that "substantial group of students for
exam-and her accompanying impediment to becom-
whom interpretation of psychometric measures provide
ing. bar-admitted-exclude her from a 'class of jobs'
no clear prediction of success in a particular mathemat-
under the ADA," and could not be permitted.
ics course."
To drive home her point, Judge Sotomayor triumph-
antly cited Bartlett's performance during a courtroom
his is the new frontier, the learning disability as
demonstration of her reading skills. "Plaintiff read halt-
T
an opportunistic tautology. The fact that one dis-
ingly and laboriously, whispering and sounding out
plays a marked lack of aptitude for a particular
some words more than once under her breath before
intellectual discipline or profession establishes
she spoke them aloud," the judge recalled. "She made
one's legal right to ensure at least a degree of success in
one word identification error, reading the word
that discipline or profession. That is not a fanciful con-
'indicted' as 'indicated.''
ceit, but an adjudicated reality. Several judges have
It could, of course, be argued that the ability to read is
recently ventured the enterprising claim that any person
an essential function of lawyering; that any law school
who is not performing up to his or her abilities in a cho-
graduate who cannot distinguish "indicated" from
sen endeavor suffers from a learning disability within the
"indicted," who cannot perform cognitive tasks under
meaning of the ADA.
time constraints, is incapable of performing the func-
Consider the lawsuit filed in 1993 by an aspiring attor-
tions of a practicing lawyer and therefore, perhaps,
ney named Marilyn J. Bartlett. Bartlett graduated in
should not be a practicing lawyer. But one would be
1991 from Vermont Law School, where she received
arguing those things in the teeth of the law. Thanks to
generous accommodations of her reading disability and
the, Americans With Disabilities Act, the Individuals
disability in "phonological processing.' Nonetheless,
With Disabilities Education Act and Section 504 of the
Bartlett did not do well, graduating with a GPA of 2.32
Rehabilitation Act of 1973, Bartlett and her fellows
and a class standing of 143 out of 153 students. She then
among the learning-disabled are now eligible for a life-
went to work as a professor of education at Dowling Col-
long buffet of perks, special breaks and procedural pro-
lege, where, according to court documents, she
tections, a web of entitlement that extends from cradle
"receives accommodations at work for her reading prob-
to grave.
lems in the form of a full-time work-study student who
assists her in reading and writing tasks."
on Westling is a crusty chainsmoker with owlish
When it came time to take the bar exam, Bartlett peti-
tioned the New York Board of Law Examiners for special
J
glasses and a stuffy, orotund manner, an easy figure
to mock. But, as it turns out, his portrait of Somno-
arrangements. She wanted unlimited time for the test,
lent Samantha was hardly a wild flight of fancy.
access to food and drink, a private room and the use of
Before beginning his formal audit of LDSS's practices,
an amanuensis to record her answers. Acting on the
Westling asked its director, Loring Brinckerhoff,
advice of its own expert, who reported that Bartlett's test
whether the office had ever turned down a single re-
data did not support a diagnosis of a reading disorder,
quest for special dispensation on the grounds that the
the board refused Bartlett's demands. Three times,
student hadn't presented enough evidence. When
Bartlett attempted the exam without accommodation.
Brinckerhoff answered no, Westling asked to see folders
After her third failure, she sued the board.
and accommodation letters for the twenty-eight stu-
On July 3, 1997, Judge Sonia Sotomayor ruled in
dents who had most recently requested and received
Bartlett's favor. Ordering the board to provide the
adjustments to their academic program. Of these
accommodations Bartlett had requested, she also
twenty-eight, Westling pronounced no fewer than
awarded Bartlett $12,500 in compensatory damages.
twenty-seven to be insufficiently documented. And,
Judge Sotomayor did not challenge the board's con-
indeed, copies of the students' filés, exhumed during
tention that Bartlett was neither impaired nor disabled,
the discovery phase of the lawsuit and now available as
at least not in the traditional sense. In an enterprising
courthouse exhibits, seem to provide some support for
new twist, however, she declared that Bartlett's skills
this harsh assessment.
ought not to be compared to those of an "average per-
For starters, some of the diagnosticians themselves
son in the general population". but, rather, to an "aver-
appeared somewhat impaired. One evaluator wrote that
age person with comparable training, skills and
"taking notes and underlying [sic] while reading" would
abilities"-i.e., to her fellow cohort of aspiring lawyers.
help a student "maintain her attention." Another stu-
An "essential question" in the case, said the judge, was
dent, a female, was erroneously referred to as "Joe" by
whether the plaintiff, would "have a substantial impair-
the evaluator who pronounced her to be learning-
ment in performing [the] job" of a practicing lawyer.
disabled. Even more troubling, though, was LDSS's seem-
The answer to this question was "yes," the judge found.
ingly reflexive acquiescence to students' wish lists.
And this answer-the fact that Bartlett would have a
Michael Cahaley, one of the plaintiffs in the lawsuit, was,
very hard time meeting the job requirements of a prac-
according to Westling's affidavit, described by his doc-
ticing lawyer-was, in the judge's opinion, precisely the
tor as having "minimal" deficits: "this very intelli-
reason why Bartlett had a protected right to become a
gent youngster should do well in high school and col-
practicing lawyer. Thus, Judge Sotomayor ruled that
lege." Nonetheless, Cahaley had requested-and was
Bartlett's "inability to be accommodated on the bar
granted-double time on all of his examinations. In
18 THE NEW REPUBLIC AUGUST 25, 1997
another case, the clinical psychologist who examined a
Scott Greeley, who, testified that he suffers from an
student reported that his "skill deficits" were "not severe
"audio-visual learning processing deficit." At B.U., Gree-
enough to be a learning disability"; but a learning spe-
ley had been provided with a note-taker, time-and-a-
cialist misread the report and recommended accommo-
half on tests and an open-ended right to have any test
dation anyway, on the grounds that "the student was
question "clarified" by the instructor. But the perks
evaluated and found to have a learning disability."
didn't help much-as Greeley explained at trial, after
Sometimes the evaluator's recommendations seemed
the accommodations were provided his GPA im-
just bizarre. In one case, a student's psychologist opined
proved to a less-than-stellar 1.9. Over the course of the
that a student who "appears to have subtle verbal
trial, B.U. attorneys established that this shoddy show-
processing difficulties" should not be "asked to recall
ing was perhaps not wholly attributable to societal per-
very specific data or information." As Westling dryly
secution of the disabled. Queried about his spotty atten-
observed in his affidavit, requests for "very specific data
dance record in a science course for which he received
or information" con-
a "D" grade, Greeley
stituted "an essential
WHAT DOES YOUR
explained that "part of
element of every
my disability is that
course and academic
I need a structured
program offered by
HEALTHY, NORMAL PERFECT,
schedule." "Would you
Boston University."
LITTLE DARLING NEED TO
say you missed over
At the trial, the stu-
half the classes?"
dent plaintiffs came
GET AHEAD iN LIFE ?
persisted the judge.
off as something other
"Probably
around
than inspiring champi-
that, yes," replied the
ons for disabled rights.
undergrad.
Elizabeth Guckenber-
It would be comfort-
ger, a third-year law
ing to think that B.U.'s
student who was diag-
"disabled" plaintiffs
nosed as having "a
represent an excep-
visual and oral process-
tion to the norm, but
ing disability" while a
this does not seem to
freshman at Carleton
be the case. Over the
College, admitted she
years, proposed re-
had received every ac-
forms to disability law
commodation she had
have been effectively
ever requested under
vanquished by tele-
the Westling regime,
vised testimony from
including extra time
sobbing children in
on exams, a reduced
A SMALL DiSABiLiTY TO
wheelchairs. Increas-
course load and pri-
ingly, however, individ-
ority registration in
the law school section
UALIFY FOR SPECIAL AiD
uals with grave physi-
cal handicaps com-
of her choice. Ben-
AND WE CAN FIND JUST THE ONE
prise only a small por-
jamin Freedman, a
you ARE LOOKING FOR
tion of the people who
senior with dysgraphia
claim special privilege
("really, really bad
CONTACT ADA RESEARCH INC. FOR COMPLETE DETAILS AND PROSPECTUS
under the federal dis-
handwriting," he says),
DRAWING BY VINT LAWRENCE FOR THE NEW REPUBLIC
ability laws. As Man-
also got everything
hattan Institute fellow
he wanted, including double time on exams, the option
Walter Olson points out in The Excuse Factory, complaints
to be tested orally and the services of a professional note-
by the traditionally disabled-the deaf, blind and para-
taker.
plegic-have accounted for only a tiny share of ADA
Plaintiff Jordan Nodelman, who claimed he suffered
lawsuits. According to 1996 EEOC figures, only 8 percent
from Attention Deficit Disorder (ADD), also had re-
of employment complaints have come from wheelchair
ceived every accommodation he ever requested, includ-
users and a mere 6 percent from the deaf or blind, bring-
ing the right to take all tests in a distraction-free envi-
ing the total for these traditional disabilities to a skimpy
ronment with extra time. At trial, he admitted that his
14 percent.
attention deficit waxed and waned. When "something's
The diagnosis of learning disability, by contrast, is
very important to me," he explained at trial, he
experiencing something of a boom. In the space of
"forc[ed] [him]self to concentrate." Nodelman had a
only a few years, the number of children diagnosed
3.6 GPA, had made the Dean's List and had taken his
with Attention Deficit Disorder, reading disability and
tests untimed in every class except Zen Guitar.
math disability has swollen by hundreds of thousands.
