The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, Margaret Warner and two law professors discuss a major ruling in the Microsoft antitrust case; Ray Suarez looks at today's unemployment rate news and its effect on the stock market. Four ITN correspondents report on the huge cyclone disaster in India. Mark Shields and Paul Gigot assess the week in politics; and Terence Smith reviews the success of an unusual movie, "The Best Man." It all follows our summary of the news this Friday.

NEWS SUMMARY

JIM LEHRER: Microsoft is a monopoly. That was the ruling late today by Federal judge Thomas Penfield Jackson in Washington. He's presiding over the Justice Department's antitrust lawsuit against the computer software giant. He said the company demonstrated it will use its market power and profits to stamp out potential competitors. The decision may lead to sanctions against the company. We'll have more on the story right after this News Summary. The U.S. unemployment rate was a 29-year low last month. The Labor Department said today it was 4.1 percent in October. At the Labor Department today, Katharine Abraham said small, incremental changes in unemployment figures should not be given too much weight.

KATHARINE ABRAHAM: I wouldn't characterize what happened to the unemployment rate over the month as a decline. It was 4.2 percent last month and 4.1 percent this month, but there was a range of statistical error. Unless the change in the unemployment rate is at least 0.2 of a percentage point, you can't really say from one month to the next, you can't really say that there is a statistically meaningful difference between them.

JIM LEHRER: On Wall Street today, the NASDAQ had its sixth record session in a row. It closed up 46 points at 3102. The Dow Jones Industrial Average opened strong and held on to finish the day up 64 points at 10,704. We'll have more on jobs and stocks later in the program tonight. Warner-Lambert and American Home Products appeared ready to merge today, despite a higher offer from another company. Late last night, Warner- Lambert's board said it was proceeding with a $71 billion merger with American Home. The result would be the world's largest manufacturer of prescription medications. Warner-Lambert all but turned away a higher offer by Pfizer, saying the lower bid would work out better for shareholders and employees. The House of Representatives today passed a $15 billion foreign aid bill. The Senate was to vote on it later. It was a compromise worked out last night between House Republicans and White House negotiators. It includes money for the Middle East peace process and debt relief for the world's poorest countries. President Clinton had vetoed a previous version in part because it left out those things. The President wrapped up his poverty tour today with stops in Arkansas and in Chicago. In Hermitage, Arkansas, he toured a tomato-growing cooperative. He said its partnership with Burger King was a model of how corporations can help poor communities. The trip was to highlight his new markets initiative, a plan for drawing investors to depressed areas. Mr. Clinton said this:

PRESIDENT CLINTON: How do we continue to find new jobs and new opportunities with no inflation? The answer is new markets. So the same people that we ought to be helping morally because they haven't anticipated in our recovery, we also ought to help because it's in the self-interest of everybody else in America, whether they're in the inner cities or the Mississippi Delta or South Arkansas or Appalachia on an Indian reservation.

JIM LEHRER: In Chicago, the President and House Speaker Hastert, who's from Illinois, were to announce a joint anti-poverty effort. It would include tax incentives and loan guarantees to attract investment in poor areas. The Navy today located both of the black boxes from EgyptAir Flight 990, but the devices have yet to be recovered. Rough seas eased enough to allow a giant robot drone to search the ocean floor, and to detect the boxes. Investigators said the voice and data recorders may help explain why the jet plunged into the Atlantic Ocean. Weather conditions were expected to worsen later this evening. In India today, relief teams reached of the some of the 7 million people isolated by floods caused by a powerful cyclone. They ferried aid to villagers stranded since the storm hit last week. Authorities said they have recovered more than 1,300 bodies, but the death toll was expected to reach at least 10,000. We'll have more on this story later in the program tonight. In Vietnam, more than 350 people have died in the worst flooding in 40 years. The government began airlifting food to more than a million people. Heavy rains continued to soak the region. And that's it for the News Summary tonight. Now it's on to Microsoft antitrust case; unemployment and the markets; the cyclone disaster in India; Shields and Gigot; and "The Best Man," the movie.

UPDATE - MICROSOFT - TRIAL

JIM LEHRER: Margaret Warner has the Microsoft story.

MARGARET WARNER: For more than a year, U.S. District Court Judge Thomas Penfield Jackson has presided over the Justice Department's antitrust case against Microsoft. This evening Judge Jackson declared Microsoft holds a monopoly over the operating systems that run personal computers. Assistant Attorney General Joel Klein, head of the Antitrust Division, said he was pleased with the court's ruling. At Microsoft headquarters in Washington, CEO Bill Gates expressed disappointment.

JOEL KLEIN: We're enormously pleased by the court's decision today. The judge found what the Department charged and what we introduced mountains of evidence to demonstrate at trial, which is that Microsoft is a monopolist and engaged in massive anti-competitive practices that harmed innovation and limited consumer choice. This is truly an important victory for America's consumers and for the American economy. It shows once again that in America, no person, and no company is above the law.

BILL GATES: At the heart of this case, though, there is a very key principle, and that is whether a company is allowed to innovate in its products on behalf of consumers. It's a principle that's not only important to us, but to all companies. And it's really at the center of why the America technology business is so strong in creating so many jobs.

MARGARET WARNER: Bill Kovacic, an antitrust professor at the George Washington University Law School, was among the first to get a copy of the findings, which just came out about thirty-five/forty minutes ago. He joins us from a Washington studio.

And with me here is Professor Jonathan Baker of the Washington College of Law at American University. Mr. Kovacic, first of all, explain briefly, what is a finding of fact?

