The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight Kwame Holman updates Congress's move to keep the government operating; Mark Shields and Paul Gigot analyze that and the weeks impeachment politics; Phil Ponce examines the continuing global financial crisis; Elizabeth Farnsworth looks at the 1998 winner of the Nobel Prize for Literature; and Terence Smith has a conversation with linguist Deborah Tannen about the Clinton-Lewinsky matter. It all follows our summary of the news this Friday.% ? NEWS SUMMARY

JIM LEHRER: The presidential impeachment inquiry officially began today hours after it was authorized. Democrats and Republicans on the House Judiciary Committee met separately to discuss how to proceed. Televised hearings are expected to begin after the November 3rd elections. Judiciary Committee Chairman Henry Hyde said he would like to complete them by New Year's. Lawyers for President Clinton and the committee agreed today to meet early next week to discuss procedures. White House Spokesman Joe Lockhart was asked how cooperative presidential aides would be.

JOE LOCKHART: We're going to work with them, as the president said. And I can't tell you now what they have. I don't know whether they want to talk to people here. I don't know where they're going. We will talk to them, as reasonable people do in a reasonable process, and I'm not in a position to forecast where their talks go, just as the committee is not in a position to forecast where they're going now.

JIM LEHRER: The clock was winding down today on the 105th Congress and on funding for the federal government. The money was due to run out at midnight, requiring Congress to pass a temporary spending bill to keep the government operating through Monday night. Members of the House and Senate have been pushing to adjourn so that they can begin campaigning full-time. The House passed the bankruptcy reform bill today. It's designed to make it harder for people to erase their debts by claiming certain legal protections. The Senate still has yet to vote on its version, and President Clinton has threatened to veto. We'll have more on the conclusion of the 105th Congress right after this News Summary. There was havoc in the world currency markets today. At one time in the last 48 hours the U.S. dollar had lost 17 percent of its value against the Japanese yen. It rebounded, but not before global money traders called for western governments to buy dollars and break the fall. On Wall Street today the Dow Jones Industrial Average seemed unaffected by the shake-up, closing up 168 points, at 7899.52. U.S. Envoy Richard Holbrooke took more tough diplomacy to Yugoslavia today. We have a report from Robert Moore of Independent Television News.

ROBERT MOORE: Even by Balkan standards of torturous diplomacy, this looks like Richard Holbrooke's final effort to reach a peaceful settlement. The American envoy warned that diplomacy and NATO planning for an attack are now running in parallel.

RICHARD HOLBROOKE: There has been no change in the situation since I saw you last. It remains extremely serious. NATO continues in intensifying planning and preparation for action, and we're continuing in intensifying diplomatic effort to see if that is going to be necessary or not.

ROBERT MOORE: So as he left for that meeting with Yugoslav President Slobodan Milosevic and those negotiations are still going on in Belgrade tonight, the military preparations are virtually complete.

GEN. WESLEY CLARK, Supreme Commander, NATO: We're moving ahead with our final preparations in every anticipation of being totally prepared to do whatever we might be called on to do.

ROBERT MOORE: It's expected that by early next week all of the political decisions required to authorize the use of NATO air power will have been taken.

JIM LEHRER: Ariel Sharon was named foreign minister of Israel today by Prime Minister Netanyahu. Sharon has opposed ceding more land to Palestinian control and has advocated Jewish settlements on the West Bank. He was defense minister in 1982, directing Israel's invasion of Lebanon. He will attend next week's meeting in Washington with Netanyahu and Palestinian leader Arafat. A White House spokesman said the administration would work closely with Sharon. Italian Prime Minister Ramono Proddy resigned today, after two and a half years in office. The center left government lost a vote of confidence by just one ballot in the lower house of parliament. That ended the second longest serving of Italy's 55 governments since World War II. Proddy will stay on until the president names a new prime minister, or calls early elections. John Glenn climbed aboard a rocket ship today for the first time in 36 years. The 77-year-old Ohio senator and six other astronauts went through a dress rehearsal at Cape Canaveral. Their launch aboard space shuttle "Discovery" is scheduled for October 29th. John Glenn was the first American to orbit the earth in 1962. Now he'll also become the oldest person ever to make a space flight. And that's it for the News Summary tonight. Now it's on to Congress moves to keep the government operating, Shields & Gigot, a global economics update, the Nobel prize for literature and a conversation with Deborah Tannen.% ? UPDATE - UNFINISHED BUSINESS

JIM LEHRER: Kwame Holman has the Congress story.

SPOKESMAN: House concurrent Resolution 331, concurrent resolution, expressing the sense of Congress concerning the inadequacy of sewage infrastructure facilities in Tijuana Mexico.

KWAME HOLMAN: One day after its passionate debate and vote approving an impeachment inquiry of President Clinton, the House of Representatives moved on to a long list of legislative action.

THOMAS: HR4353...House Resolution 212 -- S1298 -

KWAME HOLMAN: Missing from that list however were the appropriations bills still awaiting congressional approval and the President's signature to fund most federal departments and agencies. A temporary, "catch-all" spending bill...known as a continuing resolution...has supplied that funding since the new fiscal year began on October 1st. But that bill expires at midnight.

SEN. TRENT LOTT: Calendar number 368 - HR 10 - calendar number 447 --

KWAME HOLMAN: On the Senate side, Majority Leader Trent Lott lumped together several pieces of legislation, brought them to the floor, and got them all approved in a matter of seconds.

SEN. TRENT LOTT: I should note that this has been cleared with the Democratic side.

KWAME HOLMAN: None of those was a spending bill either...but some had importance for members nonetheless.

TORRICELLI: This is a simple effort to conserve 15 acres of land in Morristown, New Jersey. It is for most Americans a sacred piece of real estate. It is where George Washington spent the winter of 1779.