Perhaps the least compelling plaintiff was sophomore
Of the 5.3 million handicapped children currently on
AUGUST 25, 1997 THE NEW REPUBLIC 19
Individual Education Programs (specially. tailored,
will annoy other people, blaming others for his or her
often costly regimens of technology, therapy and one-
own mistakes or misbehavior." Rates of up to 16 percent
on-one tutoring that public schools are mandated to
have been reported.
provide to every child with a disability), the U.S.
A tongue-tied toddler could have dysphasia, other-
Department of Education estimates that just over half
wise known as a "difficulty using spoken language to
(51 percent) are learning-disabled. According to the
communicate." Boorish behavior may be a sign of
authors of the book Promoting Postsecondary Education
dyssemia, defined as a "difficulty with signals [and]
for Students with Learning Disabilities, up to 300,000 stu-
social cues." (According to the Interagency Commission
dents currently enrolled in college have proclaimed
on Learning Disabilities, social skills are a domain in
that they are learning-disabled and need special accom-
which a learning disability can occur.) An even more
modations.
sinister malady is dysrationalia, defined in an October
The National Collegiate Athletic Association, mean-
1993 issue of The Journal of Learning Disabilities as "a level
while, is under intense legal pressure from the Justice
of rationality, as demonstrated in thinking and behavior,
Department to relax the initial eligibility standards that
that is significantly below the level of the individual's
require student athletes to get a cumulative score of
intellectual capacity." A checklist of childhood precur-
700 on their SATs and to maintain at least a 2.0 grade
sors include "premature closure, belief perseverance
point average in core courses. These standards are
resistance to new ideas, dogmatism about beliefs, and
meant to offer a slight safeguard against the tendency
lack of reflectiveness."
of universities to enroll and graduate young men and
women whose ability to pass a ball exceeds their ability
hese neo-disabilities are likely to strike the non-
to pass their courses. Not so fast, said Justice Depart-
T
specialist as an exercise in pathologizing child-
ment lawyer Christopher J. Kuczynski. In a March 1996
hood behavior, and the nonspecialist would be
letter to the NCAA, Kuczynski warned that the associa-
on to something. Increasingly, scholars and
tion's academic standards may "have the affect [sic] of
clinicians in the field of learning disability are speaking
excluding students with disabilities from participa-
out against the dangers of promiscuous diagnosis of dis-
tion in college athletics." NCAA spokesman Kevin
ablement. "In the space of twenty years, American psy-
Lennon says the association is in the process of revising
chiatry has gone from blaming Johnny's mother to
its policy "to accommodate students with learning dis-
blaming Johnny's brain," says Dr. Lawrence Diller, an
abilities."
assistant clinical professor of behavioral pediatrics at the
University of California at San Francisco. The problem,
he most common estimate cited by advocacy
says Dr. Diller, is that in a variant of the Lake Woebe-
T
groups and frequently repeated in government
gone effect, "Bs and Cs have become unacceptable to
documents is that between 15 and 20 percent of
the middle classes. Average is a pejorative." And yet, as
the general population have learning disabili-
he points out, "someone has got to be average."
ties. Any hypochondriac can test himself: in a recent
Some scholars have even begun to question the
booklet, the American Council on Education supplies a
notion that there is such a thing as a learning disability.
checklist of symptoms for adults who suspect they may
In a recently published book, Off Track, one of its
be learning-disabled. Some of us will be disturbed to
authors, Robert Sternberg, a Yale professor of psychol-
recognize in the checklist possible symptoms. of our
ogy and education, presents a powerful case for why the
own: according to the council, telltale signs of adult
concept of learning disability ought to be abandoned.
learning-disablement include "a short attention span,"
Drawing on the latest research into the physiology of the
impulsivity, "difficulty telling or understanding jokes,"
human brain, Sternberg argues that there is no evi-
"difficulty following a schedule, being on time, or meet-
dence to support the view that children who are labeled
ing deadlines" and "trouble reading maps."
as learning-disabled have an immutable neurological
As the ranks of the learning-disabled swell, so too do
disability in learning. From a medical standpoint, he
the number of boutique diagnoses. Trouble with num-
writes, there is no scientific proof that children labeled
bers could signal dyscalculia, a crippling ailment that
as learning-disabled actually have a discernible biologi-
prevents one from learning math. Lousy grammar may
cal ailment "in terms of the underlying cognitive abili-
stem from the aforementioned dysgraphia, a disorder of
ties related to reading." Says Sternberg: "I'm not
written expression. Dozing in class is evidence of la-
denying that there are dramatic disparities in the speed
tent'ADD, perhaps even ADHD (Attention Deficit/Hyper-
with which people learn
But, most of the time, what
activity Disorder). Many tykes also exhibit the telltale
you're talking about here is a garden-variety poor
symptoms of ODD-Oppositional Defiant Disorder.
reader. You're talking about someone who happens to
According to the American Psychiatric Association, the
be not very good in math."
defining feature of ODD is "a recurrent pattern of nega-
To bei sure, there is no question that children who are
tivistic, defiant, disobedient, and hostile behavior
intellectually normal, and sometimes even unusually
characterized by the frequent occurrence of at least four
bright, can have genuine, serious difficulties in learning
of the following behaviors: losing temper, arguing with
how to read or to do math; and that educators should
adults, actively defying or refusing to comply with the
do everything in their power to put these students back
requests or rules of adults, deliberately doing things that
on track developmentally. But as their clinics swarm with
20 THE NEW REPUBLIC AUGUST 25, 1997
hordes of pushy parents and catatonic collegians, all
dents' scores by an average of 100 points, according to
hankering for a diagnosis of intractable infirmity, a
the College Board. In the last couple of years, testing
growing number of diagnosticians are crying foul. "The
agencies have been bombarded with requests from stu-
way the diagnoses [of Attention Deficit Disorder and
dents who proclaim that they are learning-disabled and
learning disabilities] are being used right now, a back-
will therefore need additional time. According to Kevin
lash against the conditions is inevitable," says Diller.
Gonzales, a spokesman for the Educational Testing Ser-
"We've created a paradox where the more problems you
vice, 18,000 learning-disabled examinees received "spe-
have, the better off, you may be. That's a prescription for
cial administration" for the SAT in 1991-92. By 1996-97,
societal gridlock."
that number had more than doubled, to 40,000.
It's no puzzle, of course, why the learning-disability
Requests for accommodation on Advanced Placement
movement insists that learning disability is an
exams, meanwhile, have. quadrupled-in 1996, 2,244
immutable, brain-based disorder-a malady that is "fun-
learning-disabled eggheads took their A.P. tests
damentally neurological in origin," according to the
untimed. To reap the benefits of this particularly useful
National Center for Learning Disabilities. For it is this
perk, ETS requires only a letter of verification from a
understanding of learning disability that justifies its
school special education director or a state-licensed psy-
inclusion as a protected category under the ADA. If
chologist or psychiatrist.
learning disability is an innate neurological defect that
Certification and licensure exams-long, carefully
"artificially" lowers test performance, then it follows that
standardized examinations that function as gatekeepers
learning-disabled individuals should be able to take
into the professions-are also under assault. In 1995,
tests under special conditions that will neutralize the
the National Board of Medical Examiners administered
effects of this handicap. In Help Yourself: Advice for
over 450 untimed Medical College Admissions Tests-a
College-Bound Students With Learning Disabilities, author
fivefold increase from 1990. Lawyers, too, are request-
Erica-lee Lewis stresses that asking for an untimed
ing special dispensation. This year, in New York alone,
administration of your SATs "does NOT give you an
more than 400 aspiring attorneys have asked to take
unfair advantage; it just reduces the unfair disadvantage
the bar exam untimed. "The requests have increased
by providing you with equal access and opportunity. You
tremendously," says Nancy Carpenter, who heads up the
deserve that and the law protects you against anything
New York Board of Legal Examiners. "ADD is becom-
short of that fairness!"
ing much more common. We have a lot of dysgraphia.
