The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. Leading the news this Tuesday, Soviet inspectors came to Arizona to watch 41 U.S. Cruise Missiles destroyed. The Governor of Ohio called for the close down of a nuclear weapons plant in his state and more than 50 people are dead or missing from a hurricane that hit Colombia in South America. We will have the details in our News Summary in a moment. Robin.

MR. MacNeil: After the News Summary, we mark tomorrow's anniversary of the stock market crash of 1987. Paul Solman reports on professional short sellers, then Economist Allen Sinai and Business Author Martin Mayer debate whether the market is relevant to the U.S. economy or just a conchino for insiders. Next, a stump speech by Michael Dukakis, then a News Maker Interview with another Presidential candidate, Lenora Fulani of the New Alliance Party, and we close with a Penny Stallings essay about Texas state fairs.NEWS SUMMARY

MR. LEHRER: The destruction of 41 Cruise missiles is beginning in Arizona. Their elimination was part of the intermediate range nuclear missile treaty with the Soviet Union. Another part was the requirement that each side witness the other's compliant actions. So a group of Soviet inspectors was brought to the site this morning at Davis Monten Air Base near Tucson. Forty-one protective canisters and seven launchers are also to be torn about with power saws and torches. The work is to be completed by late tomorrow or early Thursday. Robin.

MR. MacNeil: The Governor of Ohio, Richard Celeste, today demanded that President Reagan shut down a nuclear processing plant because of radioactive leaks. The plant is run by the Energy Department at Fernald, about 18 miles Northwest of Cincinnati. On Friday, the Department admitted to Congress that the government has known for decades about dangerous leaks of radioactive material and done nothing about it until recently. Gov. Celeste spoke at a news conference after writing to the President.

GOV. RICHARD CELESTE, [D] Ohio: For years, the U.S. Department of Energy has refused to spend the money necessary to operate this center in a responsible manner. Even minor improvements have been neglected. When Ohio's concern about conditions at the facility led the state to repeatedly attempt to become involved, each time the door was slammed in our face. Essentially, we've been told that this major threat to public health and safety is none of our business.

MR. LEHRER: A government panel today recommended a major new commitment to prenatal care. The Committee of the National Academy of Sciences Institute of Medicine said it was not only good health policy, it also made sense financially.

JOYCE LASHOF, University of California: The most basic problems is that our nation has failed to give adequate priority to the principle that all pregnant women, not only the affluent, should receive prenatal, delivery, and post partum services. For every dollar spent on prenatal care for low income, poorly educated women, about $3 are saved in medical expenses for low birth weight babies during the first year of life.

MR. MacNeil: A new hurricane named Joan is heading towards the coast of Central America tonight after leaving some 50 people dead or missing in Northern Colombia. With sustained winds of up to 80 miles an hour, Hurricane Joan battered the Colombian Town of Carmen De Bolivar, causing heavy flooding. It is now threatening Panama, Costa Rica, and Nicaragua.

MR. LEHRER: A French economist was awarded the Nobel Prize in Economics today. Seventy-seven year old Maurice Allais was honored for his big picture economic theories that helped rebuild France after World War II among other things. He is the first French national to ever win the economics prize. It carries with it a $390,000 cash award.

MR. MacNeil: South Korean President Noh Tay Woo today called for a summit meeting with the President of North Korea and a non- aggression pact between the two countries. The first Korean leader to address the United Nations, Noh said, "We must do everything possible to hasten the coming of the springtime for peace and reconciliation on the Korean Peninsula." Before Noh spoke, North Korean President Kim Il Sung rejected South Korea's proposals for reunification, saying there would have to be a prior peace agreement between North Korea and the United States.

MR. LEHRER: There was more trouble on the occupied West Bank today. Israeli soldiers shot and killed a five year old and a fourteen year old boy. Also, a free lance photographer from Oakland, California, was wounded by Israeli gunfire. The Associated Press said the shootings followed clashes between troops and Palestinian demonstrators throwing rocks in the West Bank Town of Nablus. Today's deaths brought the number of Arabs killed in the occupied territories' uprising to at least 309. Six Israelis have also died.

MR. MacNeil: Now a story about Ludwig Van Beethoven and a promise he made 161 years ago. Eight days before he died, Beethoven said he would compose a new symphony to be played for the first time in London. That was in 1827. Today some music by Beethoven was played for the first time in London, and it might or might not have been what he had in mind for his tenth symphony. We have a report from Ian Ross of Independent Television News.

IAN ROSS: The Royal Liverpool Philharmonic Orchestra conducted by Valter Vella rehearing in Liverpool this morning. The piece is the first movement of Beethoven's projected tenth symphony, as realized and completed by Dr. Barry Cooper of Aberdeen University, who built on Beethoven's sketches. Taking these sketches, Dr. Cooper has bridged them into a kind of symphonic sketch, an artist's impression of what Beethoven had in mind.

BARRY COOPER, Composer: So I filled it out in the way that I think he might have done and tried to get as close as I could to what he would have done. So what I have got is not, of course, simply Beethoven's Tenth Symphony, but a rough impression of what he had in mind.

IAN ROSS: One critic who sat in on the recording said of the 15 minute work that though the style was akin to that of Beethoven's Seventh and Eighth Symphonies, it resembled the arduous assembly of a jigsaw puzzle, many of whose pieces are missing. Dr. Cooper, he said, has succeeded as well as could be reasonably expected, if not a little bit better.

MR. MacNeil: Members of the orchestra said the music certainly sounded like Beethoven, but not the best they'd ever heard.