KWAME HOLMAN: At the beginning of the day, only five of the 13 annual appropriations bills had been approved and signed or were about to be signed. The President vetoed the Agriculture Bill he said because it did not provide enough emergency financial relief for farmers. And several bills awaited final congressional action. This morning, Senate Minority Leader Tom Daschle said disputes over the amount of money to be spent on specific programs were just one reason those bills hadn't yet been approved.

SEN. TOM DASCHLE: There's an of policy questions, too, David. It's not just the money. I mean, we've got to look at school construction, we've got to look at class size, we've got to look at the agriculture issues I've been talking about. We have to make sure all the environmental riders are out of Interior.

KWAME HOLMAN: This afternoon, Senate Majority Leader Lott tried to expedite passage of the Treasury Postal Appropriations Bill.

SEN. TRENT LOTT: The conference report be considered as having been read.

KWAME HOLMAN: But Nevada Democrat Harry Reid blocked speedy action on that bill because an amendment had been stripped out that would have allowed federal employee health plans to cover contraceptives. Reid -- as any senator had the right to do -- demanded the entire text of the Treasury-Postal Bill be read aloud. It took more than three hours. Back on the House side, members acted quickly to approve a Medicare bill making more money available for home health care.

REP. DICK LAZIO: This critical piece of health care that helps Americans stay in there own home, protects families, keeps them together, builds stronger communities.

KWAME HOLMAN: And then, one day after sponsoring the Democratic proposal to limit the length of the President's impeachment inquiry, Virginia's Rick Boucher offered another resolution.

REP. RICK BOUCHER: Which recognizes the contributions of the cities of Bristol, Virginia, and Tennessee and the birthplace of country music.

KWAME HOLMAN: It wasn't until about 5 this afternoon that another temporary catch-all spending bill was brought to the floor to fund the government through Monday. Quick approval by Congress and a presidential signature were expected before tonight's midnight deadline, giving negotiators the weekend to continue to work toward an overall spending agreement.% ? FOCUS - POLITICAL WRAP

JIM LEHRER: And to Shields & Gigot for analysis of the impeachment inquiry vote, among other things. Syndicated columnist Mark Shields, Wall Street Journal columnist Paul Gigot. We'll get back to the Congress vote in a minute, but Paul, the House vote on the impeachment inquiry yesterday, does it qualify, in your opinion, as a partisan proceeding by a Republican Congress against a Democratic president?

PAUL GIGOT: No, I don't think so. And I would say that while the vote was more partisan than it needed to be, a lot of the rhetoric was more partisan than the actual two resolutions. And in the end they were very close. The Democrats said we're going to inquire but stop it at December 31st. The Republican resolution runs out January 3rd because the Congress runs out and they'd have to redo the resolution all over. So I don't think there was in the end that much difference. Only five Democrats voted against any kind of inquiry. Everybody else voted to move ahead.

JIM LEHRER: So why was there so much heat about it then?

PAUL GIGOT: Because both parties, Jim, are conflict about this, and particularly Democrats, because if you ask the Democrats, they want the president to go in their heart of hearts. If he would just vanish, they'd be better off with Al Gore at the head of the party. But the base wants him to stay. They don't want him railroaded out. The Republicans would love President Clinton to stay until the year 2000, if you really ask them, but their base wants him to go. So I think - and right now for this election they're both playing very hard to their bases because this is going to be an election on November 3rd dominated, I think, by turnout, and so both parties are trying to speak to those two groups.

JIM LEHRER: Do you read it the same way?

MARK SHIELDS: I read it very much the same way in some respects. First of all, I think there's no question the cross pressure - the membership of the party is at odds with its leadership. The leadership of the Republican Party -- if you're really interested in a non-bipartisan thing you would not have Bob Barr speaking on the floor of the House on a resolution like this. I mean, Bob Barr has made it his life's work, other than protection of family legislation, to get rid of Bill Clinton, to impeach him. I mean, so that just gets the partisan juices going. I mean, if you really want to, you'd have Henry Hyde and you'd have some other Republicans of that stripe who are not noted as visceral in-fighters. But I don't think there's any question, Jim, that the Republicans in the House want Bill Clinton there, bruised, battered, bloody, and maybe even losing popularity. The problem was that the Republicans had this week was in the measurement of public opinion the president's job rating had not slipped nearly within the margin of error, while the Republican Congress is on a slippery slope. They lost 20 percent of their support in the Gallup Poll. So that's another conflict that's at work for the Republicans and as they try and deal with this.

JIM LEHRER: What about the Democrats? You heard what Paul said about the Democrats - on this - how do you read that?

MARK SHIELDS: I think - the Democrats -- a low point for the Democrats, obviously, was the 17th of August. I mean, at that point, if there had been a vote taken on an impeachment inquiry then, there would have been --

JIM LEHRER: That was the day that the president -

MARK SHIELDS: The president came out, then had his terrible speech that night and all the rest of it.

JIM LEHRER: Right. Right.

MARK SHIELDS: If they had voted on the 18th of August, 120 Democrats would have voted or 150 probably would have voted for an impeachment inquiry. Two things happened after that. One, Dick Gephardt, the House Democratic leader, met with every single member and listened to every single member of his caucus, and they came up with a strategy which gave Democrats a chance to condemn the president's behavior, every Democrat did, and find it unacceptable and at the same time gave them a chance to vote for an inquiry - as Paul pointed out - and to expose the fact that no Republicans are going to be with him on this, on limiting the duration of it, or limiting the scope of it. So Gephardt, in my judgment, Gephardt showed himself to be a very, very effective leader here, among the Democrats. And I think the fact that the Republicans were united, whether it was bipartisan or non-partisan, call it what you want, I mean, there wasn't a single - other than Jay Dickey of Arkansas - who went across the lines to vote that way.

JIM LEHRER: He was the only Republican who didn't vote with the Republican majority.