Some dyscalculia.
Most applicants just say, 'unspeci-
here's just one tiny problem: the two major
fied learning disability.' They are all over the lot."
T
studies on the subject say that precisely the
ETS officials do not like to talk about the Willingham
opposite is true. As Dr. Warren W. Willingham,
and Ragosta studies. Indeed, far from planning to
a psychometrician-with the Educational Testing
toughen up its accommodations policy, the agency
Service, points out in his widely respected textbook
seems poised to eliminate its only check on spurious
Testing Handicapped Students, institutions have long
claims-the marking, or "flagging" of a score to indicate
relied on standardized tests because such tests, for all
that an applicant took the test under nonstandard con-
their faults, tend to be highly reliable in their esti-
ditions. For years, the learning-disability industry has
mation of how well a particular applicant will actually
railed against the asterisk, arguing that it violates a stu-
perform in college or on the job. The case of learning-
dent's right to keep his or her disability a secret. Now
disabled students, in contrast, "presents a very differ-
ETS seems prepared to agree. "We are taking a good,
ent picture," writes Willingham. When students diag-
hard look at the whole issue of flagging," says ETS's
nosed with learning disabilities were allowed to take the
newly appointed director of disability services, Loring
SAT on an untimed or extended-time basis, the "col-
Brinckerhoff. "I'm not prepared to say it's going to go
lege grades of learning-disabled students were subs-
away overnight.
My gut feeling is that it may well be a
tantially overpredicted," suggesting that "providing
Section 504 violation." Yes, that's the same Loring
longer amounts of time may raise scores beyond the
Brinckerhoff who recently resigned under pressure by
level appropriate to compensate for the disability." The
Jon Westling from his B.U. sinecure. "Isn't it ironic,".
other study-by Marjorie Ragosta, one of ETS's own
muses Brinckerhoff. "I'm told by Boston University that
researchers-confirms Willingham's pessimistic diag-
I'm unqualified to do my job. Yet here I am-at the
nosis.
biggest testing agency in the world-determining
Both researchers raise a troubling question: whether,
accommodations for hundreds of thousands of people
as Willingham puts it, "the nonstandard version of the
with disabilities."
SAT is seriously biased in favor of [learning-disabled]
students." The concern is not just theoretical. There is
f course, a legally recognized disability means
reason to suspect that fast-track students, and their par-
ents, have figured out that a little learning disability can
O
more than just extra time on tests-or even
extra privileges in the classroom. Under the
be an advantageous thing-can make the difference, in
Individuals With Disabilities Education Act, a
a hypercompetitive setting, between getting into (and
diagnosis of L.D. also qualifies a child for an Individual
getting successfully out of) the right school. The privi-
Education Program-a handcrafted educational pro-
lege of taking the SAT on an untimed basis raises stu-
gram, replete with techno-goodies and other kinds of
AUGUST 25, 1997 THE NEW RÉPUBLIC 21
specialized attention. The law, which states that "all chil-
numerous handicaps had made Michael eligible for a
dren with disabilities" ought to have available to them "a
generous dose of special-education services. Under the
free and appropriate public education," encourages par-
terms specified in his IEP, Michael received three and
ents to be bound not by what the school district can
three-eighths hours a week of special tutoring; extra
offer, but by what they think their child needs. It specifies
time on homework assignments and tests; "allowance of
that, in the event that the parents don't care for their
standing up, stretching and/or walking around in class";
child's IEP, the local school district must convene a "an
"permission to chew gum or hard candy to help him
impartial due process hearing"-a trial-like proceeding
concentrate and focus"; "seat assignments in close prox-
in which both parties have the right to be represented by
imity to the teacher"; and "access to a tape recorder,
a lawyer, the right to subpoena, confront and cross-
transcripts of lectures, outlines and notes and/or a lap-
examine witnesses, and the right to present evidence. If a
top computer if needed." Now Mr. and Mrs. F. wanted
school district loses the due process hearing, it must pay
even. more. Michael's low grade on his Honors Geome-
the parents' attorneys' fees. The result, says Raymond
try midterm, they argued at the hearing, revealed evi-
Bryant, director of special education for Maryland's
dence of a new, previously unsuspected disability
Montgomery County public schools, has left school dis-
"with the concepts of quadratic equations and the
tricts vulnerable to parental tactics bordering on extor-
Pythagorean theorem." They blamed the school for
tion. "It used to be that kids didn't try hard enough, or
numerous "procedural violation[ including "failure
didn't work hard enough," says Bryant. "Now, it's ADD or
to pursue a math reevaluation of Michael" after the
L.D
They want their child to read half the material.
received a 65 on his midterm. Now, they said, their son
They want him to do half the homework. They don't
would experience "substantial regression" over the sum-
want him to take the same tests. But guess what? They
mer, unless his high school saw fit to furnish him with
want him to get the same grades!"
"extended summer programming in the form of math
tutoring."
n prosperous, sun-dappled school districts around
This, the hearing officer would not do. True, she
I
the country, exotic new learning disabilities are
wrote, Michael's poor showing on his geometry
popping up, each requiring its own costly cure. In
midterm might well be "related to his learning dis-
Orange County, where "executive function disor-
ability and/or ADD." On the other hand, she bold-
der" (difficulty initiating, organizing and planning
ly ventured, it could also be that "math remains a sub-
behavior) reigns, parents have begun demanding that
ject where Michael will not receive As in an Honors
schools foot the bill for horseback riding lessons. "This
track."
is now supposed to be the way to help kids with EFD,"
says Peter Hartman, superintendent of the Saddleback
nsconced in his pleasantly stuffy office, an
Unified School District. "There's some stable in the
E
Anglophile's fantasy of elephant ear plants and
area that they all go to." In Holliston, Massachusetts,
bas-relief cornucopias in carved wood, Jon
parents of children with Attention Deficit/Hyperactivity
Westling awaits the decision of Judge Patti B.
Disorder hanker for a trendy new treatment called
Saris. He is resigned to the knowledge that, whatever
"educational kinesthesiology," a sort of kiddie Pilates
is decided, the learning-disabled activists and their
for angst-ridden tots. "Unfortunately, the treatment can
supporters will regard him as a villain. "This is a cause
only be done by a, quote, licensed educational kines-
where the support and commitment verges almost on
thesiologist," sighs Margaret Reed, special-ed adminis-
fanaticism," he says, puffing on one Marlboro Light,
trator for Holliston Public Schools. "And it seems
then another. "And whenever you have less than ideal
there's only one in the district. And she charges $50 an
science coupled with something close to fanaticism,
hour."
you can move beyond appropriate use into areas of
Sometimes, it seems, the problem is less inattentive
abuse."
children than overattentive parents, many of whom are
The students say that, whatever the outcome, the liti-
unwilling to believe their progeny is less than perfect.
gation has salved their faltering self-esteem. Ben Freed-
Consider the case of Michael F., whose plight was
man, a 21-year-old senior who has maintained a 3.6
thrashed out at length at a 1996 hearing after his parents
GPA despite a reading and writing disability and dys-
expressed discontent with his Individual Education Pro-
graphia, likens his crusade to the civil rights movement
gram. Michael, then a ninth grader, was thriving at his
of the 1960s. "I don't want to compare myself to Dr.
high school-earning As in honors courses and demon-
King, but there are great similarities," he says.
strating "overall cognitive functioning in the very supe-
Anne Schneider, too, says she's achieved closure on
rior range (99th percentile)." He had also written a
the whole regrettable incident. To the true believers, it
book, played in the school band and, according to the
seems, there's an explanation for everything; and it's
hearing officer, "successfully completed bar mitzvah
usually the same explanation. "I've been thinking about
training."
Jon Westling," she tells me one evening. "For all his
At the hearing, it emerged that Michael did all of this
bragging about his Rhodes scholarship, he didn't do
while fighting off the ravages of "attention deficit disor-
the final paper. He's not a finisher." Schneider lets out
der, language-based specific learning disabilities, neuro-
a reflective sigh. "To tell the truth," she says; "I've
motor dysfunction, and tactile sensitivity." These
always thought: learning disability."