MR. LEHRER: And in the U.S. Presidential campaign today, both Michael Dukakis and George Bush declared their race was not over, despite new polls showing Bush way ahead. Gov. Dukakis spoke of economic issues in Kalamazoo, Michigan. He told an audience at the University of Western Michigan, the trade deficit would be eliminated in the first four years of a Dukakis/Bentsen administration, and he said the stock market crash one year ago was caused by Republican economic policies.

GOV. MICHAEL DUKAKIS, Dem. Presidential Nominee: A year has passed now since the crash and what has the administration done, what has George Bush done? Nothing. Nothing. Nothing about the merger mania or speculation, nothing about the ballooning national debt that keeps going up and up and up, nothing about a $150 billion trade deficit, nothing about our growing dependency on foreign bankers to pay for eight years of Republican deficits. I've got to laugh, you know, when Mr. Bush throws these labels around. I was always taught that thefirst thing a conservative did was pay his bills, right?

MR. LEHRER: Vice President Bush spoke at Fulton, Missouri, site of Winston Churchill's famous iron curtain speech in 1946. He said the iron curtain was starting to rust, to change.

VICE PRESIDENT GEORGE BUSH, GOP Presidential Candidate: And the evidence is clear, the facts are in and now is not the time to abandon realism about what moves the Soviet Union. Yes, the Soviet Union are restrained by their own troubles, their own difficulties, but they're also restrained by our strength, our ability to deter aggression, the unity of the democracies and to abandon that, to turn away from that path, is to invite trouble.

MR. MacNeil: That's our News Summary. Coming up on the Newshour, the stock market, Dukakis on the stump, Presidential candidate Lenora Fulani and a Penny Stallings essay. FOCUS - TAKING STOCK - WALL STREET

MR. MacNeil: First tonight we mark an anniversary. A year ago tomorrow, Americans woke up to shocking news. Stock markets around the world were plummeting, and by noon on October 19th, it was clear that the New York Stock Market was headed for a crash. But the dust settled, and despite dire predictions, the world is not all that different as a result of the crash. What did it all mean? Is the stock market relevant to the U.S. economy, or just a casino for insiders? We'll ask two people with different views in a moment. First we look at a group of investors who think October 19th was a great day. Paul Solman, our special business correspondent, reports.

PAUL SOLMAN: 10 AM, Wall Street, New York. At the New York Stock Exchange, trading has just opened. This is the stock market, nerve center of our economy, with companies evaluated and re-evaluated every minute of the day. Supposedly, this market of ours is central to America's business success, but when you watch the market's major players up close and personal, you begin to wonder if our stock market isn't a lot more important to its finaglers and insiders than to the economy as a whole. It's a quarter past 7 California time, and this big money player is just leaving for the office. Joe Feshbach is an unpopular form of speculator, the short seller. Feshbach bets against companies, hoping they'll go down in price.

JOE FESHBACH: [Talking on Car Phone] How's the market so far?

PERSON ON PHONE: The market, the market's up 12 bucks, Joe.

JOE FESHBACH: Are we making any money?

PERSON ON PHONE: We are making money.

JOE FESHBACH: That's good.

PERSON ON PHONE: As usual, Feshbach and his brothers are looking for losers. When companies fail, the Feshbachs cheer and one year ago when the market crashed, it was cause for celebration here.

JOE FESHBACH, Investment Manager: October 19th was a great day, but the best day was actually October 21st, when they started to retrade these stocks. For our investors, we picked up at least 40 percent during that week, or somewhere on the order of $60 million. I wish it was all for us, but unfortunately, they get the lion's share.

MR. SOLMAN: No wonder most investors hate the shorts and have dubbed these guys the "stock busters", a title they flaunt. Joe's twin brother, Matt, is one partner. Older brother, Kurt, is also a principal of the firm.

MATT FESHBACH: We started selling short that new Texas bank, and that looks like it'll be great.

JOE FESHBACH: Good.

MR. SOLMAN: The Feshbachs only hunt the vulnerable, companies whose price is likely to crash. Usually they find their prey among smaller companies that trade on the over the counter market.

JOE FESHBACH: The over the counter market is still strong. I mean, it's up a couple of points today. It's up 3 1/2 percent on the year.

KURT FESHBACH: I don't know what's going up, because we're not losing any money.

MR. SOLMAN: To the Feshbachs, selling stock short has provided a lot of laughs. Now it's time to explain how short selling actually works, and here's a personal example. Back in the late 1970's, gold had shot up to $850 an ounce. I figured it had reached its peak and I could make a killing, but here's all the gold I had in the world, not enough to make any money off. Although I didn't know it at the time, I could have sold gold short, and here's how it would have worked. I'd have gone to someone who had a lot of gold, didn't want to sell it, but was willing to lend it to me for a price. I would then take the gold and sell it on the open market for the prevailing price, around $1000 an ounce, put the money in the bank, and pray that gold would plummet in price, and, in fact, it did to less than $500 an ounce, which was half of what I would have sold it for. So here's how you make money selling short. I'd go to the open market, buy back the same amount of gold for half what I'd sold it for, take that gold, deliver it to the person I borrowed it from, and I'd be left with a hefty profit. And that's just what the Feshbachs do with stock. They borrow it from someone who has a lot in return for a fee. They sell it on the open market, take the money they have gotten and put it in the bank, then wait for the stock to plummet in price, so they can buy it back cheap, return it to the person they borrowed it from, and make a killing. Consider, for example, the Feshbachs' short selling of a hot stock of the early 1980's, Cannon Film. Here was a company that raised millions through the stock market so that it could follow up such film classics as Death Wish II with Death Wish 3. The stock price of Cannon kept rising through their next bid for cinematic immortality, Death Wish 4, but the Feshbachs thought they spotted an unhealthy trend here.