BILL KOVACIC: A finding of fact provides the judge's synthesis of the competing narratives that the two parties have provided about the significance of developments in the market and the significance of Microsoft's behavior as well as a clear determination of exactly what acts Microsoft engaged in and what it did. It provides the foundation for the judge's later decision about whether or not Microsoft actually violated the law.

MARGARET WARNER: Okay. Is this, as Joel Klein of the Justice Department said, an important victory for the government's case?

BILL KOVACIC: This is an important step towards victory. In these findings are foreshadowed, I believe, a number of legal conclusions that will be quite favorable to the government. The judge did not go quite so far as to say I believe Microsoft violated the law. But he crept up on that point very closely. And I think it permits a confident judgment that the government is likely to win on most of its legal claims when the judge issues his conclusions of law sometime early in the year 2000.

MARGARET WARNER: And it's true, is it not, that simply a finding that Microsoft enjoys a monopoly doesn't necessarily mean it acted illegally. Is that correct, I mean just as a matter of law?

BILL KOVACIC: Antitrust law doesn't condemn the status of monopoly principally because it is conceivable that a firm could achieve greatness and retain it simply by virtue of superior performance. It's monopoly power plus conduct, some ingredient of improper exclusionary behavior that meets the offense and the violation that the government has alleged.

MARGARET WARNER: And I know you haven't had time to read 200 pages, but what do you see there, one on the monopoly point, but secondly on the conduct point, on how Microsoft behaved?

BILL KOVACIC: For the most part the judge embraced the government's narrative of events. It found on the monopoly power issue that Microsoft, in fact, has monopoly power in an area consisting of software operating systems for personal computers. The judge also suggested that that monopoly position perhaps would be durable; that is not easily eroded by new developments at the edge of the market. With respect to conduct, the government's view of events to a large extent, is reflected in these findings; that is, the judge is looking at discreet elements of conduct as well as Microsoft's overall strategy, in many respects, embrace the government's view of the world.

MARGARET WARNER: All right, John Baker, we're sitting here with just the early wire stories and first pages of the decision but what would you add to what Bill Kovacic said?

JONATHAN BAKER: Well, I would add a quote from the judge's opinion that really puts a very... shows a great deal of concern that the judge had with what Microsoft has done. "Microsoft has demonstrated that it will use its prodigious market power and immense profits to hurt any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products." That sounds like the preliminary to a conclusion that the judge has reached of a pattern of anti-competitive conduct and could set the stage for a very broad remedy in a later stage of the proceeding.

MARGARET WARNER: Just from reading that quote or from what we've seen, does this also seem to get to ... the issue that has captured a lot of the public attention had to do with what Microsoft did against Netscape, a rival company that owns -- that has an Internet browser that we all use to browse the world wide web and that Microsoft was using its operating system power to favor its own browser, Internet explorer -- from what you read there, does it go to that issue?

JONATHAN BAKER: It appears as though -- the quote that we just read appears to be supporting what eventually would be a conclusion that Microsoft acted anti-competitively to maintain its power in operating systems by excluding Netscape. The problem here is that the government argued that Microsoft tried to protect its Windows operating system monopoly which the judge seems to have found it has, by conduct that kept the development of an end run around it; that Netscape's browser combined with Sun's Java language could create a way for people to run their applications program, word processing and spread sheets and the like, on other operating systems where formerly they had to run it just on the Windows PC's and if Netscape could and Sun could develop and succeed with their products, that would make the Windows operating system unnecessary, Microsoft would lose its monopoly power in the operating system. What the judge seems to have concluded here is that Microsoft engaged in a pattern of conduct that kept Netscape from having access to customers and that the result of that was to protect the Windows operating system from new competition.

MARGARET WARNER: Okay. Now, did Microsoft, staying with you, Jon Baker for a minute, because I understand we're having some audio problems with Bill Kovacic -- can you hear me yet, Mr. Kovacic?

BILL KOVACIC: Quite well. Thanks.

MARGARET WARNER: Terrific. Then let me go back to you for a minute. Did Microsoft present an alternative version of facts or did they simply deny the government's case?

BILL KOVACIC: Microsoft did deny some key elements of the government's case, but its particular strategy was to emphasize pro-competitive justifications for its behavior. That is, in responding to Netscape, for example, Microsoft was saying, do you really want us to stand back and be a passive observer and allow a competitor to enter and compete with a free hand -- don't you expect us to strike back? What is impressive about the judge's findings of fact are a number of points that reinforces Jon's comment. In looking at Microsoft's asserted justifications for behavior - such as bundling the Internet Explorer browser into the Windows operating system -- the judge explicitly finds that there were no pro-competitive justifications for that conduct and there were detrimental effects. So, even though Microsoft offered justification evidence and justification arguments, it's striking to see the extent to which this document basically embraces the government's view that the sole decisive purpose of Microsoft's strategy was simply to deny access to the market to Netscape as a way of enhancing its own monopoly power.

MARGARET WARNER: All right. So, Jon Baker, what happens next?

JONATHAN BAKER: Shortly after, in the near future, the judge will ask for briefs on conclusions of law that might follow from these findings of fact. And the parties will have to submit the briefs to him. Along around the beginning of next we are, we ought to expect to see the judge reaching the conclusions of law. And it's abundantly clear that the conclusions will be adverse to Microsoft from what we know so far. Then the judge will probably hold a hearing on what he ought to do to remedy the problem. Should he try and break up Microsoft? Should he merely tell Microsoft not to do it again? And, after that, we might have an appeal.

MARGARET WARNER: Mr. Kovacic, very quickly, what do you think are the chances of an out-of-court settlement? Joel Klein mentioned that prospect tonight.