22 THE NEW REPUBLIC AUGUST 25, 1997
CITY BOOS
TIME
NATION
RS
By ADAM COHEN INDIANAPOLIS
TEPHAN FANTAUZZO, HEAD OF
Indiana's public-employee
S
union, has seen a lot over the
years, but nothing beats the
day his auto mechanics came to
MARK FOR TIME
him and said they didn't want
their raises. Indianapolis had
just put out to competitive bid-
ding the business of repairing city vehicles,
Anew breed of
and that meant his workers had to bid
against private companies to keep their
activist mayors
jobs. Fantauzzo's workers were worried
that they, would be underbid. So they gave
up their pay raises-and narrowly won the
ismaking City
contract. The competition has brought a
new efficiency to the operation: costs are
down 29%, turn-around time on repairs
Hall a hothouse
has improved markedly, and customer
complaints have fallen more than 90%. At
for innovation
the same time, the workers have more than
made up for their lost raises, averaging 5%
Stephen Goldsmith
salary hikes in each of the past four years,
well above the city average. Says a once
A pioneer in privatization, he has put
skeptical Fantauzzo: "We found a way to
more than 70 city services up for
make this a win-win situation."
competitive bids; mayors across the
Auto repair is only one of more than 70
country are learning from his success
municipal operations Indianapolis', Republi-
can Mayor Stephen Goldsmith, the nation's
The driving force behind this fresh ap-
leading exponent of "competing out," has
proach to urban government is a handful of
spun off in five years in office. The city's
"new pragmatist" mayors-Indianapolis'
wastewater-treatment plants are being run
Goldsmith, Cleveland's Michael White, Phila-
by a private company, at a projected savings
delphia's Edward Rendell, Milwaukee's John
of $65 million over five years. Indianapolis In-
Norquist, Chicago's Richard M. Daley and to
ternational Airport is now run by the British
some extent Los Angeles' Robert Riordan and
Airport Authority, which promises it will save
New York City's Rudolph Giuliani-who ac-
$32 million over 10 years. Goldsmith even
tively collaborate and compare notes on how
managed to privatize Indianapolis' 2,200-job
to make cities work. Goldsmith visits Giuliani
Naval Air Warfare Center, which had landed
every few months to talk shop; Rendell and
on the Pentagon's base-closing list. With the
Goldsmith bounce ideas off each other at fre-
Federal Government's permission, he
quent joint speaking appearances. And good
brought in Hughes Technical Services to take
practices, big or small, travel fast. "You learn a
over the operation and sell products and ser-
lot from each other," says Republican Rior-
vices back to the Navy.
dan, who used Indianapolis-style competing
Indianapolis is hardly alone among
out to award cleanup contracts after the 1994
cities that have been quietly putting the fash-
Northridge, Calif., earthquake. Goldsmith is
ionable buzz words "reinventing govern-
using a silicone-based antigraffiti sealant he
ment" into practice. Municipal government
learned about from Daley. Says White: "If
has long been regarded as the great back-
there's anything that binds us, it's simply that
water of American democracy: a world of
we pride ourselves on being result-oriented."
political patronage and special-interest jock-
What makes these mayors' governmen-
eying in which policy discussions rarely
tal pragmatism possible is that they have also
move beyond synchronizing traffic lights.
developed a flexible, post-ideological ap-
But a new breed of activist mayors, recently
proach to politics. Cities that once thrived on
hailed by the New Republic as "the Pride of
straight-ticket Democratic machine politics,
the Cities," has been turning city halls into
where labor unions and social-welfare pro-
MICHAEL ABRAMSON FOR TIME
hothouses of governmental innovation.
grams were considered untouchable, are led
They are challenging entrenched interests
today by some of the nation's most nonparti-
and butting heads with traditional allies in
san and politically unpredictable politicians.
the pursuit of real reform: overhauling the
On school vouchers Cleveland's White, an
John Norquist
school system in Chicago, reshaping labor-
African-American Democrat, is sparring
management relations in Philadelphia and
with his city's traditionally Democratic
privatizing municipal services all over.
teachers' union and the N.A.A.C.P. Goldsmith
The popular mayor has pushed unions to
be more efficient, saying it's "an act of
injustice" to waste taxes in a city where
TIME, AUGUST 18, 1997
21
the average family income is $27,000
alienated his party's establishment by firing
patronage appointees who stood in the way
of his efforts to privatize: Says New York's
Giuliani, a Republican who broke with his
party by lobbying to save rent regulations:
"It's better to keep your constituents happy
than to keep a political party happy." So far,
it's been a winning strategy: all these mayors
have been re-elected handily, except Giu-
liani-who is running this year and led his
nearest rival by 23% in a recent poll.
The new pragmatism is at least partly a
response to economic necessity. Mayors are
operating in an age of sharply limited re-
sources. Federal aid to cities has fallen
sharply in the past 20 years, and urban tax
bases have eroded as businesses and affluent
residents have fled to the suburbs. Since the
mid-1970s, when New York and other big
cities teetered on the brink of bankruptcy,
mayors have had to work hard just to stay
afloat: they literally
can no longer afford to
Michael White
preside over bloated
bureaucracies or cod-
The hard-driving Democrat has adopted
Few cities have
viding basic services. Building on improve-
dle unions at contract
a business style of management to help
been. more buffet-
ments made by his predecessors in city hall
time. "There's just a
turn around a troubled city once
ed by economic
White has helped reverse Cleveland's slide
different set of prob-
dubbed "the Mistake by the Lake"
forces than Cleve-
The hard-driving mayor, who gets to city hall
lems mayors are fac-
land, whose hard
before 7:30 a.m. and sometimes works past
ing today," says Barnard College political
times once earned it the nickname "the Mis-
midnight, has adopted a business style of city
science professor Ester Fuchs. "If they want
take by the Lake." Cleveland has lost more
management. "We serve a city of 500,000
to have cities at all, the name of the game is
than 400,000 people, almost 45% of its pop-
people a day," says White. "If we don't serve
keeping their budgets balanced, keeping
ulation, since mid-century, and in 1978 it be-
them well, a lot of them are going to go
the business community and the middle
came the first major city to default on its
somewhere else." The centerpiece of his
class happy, and coming up with programs
debts since the Great Depression. Along the
strategy for improving service to his "cus-
that work."
way, city government all but stopped pro-
tomers" is a 60-page "People's Budget," set-
tourism and parks and recreation) remain under Barry
Disaster on the Potomac:
purview. Asked at a press conference what residents should do
if they want to complain about potholes, Barry replied bitterly,
How Not to Run a City
Call Dr. Brimmer 504-3400.
Other countries like to argue that Americans know nothing
of life in the rest of the world Not so in the District, whose gov.
OTHER CITIES MAY BOAST OF
ernment seems to aspire to the standards of a Third World na
innovative, hard-bargaining
tion. Fecal matter in the water bodies piled and rotting in the
mayors, but at least one un
un air conditioned morgue; potholes that could kill if the stray
ban center is clattering along
bullets don t=these are familiar stories to District dwellers. A re
injust the opposite direction.
cent exposé in the Washington Post offered jaw-dropping's
B
Beset by financial woes, high
tistics on the amount of wasted funds and government bloat
crime and decaying city ser
Washington spends more money and has more employees than
vices, Washington has now
any other city Yet the high school dropout rate has passed 50%
Wrecked cars, wracked city
suffered the indignity of hav
crime is up 16% since 1991, and tuberculosis and infant-mortality
ing its mayor, Marion S. Bar-
rates are the highest in the nation. Just last week officials an
ry, stripped of nearly all power As part of a $1 billion federal
nounced that the city's public schools would open three weeks
aid package included in the new budget agreement, nine of the
late this fall because building repairs haven been finished.
in
city's major agencies, covering everything from schools and
With such things to commend him, few believed Mayor Bar
housing to public works and the police, have been taken away
ry when he insisted that the congressional moves were not about
from Barry and placed under the jurisdiction of a financial con
Marion Barry. The mayor has turned the city into a machine that
trol board, which was appointed by Congress two years ago to
would impress Boss Tweed: jobs for all, and once hired, never*
get the city finances in order and is headed by economist An-
fired Money earmarked for services and repairs often found its
to
drew! Brimmer? Only relatively minor agencies (including
way to payroll, to put yet more unskilled workers on the clock. Also
22
TIME, AUGUST 18, 1997
N
ting out goals for the year and evaluating
years ago by City and State magazine for
build new school buildings and renovate old
whether they have been met. The city has
setting "the standard for municipal distress
ones. The Daley regime's hard-hitting re-
generally been able to give itself high marks:
in the 1990s" now has a budget surplus of
forms, which included cutting 1,700 non-
the report card cites such achievements as
$118.5 million.
teaching jobs, are particularly impressive in
40% more dead trees removed in 1995 than
a town where, in the days when Daley's fa-
the year before and twice as many children
LTHOUGH A LIBERAL DEMOCRAT,
ther reigned as mayor and political boss,
screened for lead poisoning.