KURT FESHBACH, Investment Manager: I went to four or five of their movies and they were so bad I never went to another one. I can't watch a Cannon movie.

MR. SOLMAN: The Feshbachs' decision to short Cannon was based on more than personal taste, however.

KURT FESHBACH: I would have people stand outside the theater and count people going in, you know, to make sure what was happening on a daily basis. When people aren't going in to the movie, they can't be making any money.

MR. SOLMAN: So the Feshbachs borrowed Cannon's stock, sold it at its peak, and then watched the company and its stock get massacred. Short sellers take a perverse pleasure in corporate devastation.

CHARLOTTE HUGHES, Stock Analyst: There is so much hype, so much P.T. Barnum type promotion of various stocks, that you really do get a little bit of a thrill out of pricking that balloon and saying, no, no, that's not the way it really is. This is the reality of this business. This is the potential, and this valuation is out of control.

MR. SOLMAN: The Feshbachs are unconventional and so are their stock analysts like Charlotte Hughes, seen here not dressed up for the camera. In fact, this is a sort of happy detective agency on the hunt for overpriced stocks. One of the Feshbach sluthes is on the phone right now from Texas, with a nice piece of Sam Spade work.

JOE FESHBACH: Hey, Andy, you got the Feshbach Brothers.

ANDY: Oh, really?

JOE FESHBACH: Yeah. Don't make any mistakes.

MR. SOLMAN: The tone may be self-mocking but the business is dead serious. Today they're on the trail of a businessman who's pulled scams in the past. The Feshbachs think he's pulling another one.

MATT FESHBACH: One of the traders told me that traders were beginning to suspect the quality of their financial statements, and that's why the stock's down today.

ANDY: And that's the history of this particular guy in the company. The same thing happened with the other, there were accounting irregularities in the previous company.

JOE FESHBACH: So what are we short with this thing?

MATT FESHBACH: We're short about two and a half or three million dollars' worth of stock.

JOE FESHBACH: Good.

MR. SOLMAN: As usual, the Feshbachs are rooting for a corporate catastrophe, but fabulously successful short sellers though they are, even the Feshbachs can't win 'em all. Case in point, their mistaken short selling of the sneaker company, Reebok. The Feshbachs were sure Reebok was just a hot fad, bound to burn out in time. So the brothers shorted Reebok when they figured it was about to blow and waited for the market to dampen enthusiasm for the stock, however, the company avoided the dousing by diversifying, the Feshbachs were all wet, and it cost them millions. Short selling is not for most speculators, because it takes a lot of patience and nerve.

MATT FESHBACH, Investment Manager: Short selling has like unlimited risk, because a stock can go up infinitely, and that's why you lose your entire investment in a long, right, but in a short, you can go from 10 to 30 or 10 to 50 or 10 to 100, whereas, a long can only go from 10 to 0. So you could end up losing multiples of your investment.

MR. SOLMAN: But the Feshbachs have nerve, which they credit to the teachings of scientology, by the way, and the profits to fortify them when their stocks go the wrong way, up instead of down. They remain the bad news bears of the stock market and very successful ones at that. People in the business community tend to condemn short sellers like the Feshbachs, charging that they're parasites on the system. But when you think about it, they're really no different than any other investors, constantly trying to get the news first, to beat the other guy, to play the edge, however slight. It's true of investors who go long, that is, who buy stock anticipating a run up in price, and it's true of those who go short, anticipating that the price will fall. And it's true of today's major money managers, whose short-term computer strategies now affect, perhaps even drive the stock market.

TRADER: [On Phone] I'd like to buy 20,000 shares.

MR. SOLMAN: But the real question, however, one year after the crash is not whether any one of these strategies is objectionable or dangerous in itself. The real question is whether any strategy in the stock market has relevance to American business as a whole. After all, the crash hasn't really seemed to affect the economy, which makes the stock market and its companion markets in Chicago and elsewhere might really be little more than a game these days, a game which creates a good deal of excitement, a fair amount of employment and not a whole lot else.

MR. MacNeil: To what extent has the stock market become a game, a side show unrelated to American business? We have two different views. Allen Sinai is the Chief Economist for the Boston Company, a financial services firm. Martin Mayer has been writing about Wall Street since 1955; his most recent book is called "Markets". Mr. Mayer, what's your answer to Solman's question? Is the market little more than a game now?

MARTIN MAYER, Author: There's a very heavy game component. There always has been. The market, you know, it's the center of market capitalism. It's supposed to give advice on where money should be invested. It's supposed to represent in its mechanism the way in which people who have money to invest think the country is going to go, which industries are going to do well, which companies within industries. It's quite true that most of us are very surprised at how little impact last fall's crash had, but the basic reason for that is that while the stock market was going down, the bond market was going up. And since the big players are institutions, they were making money in the bond market in this supposed flight to quality while they were losing money in stocks. That isn't inevitably going to happen. You put another trillion dollars on the national debt, you put another $1/2 trillion on the foreign debt, and people might not regard Treasury paper as a place to go when looking for quality. They might go to marks or Swiss francs, French francs, pounds, gold, you name it. And if that happened, if both markets went down at once, then you would have a very very substantial impact on the U.S. economy. It didn't happen this time. We lucked out, might not luck out next time.

MR. MacNeil: Is the market little more than a game now?

