Amid the second worst drought in this century and nostalgic reminiscences of Joe Alsop’s dinner parties, Washing ton bakes as the government grinds to a halt in gridlock—a libertarian dream scenario, which threatens to leave the country in the hands of Alan Green span and Wall Street.
Except that Greenspan last week cautioned against the Republicans’ obscene $700 billion-plus tax-cut proposal, which sparked a snarling fight between the Fed chairman and Jack Kemp, ever the supply sider. Kemp accused Greenspan of doing “immeasurable damage” to the Republican cause.
In a private letter obtained by The Washington Times, Kemp ranted: “You really sent me over the edge when you went on record urging Congress to retire the national debt in stead of cutting tax rates….Why, I simply couldn’t believe my ears, Mr. Chairman. If I may say so, you are starting to sound like MIT economist Lester Thurow and Treasury Secretary Larry Summers” (two of Clinton’s advisers).
With both houses having passed the gargantuan tax cut, it goes to Clinton, who has promised (one can only hope) to veto it. The Republicans’ wet dream will supposedly be converted into quivering reality by infusions of projected $1 trillion surpluses over the next decade. However, the surpluses will exist only if ever-deeper cuts are made in social programs.
On another summery front, just as the Mark O. Barton massacre projected gun control into screaming headlines again, both Congress and the administration have come to grief on the issue, with virtually meaning less legislation heading for a House-Senate conference this week. About the best one can expect out of the final measure is restriction of machine guns to those under eight, although, as this column reported last week, kids as young as nine are using assault weapons in combat-shooting competition.
Until last week, Clinton was at least able to count the Kosovo conflict as a major victory, but now reports of sharp differences over the conduct of the war are emerging. On Monday, it was revealed that NATO commanders—most notably British general Michael Jackson, who led the ground operation in Kosovo—had ignored or countermanded orders from Supreme Commander Wesley Clark, including a last-minute directive to block the Russian takeover of the Pristina airport by setting helicopters on the runways to prevent the Russians from landing. Last month, the Pentagon cut short Clark’s tour as NATO commander four months early.
Indicted in Maryland for illegally tap ing Monica Lewinsky, Linda Tripp laid the blame for the prosecution on a cabal involving Hillary Clinton and Maryland lieutenant governor Kathleen Kennedy Townsend.
Right wingers note that the Clintons recently took Townsend to the memorial service in Manhattan for her cousin JFK Jr. aboard Air Force One, and Hillary sat next to Townsend during the service. Over the weekend, Matt Drudge, the parrot for the Tripp camp’s line, asked: “Is this just some twisted revenge on Linda by a spouse with high political connections in the state?”
The story, according to Tripp “press sources,” goes like this: Hillary set up Tripp through Townsend, aided and abetted by Maryland congress man Steny Hoyer, who gave the White House a heads-up when the deal was consummated.
Johnny Chung Lately
While Hillary listened her way across upstate New York (where she is down 39 to 49 percent against Rudy in re cent polls) and downstate Tina Brown flakked the line that Bill’s sexual hi jinks could be explained because he was psychologically abused as a kid, perhaps the most informative, if little reported, political gossip of last week came with the posting of a new Web site by Johnny Chung (www.JohnnyChung.com).
Chung is, of course, the Taiwanese immigrant who testified to the House Government Reform Commit tee that he gave $400,000 to Democrats from 1994 to 1996, including $100,000 from a Chinese military officer, and visited the White House nearly 50 times, sometimes accompanied by Chinese business clients.
The site contains Chung’s testimony, along with photos of him with Hillary, the president, and Al Gore. One pic of an animated Chung shaking the First Lady’s hand bears the notation: “To Johnny Chung With best wishes, and appreciation for your sup port and friendship—Hillary Rodham Clinton”
After cooperating with prosecutors, Chung got five years’ probation last December and is working off 3000 hours of community service at an undisclosed site.
Chung feels he was double-dealt by the Democrats. On the Web site, he relates testimony about an incident in which he claims he got screwed trying to curry favor with Chinese intelligence operatives who wanted an “in” at the White House. When Chung sought to introduce General Ji Sheng De’s wife to the president at a “Back to the Future” fundraiser at a Holly wood studio after she came to the U.S. in 1996, plans went awry:
“There was a mix-up with the DNC, and my driver and secretary were given a private audience with the President…me and the general’s wife and son were not included. While my driver and secretary were very appreciative, I was very upset.”
Chung had counted on getting a photo of Ji’s wife and Clinton together, which, back in China, would have demonstrated his ability to get things done. When that didn’t happen, he says, he refused to contribute money. According to Chung, when he balked, a DNC staffer approached him and complained.
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
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
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