Milwaukee's Norquist has also
politicians used to say that the purpose of
Cleveland's problems are not all behind
taken a tough line with city
the public schools was to provide jobs for
it, but under White's administration, there
workers. He was faced a few
the people who worked there.
is a clear sense that the city is on an up-
years ago with a standoff be-
Critics of the new-style mayors say many
swing. Downtown boasts not only a new
tween his public-works and fire
of their reforms are unproven. Goldsmith's
$72 million light rail line to move tourists
departments over the painting
detractors say privatization projects such as
along the lakeshore but also Gateway
of firehouses. The fire depart-
the wastewater-treatment plants may look
Complex, which features a new baseball
ment wanted the buildings painted in the
better in press releases than in practice. "We
stadium and a basketball arena that lured
summer, when its trucks could easily be
don't even know if we're saving any money,"
the Cleveland Cavaliers back from the sub-
kept outside, but public works said too
says City-County Councilor Susan Williams.
urbs. Most important, the city's long period
many of its people would be on vacation.
"Every time I blink, it seems they want $10
of fiscal crisis has subsided. After a general
Norquist allowed the fire department to en-
million to fix this or $8 million to fix that."
fund deficit that grew to almost $7 million
gage a private contractor to get the project
And handing over government operations to
in 1990, the city has balanced its books and
done in the summer. "The good news for
the private sector can open the door to pa-
has accumulated a rainy-day fund of $25
the public-works department is they
tronage and other kinds of malfeasance, the
million. Standard & Poor's, which suspend-
learned from this and changed their proce-
very reason the civil-service system was in-
ed the city's bond rating after its 1978 bank-
dures," says Norquist. "Competition didn't
stituted more than a century ago. Indi-
ruptcy, today gives the city an A.
put them out of business, but it almost did."
anapolis suffered through "golfgate" three
A prime article of faith among the new
In Chicago, Daley has taken on his city's
years ago, when private operators of munic-
mayors is that city employees must become
most intractable problem: a $3 billion
ipal golf courses were accused of improper-
more efficient. Rendell, a Democrat and a
school system that former U.S. Education
ly handing out renovation contracts. When
tough-talking former prosecutor, is widely
Secretary William Bennett once called the
Goldsmith made an unsuccessful run for
credited with saving Philadelphia by going
worst in the nation. Two years ago, Daley, a
Governor last year, Democrats attacked him
eyeball-to-eyeball with the city's powerful
Democrat, convinced Illinois' Republican
for accepting contributions from companies
public-employee unions shortly after he
state legislature to hand him authority over
that had won contracts for city services. "Pri-
took office in 1992. Rendell offered work-
the schools. He ousted the city's entrenched
vatization is just patronage in pinstripes,"
ers a contract that froze wages for 33
educational bureaucracy, installed a school
says former Marion County Democratic
months and cut back on paid holidays. Af-
board that put nearly 20% of the schools on
Party chairman Kipper Tew.
ter a 16-hour strike, the unions capitulated.
probation for low performance and got ap-
To some, the new pragmatism is only a
Under Rendell, a city that was cited five
proval for $850 million in bond issues to
pretext for tilting government away from the
deterring change is the racial politics of the highly segregated city.
NI can predict the effort, Brimmer says "It will be done
For the mostly black District residents, Barry re elected in 1993
The federal takeover has roiled the city always testy po-
despite serving jail time for crack use promised a toehold into the
litical waters, inspiring loud public protests. So loud that
middle class. "It's the ultimate patronage, says a D.C. Council se-
Eleanor Holmes Norton the District's nonvoting representa-
nior/aide If you have a government check, a refrigerator full of
tive in Congress, did an about face: after first calling the deal a
food, who cares about the pot-
"big win, she denounced it as
hole outside?'
"too high a price. Meanwhile
Onto this battlefield. steps
Barry-whose popularity is so
Brimmer, 71, a former Federal
low that nearly 80% of resi-
Reserve Board member Like
dents say it satime for him to
ry Brimmer is black, but
go is using the setback to his
there the similarities end. While
advantage Democracy has
Barry is fond of dashikis and
been raped, he asserts, decry-
bling rhetoric, Brimmer is as
ing the white Republicans in
precise and exacting as the cut of
Congress-particularly North
his charcoal-gray suit. He took
Carolina Senator Lauch Fair-
immediate action last week, fir-
cloth- who spearheaded the
ing three department chiefs and
takeover: Says a congressional
threatening that more heads
aide: Faircloth doesn't realize
will roll unless changes are
that he just became treasurer to
made Still, some are skeptical
Marion Barry' pre-election
of his ability to tackle a job akin
campaign:
By Tamala M.
to fixing a plane while flying it.
Edwards. With reporting by James
"I can't predict the outcome, but
Barry, before the takeover, meets with Norton in March
Carney/Washington
TIME, AUGUST 18, 1997
23
THE TIES THAT BINI
Should breaking up be harder to do? The debate over easy divorce rages on
By WALTER KIRN
ents, she identified broken families as
North Carolina jury added to the simmer,
Public Enemy No. 1, responsible for a gen-
ing debate by taking the side of an aban
OW QUICKLY IN A FREE SOCI-
eration of sad-and angry, underachieving
doned wife, ordering the "other woman.", to
youngsters. In a flash, Whitehead's point of
H
=
ety controversy becomes con-
pay her $1 million (see following story)
sensus only to become contro-
view won converts no less influential-and
Though the decision was based on an an
versy again when the new
liberal-than Donna Shalala and Hillary
tique "alienation of affection" law, it still
conventional wisdom jells.
Clinton, who in her book It Takes a Village
sent chills through the country's Second
Take the national debate
wrote of feeling "ambivalent about no-fault
Wives Club-and its associated husbands.
about divorce. In 1992 Vice
divorce when children are involved."
Nevertheless, the worm has already be
President Dan Quayle made
It seemed that 1990s America was
gun to turn again. Last winter, Whitehead
his infamous Murphy Brown speech railing
growing as disillusioned with divorce as
expanded her essay into a book, The Divorce
against single motherhood and was
1960s America had grown with marriage. As
Culture, and all hell broke loose. A New York
ridiculed by almost every social observer to
the backlash against divorce progressed,
Times reviewer dubbed Whitehead's trea-
the left of Pat Robertson. Less than a year
state legislatures across the country, in an as
tise a "self-blame book" and mocked its
later, social historian Barbara Dafoe
yet unsuccessful attempt to reduce what
scholarship. Esquire magazine ran the bold-
Whitehead published an essay in the At-
was still the world's highest divorce rate,
face cover line DIVORCE IS GOOD FOR YOU. In
lantic Monthly titled "Dan Quayle Was
called for a rollback of no-fault divorce laws
the New York Times, essayist Katha Pollitt
Right." Citing studies that tracked the de-
and even for premarital waiting periods.
took on the new Louisiana law that created
velopment of children raised by single par-
Last week, in a melodramatic flourish, a
"covenant marriage," a more binding vow
48
TIME, AUGUST 18, 1997
!CL
SOCIETY
tive of getting these issues on
and is skeptical of mandatory counseling.
the national-policy debate. I
Divorced and quick to admit it, Pollitt says,
N POLL: DIVORCE
can tell you, though, there is
"I had marital counseling. It is very expen-
no indication that public atti-
sive, and like all forms of therapy, it works
believe it should be harder than it is
tudes are swinging in a way
only if you want to be there."
married couples to get a divorce?
consistent with this move."
Pollitt sees an ulterior motive behind the
Other academics agree with
assault on no-fault divorce: a backlash
50%
No
46%
Bumpass. Stephanie Coontz,
against feminism. While husbands once ini-
who teaches family studies at
tiated most divorces, the situation has re-
it be harder than it is now for married
Evergreen State College in
versed itself: more wives now seek divorces.
with young children to get a divorce?