MARK SHIELDS: That's right. So the fact that they held it to 31 Democrats who broke ranks was really -- because there was a sense of betrayal in the Democratic House caucus toward Bill Clinton and a sense of fury, and that there were no recriminations among Democrats, at least --

PAUL GIGOT: And, Jim, it could be the definition of peeric victory. A lot of White House people are cheering - but, boy, I think they may pay a price for this. And that is because they wanted so few Democrats to go -- vote for the Hyde resolution and because they put so much pressure on behind the scenes. I mean, Jim Moran told me that this was a --

JIM LEHRER: He's the congressman from Virginia - a Democrat --

PAUL GIGOT: From Virginia, who voted for the Hyde resolution. And he said that there was a lot of pressure from the House leadership and the White House on this to vote against the Hyde resolution. They made it a partisan vote. And in doing that, they put a lot of their people in very competitive seats in tough positions -- either way. If they vote against the president, their base might be hurt and not come out. If they vote for the president, they might anger some voters, swing voters, independent voters, Republican voters, who are angry with the president. It was a no-win vote for these people - and forget the polls and the approval reading. Those polls don't matter. Maxine Waters in California - who cares if 99 percent of her voters are in favor of the president - she's going to win anyway. With David Price in North Carolina, Jay Johnson in Northeastern Wisconsin -- Lee Hamilton's district in Southern Indiana, those are the seats the Democrats could lose, and they may lose because of this vote.

JIM LEHRER: All right. So what does this set up in your opinion, each of yours opinion, about this election? Is it a referendum on Bill Clinton? Is it becoming a very, very important election?

MARK SHIELDS: It is. It's a more important election than most mid-term elections. It is a referendum. If the Democratic losses - I mean, we know all about the historical trend, Jim, six years into a presidency the party of the White House in recent years has lost an average of 40 House seats. That's not going to happen. But if the Democrats lose 20 House seats, then the new Congress will be more anti-Clinton, the Democrats will be more gun shy about supporting the President. If the losses, instead, are five or six House seats, then that, I think, will be a message to the Republicans that this dog ain't gonna hunt, that there is not a mood in the country to get rid of the president; yes, to reprimand him, to censure him, to make him stand in the snow bank in his bare feet, or whatever else, but there is not that momentum to get rid of him.

PAUL GIGOT: In May the Democrats were saying we have a chance to take back the House.

MARK SHIELDS: That's right.

PAUL GIGOT: And they did. If they now lose 15 or 20 seats, I don't think they're going to be coming back here on November 4th saying, you know, that was our fault, that was something we did. They're going to say it was the President of the United States who cost us again. And they're going to come back in a mood that is not all that cheerful for the president. And the president knows this, and that's why he's trying to make this, he's trying to gin up as much Democratic vote and base vote as possible. I mean, this election, a Democrat told me that the real crisis for this president may not be -- turn out to be August 17th; it may turn out to be November 4th.

JIM LEHRER: Because if there is a large gain in Republican seats -

PAUL GIGOT: That's right.

JIM LEHRER: -- then terrible things happen for the president.

MARK SHIELDS: I think there have been three events, and -- the 3rd of November is the big enchilada here, no question about it - that election date. But the August 17th was the low point for the Democrats and to the degree that Clinton and the House Democrats -- I disagree with Paul, obviously - I think the Democrats that they could hold the Democrats together probably works for the party, that there were no recriminations, that there weren't Democrats standing up there and castigating the White House and all the rest of it, I think --

JIM LEHRER: You mean, on the floor?

MARK SHIELDS: On the floor, in public, or in interviews, I think that works for the Democratic Party -- All Dick Gephardt and David Bonior are concerned about is the 3rd of November. They're not concerned about - they're concerned about changing the subject. You saw - in Kwame's piece you saw Tom Daschle and Dick Gephardt, and they're talking about 100,000 schoolteachers and school construction -- they want to change the conversation. They don't want Monica. They want to talk about schools.

JIM LEHRER: Well, let's talk about Kwame's piece for a moment. First of all, clearly, there was that talk - a few weeks ago - oh, there might be a government shutdown - clearly there's not going to be any government - they're working that out. The House has already voted for a continuing resolution. The Senate's probably going to do the same, then they'll come up with another one next week. What's at work in all this thing? How does that play off of the impeachment issue?

PAUL GIGOT: It's directly related to it, because there's really only one politics of the White House now, and it's the politics of survival. And Monica Lewinsky has done an awful lot of things to this presidency. And one thing it's done that is the most remarkable is it's driven this president into the arms of Barney Frank and the House liberals. They've always been suspicious of each other. They've never really fought --the liberals in the House that they like -- but now they have leverage and man, they're going to use it. And that leverage is, Mr. President, we want issues, we want, as Mark says, change the subject. If you need to veto every bill that comes up, veto those bills, make an issue of education, make an issue of agriculture, and the Republicans are laying down across the board, giving up the tax cut, giving them the IMF, egg money, $4 billion, the president vetoed the egg bill. Pat Robertson, Republican from Kansas, agriculture expert, called me up and said we just had a veto from our new president, Tom Daschle - the Senate - the Democratic leader -- because he doesn't like the farm bill and he and Tom Harkin of Iowa said to the president, veto that bill, he vetoed it.

MARK SHIELDS: The Democrats, Bill Clinton, in his hour of peril, maximum peril, the new Democrats, who are so much, you know, a classy group, the third wave, the Tony Blairs of the United States -- I mean, who was the first one who took them on - you know, went to the Senate floor - we talked about it here -

JIM LEHRER: Oh, absolutely.

MARK SHIELDS: Joe Lieberman president of -- founding director of the new the DLC --

PAUL GIGOT: Democratic Leadership Council.

MARK SHIELDS: The DLC, Democratic Leadership Council.

PAUL GIGOT: Mark's blood brother.