BILL KOVACIC: It wouldn't surprise me at all if the parties do talk. My impression is that because this document is so relatively one sided, that it is relatively likely that the government parties will feel emboldened by the document, that the document will likely lead them to ask for a broader array of concessions and more decisive forms of remedies, remedies that I suspect Microsoft will find unpalatable.

MARGARET WARNER: All right, Mr. Kovacic, I have to cut you off there. But thank you both very much.

FOCUS - UPS & DOWNS

JIM LEHRER: Jobs and the stock market, and to Ray Suarez.

RAY SUAREZ: To help us walk through the numbers, we are joined by Greg Jones, chief economist at Briefing.Com, an online market analysis firm; and Jared Bernstein, an economist at the Economic Policy Institute, a research and policy organization. Greg Jones, you'd have to go back to January 1970 to find a lower monthly figure, and yet hourly wages budged barely upa penny. What do you read into the numbers?

GREG JONES: That's the incredible story with these employment numbers and indeed with the employment numbers we've been seeing for the last several years now. We've seen very strong job growth. We've seen an unemployment rate, which has fallen well below levels that people in the past thought would prompt inflationary pressures, at least wage inflation. And we haven't seen it. As you noticed, the hourly earnings number only went up a penny and over the last year, earnings are up 3.6 percent, which is actually at the lower end of the recent rage. So, we're seeing strong job growth alongside very moderate earnings growth. And that's really the story here. And it's an excellent story on the economy and the markets.

RAY SUAREZ: Well, how do you explain that? We have not only a tight job market but if you look at it another way, could you say people are not benefiting from the fact that things are pretty good.

GREG JONES: Well, that's true to an extent. You have to keep in mind that the 3.6 percent increase that I just noted is a nominal number. It's not adjusted for inflation. And actually over the past several years we've seen inflation fall. So people's actual purchasing power has been rising, which is to say real wages have been on the rise. So workers are benefiting in that sense. There's also something else that is at play here. And that is, even while job growth has been strong, job losses have been very strong as well. There's been an incredible amount of churn in the job market. And what that is doing is creating insecurity on the part of workers in certain parts of the labor market. And I think some people are making the tradeoff of wages for job security. Certainly that's not the case in some of the hottest areas, say technology-oriented jobs. But I think there's a lot of, you know, older workers and management level jobs that are much less secure even though the unemployment rate is at 4.1 percent.

RAY SUAREZ: Jared Bernstein, what do you find hiding in those big national figures?

JARED BERNSTEIN: I agree with much of what Greg just said. The fact though that as he mentioned, the growth of wages has actually decelerated. Wages are growing more slowly this year than they were last year despite the fact that the labor market has tightened up. I think that's one of the big questions that economists are trying to answer right now. I think probably one of the best explanations has to do with, as Greg mentioned, a residual amount of employee insecurity. Remember in the early 90's we had large-scale layoffs that affected not only blue-collar workers, as is typically the case, but also white-collar workers as well. Middle management. Many of those workers lost jobs. Even though the labor market has tightened up considerably, residual insecurity is still playing a role. There is another factor. If we look at the quality of jobs that have been created recently in the recovery, we've seen a decline in manufacturing jobs. We've lost over half a million jobs from our manufacturing sector since that sector peaked in March of 1998. That's... those are good jobs for blue-collar workers that pay high wages, high fringes, typically unionized jobs. We've added many jobs in the service sector. That's where all the job growth has been. Now, service sector jobs cut a broad swath. We have very high quality service sector jobs in terms of pay, lawyers, physicians and so on. We also have a great deal of low-end service sector jobs. I think there are two myths out there. One is that America only creates hamburger flipper jobs. That's wrong. The other is that America only creates computer programmer jobs. That's wrong, too. In fact, most recent numbers have suggested we've been creating jobs a little bit more quickly at the bottom end of the service sector. In fact, just this last month we had a pretty big spike in the number of temporary workers. Those jobs tend to be more insecure, pay lower wages, are less likely to be covered by fringes. So there is a job quality, a composition of the new jobs effect that is helping to dampen wage pressure. Now, as Greg mentioned, wages have been rising in real terms but for many workers that's come pretty late in the recovery. Only since about 1996 or so did we actually see real wage gains for middle and lower-wage workers. That's been a drag on family incomes.

RAY SUAREZ: Well, Greg Jones, you mentioned earlier in your view, this is pretty good news. Earlier in this recovery when there were job numbers like this we could expect a 50 or 100 point plunge in the market. Markets responded robustly to this tight labor market. Why is that?

GREG JONES: Well, they're not responding positively to the tight labor market. They're responding positively to the fact that the tight labor market continues to not be...to not put outward pressure on inflation, on wage inflation. So that was the real key to the market response today is the fact that we're really seeing what, for the stock market is a best of all possible worlds. You see a strong economy alongside very tame inflation. So that was the key to the market response today.

RAY SUAREZ: But Jared Bernstein, along with the tame inflation, there are smaller or stable pay packets to pay for the things that these market leaders make and sell.

JARED BERNSTEIN: I think this is one of the interesting kinds of controversies that comes up every first Friday of the month when the unemployment rate is released and we look at the financial markets. If wages are flat, the markets love it - a very ebullient stock market today. However, those wages are - represent, as Greg mentioned, workers' purchasing power. Now in an economy growing as quickly as ours, we very much expect the buying power, the incomes and the wages of middle and low-wage workers to be increasing. Unfortunately, over the past two decades there has been a very pronounced gap in the earnings, the income, particularly the wealth of working families at the top of the wealth scale versus those at the bottom. What we need more out of our economy, I think, is growth that's broadly shared, not simply a low unemployment rate but a low unemployment rate that's accompanied by commensurate wage gains that are shared by families throughout the wage and income distribution. In that sense, we would like to see wages perhaps growing a little bit more quickly.