ALLEN SINAI, The Boston Company: No, I think that really overstates it. There is certainly a speculative element and there always has been and always will. That is the way these kinds of markets function. It is the stock market, equity market. It is one of those markets that channels resources, financial resources into our economy, where it needs to be, and if it stops functioning or functioning very poorly, it interrupts the allocation of funds that we need to have for a healthy business climate.

MR. MacNeil: Is it efficiently channeling new resources into the U.S. economy since the crash?

MR. SINAI: I think it's less of a vehicle now for financing for capital spending, for raising money of any kind for new enterprise than before. In a way, it's efficient because the stock market is reflecting a good deal of pessimism and uncertainty about uncertain economic and political events in the future. But it is really not performing the function that it probably should be performing in terms of providing good signals to those who need to raise money in order to keep our capital spending development on the right keel. What it boils down to for companies is higher costs of financing, because the stock market really hasn't been doing too well and it is not an easy place to raise money at this time.

MR. MacNeil: How do you look on the market as a supplier of capital to American business right now?

MR. MAYER: Well, it was never the supplier. It was always the secondary market. It gave information to the real suppliers. It was a place where you could sell after you had bought. It was not where you actually raised the money, with a handful of exceptions and -- I think the market is performing quite inefficiently now. I think that the market is in long-term trouble, because I think that we're dealing with -- the phrase that one uses, that I use, is that there are elephants running in the squirrel cages -- we are now so dominated by enormous institutional orders and by a kind of fiction that these enormous institutional orders can be handled by little speculators like the Feshbachs, who by the way perform a function. If there weren't people who were prepared to go short a stock that other people wanted to buy, prices would bemore volatile. I have nothing against that. When you get pools that are running prices down, you have problems, but people whose judgment says, it's going to go down, that's fine, there are others who say it's going to go up.

MR. MacNeil: But explain the elephant in the squirrel cage. What exactly is happening in simple terms that you think is making the market inefficient?

MR. MAYER: When I first went down in the 1950's, almost 40 percent of all the trading that was done was done in odd lots, less than 40 shares. The average transaction was less than 100 shares. Today the average transaction is something like, what, 4500 or 5,000 shares. 60 percent of the trading is done in 10,000 share lots or bigger. The trading is done basically by big institutions, mostly tax exempt variations, who can play for tiny bits. They are not today --

MR. MacNeil: Pension funds and insurance companies.

MR. MAYER: Pension funds particularly, insurance companies to some extent, in a funny way mutual funds, because mutual funds pass the capital gains through. They do not themselves pay taxes on it, so that their performance also is measured without a tax component. Private players can't play in that market. All these guys have the same machinery, they have much the same information, they use much the same program, they feed the stuff through, and they all run to the side of the boat, with the same side of the boat, when certain news events occur, and that's very bad for the market.

MR. MacNeil: Bad for the market?

MR. SINAI: Well, I think it is unfortunate, and it is to me really one of the bad results of the crash that the individual American investor is so disenchanted with the stock market. When I was a kid, I owned 10 shares of some corporation, I had a piece of corporate America, and I was quite interested in how our companies did. It really is, since the crash and before that, it is much harder for individual investors to participate. They do.

MR. MacNeil: Individual investors being the squirrel playing with the elephants?

MR. SINAI: With the elephants and being those who trade in odd lots. They do participate because their moneys or savings go into pension funds and into mutual funds and their interests are looked after or should be looked after in those institutional movements of money, many of whom move it in a very conservative way, but the individual now feels very much a part from an essential part of capitalism, the provision of keeping track of how we do in our businesses and how we do in the economy.

MR. MAYER: Most of these funds turn over this money much too fast.

MR. MacNeil: All right. Now that's what I was going to ask next. Are these big institutional investors turning over the money in a way that is healthy for the economy and reflecting the fundamentals of the economy and the value of the stocks, or are they doing it merely speculatively to make on a small margin with a huge quantity of stocks a profit for their pension fund that day?

MR. MAYER: Their performance is judged every 30 days, every quarter. They are investing money which is being put aside for the long-term, to pay pensions, to pay life insurance policies. They should have a long time horizon, unfortunately, we have structured the world so that they are not judged by the quality of their work looking on a long time horizon where their liabilities lie, but they are judged on how they do day by day virtually. And that's a great mistake, and that is making the market in a fundamental sense much less efficient.

MR. MacNeil: And more speculative?

MR. MAYER: You once had gamblers. Now you've got a kind of game of kings. The word "speculative" completely misstates what is going on here really. What you've got is a pool of capital which is going to make money out of liquidity, I mean, which is going to make money out of volatility. You have liquidity there that needs the market to move and up down rapidly. You have separate markets. You can lean on one. You create motion in the other. The public doesn't understand it terribly well, but it does know that it's not for us anymore. It's not for investments; it's for guys who are playing the short-term. They may be very well hedged, they may be doing something that is really fundamentally conservative, but it produces a great deal of volatility and it really drives the little guy out. And I think you're going to have to separate the institutional from the individual market in a meaningful way.

MR. MacNeil: What's your comment on that?

MR. SINAI: Well, I really don't think there's the kind of trading in short run ins and outs that implies so much speculation on the part of pension funds and institutions. They have quite substantial fiduciary responsibilities and responsibilities to their investors. There is a performance.

MR. MacNeil: But they do have to perform, don't they and --

MR. SINAI: There is a performance. It's a little longer than 30 days. It's more like every quarter, and if one looks at the returns on mutual funds, and one can choose a mutual fund, for example, for one's own objectives, aggressive, risk taking, conservative, principal conserving, one can choose a mutual fund that way that by and large over a long period of time the returns on those funds to investors have done very well in terms of their own objectives. And i think the magnitude of the trading in and out, the speculation that Dr. Mayer is suggesting exists, doesn't really exist to that extent. By and large, fundamentals move markets, market prices may get out of kilter for a time, as they were last summer and early fall in terms of an overvaluation of the stock market, but one way or another they correct, and over a period of time, two, three, five years on average, stock prices and the rate of growth of them will move in tandem with how our economy does, how earnings go, and how the fortunes have been ebb and flow for American corporations.