MARK SHIELDS: Jesse Jackson called it the Democratic Leisure Class, you know, DLC. But - I mean, these are the people who oftentimes represent suburban districts - but in Bill Clinton's maximum peril, the people who stood up to defend him have been the liberal labor Democrats, and they're the ones to stand up. Are they going to - are they going to say, okay, Mr. President, we'll stand with you, we'll go shoulder to shoulder, we'll do anything for you? But hey, pal, there's a few things we care about - education and -

JIM LEHRER: Hear this. Here's a list.

MARK SHIELDS: That's right. Exactly.

JIM LEHRER: Okay. And thank you both very much.% ? UPDATE - GLOBAL CRISIS

JIM LEHRER: Still to come on the NewsHour tonight, the global economic crisis, the Nobel Prize for Literature, and a conversation with Deborah Tannen.

JIM LEHRER: Phil Ponce has the economy story.

PHIL PONCE: Finance ministers and central bankers from 182 countries spent this week in Washington trying to stem what is now widely deemed the most serious financial crisis in half a century. The financial turmoil began in Thailand a little more than a year ago and then spread throughout Asia. The Asian flu, as it came to be known, spread to Russia and now threatens some Latin American countries. On Wednesday, Federal Reserve Chairman Alan Greenspan gave his prognosis.

ALAN GREENSPAN: As the belief that the Asian contagion had moved into remission has been proved quite wrong -- the result of this, as I'm sure you're all acutely aware by now, has been a very dramatic change in the whole risk profile of the world.

PHIL PONCE: By meeting's end yesterday, leaders reached what they called a broad blueprint to end the crisis.It includes allowing countries in extreme financial crises to temporarily stop debt payments to foreigners; a consensus by the G-7 major industrial nations to focus on promoting economic growth, rather than fighting inflation. The International Monetary Fund's managing director, Michel Camdessus, saw a positive outcome from the meetings.

MICHEL CAMDESSUS, Director, International Monetary Fund: It is clear that we face a systemic crisis, that you will determine to maintain a sense of perspective recognizing that the global economy has brought enormous benefits and that this crisis, if properly addressed, could be seen in a longer-term perspective as just a temporary setback.

PHIL PONCE: But the crisis has brought renewed criticism of the IMF, and questions about its response to the problems in individual nations that continue to flounder after receiving bailout aid. The next test may be Brazil. Yesterday, the IMF and Brazil confirmed they are negotiating such a package as the international community tries yet again to keep the Asian flu from spreading.

PHIL PONCE: Joining me now Fred Bergsten is director of the Institute for International Economics and a former Treasury official in the Carter administration; Susan Aaronson is an economic historian at George Mason University; and David Henderson is an economic professor at the Naval post graduate school in Monterrey, California, and a research fellow with Stanford University's Hoover Institution. Welcome all.Mr. Bergsten, you were at the meetings this past week. What was the mood like?

FRED BERGSTEN, Institute for International Economics: I've been going to these meetings for over 30 years, I'm sorry to say, and the mood was by far the gloomiest ever. Not only officials were worried, the private financiers were particularly distressed. They see a global credit crunch, a global margin call. Loans were being pulled in all over the world by private institutions. This is an extremely serious global financial crisis.

PHIL PONCE: Mr. Bergsten, yesterday the World Bank president, James Wolfensohn, was on our program, and he basically acknowledged that things were very, very serious, but he - at the same time he expressed some optimism. Is that just - did that optimism in any way make itself felt at the meeting?

FRED BERGSTEN: It wasn't felt at the meetings, but I think the meetings overdid the pessimism. They didn't do much at the meetings, but I think a number of things could happen literally in the next week or two that could begin to turn it around. As your lead piece said, Brazil is feared to be the next domino, but they just elected a president. He's going to put out new economic programs. He's going to get mega billions of support from the international community. Japan, which is the single most serious crisis in the world, is passing new legislation through their parliament to get their banking system in order, start stimulating their economy. I think the Congress, before it goes home in the next couple of days here, will pass substantial funding for the International Monetary Fund. That will put it back in business. And I think the central banks - the Federal Reserve here - the European central banks - will be reducing interest rates significantly over the next few weeks to try to stimulate world growth. Finally, the Japanese yen has strengthened greatly in the exchange market. That'll help the competitive position of the Asian and other developing countries. So I think there are a number of things - not actions at the meetings - but developments that are quite likely to occur over the next few weeks that will begin to pick the mood off the floor at least to some extent.

PHIL PONCE: Professor Henderson, are you encouraged by any of the things that Mr. Bergsten just talked about as possibly contributing to solutions?

DAVID HENDERSON: Well, I'm encouraged by some and discouraged by others. See, I think that the IMF shouldn't even be in existence. I think that it creates moral hazard. That's a fancy term meaning that when you have a safety net, there's a tendency for investors to - they know they'll be bailed out if they make bad investments, and, therefore, they make riskier investments. It's kind of "heads, I win, tails, I break even." And so I think the IMF funding is part of the problem we're looking at here, that it was the IMF bailout of Mexico that, in part, led to the problems in Korea, for example.

PHIL PONCE: So you're saying the IMF people will what, use it as a crutch, investors?

DAVID HENDERSON: I'm sorry?

PHIL PONCE: So you're saying that investors - in your opinion - look at the IMF as a crutch.

DAVID HENDERSON: They look at it as something that will bail them out when they make investments that go sour, which is what it has done.

PHIL PONCE: Professor Aaronson, IMF existence a bad idea?

SUSAN ARIEL AARONSON: Absolutely not. But clearly, we need to look at what is the real problem going on here and was the IFM currently doing the right approach to solving that problem, and I think we need to worry about how we best can continue to encourage democracy and capitalism around the world. And the - many of the proposals that people are talking about address fickle capital, but they really don't address who's being hurt in those countries and the political implications of their pain.