RAY SUAREZ: Greg Jones.

GREG JONES: I think that's absolutely true. You can't argue with that. You can't argue with the fact that that is happening. We are moving to a more, as Jared mentioned, a service-based economy and a more knowledge-based economy. And as that happens, the skills and the knowledge-based workers are benefiting far more than say manufacturing workers. So we're seeing a real disparity in some parts of the labor market.

RAY SUAREZ: Are the numbers telling us that people getting newly created jobs are those people in the least position to demand higher wages, at least at the outset, Greg?

GREG JONES: Well, I think there are a lot of different things going on. To some extent you're seeing that. In some of the hottest areas of the labor market, namely technology, you're actually seeing people make a tradeoff of wages for stock options; they're taking a stake in the company rather than demanding the higher wages. So I think there are a couple of things going on helping to hold down wages, the insecurity issue that is affecting some older workers, and with the workers in the tightest areas, it's a decision to take stock options instead of wages which is helping.

RAY SUAREZ: Greg Jones, Jared Bernstein, thanks so much.

JARED BERNSTEIN: Thank you.

GREG JONES: Thank you.

FOCUS - CYCLONE DISASTER

JIM LEHRER: The terrible cyclone disaster in India: Thousands may be dead. We have three separate reports filed this week by correspondents of Independent Television News. The first is from Paul Davies.

PAUL DAVIES: In a country that has become accustomed to nature's extremes, they are calling this the worst storm in living memory. The cyclone lashed India's East Coast with winds of up to 150 miles an hour. Hundreds of fishermen are feared lost at sea. Inland, millions of people have been left homeless by flooding. The rain has stopped now, but whole districts are under water, and many small communities have been washed away. As rural workers try to save what they can, the Indian government has described the cyclone as a national calamity. The after effects of the storm are now hampering relief efforts. The main road from Calcutta to Madras has been severed, and power stations have been put out of operation. Many villages remain cut off from the outside world, in desperate need of food and medicine.

JULIET BREMNER: Stranded for six days, the people living in remote rural villages of Orissa have simply had to wait for help to come to them -- communities cut off by the floodwaters that followed a cyclone that's devastated this entire region. Helicopters dropped the emergency supplies from the air. The survivors chase after the desperately needed aid. For those who have survived, the most immediate threat is starvation and dehydration. They snatch at this precious lifeline as it falls from the sky. Where food and fresh water can be delivered by road, the distribution is still chaotic. Thousands of frantic people complain that the meager rations aren't sufficient to feed one person, let alone an entire family. Hungry mobs search the empty lorries, but there simply isn't enough to go round. The poisonous mixture of rotting bodies and stagnant water has raised fears of cholera and typhoid, but medical supplies too are in pitifully short supply. The civilian authorities have been criticized for their slow reaction. Despite the extent of this disaster, it's taken nearly a week for the rescue effort to get into full swing.

JULIAN MANYON: As the floodwaters finally go down, smashed villages are laid bare, revealing the appalling distraction left by 180-mile-an-hour winds and the great tides that followed. The wreckage stretches for mile after mile with dead animals littering the fields, sometimes alongside the bodies of their owners. Survivors huddle together on every patch of raised ground. Our pilot, like the army flight crews, was extremely reluctant to land, fearing that the helicopter would be mobbed by starving people. In one small town, the people begged us to come down. But at the last moment, the pilot decided that the crowd was simply too large. Finally we landed on the outskirts of a small village and people rushed towards us. Anxious, almost hysterical, they told us that all their food supplies were destroyed by the flooding. We were the first outsiders they had seen since the cyclone struck.

SPOKESPERSON: We didn't eat any food for four or five days.

JULIAN MANYON: You haven't eaten for four or five days?

SPOKESPERSON: Yes, sir.

JULIAN MANYON: Throughout this devastated areas, there are literally thousands of small communities in the same desperate position as this one. Even though the floodwaters are starting to recede, the people who have survived here are desperately short of food and of fresh water. The government has promised aid and occasionally military helicopters fly over, but the food for the moment, just isn't getting through. We found the same hopelessness at the other place where we were able to touch down -- a shanty town in the port of Paradiq on the coast. Government helicopters have brought some rice to the town but almost none ever it has so far reached this district. Instead, people are trying to dry out their old rice stocks, which lay for days under filthy floodwaters. The result is illness among the survivors.

PATRICK FULLER, International Red Cross: The conditions are very unsanitary. We're seeing increasing number of gastroenteritis cases being admitted into the hospital. But also with the amount of stagnant water still around in slightly outlying areas, we're seeing increasing numbers of malaria coming in.

JULIAN MANYON: People are struggling to rebuild their lives but with no resources and against heavy odds. We were told that the cyclone killed more than 100 people in this district alone. Now there's anger that the government seems to be doing so little to help while people are dying.

SPOKESMAN: In the morning, one child of two, three years is dead.

JULIAN MANYON: A two-year-old child died here this morning.

SPOKESMAN: He suffered from diarrhea. Now in the morning, 5:30, He died.

JULIAN MANYON: The effects of this disaster will be felt for years. The seawater that flooded inland will make the fields infertile for at least two seasons President -- and that, in a land where farmers always face a struggle to survive. The people of this battered province need help now and they will go on needing it for sometime.

JIM LEHRER: Officials say the final death toll could reach 10,000.