MR. MacNeil: In the year since the crash, the little investor has not come back. Has he gone for good, in your view?

MR. MAYER: I think he's gone unless you restructure these markets so that you no longer have giant players and giant broker/dealer firms buying and selling from their own inventories at the closing price, covering themselves ahead of time, playing games for little profits that are guaranteed to them, which are not available to the ordinary investor.

MR. MacNeil: Little profits which magnified by very large volume are considerable profits.

MR. MAYER: By very large orders. We now turn over 60, 70, 80 percent of the listed shares a year. That's very high and that's too much and people, yes, if they want to hang on two, three, five years, I think the market is probably fairly valued, but if they come in at the wrong period in that two, three, five years and they leave at the wrong period, they can take a whip sawing of a kind of that is unnecessary and very unfortunate. I think they're gone for a while.

MR. MacNeil: Are they gone for a while?

MR. SINAI: Well, I think there are two reasons why individual investors are disenchanted. One is the tremendous proliferation of so many instruments and the detachment of individual investors from what goes on in the marketplace.

MR. MacNeil: Instruments meaning buying indexes and all that sort of stuff --

MR. SINAI: All of that --

MR. MacNeil: -- baskets of shares --

MR. SINAI: -- which we have touched on. The other is fundamentally economic problems, potential financial problems for the United States, potential rises in interest rates, and certainly it's having to do with the election and what the policies will be. I think of the two, if we happen to take care of our budget deficit responsibility, if we had Federal Reserve policy that meshed with a tighter budget policy, if we got through the election, we will get through the election and resolve some of the uncertainties about who the next President will be and the policies that will be followed, and if we became more competitive in the world economy, I think most of what we were talking about in terms of disenchantment would go away very very quickly.

MR. MacNeil: Allen Sinai, Martin Mayer, thank you both for joining us. Jim.

MR. LEHRER: Still to come on the Newshour tonight, a Dukakis stump speech, Presidential candidate Lenora Fulani, and the biggest state fair of them all. SERIES - '88 - ON THE STUMP

MR. LEHRER: We continue now our series of excerpts from the Presidential and Vice-Presidential candidate's stump speeches. Yesterday we heard from George Bush. Tonight it's Michael Dukakis. He spoke this morning at Western Michigan University in Kalamazoo.

GOV. MICHAEL DUKAKIS, Dem. Presidential Candidate: I'm going into these last three weeks as an underdog, so did the Los Angeles Dodgers -- fighting for the values that I believe in, the values that are at the core of this campaign. I'm here today because I want to be the President who stands up and fights for you and for people like you all across America. Mr. Bush has done nothing about curbing excesses on Wall Street and nothing about bringing back investment to Main Street, where it belongs. Sitting back is his way, but it's not mine. We've got to end the Republican rainbow coalition of red ink for our children, pink slips for our workers, green mail for sharp operators on Wall Street, and golden parachutes for top corporate executives. And next January 20th, the days of merger mania on Wall Street are going to end and Main Street's day will dawn in the United States of America -- the beginning of an America that invests instead of speculating, that builds industries, builds industries instead of carving them up, that takes on our foreign competition and wins by exporting American products, not American jobs. In its first four years alone, this administration turned two generations of trade surpluses into the world's largest trade deficit and cost our workers in this country 5 million jobs. In the first four years of the Dukakis/Bentsen administration, we're going to turn that trade deficit back into a trade surplus and reclaim those jobs. That's our goal, to eliminate the trade deficit in four years. Now it's going to take hard work. We're going to have to bring that budget deficit down, and we're going to do it. We have to open up foreign markets to American goods, and we're going to do it. And what about Mr. Bush? Well, he's got the flags, he's got the balloons, but no convictions, no ideas, and no plans. Two days ago he announced that he didn't want to talk anymore about what he would do if he was elected President. Maybe it's because he hasn't the vaguest idea how to deal with the trade deficit, how to rebuild our industrial heartland, and how to revive Main Street. Mr. Bush may be content to sit in the sidelines, but Lloyd Bentsen and I want to be on the playing field on the American side. We're going to stand up and fight for American companies and American products, and American jobs. And with your help, we're going to win this fight.

MR. MacNeil: Michael Dukakis speaking in Kalamazoo, Michigan. We'll continue to run excerpts from the candidates' stump speeches throughout the remaining three weeks of the campaign. NEWS MAKER - '88 CAMPAIGN

MR. LEHRER: We move now to another candidate for President of the United States, Dr. Lenora Fulani. She is the candidate of the New Alliance Party, one of more than a dozen other candidates besides Bush and Dukakis. She is the only one of those others whose name appears on the ballot in all 50 states and the District of Columbia. She is here for a News Maker Interview which will begin right after this set-up report by Kwame Holman. [Radio Talk Show Segment]

KWAME HOLMAN: Lenora Fulani is 38 years old and a developmental psychologist with a Ph.D. She ran for Mayor of New York City in 1985 and for Governor of the state in 1986. As head of the New York-based New Alliance Party, she travels the country speaking out for the rights of blacks, women, gays, Latinos, and native Americans.

RADIO TALK SHOW HOST: What kind of signal do you hope to send to the black community?