PHIL PONCE: And, Professor Aaronson, who is being hurt, in your opinion?

SUSAN ARIEL AARONSON: Well, in Brazil as example, in Indonesia as example, the middle class and the poor are being hurt as unemployment has gone up in all of these countries dramatically and prices have gone up. For example, the Indonesian economy has shrunk by some 15 percent. Unemployment is up dramatically I think to about 15 percent. Prices have risen 85 percent. So that means that people can't afford their basic necessities, and that's something that we should care about if we care about Indonesia's political stability.

PHIL PONCE: Mr. Bergsten.

FRED BERGSTEN: Let me come in because I think Professor Henderson is just wrong. There's no empirical support for his moral hazard theory. He wants to shoot the messenger. The issue is whether the IMF makes the situation better or worse. Indonesia, Brazil, and their poor people are in big trouble, but they'd be in lot bigger trouble without the IMF. They would have deeper recessions. They have bigger currency devaluation. They defraud and capital controls. The IMF at least gives them a chance to recover more swiftly with less pain. There's a lot of pain, but it would be a lot worse without the International Monetary Fund. That's why it's critical for the Congress to provide the full U.S. support for the IMF before it goes home.

PHIL PONCE: Professor Henderson.

DAVID HENDERSON: What you're concentrating on is the up side of the IMF. And you're right about the up side.

FRED BERGSTEN: I'm glad you agree.

DAVID HENDERSON: Yes. I'm saying there's a down side. I don't understand how you can deny moral hazard. When people buy insurance on a house, they're more likely to take more risks.

FRED BERGSTEN: Are you against insurance on houses?

DAVID HENDERSON: No. I'm against people subsidizing your housing insurance. If you buy the insurance, you have the right to take those risks, and the insurance company - the insurance company will let you - will give you lower rates when you do certain things to make it less risky. And that's fine. But that's not what we're talking about here.

PHIL PONCE: Professor Henderson, there's been talk that in order to sort of moderate these - the market's volatility that there should be steps taken to sort of control the flow of capital. I assume your response to that would be -

DAVID HENDERSON: Absolutely not. I mean, the reason is - think about what it means to control the flow of capital. People keep focusing on controlling the flow of capital out. Well, if you control the flow of capital out of a country, guess what, people are less willing to invest in the country in the first place. If I know that I can't take my assets and my earnings on those assets out of the country, I am less willing to invest in the first place. I mean, what these countries need is capital investment. They don't need less capital investment.

PHIL PONCE: Professor Aaronson, are you in favor of controls to help - to help the middle class and the poor? I mean, is that one thing that can help this volatility, capital rushing in, then capital rushing out?

SUSAN ARIEL AARONSON: Well, governments have a responsibility to their citizens and just as there are times that they must protect, there are times when they feel they must defend their currencies, and nations have historically adopted capital controls. Europe did after the Second World War. However, in general, it's not a good idea, but two countries recently have done so successfully. At the same time -

PHIL PONCE: Which countries are you referring to?

SUSAN ARIEL AARONSON: Chile and Argentina, I believe.

DAVID HENDERSON: Interesting, though, Chile has gotten rid of most of its capital controls in the last couple of months.

FRED BERGSTEN: I think -

DAVID HENDERSON: If they're so good, why did they get rid of them?

FRED BERGSTEN: Well, I think one has to distinguish between different types of capital controls.

SUSAN ARIEL AARONSON: Yes. Absolutely.

FRED BERGSTEN: What Chile and Colombia - not Argentina -

SUSAN ARIEL AARONSON: Thank you.

FRED BERGSTEN: -- have done is to try to prevent excessive in-flows that would lead to bubbles in their domestic economies, running the risk then that they would flow back out and destabilize.

DAVID HENDERSON: And then what you're doing is you're trusting the government to decide what's an excessive in-flow.

FRED BERGSTEN: Right. Exactly.

DAVID HENDERSON: How do you do that?

FRED BERGSTEN: Exactly. That's exactly right.

DAVID HENDERSON: How do you trust people who don't have their own wealth at stake -

FRED BERGSTEN: Well -

DAVID HENDERSON: -- to decide what's an excessive in-flow -

FRED BERGSTEN: When the people invest --

PHIL PONCE: I'll get back to you. Mr. Bergsten.

FRED BERGSTEN: Well, the question is: Who leads to bigger troubles, government intervention or the excessive volatility in the market? Sometimes governments are big problems and their invention is excessive, but sometimes the markets demonstrably cause big problems too. Therefore, I think it's reasonable for a country like Chile to limit the in-flow, realizing there are some costs. I agree with Professor Henderson, but also limiting the risk and vulnerability in the longer run. What Malaysia has done recently is what he said, tried to put controls on in the midst of a crisis to stop capital flight. That stops in-flow just when they need it. That's a bad idea. But one has to be sophisticated and figure out what type of controls we're talking about. Some do make sense. But some are very poorly designed, as I said.

PHIL PONCE: Professor Henderson, let me ask you this. Let's talk about the basic premise - again, the World Bank president yesterday said that one of the outcomes of this week's meetings was that there was a consensus that there is a crisis mode, that this could be the worst economic crisis in 50 years. What's your response to that?

DAVID HENDERSON: Well, first of all, I think you have to be clear what you mean by the worst economic crisis, and they have never made that clear. If you say the conditions are at their worst in 50 years, that's absolutely absurd. I mean, look around the world, look at the IMF's report last week that said that the world economy is growing at 2 percent. Now how can the economy be 2 percent bigger this year than last year, and it's worse this year than last year? And look at the fact that economies have grown over the last 40 years. There's no way that this can be the worst situation in 50 years. It's kind of like Clinton's campaign statement back in '92 that this was the worst economy in 50 years, or like Bob Dole's statement in '96 that Clinton's economy was the worst in 100 years. Both were patently absurd.