FOCUS - POLITICAL WRAP

JIM LEHRER: And now to a look at the week of politics with syndicated columnist Mark Shields, Wall Street Journal columnist Paul Gigot.

Paul, first, on presidential politics, how do you read the impact of the now-famous George W. Bush interview last night on foreign affairs? He was asked to name four leaders - the leaders of Chechnya, Pakistan, India, and Taiwan - he could name only one. Is it a big deal?

PAUL GIGOT: Well, probably in the question itself, no. I mean, the questions were kind of ankle biting really. I mean, you can argue that a Texas governor who know who the president of Chechnya is probably isn't paying enough attention to Texas, but there is a problem because they fit into a kind of a growing stereotype among the media, certainly, and that is family, his opponents, that maybe he's not up to the job, that maybe he's gotten things too easily, maybe he's not as experienced enough, particularly on foreign affairs and particularly when you contrast him with John McCain - that's the kind of contrast that he wants - the McCain people want to make with George W. Bush, is what about experience and biography - just as Al Gore would want to do that later.

JIM LEHRER: How do you read the - what do they call it - the jeopardy question last night, Mark?

MARK SHIELDS: Well, Jim, a sense of relief that I wasn't asked.

JIM LEHRER: Well,you join millions with that one.

MARK SHIELDS: And, secondly -

JIM LEHRER: Those of us who talk about those stories every night.

MARK SHIELDS: No, that's right. That's right. Secondly, I think, Paul is on to something. There's a "gotcha" quality to it - ho, ho, ho. I think if anybody comes out - you know - comes out with another black eye where he least needed it - but I think that the fact that Governor Bush skipped the first two candidate appearances up in New Hampshire, with the other candidates, which I didn't understand, because there's very low risk with the six or seven candidates on the floor, and the same stage, that has - that has given his opponents - Paul's right - the opportunity to plant the seeds of doubt. And this just kind of goes along with that. And I think what it does is it raises the bar and raises the stakes the 2nd of December. People will be looking at - that's the apparent -

JIM LEHRER: In Iowa.

MARK SHIELDS: In New Hampshire.

JIM LEHRER: In New Hampshire?

MARK SHIELDS: And that's when people will be looking at, I think, George W. Bush more than any of the other candidates.

JIM LEHRER: Yeah. All right. Now, the other Republican who had something to do with this week, Mark, was John McCain, and had to do with whether or not he had a hot temper or not. How important is that?

MARK SHIELDS: Well, John McCain took - well, it's obviously important - temperament is important in a President. Disposition is important in a President. And what these primaries are really all about are what is somebody like, what is he really like, what is this fellah made of? Is he the kind of guy we can trust? And what John McCain has tried to do is turn it to his own advantage and say sure. I've got a temper. I've got passion. I care deeply. And these are the things I'm passionate about; these are the things that make me angry. I don't know if it's going to work for him. I know it didn't helped John McCain - I know it didn't at all -- to suggest that George W. Bush's campaign was behind the "New York Times" story. I mean that did sound a little bit... a few echoes of Richard M. Nixon and who's planting stories against me?

MARK SHIELDS: Yeah. Paul, what do you think --

PAUL GIGOT: I don't think the temper per se is going to be a problem for John McCain or for any candidate unless me blows up in which case it was probably because the seed has been planted.

JIM LEHRER: But he would almost have to blow up on camera, is that what you mean?

PAUL GIGOT: Or in a debate or something...in front of an interview with you or somebody else. But the thing that's interesting to me about this is -- notice how this debate about these people is all about character and biography. It's not about substance. Nobody in this campaign of the leading candidates is really debating much about policy so far. In this campaign, biography seems to be destiny. And if I were George W. Bush, I would not want to have a fight over biography and character with John McCain. I think that's his strength.

JIM LEHRER: Move on to something else.

PAUL GIGOT: Move on to the issues where he has problems with the Republican base on taxes and campaign finance reform and I think you're going to see that from Bush because they had this yellow rose garden strategy of Texas which is - you know -- stay above the fray; we don't need to engage; we don't need to debate. They found out that that's a liability and now they're going to start to engage and I think you'll see that more.

JIM LEHRER: In summary - sure, Mark.

MARK SHIELDS: Just one quick thing.

JIM LEHRER: Sure.

MARK SHIELDS: I think -- one of the Bush people I talked to today was really relieved that when George W. Bush was given that test last night, that he didn't explode at the reporter because there was a certain "gotcha" ambush quality to it. And I think that is real... and I think Paul was referring to Herodotus who said character is destiny.

JIM LEHRER: Was that right, Paul?

PAUL GIGOT: Only Roman philosophers, not Greek.

JIM LEHRER: Okay. Look, finally on to Republicans before we move on. By taking all these things we've just been talking about - plus anything else you want to add to it, has this week resulted in any kind of change or major development, major movement, Paul?

PAUL GIGOT: Continuation of the McCain charge in New Hampshire -- and the -- a change of strategy by the Bush campaign to engage now and to get him into debates earlier. At first they weren't going to debate until January. Now they're going to do it a couple of times in December. You're seeing him on the road more, you're seeing him in New Hampshire. You're seeing him begin to talk to reporters -- give the sense that he doesn't think this is an inherited proposition he's got to fight for.

JIM LEHRER: Your overview, Mark?

MARK SHIELDS: I think I would add to this, Jim, that independents can vote in either primary in New Hampshire. I was with Vice President Gore this week in New Hampshire and his people are cheering on John McCain. Why? Because they figure if the action is over there, the independents to whom Bill Bradley, Gore's challenger has a great appeal in every poll, will go over to the Republican side and vote for John McCain. George W. Bush this week, in New Hampshire, was doing penance, public penance. He was going to little bitty towns. He was retailing, he was saying I'm not too big. I'm here, asking for your vote. That was the message he was delivering.

