The NewsHour with Jim Lehrer

MR. LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, the federal shutdown's impact. Kwame Holman in Washington, Elizabeth Brackett in Chicago have reports. Charlayne Hunter-Gault talks to our regional commentators. Russian capitalism, Paul Solman considers the problems. A dialogue about evil, David Gergen engages author Andrew Delbanco. And the legacy of Arleigh Burke as seen by his current successor, Adm. Mike Boorda. It all follows our summary of the news this Tuesday. NEWS SUMMARY

MR. LEHRER: This second day of the new year was the 18th of the federal government shutdown. Budget negotiations between congressional leaders and the President resumed late today. Just before that meeting, the Senate passed by voice vote a temporary spending bill to put government employees back to work. But some Senators said balancing the budget was still more important than the government shutdown. Others said federal workers need their paychecks now.

SEN. PAUL SARBANES, [D] Maryland: There seems to be an assumption on the part of many members of the Congress--maybe it reflects their own particular financial situation--an assumption that people somehow have money stashed away that they can simply draw down on, and so when the paycheck doesn't come in, it doesn't make any difference in their standard of living. That's not true for an awful lot of people. A lot of people need the paycheck in order to pay car payments, house payments, tuition payments, meet their ordinary living expense, and this is particularly true of people at the lower and middle grades, but it applies throughout the federal service.

SEN. CRAIG THOMAS, [R] Wyoming: If you want to find a solution, you can find a solution. You can't just continue to talk, say we've had the useful conversation, and walk away, having made no decisions. That's not a way. I have a little different view, however, of some of the reasons that we're here than the gentleman from Maryland. The President could have signed the appropriations bills. We could have had those people back at work. He chose not to do that. We started on November 14th, I believe, with an agreement to find a balanced budget in seven years, using CBO numbers. And that was not done.

MR. LEHRER: The Senate bill now goes to the House, which was not in session today. Speaker Gingrich said it would be hard to get it passed there. House Republicans have refused to consider a temporary bill without a balanced budget agreement. We'll have more on this story right after the News Summary. On Bosnia today, Sec. of Defense Perry visited Bosnia-bound U.S. troops at the Aviano Air Force Base in Italy. Perry and the chairman of the Joint Chiefs, Gen. John Shalikashvili then flew to a base in Hungary, another departure point for the Bosnia force. They will go to Bosnia, itself, tomorrow to see American troops already in Sarajevo and Tuzla. Back in Washington today, five major tobacco companies officially challenged proposed new regulations of cigarettes. They filed 2,000 pages of documents with the Food & Drug Administration, claiming the rules are illegal and unnecessary. The FDA would ending vending machine sale of cigarettes and require tobacco companies to fund ad campaigns warning children of the health dangers of smoking. A tobacco industry spokesman criticized the FDA regulations.

STEVEN D. PARRISH, Philip Morris Companies. The agency proposes far more than preventing youth access. It seeks to ban practices and impose requirements that will not keep kids from smoking but will interfere with the rights of adult smokers and the rights of adult smokers and the rights of the companies to sell their products. Even the focus groups that FDA conducted cast doubt on the role of advertising and promotion and influencing U.S. smoking. Instead, the evidence shows that peer pressure, parental influence, and other social factors predominate.

MR. LEHRER: Opponents of the tobacco industry said today parents need assistance educating their children about cigarettes. A spokesman called the FDA's action on underage smoking long overdue.

SCOTT BALLIN, Coalition on Smoking OR Health: For years, for 40 years to be exact, we've heard the industry promise to put the public's health above their corporate interest and that they don't want children to use tobacco products. Their promises were hollow deceptions designed simply to keep Americans smoking, to recruit new young smokers to get hooked on their products so that they could continue to reap profits at the expense of disease, addiction, and death.

MR. LEHRER: Also in Washington today, two federal agencies released a new set of nutrition and health guidelines. They recommend 30 minutes of exercise every day, supplementing a vegetarian diet with additional vitamins, and drinking alcohol in moderation. Health & Human Services Sec. Donna Shalala presented the recommendations at a news conference.

DONNA SHALALA, Secretary, Health & Human Services: These new guidelines will provide every American with the best scientific information about how to make smart food choices that promote good health. Forget about all the background noise. These guidelines are the gold standard for nutrition and for health. They will help Americans to cut through all the fads and all the myths concerning our diets, and they will allow Americans to ring in the New Year with new diet resolutions that will protect their health and maybe save lives.