PHIL PONCE: Professor Aaronson, what's your sense of the crisis?

SUSAN ARIEL AARONSON: I think it is a great crisis, and I think at this point in time the people that are getting hurt the most are the people who are always getting hurt. They're the politically less powerful, and I think we need to be concerned about that.

DAVID HENDERSON: I agree.

SUSAN ARIEL AARONSON: And it seems to me that condemning the IMF is not the solution, nor is defunding the IMF. The issue is: How can we create an architecture that fits the problem? And to me, debunking it, condemning it is in no way a solution that's constructive.

DAVID HENDERSON: I think it's actually half of a constructive solution. The other half is, if the IMF is out of there, there's at least more incentive for governments in those countries to get rid of all restrictions that are keeping those economies down.

PHIL PONCE: Mr. Bergsten -

DAVID HENDERSON: The economies that have done well around the world are the ones that have deregulated and lowered the size of government.

PHIL PONCE: Mr. Bergstein, let me get your reaction to something that India's minister of finance has quoted - he was quoted in the Washington Post this morning. He said, "The brute fact is that after five days of intense discussion and debate, we are still at a loss as to why contagion has continued to spread." Can anyone really explain this contagion?

FRED BERGSTEN: I think you can explain it. I think you can explain it as a combination of huge amounts of capital, very volatile, seeking small differences in return, and faulty government policies, which have led to big trade deficits, weak financial systems, faulty systems of corporate governance, as in most of the Asian countries. You asked how serious the problem is. One third of the world - practically all of Asia - is in recession or worse. These are countries that grew 6 to 8 percent a year for the last twenty to thirty years. Now they're dropping by 6 to 8 percent a year-maybe 20 percent in Indonesia. These are depression-like swings in economic activity in these countries. Money has flowed out. It's gone to other places, safe havens, particularly U.S. Treasury securities. There's a huge amount of instability in the world markets. That's the underlying trigger for all this. But the underlying source, in turn, is faulty government policies, weak economic performance, and very fickle capital markets that move to exploit it.

PHIL PONCE: Professor Henderson, quickly, your response.

DAVID HENDERSON: Yes, Phil, I agree that fault government policy is a big part of it. I mean, Indonesia has all these monopolies that are given to the people in power. And that's been terrible for that economy. And the more capital investment you have in these economies, the more it will undercut those monopolies.

PHIL PONCE: I'm afraid that's about all the time we have. I thank you all for joining us.% ? FOCUS - NOBEL WINNER

JIM LEHRER: The Nobel Prize for Literature and to Elizabeth Farnsworth in San Francisco.

SPOKESMAN: Jose Saramago.

ELIZABETH FARNSWORTH: When the Swedish Academy named Jose Saramago this year's Nobel Laureate in literature, they said he was a writer....

STURE ALLEN: Who with parables sustained by imagination, compassion and irony continually enables us once again to apprehend an elusory reality.

ELIZABETH FARNSWORTH: Saramago was born in Portugal in 1922 in a small town north of Lisbon. His family couldn't afford to buy books, and Saramago had little formal education. He published his first novel in 1947 when he was 25 years old, but international recognition didn't come until -- at age 60 -- he wrote "Baltasar and Blimunda," a love story set in the Inquisition. Among his novels are: "The Stone Raft" -- perhaps his best known work - "The Gospel According to Jesus Christ," which provoked criticism from the Vatican -- and "Blindness," which was published in the United States this year. Saramago's works have been translated into thirty languages. The 75-year old author told reporters yesterday at the Frankfurt, Germany book fair that he was proud to be the first Portuguese writer to win the prestigious award.

JOSE SARAMAGO: [speaking through interpreter] Having won it as a writer in the Portuguese language is a great honor, and gives me a feeling of enormous responsibility and respect for all those writers before me.

ELIZABETH FARNSWORTH: The Nobel Prize -- worth nearly $1 million -- will be awarded at a ceremony in Stockholm on December 10th.

ELIZABETH FARNSWORTH: And for more we turn now to Jose Ornealas, Professor of Portuguese Literature at the University of Massachusetts, Amherst. He's also president of the American Portuguese Studies Association and editor of a forthcoming book on Jose Saramago. Thank you for being with us.

JOSE ORNELAS: You're welcome.

ELIZABETH FARNSWORTH: Saramago is not very well known in this country. What do you like best about his writing?

JOSE ORNELAS: What I like best about his works is the way he looks at the world and how he is able to look at reality and look at things that other people do not see. In other words, he will analyze and define Portuguese and you will see things that were missed before, whereas, we, the Portuguese had the wrong epics, that Saramago come along and rewrite that epic and show a different version of that epic.

ELIZABETH FARNSWORTH: Excuse me for interrupting. Is it that he's looking at it through the eyes of a different group of people?

JOSE ORNELAS: Yes. Yes. Of course, he's looking through the eyes of a different say group of people. He's looking through the eyes of the lower classes and also women - how women perceive that reality - and rather than the official discourse of the periods.

ELIZABETH FARNSWORTH: A recurring theme in his work is the loner struggling against authority.

JOSE ORNELAS:Yes.

ELIZABETH FARNSWORTH: In his life, has he struggled against authority?

JOSE ORNELAS: Yes. He's been a leftist all his life and has been a member of the Communist Party, and all throughout his life - especially during the time of the dictatorship in Portugal - during the fascist regime - he was always a person who was always in a vanguard of people who were fighting against the oppression in the country. They subsequently followed that route in his works - again - fighting against oppression becomes a main theme.

ELIZABETH FARNSWORTH: And he's an atheist, is he not? The Vatican yesterday denounced his work for its anti-religious vision.