JIM LEHRER: Okay. Now to the Democrats, Mark. What is your summary view of what happened this week between Gore and Bradley?

MARK SHIELDS: Well, it's fascinating. I was with Bradley today and Democrats, Jim, are painfully aware of what unanswered charges have meant in the past -- Michael Dukakis in 1988, his failure to respond to the charges that he was not patriotic and didn't care enough about the flag and all the rest really hurt him in the campaign.

JIM LEHRER: He says that himself.

MARK SHIELDS: He says that himself. And Bill Bradley's own supporters in New Hampshire said to me there was the one disappointment they had in that Dartmouth town meeting -- that he did not come out at Al Gore stronger after the Vice President charged that the Bradley health plan was going to eat up the entire surplus and leave no money to repair Social Security. Bradley's answer is this, Bradley's answer is: I am making an affirmative case for my candidacy and this is a different time from 1988. People want... don't want that counterpunch, that back and forth -- I hit you, you hit me. And I have to say, Jim, after sitting in on half a dozen town meetings with all the candidates the line that gets the biggest applause is when any citizen stands up and says I want the bickering and this excessive cheap partisanship over. Maybe Bill Bradley is on to something.

JIM LEHRER: Yeah. What do you think, Paul?

PAUL GIGOT: I think we saw this week the continuation of Bradley setting the terms of debate of this race, both the agenda in determines of health care and gun control. He is setting an agenda. And the Vice President is being forced to respond and nit-pick and argue with. But it's Bradley's termsof debate. It's the kind of issues that Bradley wants to put on the table. I want to put big ideas, and I want to do it in a big way. And I think he's got the Vice President - he's got him answering him. So, he is setting the terms of the debate. The other thing is Bill Bradley hasn't had to deal with the distractions that Al Gore has about his campaign and the biggest story this week on Al Gore is the fact that he was paying $15,000 a month to Naomi Wolf, a feminist writer, to give him advice on how to be an alpha male as opposed to a beta male. That's not the message that the Vice President wants to leave in primary states and that's what he has had to do time and again. That, I think, distracts him from his main message.

JIM LEHRER: You think the Naomi Wolf thing is a negative for the Vice President, Mark?

MARK SHIELDS: Well, it may not be -- I think it is a negative but it's certainly a plus for Jay Leno, David Letterman, Conan O'Brien. Those guys have ammunition for at least a week.

JIM LEHRER: As if they didn't already have enough.

MARK SHIELDS: Well, it's intriguing to me because two things: First of all, the charge that was made, I asked Bradley today if he wanted to comment on it and he said "not on your life." He doesn't want to comment.

JIM LEHRER: You mean, on the Wolf thing?

MARK SHIELDS: On the Naomi Wolf thing -- he didn't want to go anywhere near it. But I have to say this about Al Gore: I saw him in several different settings this week and we'd seen Al Gore sort of the wooden phlegmatic Al Gore that was only a heartbeat away from the vice presidency in the past; then we saw sort of the hyper Al Gore who was like John Kasich on speed - it seemed - you know, with all these hand motions. And I have to say -- this week I saw him, he was more comfortable with himself and with the crowd, and I think he had a more positive impact than I've ever seen. So, maybe he is finally hitting his stride in the midst of all this strife, but the Naomi Wolf thing was not helpful.

PAUL GIGOT: This is the problem the Vice President has. Will the real Vice President please stand up - you know -- which personality is it - a, b, or c? And the Naomi Wolf thing feeds into this because it's a question of authenticity. Would you really need advice from somebody - at fifteen grand a month -- on what kind of man to be?

JIM LEHRER: Yeah. Yeah. Quickly, Paul, before we go -- Carol Moseley-Braun, the former Illinois Senator, her nomination to be ambassador to New Zealand was held up by Senator Helms. Today out of nowhere he drops the objection. She comes to a one-hour hearing. It's all love and whatever -- he isn't there. But now she is expected to be confirmed without a problem. What happened?

PAUL GIGOT: Well, I think the Republicans concluded that it wasn't worth the political heat -- that it's only one year, it's an ambassadorship - because there is only one year left in the administration. It's an ambassadorship to New Zealand not a heavy policy post. And I think they think that the White House set a trap for them. They knew that that would raise red flags with the... her nomination would raise red flags with Jesse Helms. He would either then have to let her go and swallow hard, or object to her and they could come back and say, race; race was the problem. Play the race card and create a stir and Republicans said we don't want to do that. Let's get rid of it.

JIM LEHRER: Anything you want to add to that quickly, Mark?

MARK SHIELDS: The Republicans didn't need Senator Helms being their fact, the party's face and voice on this issue and the objection he raised to Carol Moseley-Braun, you'll recall, was that she owed an apology to the nice little ladies of the Daughters of the Confederacy because she had opposed their copyright to the stars and bars on the floor of the Senate. I mean, that is not where the Republicans needed to have a debate on foreign policy or ambassadors.

JIM LEHRER: All right. Gentlemen, thank you both very much.

FOCUS - THE BEST MAN

JIM LEHRER: Now, a new film, and who's going to see it. Media Correspondent Terence Smith has that.

ACTOR: Let the games begin.

TERENCE SMITH: Not surprisingly, the film of choice for U.S. audiences over the Halloween weekend was the thriller, "The House on Haunted Hill."

WOMAN PURCHASING TICKETS: Can I get three for "The Best Man."