MR. LEHRER: Former Interior Sec. James Watt pled guilty today to a federal misdemeanor charge. He admitted he withheld information from a grand jury investigating his activities as a housing consultant. Watt had been indicted on 18 felony counts charging him with perjury and obstruction of justice. He could face up to six months in prison and a $5,000 fine. Watt helped clients seeking federal aid from the Department of Housing & Urban Development after he left President Ronald Reagan's cabinet. In economic news today, AT&T announced it will cut 40,000 jobs in the next three years. A company spokesman said more than half of them are supervisory, administrative, or marketing jobs. The move is part of a restructuring of AT&T into three separate companies providing communications services, communications equipment, and computers. And that's it for the News Summary this Tuesday. Now it's on to the government shutdown, two reports, and ourregional commentators, Russian economics, a Gergen dialogue on evil, and remembering Arleigh Burke. FOCUS - FEDERAL SHUTDOWN

MR. LEHRER: The federal shutdown and the budget disagreement that caused it continued today, as did the high-level talking about talking. It is once again our lead story. Our coverage begins with two reports. First, Kwame Holman looks at some of what is not happening in Washington these days.

MR. HOLMAN: Washington's federal workplaces were a study in contrast this rainy, first official work day of the new year. Most of the 6,000 workers at the Small Business Administration are considered non-emergency, and the agency's main office was a lonely place this morning. But a skeleton staff of the Commerce Department's 36,000 employees did trickle in to work. They are among 1/2 million federal workers performing duties at the nine major departments and two dozen agencies affected by the shutdown. They're required to work even though funding for their jobs is held up by a budget impasse now in its third week. But Commerce Undersecretary Everett Ehrlich is concerned about the work that's not being done. He says going without the myriad economic aid that the Commerce Department normally collects will reverberate throughout the economy.

EVERETT EHRLICH, Secretary, Commerce Department: And I think that economic actors ought to have facts about the economy. It's our job to produce them. As those facts become more and more distant and more and more delayed, our economic actors, firms and households and people who trade stocks and bonds and the like, are all moving away from reality. They're relying more on guesswork, and that means an economy that's more volatile and less reliable in the long run, and it means that more of our decisions are made on a smaller and smaller base of information. That can't be good for economic activity.

MR. HOLMAN: The Labor Department too is operating with a tiny fraction of its workers. In a fifth floor hallway of Labor's main building pension plan reports from thousands of private companies await government processing. The Department said 3500 investigations of potential pension and health plan fraud are on "hold." The Wage & Hour Administration is not enforcing most fair labor practices. And only the most egregious worker safety complaints are being investigated. On Capitol Hill this afternoon, Sec. Donna Shalala took personal charge of enumerating what's being left undone by the lack of funding for her Department of Health & Human Services.

DONNA SHALALA, Secretary, Health & Human Services: Today, when states normally would expect to receive their federal money for services ranging from child care to elder care, from disease prevention to violence prevention, what they will get instead is an empty sack and the devil's choice of either cutting services, like their meals programs, or laying off employees, or taking money from other state programs and creating a cash flow problem there.

MR. HOLMAN: And the list of government activities crippled by the lack of funding continues. The Environmental Protection Agency says clean-up operations at half of its twelve hundred Superfund hazardous waste sites are to be halted today. The EPA says it will use its few remaining funds to continue cleaning up eighty sites that potentially pose an immediate health risk. But one spin-off of the budget battle may be welcomed by the public. Because of the impasse, the Internal Revenue Service has stopped collecting three airline taxes, including a 10 percent ticket tax that brought in $15 million a day.

MR. LEHRER: Now, how all of this is being felt outside of Washington. Elizabeth Brackett of WTTW-Chicago reports on workers in the Chicago area.

MS. BRACKETT: It's been two weeks since Don Pellico boarded the train from suburban Glen Ellyn to downtown Chicago. Pellico has not been off work by choice. A federal employee with the Small Business Association, Pellico was on furlough. But he was back at his desk this morning, one of 13 SBA employees called back to work in the Chicago office.

DON PELLICO, Small Business Association: [on phone] This is Don Pellico. I am back in the office today, Tuesday, January the 2nd. There is still the official furlough still in existence; however, I am back to work on emergency cases only.