JOSE ORNELAS: Yes. He is an atheist. But, on the other hand, he is an atheist with a human face, because he has said all along, now, I'm an atheist, I don't believe in these things, but on the other hand, I cannot get away from what surrounds me, and what surrounds me is Catholicism, all the images, all the myths, and all the symbols of Catholicism. Even if he is an atheist, he is surrounded by it, I think he has to deal with that personally.

ELIZABETH FARNSWORTH: What is he like personally? You know him.

JOSE ORNELAS: Well, he's a shy person. He's very direct. He doesn't mince words. When he has something on his mind, he'll come out ahead and say it and let the chips fall where they may fall. He does not worry about the consequences. And he's always fighting for what he believes is right.

ELIZABETH FARNSWORTH: In fact, he says he most respects lovers, eccentrics, and mad men, and he says, God does too. It's the strict moralist, he says, he doesn't like. That's sort of a theme of his writing too, isn't it?

JOSE ORNELAS: Yes, yes, it is. And he always is - his novels are full of eccentric characters. For example, in "Baltasar and Blimunda," the two main characters, the woman is a seer; she can look into people's souls and see what they feel, what they think, and also the man - the main character in that novel - Baltasar - is a person who has an arm missing, and he uses a hook to move around. On the other hand, the hook is a symbol of power, because with a hook he can do a lot more things than people who have the two hands.

ELIZABETH FARNSWORTH: Some say that Saramago's best novel is the "Year of the Death of Ricardo Race." Would you read something from it for us.

JOSE ORNELAS: Yes, of course. "Anyone who says that nature is indifferent to the cares and sufferings of mankind knows little about mankind or nature. A regret, however fleeting, a headache, however mild, immediately disrupts the orbit of the stars, alters the ebb and flow of the tides, interferes with the moon's extent, and travels the currents in the atmosphere and the undulating clouds. Let one cent be missing from the sum collected at the last minute to settle a bill and the winds grow violent; the sky becomes heavy; all nature commiserates with the anguished debtor."

ELIZABETH FARNSWORTH: What is in those lines that particularly strikes you? Is it the sort of - I hate to use the word "magical" but that's the only word that comes to mind - part of it?

JOSE ORNELAS: Yes. It's very magical. It's very poetic, and also it sort of follows a style which is baroque. He has been influenced by Portuguese writers of the 18th century, 17th, 18th century, especially - Viera - or - our most famous writer of that period. And also another thing that's unique about this style is that he is not afraid to use popular language in his works, although it's written in such a way that makes it very complex because it doesn't follow a normal structure of the sentence. Also, he continuously interrupts his narrative with - by inserting comments - a lot of them ironic in the middle of the narrative. That's the author's voice speaking or making comments about what's happening there, and a lot of times he makes positive comments and at times he makes negative comments, but it's present there, constantly.

ELIZABETH FARNSWORTH: And, Professor, Portuguese and Brazilian writers and politicians have been quoted widely today and yesterday saying how important how this is award is for Portuguese speakers everywhere. Explain why that is. Why is this so important?

JOSE ORNELAS: Well, I think languages and cultures and need these types of prices, because it's one way that they can renovate themselves, in other words, what's happening here is that Portuguese culture and Portuguese languages is on the map. Everybody knows about Saramago; everybody's interested about going out and buying books - reading one of his books - and I think that they'll look at it and say this is a very vibrant language, a very vibrant culture, and we can learn from the Portuguese for this culture, and if you don't have somebody who's doing these things and being rewarded for what they are doing, then language sort of will disappear and also cultures.

ELIZABETH FARNSWORTH: Well, Professor Jose Ornelas, thank you very much for being with us.

JOSE ORNELAS: You're welcome.% ? CONVERSATION - PERSPECTIVES

JIM LEHRER: Finally tonight, another of our conversations about issues raised by the conduct and the investigation of President Clinton in the Monica Lewinsky matter. We've heard from Stephen Carter, Orlando Patterson, and William F. Buckley. Terence Smith has tonight's conversation.

TERENCE SMITH: With me is Deborah Tannen, professor of linguistics at Georgetown University. Her most recent book is "The Argument Culture."Welcome. Deborah Tannen, let me ask you this: There is an argument going on in this town now about whether this whole matter is or is not just about sex, but isn't it also about language and the parsing of words, arguments over what the meaning of "is" is, that sort of thing?

DEBORAH TANNEN, Author, "The Argument Culture:" Yes. But also, I think, it's pitting the common sense understanding of words against the legal understanding of words. It's very easy for us to laugh at the president's parsing words in that way with the present tense, so it wasn't the past tense. But the question is: How did he get in this position where he had already been questioned under oath, had made a statement in one context and then is put in a very different context, talking to the American people and they expect a very different kind of language, and they're judging it in a very different way. So I think it's that being caught between the legal language and everyday language. All this talk about perjury, obstruction of justice, the average person's feeling is that these are very heavy words that require heavy deeds to bear their weight. They don't feel that the words should be applied to - it's the difference between a situation in which the cover-up, itself, is the crime, versus covering up a crime. If the law doesn't make these distinctions, the average person does, and what concerns me is that it ends up not giving people more respect for the law but actually it's a very dangerous situation where they have contempt for the law if they see the law can't make a simple distinction that they can so easily make.

TERENCE SMITH: For example, on this broadcast on January 21, the president looked Jim Lehrer in the eye andsaid, "There is no sexual relationship," taking refuge in the present tense, in effect.

DEBORAH TANNEN: That's right. But, of course, if you look at it from the point of view of that context, it seems quite absurd. But if you look at it from the how we got to that context, the history of his having been hounded, you would have to say, by people who were trying to catch him in some sort of an error, and he had already given this deposition in which he had been questioned and of course, we can talk about this-he didn't know that the questioning was going to be about Monica Lewinsky, so he wasn't prepared for that. He thought he was being questioned about sexual harassment issues relating to the Paula Jones case.

TERENCE SMITH: In his testimony.