TERENCE SMITH: But it's the film that came in second that week at the box office that has people talking. "The Best Man," a romantic comedy which features an ensemble cast of African Americans debuted at number one the weekend prior to the holiday. When it opened, the film, about a wedding weekend reunion, earned an estimated $9.1 million, nearly its entire production budget. But the quick box office returns are only half the phenomenon of this low budget film. Universal Pictures has launched a $10 million advertising campaign that is aimed at winning over audiences of all races, not just African Americans.

SONG IN MOVIE: Will you...

TERENCE SMITH: Among "The Best Man's" selling points, according to movie critics, is its wedding theme. Such movies like, "Father of the Bride," and "Four Weddings and a Funeral" often perform well among women of all races. And while the studio will continue to market the film to black moviegoers, universal is also targeting another demographic niche: White women, ages 18-24.

SPOKESMAN: The critics are celebrating "The Best Man."

TERENCE SMITH: Universal has broadened its campaign to TV spots, like this one, during shows with primarily white audiences including such shows as "Dawson's Creek" and "Beverly Hills 90210." And the film's producers hope it will also benefit from the cyberspace equivalent of word of mouth, "word of web." Like last summer's sleeper hit, "The Blair Witch Project," "the best man" was pushed by an informal, but intensive e-mail campaign to African Americans across the country. E-mails such as this one: "We must come out THE FIRST WEEKEND and tell everyone we know, because the main color that matters in Hollywood is GREEN $$$... Tell all your friends and family whether they are black, white, brown, or purple! This is NOT just a Black movie!"

SPOKESMAN: Quiet

TERENCE SMITH: But other hit films with ensemble black casts, such as "Soul Food" in 1997, have not significantly crossed over to a mainstream audience. Industry executives admit reaching a crossover audience generally demands not a newcomer cast like this one, but crossover talent, such as Eddie Murphy or Will Smith.

WILL SMITH: ("Men in Black") I make these look good.

TERENCE SMITH: Some members of The Best Man" cast have criticized the media for pigeonholing the film. In its fall preview, "Entertainment Weekly" called the film, a "big chill" for the African American audience. In response, actor Taye Diggs wrote a letter to the magazine: " I found this statement both inaccurate and ignorant, not to mention racist and stereotypical. I gather you were saying the movie is exclusively for African Americans, leaving out other races from its enjoyment." Audiences, it seems, agree.

FRAN NEWKIRK: Color has no significance at all in this movie. It's just about friendship and a man and a woman actually loving each other enough to want to be married.

MELODIE COOPER: It's a movie that anyone could enjoy. It just so happens that the cast is African American, but it's certainly something that I think all races could enjoy.

TERENCE SMITH: Nonetheless, studio research suggests that three weeks after its release, "The Best Man" continues to attract an overwhelmingly African-American audience.

TERENCE SMITH: Joining me now is the director of "The Best Man," Malcolm Lee. Stacy Spikes, founder of the Urbanworld Group, which hosts an annual film festival showcasing black talent. He has served as vice president of marketing at Miramax, and head of marketing at October films; and Sharon Waxman, entertainment writer for "The Washington Post."

Welcome to you all. Malcolm Lee, let me begin by asking you what the success of your film, and congratulations on that,...

MALCOLM LEE: Thank you.

TERENCE SMITH: ...Says to you about movie audiences today and what they're looking for.

MALCOLM LEE: In particular, we had a lot of good response from the African American audience. And it really showed me that they're starving for other forms of entertainment and stories about the African American experience that don't involve drugs or despair or living in the ghetto.

TERENCE SMITH: Stacy Spikes, what, from a marketing point of view, was the key here? What has made the difference - to take this film and make it number one weekend and number two the next?

STACY SPIKES: It has a unique story I think as Malcolm said. It crosses line. It's a movie that's a great film. It hits emotional highs that films should have. And it also just is a wonderful film that you want to see. When you leave, you're very happy that you went and saw it.

TERENCE SMITH: Sharon Waxman, has this film, would you say, caught Hollywood's attention -- by being number one and number two, two consecutive weeks? Would it lead perhaps to more films like it?

SHARON WAXMAN: No audio and the black community... I'm hearing a return here.. .would say that despite the success of other African American films, there have not been a lot of movies put into production that would imitate or move along on that path like "After Waiting to Exhale" which was a huge success there were not ten other "Waiting to Exhale", you know, similar films put into production. There have been some. There have been "Soul Food." There was "How Stella got her Groove Back". But, you know, that seems to be the question, I think that the success of this film will get people's attention. But it remains to be seen if Hollywood is going to go around and do another ten films like this. Although I think universal has Malcolm's next film, isn't that right, Malcolm?

MALCOLM LEE: That's correct, Sharon.

TERENCE SMITH: Tell us about it and whether it follows in any way what you did with this film.

MALCOLM LEE: Well, it's certainly going to touch or delve deeper into male-feminine relationships. And I think that I've touched on it some in "The Best Man." That was over like one weekend. And the tentative title is called "Sex and the Married Man." I'm not sure where I'm going to go with that yet, but you know, I have some ideas percolating.

TERENCE SMITH: When you wrote this film, "The Best Man," did you have an audience in mind, a particular audience?