LENORA FULANI: A powerful one, one that makes it very very clear, and I think our standing together supports this, that there is a new and powerful independent leadership developing in the African American community that's not --

MR. HOLMAN: Fulani is running on a platform that supports, among other things, minority rights.

LENORA FULANI: The thing that African American people have been fighting for in this country for a long time is freedom, fairness and social justice. We still don't have that. The poverty in the African American community, in the native American community among Latino people is higher than it was when Johnson declared his fake war on poverty many years ago.

MR. HOLMAN: She wants to increase government funding for health care and housing and slash military spending.

TELEPHONE WORKER: I'm calling from the Fulani campaign office in New York.

MR. HOLMAN: This is the New Alliance Party's second run for the White House. In 1984, their candidate was on the ballot in 33 states; he drew 60,000 votes. This year, Fulani hopes to get a million votes from disaffected voters who feel ignored by the Democratic and Republican Parties.

FRED NEWMAN, Fulani Campaign Manager: Those two parties are moving further and further to the right and closer and closer to each other. So there is an unrepresented majoritarian grouping, in our opinion, and there needs to be a party and a candidate that gives expression to what those people want, and it's not the Democratic Party.

MR. HOLMAN: So far, the Fulani campaign has raised about $2 million; 880,000 of that came from federal matching funds. She is the only independent candidate to qualify for matching funds and the only one to appear on the ballot in all 50 states and the District of Columbia. Fulani's goal is to bring about a fundamental change in America's social policy. She tried to do that originally by supporting Jesse Jackson's campaign. When Jackson lost his Presidential bid and Democratic nominee Michael Dukakis selected a conservative as a running mate instead of Jackson, Fulani decided it was time to teach the Democrats a lesson.

LENORA FULANI, Presidential Candidate: Our strategy should now be clearer than ever. The more the black community is responsible for costing Dukakis the White House, the more we do to make him a loser, the better off we will be after the election. Settled comfortably in the White House, Mr. Dukakis and the Democrats would forget us like yesterday's news, but out of power due to our independent vote, the Democrats will be forced to take seriously the black agenda, the black community, and Rev. Jesse Jackson.

MR. HOLMAN: Rev. Jackson has not endorsed Fulani's campaign. Her best known supporters are controversial ones. Nation of Islam Leader Louis Farrakhan and the political activist Rev. Al Sharpton. The campaign has focused most of its efforts on eight states with large numbers of electoral votes and large black communities. Analysts agree the Fulani campaign's chances of affecting the election's outcome are very small.

MR. LEHRER: Now to Dr. Fulani. Welcome.

DR. FULANI: Hi. Thank you.

MR. LEHRER: Your main purpose is to defeat Dukakis, is to try to get blacks not to vote for the Democratic ticket.

LENORA FULANI, 3rd Party Presidential Candidate: And to make it clear to the Democratic Party that they can't take the black vote, the progressive white vote, and the gay and lesbian vote for granted. It's also to speak as the only candidate who is doing so in this Presidential race in behalf of the black agenda, my people's fight for social and economic justice, a fight that we've been in ever since we've reached the shores.

MR. LEHRER: How are blacks helped by a Republican President and Vice President over a Democratic President and Vice President?

DR. FULANI: Well, the real issue that we're not helped by either, unless we have some way of impacting upon what they do. One of the things that people have been brainwashed into believing in this country is that what matters in a race, be it for dog catcher or for President of the United States, is who wins. But really matters is who emerges from that race with political power and political leverage. I think we can see in the choice of Lloyd Bentsen, for example, over Rev. Jackson that the so-called Reagan Democrats have a lot more power and control over the Democratic Party than we as black people and as builders of a rainbow movement in this country who helped Jesse Jackson deliver 7 1/2 million votes. When the rich white men who run the Democratic Party went into that back room and made a decision about who they would select as their Vice-Presidential Candidate, they said, look, don't worry about the black vote, we'll get it, let's go after the vote that we have to work for, and when we get, you know, when people go out to the voting booth in November, they'll just pull that lever in the African American community and in the gay and lesbian community and in other disenfranchised communities because they have no choice. What the Fulani campaign says is that we have a choice and we're going to fight like mad over the next three weeks to give the American people knowledge of this real option that exists for them.

MR. LEHRER: How do you explain then Rev. Jackson's decision to support with enthusiasm with the Democratic ticket?

DR. FULANI: Well, he has to live with it is how I explain it.

MR. LEHRER: I see.

DR. FULANI: He made it very clear to us that he was going to go with whomever the nominee of that party was, and I don't hold that against Jesse. I think he did a brilliant job. We love him for that job. But many people in the African American community have no desire to go with him. Actually, what political analysts are saying from people who've written articles on my campaign from the Congressional Quarterly to the Boston Herald is that the Fulani campaign, if it receives enough of the black vote, has the opportunity to determine who ends up in the White House. Tony Brown, a well respected columnist in the African American community wrote an article entitled, "The Woman Who Might Choose The Next President." So we're going after that vote. I'm also going after the vote of the millions of people who are showing up in polls who are saying we don't see a real choice between Dukakis and Bush, we're not moved by them, they're not passionate, they're not, you know, enthusiastically gathering support in this country because they don't represent us. One of the ways too I can tell that the campaign is catching on is because the heat has been turned up.

MR. LEHRER: Is that right?