DEBORAH TANNEN: Right. But having those prosecutors on his tail, you might say, he then wasn't free to answer in a way that he might otherwise answer.

TERENCE SMITH: You know, there's an old saying that there are two kinds of truth - one, the kind you can prove in court; and the second is the kind of truth that any fool can see. I wonder if the public isn't exercising the second standard.

DEBORAH TANNEN: They are. And I have to say what is most troubling to me in the current situation, it's a very dangerous situation when there is this tremendous gap between what the average person thinks and what I call the three "p's" - the pundits, the politicians, and the press. We need to have faith in the great institutions of our democracy -- journalists, politicians, and the law -- and what we see now is that people are losing respect for all those three institutions, because there is this tremendous gap. The average person is saying this is not impeachable; it's not that significant; we don't approve of it, but let's attend to the really important business of running the country. And yet, they are not able to get their voices heard. You know, it's - in an odd way it reminds me not so much of Watergate but of Vietnam. I hear people saying things like I'm ashamed to be an American; I feel like leaving the country -- right after the videotape was played. The first 10 calls that I heard on C-Span - having watched the whole four hours - were saying, we've got to stop this. And they were -interestingly, it was bipartisan. The people are bipartisan. Republicans, as well as Democrats, saying - in fact, one Republican said, "If my party succeeds in bringing down someone over this" - and very interesting what he said - he said, "I'll never vote again." He didn't say I won't vote Republican; he said, "I'll never vote again." It's the cynicism about our process that is to me the most dangerous aspect of what we're seeing.

TERENCE SMITH: Do you think that the public has arrived at some sort of distinction between lying about sex and lying about a crime?

DEBORAH TANNEN: We know that the majority - not everybody but a very large majority say that if you lie about a sexual relationship, it's not the same; we should not be concerned on the same level as we would if a public figure had lied about misconduct in public office. So, yes, they made that distinction, and to see all the people in power not making the distinction is what is leading to this disillusionment, this frustration.

TERENCE SMITH: One of the famous phrases in this whole matter is when the president wagged his finger at the camera and said, "I did not have sexual relations with that woman." I wonder whether that caught your ear and what - how women, especially, but perhaps other people respond to that phrase, "that woman."

DEBORAH TANNEN: It did. It did. And it has been replayed many times. I think when you normally hear "that woman," you think that there's an attitude of contempt and that would be a very negative interpretation. I believe, again, he was caught in this situation where our society, being what it is, at that point in order to protect himself from being indicted for having said something different under oath, he thought that he had to say that. I think we really need to pull back and ask the larger question. I'm surprised it isn't being asked more. How did we get to a situation where the President of the United States was asked under oath about his sex life? This, to me, is really the major question. And I believe it's a whole series of things. We tend to put it as Clinton Vs. Starr, the gun fight at OK Corral. And that limits our way of understanding it. It's - my word for it is the argument culture. It is the whole tenor of our culture now in the law, in politics, and in the press, where attack is valued; compromise is not valued, and people are out to destroy their opponents any way they can. And this is what led to this.

TERENCE SMITH: And one of the techniques they're using - and it's resulted in a new coinage here - sexual McCarthyism is a phrase we hear now.

DEBORAH TANNEN: Yes. I have also heard people saying that it feels like a coup de tat. They feel that their electoral will is being undermined by a faction, and this is very dangerous. And the "sexual McCarthyism" is very dangerous, very interesting to see how sexual harassment now is being taken seriously. We have laws to protect against it. But these laws can, in turn, be abused, and by the argument culture we are abusing the legal system. So you have a sexual harassment case with Paula Jones. They use the discovery process - the right to depose witnesses - as an excuse to dig up women who had consensual relationships with the president. Well, that's not sexual harassment. It was not relevant to the case, but it was abused. I have actually heard cases - an academic case - where there were two men - rivals - and one went - one by one - to every woman in that department trying to find out if maybe she had been sexually harassed by his rival. In fact, they hadn't been. He gave that up.

TERENCE SMITH: Using it as a weapon.

DEBORAH TANNEN: Men can use this as a weapon in their battles against each other.

TERENCE SMITH: The whole public discussion of sometimes graphic description of sex and sexual acts in all of this, has it - it's remarkable [a]; [b] has it changed public mores and what's acceptable language?

DEBORAH TANNEN: It is changing public and private mores. People are now having private conversations about personal sexual topics they would not otherwise have. One person used this phrase that he felt that we have all been raped because our children are being exposed to this explicit sexual discussion, and by the way, it would be just as offensive if we were hearing in detail about what married couples did in private. We are simply bringing into the public sphere what in the past was private, and this too is very, very troubling.

TERENCE SMITH: You know, some 65 percent of the public apparently in polls indicates that they do not want to see the president impeached, and yet, Congress is forging ahead right down that road with the Republican majority. I wonder if they're not listening. Is there a disconnect here?

DEBORAH TANNEN: Yes. And it's the disconnect that troubles me. We know that we have had more and more cynicism. People feel that the government is more interested in partisan bickering than they are in solving the problems that face them, and this is simply being reinforced. People are saying they don't want the government spending; they were saying they didn't want all that money spent on investigating the president's private life; but they can't seem to be able to stop it. And that's very troubling.

TERENCE SMITH: Deborah Tannen, thank you very much.

DEBORAH TANNEN: Thank you.

JIM LEHRER: Next week, we'll continue the series with authors Calvin Trillin and Shelby Steele.% ? RECAP

JIM LEHRER: Again, the major stories of this Friday, lawyers for President Clinton and the House Judiciary Committee agreed to meet early next week to discuss impeachment inquiry procedures. Congress passed a temporary spending bill to keep the federal government running until Monday night, and U.S. Envoy Richard Holbrooke met again with Serbian President Milosevic and told him to pull troops out of Kosovo, or face an aerial attack. We'll see you on-line and again here Monday evening. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.