Olympia, Washington, de-
And if you believe Ashton Applewhite, au-
61%
No
35%
rides the think-tank activists
thor of Cutting Loose: Why Women Who End
as old-fashioned social reac-
Their Marriages Do So Well, divorce, though
tionaries in disguise. "Divorce
usually painful at first, is a true liberation for
people be required to take a marriage-
is the entering wedge for
many wives. In her book, she profiles 50
course before they can get a
these people. They found an
women, including "Dina," an immigration
lice
?
issue that looked less mean
attorney. The mother of two sons, Dina re-
64%
No
34%
than attacking unwed moms.
grets agreeing to share custody with the chil-
Everyone is against divorce in
dren's father. Ultimately, though, she works
the
reason for the increase in
the abstract, but in the con-
things out, illustrating Applewhite's point
of
divorces?
crete, they understand why
that the key to successful postmarital par-
particular people they know
enting is flexibility. In Applewhite's view, di-
seriously by couples
45%
had to have a divorce." "These
vorce can bring opportunities for personal
more accepting of divorced people
15%
think tanks know how to tap
growth, particularly when that growth has
into people's anxieties," says
been thwarted by a suffocating union.
to get divorced today
10%
Arlene Skolnick, a research
Whitehead, however, regards this
are
selfish
9%
psychologist at the University
promise of self-renewal through divorce as
of California, Berkeley. "The
the original sin of recent decades. She calls
in women's and men's earning power
7%
gap between the way we'd like
the phenomenon "expressive divorce" and
9%
families to be and the way
locates its origins in postwar prosperity.
they are creates a constant
For Whitehead there's a close connection
toothache that can be poked."
between soaring divorce rates and middle-
rease in the number is due more to:
But Maggie Gallagher,
class narcissism, and though divorce rates
in women's attitudes toward marriage 38%
who is affiliated with the Insti-
have actually plateaued, the siren song of
tute for American Values and is
personal liberation sounds as sweet as
in
S attitudes toward marriage
18%
the author of The Abolition of
ever. Pollitt is contemptuous of the notion.
32%
Marriage: How We Destroy
She says, "The picture is that people are go-
Lasting Love, rejects the
ing along married and in a state of, if not ec-
the government make it harder for
charge that reforming divorce
stasy, then reasonable content. And then
to get a divorce?
laws is a hothouse, right-wing
somèbody decides to be selfish, frivolous
issue. "The real reason that
and pleasure seeking."
37%
No
59%
public opinion has changed is
not because a small group of
HIS IS THE DEBATE'S GREAT
poll of 1,017 adult Americans taken for TIME/CNN on May by
very clever people have been
QUESTION, the one that keeps the
Partners Inc. Sampling error is 3.1%. Not sures omitted.
manipulating it but because as
divorce ball bouncing: Does the
more and more social-science
high divorce rate reflect a mas-
be ended only because of extreme
data accumulated, a number of prominent
sive cop-out by increasingly
tances. "You don't have to be abused
family scholars changed their minds. As
self-indulgent individuals, or is
yed," Pollitt declared, "to have a bad
more ordinary Americans had actual expe-
it based in vast social forces
Earlier Pollitt had baldly asserted,
rience of what happens with a 50% divorce
such as the economic indepen-
is an American value." Thus, in a
rate, they too became concerned."
dence of women? It's a question that can't
backflip, the backlash against the
Like adversaries in a divorce court, each
be answered with statistics, though cer-
against divorce is under way.
side in the public-policy debate has its own
tain experts try. According to sociologist
I prefer a world in which there
roster of expert witnesses and armory of ex-
Bumpass, "There have been fluctuations
divorce?" asks Larry Bumpass, a
hibits. Divorce opponents including Gal-
around the trend line, but the overall dy-
at the University of Wisconsin.
lagher and Whitehead point to the mountain
namic that has given rise to increased di-
iswer is an obvious yes. Do I think
of evidence about the corrosive effects on
vorce has deep historical roots." He takes a
a. realistic policy objective? The
children. But that research, say their critics,
lofty, long view and tends to speak in ivory-
is no." He contends that the antidi-
is garbage. "You cannot compare the chil-
tower mouthfuls, such as "the underlying
ovement isn't a genuine movement
dren of two-parent homes with children of
individualism of modern industrial-market
a think tank-inspired pseudois-
divorce," argues Pollitt. "You have to com-
society." Which isn't to say he doesn't have
points to the role being played by
pare the children of divorce with the chil-
common sense. Almost alone among the
like the Institute for Ameri-
dren of people in marriages that are dread-
debaters, Bumpass detects a self-regulat-
and its offshoot, the Council on
ful but continuing." She dismisses the list of
ing mechanism in the nation's experience
"They have a very explicit objec-
remedies offered by the antidivorce crowd
with divorce. "It's quite possible that co-
TIME, AUGUST 18, 1997
49
NATION
VIEWPOINT
George J. Church
CHUCK KENNEDY FOR TIME
Robin Hood in Reverse
The poor shouldn't pay my pension-but they will
VERY TIME I SEE A COOK FLIPPING BURGERS OR A CLEANING WOMAN EMP
E
tying the trash baskets, I wonder if I can resist the temptation to rob them
Nobody would stop me. In fact, the government wants me to do it.
How? Just quit working. I'm nearly 66 and retired, but I earn too much
now as a writer to qualify for a Social Security pension. If I were to loaf full time,
however, I could collect about $15,000 a year.
I don't need or even want it. A company pension, plus income from savings
and investments, should keep me and my wife in comfort for however long we
live. But even if I resist the temptation until 2001, I can then expect a letter
urging me to apply for a Social Security pension. After age 70, there are no more
Edward Rendell
restrictions: I'll be entitled to Social Security checks even if I'm still working.
Officially, I've earned them by paying Social Security taxes for 44-plus years.
A former prosecutor, he took a tough
Balderdash. Those taxes wouldn't defray my pension for more than a few years-
line with municipal unions and endured
and they've already been used to pay the pensions of those who retired years
a strike. His formerly distressed city
now boasts a budget surplus
and years ago. My pension, in fact, will be paid by people still on the job.
That points up one of the great inequities purposely ignored in the recent
budget agreement. The working poor continue to pay far more than their fair
poor and racial minorities. In Cleveland,
share of the Social Security tax. That tax is levied-at a current rate of 6.2%-on
White's housing program has drawn criti-
only the first $65,400 of income, so those
cism for its focus on building $100,000-to-
who earn more pay much less than 6.2%
$200,000 homes in neighborhoods where
of their total earnings. The working
the median cost of a house is $35,000 and the
poor pay the full 6.2% on every cent of
poverty rate is 41%. Williams, who repre-
their meager wages. And this is a mer-
sents a poor Indianapolis district, says her
ciless tax-no exemptions, no deduc-
constituents are too often left out of Gold-
tions, no credits. (One excep-
smith's market analyses. "An inner-city
tion in the new tax bill: the
swimming pool shouldn't be a profit center,"
working poor will get the
she argues. City halls are lowering expecta-
$500-a-child credit. Big deal.)
tions, says Barnard's Fuchs, because the
Taxing the poor to give to the
money and political will for antipoverty pro-
rich throws Robin Hood
grams are just no longer there. "It's not
into reverse.
about doing more with less," she says. "It's
That should be a prob-
about doing less with less."
lem for the nation's con-
Indeed, there are limits to what even
science as well as mine.
the most pragmatic mayors can do for cities
Government programs are
today, despite the most robust national
shot through with benefits for
economy in decades. The harsh truth is that
those who don't need them. Yet any pro-
even the best-managed big cities have prob-
posal to institute a means test is either ignored or
lems too large to solve on their own. Just as
howled down. Example: Medicare premiums are the same for me as for some-
Philadelphia has emerged from its gloom, it
one with a fraction of my income. But the Senate's proposal to make affluent se-
is facing the loss of $2.3 billion in welfare,
niors pay more was dropped from the tax bill, largely because House Republi-
Medicaid and other social programs over
cans feared a savage attack from Democrats.
the next five years. As many as 40,000 wel-
Why is this? One excuse is that the well off and the middle class must be
fare recipients could lose their benefits by
bribed to allow the government to do anything for the poor. For instance, they
the year 2000, and Rendell estimates that
will not support subsidized school lunches for poor kids unless their own chil-
incentives to private industry will produce
dren also get cheap food. But the real reason is that everyone who gets a gov-
jobs for only 4,000 of them. Claiming that
ernment benefit comes to regard it as a sacred right that must never be tak-
the federal cutbacks are "a runaway freight
en away. Or reduced. Or even increased less rapidly. Witness the screaming
train headed our way," Rendell traveled to
after a panel of economists suggested the consumer price index overstates in-2
Washington this spring to urge the White
flation. Why? Adjusting the index would lead to smaller future increases in ben-
House and Congress to help out by enacting
efits (including Social Security) tied to the CPI. Monstrous! To the barricades!
a jobs bill. It is unlikely that federal relief
Benefits thus must go on increasing, needed or not, even if they drive the
will come anytime soon. Still, articulating
the limits of what city government can ac-
programs paying the benefits (Social Security, Medicare) toward bnkruptcy.
Moreover, there is not the slightest sign this mind-set will change. So maybe I
complish is sometimes the most pragmatic
step of all.
should collect that pension after all. It's robbery, and I know it. But why should
-With reporting by Erik Gunn/
I be the only sap who spurns a share of the loot?