DR. FULANI: I have been maligned and attacked. You know, any day I'm called a Communist, the leader or member of a cult, I'm brainwashing people, I belong to the LaRoucheites, none of that happens to be true, but I think we have the Democrats scared, so much so Michael Dukakis is spending $6 million in black media. This is recordbreaking money that the Presidential candidates have never spent that kind of money on black media, so much so that black Democrats like Ron Brown, who for 15 months has not said anything about my campaign with Dukakis failing in the polls, is, you know, being called on -- he's calling my attempts ridiculous. Ron Walters, who was the strategist for Jesse's '84 and '88 campaign, is saying things like Fulani is not a credible black leader, she's not organic to the black community. You know, this is nonsense. It's these people's attempts to hold onto the paychecks that they get as black leadership from that party while our people are failing in the streets. And my campaign is exposing that level of leadership in the African American community, amongst gays and lesbians. And what the people of this country are saying is that we are not going to finance their yachts and their limousines and their academic, you know, sit-outs, while we're in the street slugging it way because we're being robbed by both parties and excluded from an electoral process by their abuses of power.

MR. LEHRER: So you are running for President, but you're not running to be President, is that right? You're not saying or suggesting that there's any chance that you could be, in fact, elected, is that right?

DR. FULANI: Not unless we build a national third party, which is what I'm running to do.

MR. LEHRER: But I mean three weeks from now.

DR. FULANI: I have no illusions about ending up in the White House. What I plan to do is to establish the option for the American people when they go to the booth to have someone other than this rich white man or the other to vote for. People need real options. That's what they're crying for in all of the newspapers, letters to the editors and editorials.

MR. LEHRER: How would you summarize your qualifications to be President?

DR. FULANI: Well, I've never been a Grade B actor. Obviously, I'm not, you know, wealthy, nor am I a white man. My qualifications, like Rev. Jackson's qualifications, come from my leadership ability and the capacity to organize, you know, 1 1/2 million people to come out and support my campaign through giving me their signatures. Over 100,000 people have written out checks in order to support the campaign. My qualifications is that of a black woman who's sick to death of being run over and under by a two party system that does not represent me and who's willing to do whatever I have to do and take whatever risks there may be involved in running for President in order to provide people with an option.

MR. LEHRER: What risks? You've mentioned that a couple of times. What kind of risks are you taking by running for President?

DR. FULANI: I mean, basically, it's the risk of running up against the wealthy white men who control the system, of qualifying, doing all the hard hard work of qualifying for being included in the debates by virtue of the objective criteria that exists and having the Democrats and Republicans pretend like there is not a third candidate, going into federal court, spending the money to get there, having a federal judge rule --

MR. LEHRER: Just to get on the ballots, you mean, in these states?

DR. FULANI: Right, definitely. Having the federal judge rule in this case that I had against the commission who sponsored both debates that the questions that I was raising about the invalidity of the tax exempt status of that commission were absolutely right on. But he would not call for an injunction, because he did not wish to disrupt the political order, also the risk of being maligned by, you know, the real folks of the Democratic and Republican party, that leadership, people like Ron Brown who get on TV and say things like I'm ridiculous, when, in fact, what I'm doing is providing my people and the other disenfranchised people in this country an opportunity, an option to express our total disillusionment with these two parties.

MR. LEHRER: Do you have any message for the franchise people, I mean, for the majority whites? Do you want them to vote for you? What would be your message to them?

DR. FULANI: Well, the message that many have responded to, which is a message for a fight in this country for democracy. I think it's being eroded. I think we need to be very frightened by the abuses of power by the people who run this nation. I think, you know, for the folks who are turning up in polls and saying, I don't know who to choose from, many of those people come from all walks of life. I think what they have to do is do what the Chilean people did just a week and a half ago, to say no to a process that is alienated from all kinds of common people, that does not represent us, and that is not really steeped in or cares about democracy. I care about the people of this country. I really got fired up in seventh grade civics class when they told me that the thing that we had going for us as a nation was a participatory democracy that represented all folks. I found out as a young black girl, watching my father die at the age of 12, because an ambulance service would not come into the community to pick him up, that --

MR. LEHRER: Because it was a black community, they didn't serve blacks?

DR. FULANI: Because it was a black community and a poor community, that that --

MR. LEHRER: Where was that, that was in Pennsylvania, right?

DR. FULANI: Chester, Pennsylvania -- that justice did not extend and that you had to fight for it, and that's what I've been doing, fighting for it, standing up and saying that we as the African American community must lead the way at making it possible for us to determine the direction of our country, not a handful of elitists, racists and exclusive white men.

MR. LEHRER: You have said, you have conceded that you don't expect to be elected President, but you must have considered, have you not, what a Fulani Presidency would be like. What would be different about it? What would you do?

DR. FULANI: Well, one thing is thatI would have to fight my way to the White House, given that this whole process is so unfairly controlled --

MR. LEHRER: Well, you're on the ballot in all 50 states. I mean, people could vote for you.

DR. FULANI: Basically, one of the things that I would do right away, which is what I've been fighting for very strongly, is more inclusion on the part of the American people. I think we need automatic voter registration. I think we need to send out a message to the Congress, the Senate, and other forces that control the country at a state and local level that the people of this country will be more involved, that we really do believe in democracy, that there must be a majority rule. Let me just give you an example of something that has been very surprising to people. In the State of Indiana, both Dukakis and Bush filed late and are on the ballot illegally there. I am the only Presidential candidate on that ballot legally. In the State of Missouri, where Ron Paul, the libertarian, did the same thing, he was thrown off and every appeal to get on has been denied him. I have taken this message out. We actually sued the Board of Elections in that state to fight against that abuse of power, because what I've been teaching the American people is that that abuse is not just the abuse to an independent, it's an abuse of our Democratic rights. And people are shocked. They're shocked at the exclusion. They say, Dr. Fulani, are you sure you're on the ballot in all 50 states, maybe they don't know it, maybe that's why you weren't in the debates. But they do know it. But they don't care about us. They care about projecting images that allow them to win, while we continue to lose.

