Republicans Pant for Welfare Massacre

Hot Dreams

While the hearings were going on, Chung says, he felt that the Democrats backslapped him in public and made fun of him behind his back. He feels the president and First Lady used him.

Killers on the Margins
1929 Redux

What sent Mark O. Barton off the deep end in Atlanta last week were reported losses in day-trading stocks. Day traders—people who trade stocks, often on-line, in hectic dealings—have been under scrutiny be cause of loose margin requirements, which allow them to play the market with relatively small amounts of cash.

Indeed, as former congressman and House Banking Committee chair Henry Reuss points out, the secret engine driving the spiraling market is not the cost of labor, consumer spend ing, or costs of production but a Federal Reserve requirement that traders need put up only 50 percent of the price of securities. Similar margin requirements played a central role in the 1929 crash. Because that was all the money some investors had, when the tide turned, they were washed away.

"Recently, brokers' loans have exploded, in large part due to the increase in day trading and hedge-fund borrowing," Reuss argues in an article published by the Virginia-based Financial Markets Center. "Specifically, margin debt has risen from $97.4 billion in December 1996, when Chair man Greenspan detected 'irrational exuberance,' to $177 billion in June 1999. The boom in stocks and the boom in margin lending have gone hand in hand." Reuss notes that, ac cording to the Center, "margin debt has risen more than three times faster than household borrowing and overall credit market debt since 1993."

Tales From the Trans Crypt
Courting Disaster

Accident victims and others who seek damages in court occasionally doubt the independence of the judge, but who would have thought that they need to be wary of the most innocent-seeming of courtroom workers: the court reporter bent over the little ma chine taking down what's been said?

According to the code of professional ethics of the National Court Reporter's Association, a court reporter must be "fair and impartial toward each participant in all aspects of re ported proceedings" and "guard against not only the fact but the appearance of impropriety." Some states have incorporated these rules into civil codes.

But, according to the Foundation for Taxpayer and Consumer Rights, some court reporting companies have made deals with insurance companies and other corporate litigants in which, in return for their vast legal business, they provide them with transcripts sometimes at almost 40 percent below market rates. In return, unbeknownst to plaintiffs, certain insurance companies get special services. Among them: companies are provided with the names and vital statistics of all parties to a deposition—even when the deposition is not made public. This information goes into a database, which is then used to track witnesses and plaintiffs in future cases.

"Citizens who seek justice in our courts should not have to wonder whether the court reporter taking their deposition is working for the defense," says Massachusetts state representative Harold P. Naughton Jr. Fourteen states—Hawaii, Texas, Minnesota, Utah, West Virginia, New Mexico, Georgia, Louisiana, Nevada, Kentucky, Michigan, Arkansas, Indiana, and North Carolina—have adopted rules to ensure that contracting with court reporters doesn't occur.

Research: Ioana Veleanu

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