Milwaukee and Kevin Fedarko/Cleveland
24
TIME, AUGUST 18, 1997
SOCIETY
habitation is, in a sense, pruning off di-
vention in Washington, "Smart Marriages,
an earlier time, the current soul search
vorces that would otherwise have OC-
Happy Families," therapists from around
about divorce owes its existence to
curred. You have what a colleague of mine
the world gathered to share findings and
hang-loose 70s. If mistakes have
calls premarital divorces."
techniques. Some events, like the lecture
made, who's to say that we can't learn
By encouraging. couples to marry less
on "Hot Monogamy," were reminiscent of
them without resorting to blunt reversals
hastily and keeping them frightened and
a Reader's Digest article. Other ideas, such
policy and nasty ideological pur
honest when they do wed, the high divorce
as church-based programs that ask engaged
Looked at from ground level, away from
rate may be, paradoxically, its own anti-
couples to fill out marital "inventories,"
clamor of dueling research studies
dote. Revising no-fault divorce laws could
seemed promisingly pragmatic. The pre-
butting talking heads, the idea that divores
be irrelevant and mandatory counseling re-
sent is always struggling against the past.
could prove a friend to marriage has the
dundant, especially when one considers
Much as the laid-back breakups of 20 years
likely ring of truth.
-Reported by
the boom in voluntary counseling. At a con-
ago arose from the hard-bitten marriages of
King/Washington and Andrea Sachs/New York
An Antique Law Sends Tremors Through Many a Heart
AST WEEK, WHEN A NORTH CAROLINA WOMAN, SUCCESS
South Carolina-have there been successful suits in recent
fully sued her husband's lover for wrecking their mar-
years, and no verdict within memory anywhere close to last
riage, it gave the current national recalculation of the
week's million award After a seven-day trial, the jury de-
costs of divorce a new bottom line. Lawyers have a word
liberated for just three hours before making its ruling. To
for it. They call these "heart-balm" cases, the heart being the
Dorothy; who receives child support and is seeking alimony,
injured party, the balm in this case a cool, soothing $1 million.
the verdict is assurance that people around this county are
The melodrama was set in Burlington, N.C., a small town
saying to me, You were right to stand up for yourself, and say
about 20 miles from Greensboro, where Dorothy Hutelmyer
ing to the other person, You were wrong in what you did
was twice president of the PTA, her husband Joseph coached
breaking up my family
baseball and ran Seaboard Underwriters, and Lynne Cox
Cox who is now Mrs. Hutelmyer herself-she married
worked as his secretary. The Hutelmyers was a storybook mar
Joseph this year the jury merely chose to ignore her side
riage says Dorothy's lawyer
of the story She has never
Jim Walker. "He wrote poet-
denied that she and Joseph
ry to her love songs
had an affair; but the idea
But then, as a parade of
that he had been happily
witnesses testified, along
married before she came
came Lynne Cox, freshly di-
along is "ludicrous and ab-
vorced and newly reborn in
surd The two of them had
makeup and contacts and
not had any physical rela-
short skirts. She was soon
tionship in over seven years
spending more time alone
If my husband had not
and on the road with her
made love to me in seven
boss, and admits to having
years, I would think there
an affair with him Thus
was a problem.
were laid out the precondi
Will Dorothy ever collect
tions for an alienation of af-
$1 million from her? Are your
fection suit, a rare legal re
kidding?" says Lynne. 8
course for spurned spouses
make $425 a month. I'm a
that only a handful of states
ALIENATION: Dorothy, with Joseph in happler times, left, and smiling
full time student I clean an
still recognizes:
last week after the $1 million verdict against the other woman
office building part time to
In order to prevail in court, a plaintiff needs to show that have some pin'money. Do you think she going to get $1 mil-
the marriage was perking along.quite contentedly until a
lion? Lown no property. I have no savings Nor does she have
wanton intruder came along to wreck it. The complaint
money to fight the ruling. My attorney's fees are in excess of
charges that Dorothy enjoyed the "love, society, companion
$14,000. I'd love to appeal, but there's nothing I can do.
ship, support, affection, right of consortium and kindly of
While the verdict may have come as balm to the hearts
fices' of Joseph until Cox intentionally, wrongfully and un
of desperate summer talk-show hosts, spurned spouses and
justifiably and with malice alienated and destroyed a love and
anti-divorce activists, it's unlikely to start a trend. The vast
affection that previously existed
majority of states that have rejected such suits aren't likely to 300
If the language sounds archaic, it matches the spirit of the
start allowing them again, says Professor Dan Subotnik of
law; such suits date back at least to 18th century common law,
Touro Law Center in New York. As for Dorothy's sweet re:
when wives were viewed as property, and stealing a wife was
venge, the new Mrs. Hutelmyer claims to feel no rancor.
akin to cattle. rustling. In this century, as women gained
feel sorry for her. she says Until she can acknowledge that
greater legal and financial independence, most states threw
she shares in the responsibility of the breakdown of that mar
out their alienation of affection statutes; in only a few conser
riage she can never get on with her life
By Nancy Glbbs.
vative states-including Missouri, Mississippi, North and
Reported by Andrea Sachs/New York
50
TIME, AUGUST 18, 1997
ON POLITICS
BY MATTHEW MILLER
Little baby steps
hen President Clinton recently toasted the bipartisan
private coverage. Some bosses promptly. stopped providing
W
budget deal, its expanded health coverage was
coverage; some employees switched to Medicaid because its
among his proudest boasts. "It's a victory," he said of
benefits were more generous.
the agreement, "for every child in a poor household
State governments compound this problem. Many observers
who needs health care."
expect governors to use fresh federal dollars in lieu of state
Actually, it's more like every fifth child. The budget deal's
money they now spend themselves covering needy kids. By sav-
provision of $24 billion over five years to cover uninsured kids
ing the states health care money, the health initiative would
is the biggest such effort since Medicaid was created in 1965-
end up, for all practical purposes, being a federal supplement
yet for all the celebration, experts say
for general state expenses like road
the package will probably end up in-
repair and prison building.
suring fewer than 20 percent of the
The problem is it's hard to reach
nation's 10 million uncovered chil-
those who need public help without
dren. Dissecting this disappointment
attracting those already covered. The
helps explain why "incremental"
Clinton administration did the best it
health reform-the only kind politi-
could. But the strange solution it had
cians dare endorse after Clinton's
to devise was to offer lousy benefits.
grand fiasco of 1993-94-is even
The Clinton kiddie-care package is
more incremental than it sounds,
thus intentionally less generous than
thanks to the peculiar economics of
Medicaid and many private plans.
American health care.
Under Medicaid, for example, most
In theory, insuring kids should be
states include extra screening, test-
both politically popular and cheap. A
ing, and vision and dental benefits.
decent benefit package runs just
The administration plan doesn't. And
$1,200 a year, versus $6,500 for sen-
unlike Medicaid, the new plan will re-
iors, who tend to get sick more often
quire copayments and deductibles
and more seriously. The new budget's
that could reach 5 percent of income.
$5 billion yearly for children's health
The theory is that only those who
should therefore insure about 4.2
really need coverage will sign up.
million new kids. (Clinton claims
There's evidence this "cruel to be
cover "up to 5 million," harmless
kind" approach works: Experts say it
rounding up, it would seem.)
helped Florida and Minnesota be
In reality, it will probably cover
more cost effective when expanding
only 2 million, according to the Con-
kids' coverage in recent years.
gressional Budget Office. That's be-
Children's health care is politically popular.
Having to worry that good benefits
cause of our byzantine system of
can backfire and leave fewer Ameri-
health finance. Unlike nations such
cans insured is just part of the fun of
as Canada, which basically has one
Why the biggest health care
incremental health reform. Mean-
public source of health funding, the
while, the trends that plagued health
United States has both private and
initiative in decades won't
care back when Clinton sought more-
public insurers, and both state and
ambitious fixes are getting worse.
federal governments sharing the bills.
end up covering most kids
There are 40 million uninsured
This means that when the federal gov-
Americans, more than when Clinton
ernment moves to subsidize health
called for universal coverage in 1993;
care, that new money, instead of being added to other health
their ranks are growing by a million a year, as companies out-
spending, typically displaces some of it. The reasons are sim-
source or turn to temps to avoid paying for benefits. Though
ple. If you're a business owner, it's only common sense to drop
cost growth has abated recently, thanks to managed care,
insurance for employees newly eligible to get it from the gov-
most experts expect costs to take off again soon, driven by new
ernment. If you're an individual who buys your own insurance,
health technologies and the aging population. And managed
you also would be wise to let the government pay instead.
care is squeezing hospitals in ways that make it harder for
Repercussions. These kinds of individual decisions have
them to treat uncovered folks free as a last resort.
enormous cumulative impact. When Medicaid, the health pro-
Liberals comfort themselves by viewing Clinton's latest win
gram once offered only to welfare recipients, started covering
on children's coverage as a step in the right direction. Still,
pregnant women and children in low-income, working fam-
some fret, only in America would an activist president aim to
ilies in the late 1980s and early 1990s, economists found be-
cover just half of uninsured kids-and then celebrate a "vic-
tween 30 and 50 percent of the "newly" insured already held
tory" likely to reach fewer than half that many.