MR. LEHRER: You've talked about taking risks, but it seems to me like you are enjoying yourself, are you not?

DR. FULANI: I am that, but it's so riskful. You know, I have two young children, a 15 year old daughter and an 11 year old son. Also when black leadership stands up in this country and speaks out in behalf of social justice, it's been known that we get our brains blown out. We see what's happened to other independent black leaders. I, for example, am a very staunch supporter of Tawana Brawley and the Rev. Al Sharpton, who's also endorsed my campaign. And we've seen the New York Times and other major newspapers in the state go out of their way to misconstrue the facts of this young woman having been raped and attacked by white law enforcement agents.

MR. LEHRER: And also many blacks too --- just for the record, a lot of black leaders have also criticized that, I mean, have taken an opposite position than what you take.

DR. FULANI: All right. But there is a gap, which is the point that I'm making about my candidacy, between what black leaders do and what the people in the streets do. I invite Ron Brown and Ron Walters, and all of these other so called black leaders to come into the community and --

MR. LEHRER: I was just talking about the --

DR. FULANI: Right -- and the people who are criticizing Rev. Sharpton, and to listen to what the people are saying about his leadership and his support of our people in that state.

MR. LEHRER: Dr. Fulani, again, thank you for being with us tonight.

DR. FULANI: Thank you for having me.

MR. LEHRER: Good luck to you. ESSAY - NOSTALGIC RIDE

MR. MacNeil: Finally tonight we have an essay from one of our regulars, Penny Stallings. When the weather starts to turn cold, she knows it's time to go home to Dallas and the Texas State Fair.

PENNY STALLINGS: Some people get it in Paris, others in Rome or Venice, butme, I get it when I leave New York to come home to Dallas, for the state fair of Texas, the feeling that this is where I belong. For those of us who grew up on it, the fair has always had a kind of surreal quality, with its juxtaposition of down home wholesomeness and side show sleaze. Like Texas, it doesn't have any rhyme or reason, it just is, and like Texas, it's bigger and gaudier than any other fair around. Where else would you find Big Tex, the 52 foot cowboy who talks, cows the size of Winnebagos, horses the size of dogs, and pigs that race like greyhounds? There is the midway, with its fun houses, side shows, and rides guaranteed to make you wish you hadn't eaten that last burrito. That's the newly renovated band shell, once the home of the Starlight Operettas. People still talk about the time a June bug got fresh with Nanette Fabbre during the finale of "Bloomer Girl". Many of us have special memories of the fair, first date, first kiss underneath the willows that overhang the lagoon. My own special memories are of stories my grandparents told about playing the state fair with a wheel of fortune. Young and adventurous, they'd travel the carni circuit by motorcycle during the depression. In the fall of '31, they ended the summer season in Dallas, a pretty tree lined town next to what was then the Trinity River. In those days, much of the midway was made up of burlesque reviews and side shows with the usual array of Siamese twins, headless torsos and man eating rats. But Baptist leaders successfully mounted a movement to clean up the midway. In the 40's and 50's, the fair enjoyed a period of grace. It couldn't have been more stylish, but the 60's were a troubled time for the fair. For teenagers, it was a corny, red-necked scene, and for middle class whites, it was a rundown mess in the bad part of town, that's bad as in poor and black. Tensions escalated once civil rights demonstrations forced the desegregation of the fair in 1961. Until then, blacks had been limited to one day a week out of the sixteen day season. Strapped for cash, Fair Park fell into a pitiful state of disrepair. Dallas's city fathers even considered moving the fair to another location. The fact that that would mean bulldozing the park's 50 magnificent art deco monuments didn't exactly spark a public outcry. After all, they were weird looking and old. But what you have to understand is that whereas most American cities are an amalgam of the old and the new, Dallas is an amalgam of the new and the newer. In the building boom of the 70's and early 80's, when Swiss cranes dotted the Dallas landscape like crows in a cornfield, mirrored skyscrapers seem to spring up overnight. That made the fair grounds built in 1886 a virtual antiquity. Of course, in Texas, today's antiquity is tomorrow's building site, but then a miracle happened. The fair received a multi-million dollar grant to renovate the music hall, the fabulous Morish Palace that is now home to the Dallas Symphony, Ballet, and summer musicals. The fair ground's future was secured. Over the last decade, the fair has gradually been destroyed to its former glory. Today its murals glow with color and the spirit of the centennial once again rises up against wide Texas skies. Best of all, Texas may actually be coming to appreciate the quirkiness of this art deco Oz with its ridiculous mix of bronco busting and ballet, penny arcades and pig races. Maybe in these volatile days, when it seems like most Texans come from somewhere else, any sense of permanence has a soothing effect, and for all those Texans who've left home for other places, it's comforting to return to a place that hasn't changed perceptively in over 50 years. Whoever it was that said you can't go home again couldn't have been from Texas and he sure as shootin' hasn't seen the Texas State Fair. RECAP

MR. LEHRER: Again, the major news stories of this Tuesday, Soviet inspectors arrived in Arizona to witness the destruction of 41 U.S. Cruise missiles as agreed to in the Intermediate Range Nuclear Missile Treaty. And Ohio Gov. Richard Celeste asked the federal government to shut down its nuclear weapons facility near Cincinnati until radioactive pollution problems are solved. Good night, Robin.

MR. MacNeil: Good night, Jim. That's the Newshour tonight and we will be back tomorrow. I'm Robert MacNeil. Good night.