MALCOLM LEE: Somewhat. I had a feeling this women would appeal to African Americans, certainly. It's kind of like in somewhat of a response to "Waiting to Exhale" in that they had four women at its core who are educated,intelligent, leading interesting lives -- where I wanted to have four black men do the same kinds of things. But the story, especially, you know, surrounding a wedding, such a universal feel to it, universal... you can't get more universal than a wedding. So, you know, when I was writing it, I didn't really feel like it should be pigeonholed to appeal just to one kind of audience, you know, because I certainly loved "My Best Friend's Wedding" and it didn't have a black person in the wedding -- the same with "Four Weddings and a Funeral." I feel that if you can enjoy a movie with Julia Roberts or Hugh Grant, who wasn't a star at the time in "Four Weddings and a Funeral," then you can certainly enjoy the film "The Best Man".

TERENCE SMITH: Let me ask you about the E-mail campaign that seems to have made some difference here. What was behind that and is that something for other films in the future?

STACY SPIKES Well, I think that there's a pride that comes along with these movies that if it hits the right note. Malcolm and I were talking about this earlier. I got maybe 30 or 40 E-mails of people saying "are you going to see this film?" "We're going to see the film" you're going to be there on opening night, right?

TERENCE SMITH: Sort of a rally around the flag?

STACY SPIKES: Absolutely. And we have to make a statement to say that if we don't support our own films at the box office, then who will? Then we can't complain about the fact that Hollywood doesn't make more movies featuring people of color and especially a film that has such positive role models. One of the most unique things about this movie is no one was carrying a gun. No one was robbing a liquor store. Everybody was really happy, upper middle class prosperous, you know, married and everyone was what I know in America as Black Americans. So it was very unique to have that kind of story.

TERENCE SMITH: Right. But from your experience in marketing films, what would it take to make a film like this become a crossover hit?

STACY SPIKES:I think the universal hit on it where they go after, for instance, Taye Diggs has had crossover appeal with other movies he has been in.

TERENCE SMITH: He's the best man -- the principal star here.

STACY SPIKES: Correct. Correct. And you could see immediately in the second week campaign he did Later Today and other shows that weren't black shows but they moved him quickly into shows that would have a crossover audience. And their advertising also impacted that as well. So I think you have to push that but America still has to open up a little bit and be willing to go see those movies regardless.

TERENCE SMITH: Sharon Waxman, you wanted to say something?

SHARON WAXMAN: I wanted to comment just on the idea of an E-mail campaign and people trying to rally people around the flag to go see a film like this. I don't think that you can have a hit film based on a lot of people sort of doing the right thing in terms of supporting one kind of film or another kind of film. You know, this film's success is about people going to see the film because they like the film -- not because they think it's the right thing or sends the right message or we have to be supportive. Most people are out there working all week and they would like to go to a fun movie on the weekend and they're going to a movie that appeals to them and looks like fun. So if this movie has succeeded, it's probably because it answers all those needs, not because people, you know, a significant number of people, enough people to make it a hit, are trying to send a message of any sort.

TERENCE SMITH: Right. But in Hollywood, why is it so difficult? You pointed to the history of a hit, and then not necessarily a follow-up. Why is it so difficult to get films made with principally African American themes or casts or both?

SHARON WAXMAN: I don't think there is a really good answer to that. I think my sense of it is not anything as simple as there is racism in Hollywood or it's not quite so stark as this. I think it has to do more with the fact that there are not a lot of minority studio executives in the positions who can green light movies. And so they don't relate, perhaps, to those scripts or they don't, you know, recognize themselves in those stories, which they ought to. And it ought to be an economic decision. If one movie is a huge hit and makes a lot of money, logic would dictate would you go out and try to make another one. But I think this has been a longstanding concern in the African American film community, I think. I hear it all the time, that there are not enough people of color making the decisions to, you know, make the films.

TERENCE SMITH: Well, let's ask Malcolm Lee about that. You're part of a rather famous filmmaking family, your cousin Spike Lee. Is it difficult?

MALCOLM LEE: Yes, certainly it's difficult you know. I got to make this film because I wrote the right script at the right time. I think the films like "Waiting to Exhale" and "Soul Food" which are two years apart from each other were very integral in having... in getting "The Best Man" made. And even if we did have, you know, executives of color in the studios, that doesn't necessarily mean they'll get the films green lit either. I think -- it seems to me that the bottom line is how much money these films are going to make. And they're only going to make this movie for a price, you know. This was a $9 million movie. If we had the same story line, a wedding, romantic comedy and we had had white actors in it, I'm sure we would have had a bigger budget for this movie because... simply because the actors that we could have gotten or attracted to this movie, would have been a higher... not higher caliber, but higher...

SHARON WAXMAN: Price tag.

TERENCE SMITH: Bigger profile. I saw the movie. I enjoyed the movie. A thought occurred to me but I want to ask you. You could have made this in theory with an all white cast. In other words, the themes are there and they are universal.

MALCOLM LEE: Sure.

TERENCE SMITH: You buy that?

MALCOLM LEE: I mean could I have, yeah. I mean I think you could put any race of people into this film. It's a film about human beings and about love and fidelity and commitment....things we can all relate to. And I know that, you know, as an African American man, I know I go through these issues and I know plenty of people in my friends and family that I've associated with who go through these issues as well, so why not it a black film or film with predominantly African Americans in it because it's long overdue -- you know, a film like this is long overdue where you have people celebrating love, you know, and there's very little love that's scene on screen with African Americans.

TERENCE SMITH: Right. All right. Thanks very much to all three of you.

MALCOM LEE: Thank you.

STACY SPIKES: Thank you.

RECAP

JIM LEHRER: Again, the other major stories of this Friday: a federal judge in Washington said Microsoft held a monopoly in the market for personal computer operating systems. It was the first major ruling in the Justice Department's antitrust case against the software giant. And the LaborDepartment said the U.S. unemployment rate was 4.1 percent in October, a 29-year low. We'll see you online, and again here Monday evening. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.