22
U.S.NEWS & WORLD REPORT. AUGUST 18 / AUGUST 25, 1997
ON CULTURE
BY ARIANNA HUFFINGTON
Peppermint Prozac
S your daughter depressed about acne? Soon, you may be
abuse. It is our job as parents to help our kids navigate life's
able to take her to a dermatologist for peppermint-flavored
emotional roller coaster. Their mental health depends not
Prozac. Is your son blue over an ingrown toenail? Take
only on their life experiences-good and bad-but on how they
him to a podiatrist for some antidepressants. Is he angry
learn to cope with them.
about having to wear braces? His orthodontist may soon be
Children behave notoriously in line with the expectations of
handing out pills along with a dinosaur toothbrush.
the adults around them. If we think they can't cope without a
Already, at least 580,000 children are being prescribed anti-
pill, they will grow up believing that. If we teach our children
depressants-and those numbers are likely to increase dramat-
that pills will make them feel better, how can we then tell them
ically. For now, doctors can prescribe
not to try a joint or a few drinks to lift
CHIP
STONE
IMAGES
Prozac to kids but Eli Lilly, which manu-
their spirits?
factures the drug, can't market it as a
It may not be long before stressed
children's remedy. According to the
parents and teachers, bombarded with
Medical Sciences Bulletin, however, "the
ads promising immediate relief for
FDA is currently evaluating Prozac for
their-kids-and themselves-will turn
use as an antidepressant in children." If
to Prozac with alarming frequency. For-
the FDA gives its blessing, Eli Lilly will
ty percent of American children live
be free to peddle "children's" Prozac-
without a father in the house. How
especially now that the FDA is about to
tempting antidepressants will seem to
clear the way for TV advertising of pre-
those overwhelmed mothers.
scription drugs. The company already
One psychologist, Barbara Ingersoll,
has on the market a peppermint-fla-
recently proclaimed that before long
vored version of Prozac. And where Pro-
"mood disorders will be treated not as
zac leads, other antidepressants, such as
exotic, uncommon conditions in chil-
Zoloft and Paxil, are sure to follow.
dren but more like [cavities] or poor vi-
Doctors may prescribe antidepres-
sion
There won't be a stigma for kids
sants to children without any psychiat-
on Prozac-the stigma will be on not
ric evaluation. Yet the symptoms used
taking Prozac." In the past, the upper
to identify depression in a recent Prozac
classes typically dealt with the stresses
ad range from feeling "unusually sad or
of childhood by sending their kids to
irritable" to finding it "hard to concen-
boarding school. Now, instead of being
trate." I have two healthy little girls,
sent to Hotchkiss, children can be
ages 6 and 8, both of whom have experi-
transported to Camp Prozac.
enced these symptoms. Indeed, I don't
There are so many forces pushing us
know any normal children who haven't.
to accelerate the use of antidepressants
No doubt there are children and teen-
Will Prozac be used for childhood blues?
for children. But we need to slow down.
agers who could genuinely benefit from
"Children are so vulnerable," says Mi-
antidepressants. But it's easy to see how
chael Faenza, president and CEO of the
millions might wind up taking antide-
Overprescribing anti-
National Mental Health Association.
pressants as a false cure for childhood
"We don't have a good body of research
and adolescence. One father in South-
depressants to kids is a
yet about how antidepressants will af-
ern California wrote to me recently to
fect them long term." Even in Aldous
say that one of his son's friends is on
form of child abuse.
Huxley's Brave New World, Soma-the
antidepressants "because her parents
drug that kept everyone manageably
are 'too strict' and she is depressed at not
numb-wasn't put in the kids' bottles.
being able to do what other kids do."
Here is a modest solution. Until much more is known about
A passing cloud. Signs of depression may be nothing more
the effects of antidepressants on children's brains, why can't
than a passing cloud-or an indication of unresolved grief and
doctors simply refuse to prescribe the drugs without a full psy-
loss. A doctor spending a few minutes with a child cannot pos-
chiatric evaluation? Since Eli Lilly claims to be concerned pri-
sibly know the difference. "It's part of the human condition to
marily with the mental health of its customers-as opposed to
feel crummy if something bad is happening in one's life," says
opening an enormous new market for Prozac-company exec-
Harold Koplewicz, vice chairman of psychiatry at the New
utives would no doubt agree to such a restriction. And if they
York University Medical Center. "But that is very different
find that pill too hard to swallow, maybe the FDA could give it
from having a clinical disorder."
to them in a nice peppermint-flavored version.
Indeed, substituting the quick fix of a drug for the often
frustrating reality of parenting can be a subtle form of child
Arianna Huffington is a nationally syndicated columnist.
28
U.S.NEWS & WORLD REPORT, AUGUST 18 / AUGUST 25, 1997
EDITORIAL
BY MORTIMER B. ZUCKERMAN / EDITOR-IN-CHIEF
Attention must be paid
New evidence for an old truth: Babies need love that money can't buy
ater than I might have expected, I have begun
later intelligence and economic and social success.
L
learning about parenthood firsthand. On July 7,
This should be hopeful news, for it suggests that rich
Abigail Jane Zuckerman was born. Now I under-
possibilities are open to every child. But the same research
stand what all the excitement has been about.
shows that verbal stimulation differs by income and edu-
Looking at a newborn in her crib, anyone must have a
cation. On average, the child of professional parents hears
sense of the many things that have been determined
about 2,100 words an hour; of working-class parents,
about her life, by genes and circumstance, but also of the
1,200 words. Parents on welfare speak only about 600
countless decisions and shaping experiences that lie
words an hour. Professional parents give their children
ahead. Parents of every era have worried about making
emotional encouragement 30 times an hour-twice as
these choices in the right way. Recent scientific findings
often as the working-class baby and five times as often as
give new reason for concern-in
the welfare baby. This word play is
particular, about whether children
so important that those left behind
can thrive under the modern belief
When babies
at age 2 may never catch up.
that parents can contract out their
These findings come when many
basic responsibilities for care.
are cared for by
subscribe to the notion that there is
Every day a newborn baby's brain
no harm in a mother's leaving her
is developing with phenomenal
caring adults,
baby in someone else's care and re-
speed. Billions of nerve cells-neu-
turning to work. More than half of
rons-are growing and specializing.
they become much
all mothers are back at work before
By age 2, the number of synapses, or
their baby is 1. The working mother
connections among the neurons,
better learners
is a fundamental feature of this era.
approaches adult levels, and by age
But what will parents do when they
3 a child's brain has 1 quadrillion
learn that absence in the first three
such connections. The synapses are
years may have a significant effect
the basic tools of processing within the brain. After this
on their baby's future? Most working parents know in
early spurt of rapid growth, they are then selectively
their hearts that "quality time" is no substitute for quanti-
pruned, enabling the brain to form physical "maps" that
ty time-the time that a child requires for emotional and,
allow communication and learning to take place. Accord-
it now seems, intellectual development.
ing to recent findings, the neuron links that are the keys
What children need is the touching, holding, cooing,
to creativity and intelligence in later life are mainly laid
rocking, and stimulation that come traditionally from a
down by the age of 3.
mother. In some households a stay-at-home father will
Is inherited ability the main factor in establishing
fill the role of the absentee mother, but that is rare. In
these connections? Apparently,not. Interactions with an
most families, if it is not the mother spending those three
attentive adult-in most cases, a mother-matter most.
years with an infant, it will be a baby sitter or day-care
The sight, sound, touch, smell, and, especially, the in-
worker. Often there are class, educational, and-increas-
tense involvement, through language and eye contact, of
ingly-language differences between the parents and the
parent and child affect the number and sophistication of
hired caretaker. Parents are therefore going to be chal-
links within the brain. These neural patterns-again, set
lenged to find a better balance between raising. their
by age 3-seem to be more important than factors we
children and working, especially parents who are too
usually emphasize, such as gender and race. In their
tired and emotionally drained to give children the stimu-
book Meaningful Differences in the Everyday Experience
lus and engagement they need. When babies are cared
of Young American Children, professors Todd Risley and
for by caring adults, they become much better learners
Betty Hart say that the number of words an infant hears
and are much more confident to take over the world.
each day may be the single most important predictor of
Attention is the greatest gift that parents can bestow.
I
92
U.S.NEWS & WORLD REPORT, AUGUST 18 / AUGUST 25, 1997