MS. BRACKETT: Without a budget, the SBA cannot spend any money, so those trying to get or complete an SBA loan can still not be helped. But the government does want to protect its assets. Pellico's supervisor, Anthony McMahon, says that's why Pellico was called back.

ANTHONY McMAHON, Small Business Association: His job assignment deals with property that's been foreclosed on or being foreclosed on and liquidated, the recovery of dollars for the government that have been made in loans that for one reason or another have failed, and he has caseload that is losing value if it's, if it's not attended to on a regular basis, so--

MS. BRACKETT: Can he make decisions today?

ANTHONY McMAHON: No, but he can--he can recommend some actions that he thinks are, are of particular import, where there is going to be actual loss of value for us, and we can transmit those to Washington for approval.

MS. BRACKETT: As Pellico looked through the mound of paperwork that had built up, he was again angered by the furlough.

DONALD PELLICO: I wish I wasn't playing catch-up, because now I'll be putting out fires, so to speak, for the next couple of weeks, resolving problems that initially weren't there but have become major problems now.

MS. BRACKETT: Pellico thought he would be away from his desk even longer, but last Friday, he got the call to return.

DON PELLICO: [Friday on phone at his home] Okay. Working for no pay. Okay.

MS. BRACKETT: Carol Pellico was glad to hear that her husband would be back at his job. She at first thought it would mean a fully paycheck and was disappointed to learn that was not the case. With two small children and Christmas bills looming, Carol Pellico was getting nervous.

CAROL PELLICO: [on phone] Actually, I'd like to wait just a little bit. My husband was furloughed from his job for a couple of weeks. You know how that goes, so money's a little bit tight, but- -

MS. BRACKETT: After nine years as a loan officer with the SBA, Pellico makes a little under $50,000 a year, but after paying $1100 a month for the mortgage, $360 a month for the car, preschool payments for four and a half year old Ryan, plus a loan for some home remodeling, the Pellicos have not put much aside for emergencies like this one. What frustrates government employees and their families is a feeling they have so little control over both the budget debate and their own future.

DON PELLICO: It's not the two weeks of, of furlough that worried me and the half paychecks; it's the agency, itself. A lot of people out there have no clue as to what the SBA does, and there are many members of Congress, new members, who have no clue what the SBA does, so when I hear that they want to abolish SBA and they don't really have a background as to what the SBA does, it's frustrating.

MS. BRACKETT: For the moment, bothPellicos are glad Don Pellico is back on the job.

DON PELLICO: We learned that it's better that I work full-time than stay at home.

CAROL PELLICO: I don't think Don was cut out--

DON PELLICO: Well, we've confirmed that fact.

CAROL PELLICO: I don't think Don was cut out to be Mr. Mom.

PATRICIA JACKSON, Health & Human Services: Just in case I didn't know something, you were supposed to point it out to me.

MS. BRACKETT: In another suburban home, government worker Patricia Jackson still waits for a call to return to work. Jackson has worked for 15 years as an administrative officer with the Department of Health & Human Services. A single mother of two, she earns about $35,000 a year and lives from paycheck to paycheck.

PATRICIA JACKSON: Well, I'm really worried about being able to pay my bills, you know, because my children's tuition is due the middle of January, and that's the check that's not going to be coming, and, you know, rent is due next week, car payment, car insurance, all my utilities. I mean, they're up to date, you know, for last month, you know, but they're coming up again.

MS. BRACKETT: Jackson cut back on Christmas spending, and she says her two children have felt the impact of the budget crisis.

CHARETTE COX: She isn't working because it's like the President and the Congress people can't come to a mutual decision. Until they do, all the like federal employees aren't gonna, gonna be able to come back until they come to a mutual decision. And I wish they'd hurry up because it's like we used to be able to do more things but now we can't do any things like we used to do, because she is not- -she doesn't have a job that much, so we'll go places like we did, but we can't spend as much money as we used to, and we have to watch how we spend it.

MS. BRACKETT: Right now, Jackson's biggest concern is her children's Catholic school tuition.

PATRICIA JACKSON: I can probably pay the rent, but the other bills, no, and of course, I'll have to explain to the school why I can't pay their tuition and ask them, well, don't kick 'em out, you know, I'm gonna pay you when I get it.

MS. BRACKETT: Jackson says she understands why taxpayers might object to government workers getting a paycheck for not working, but she wishes they would put themselves in her shoes.

PATRICIA JACKSON: Well, then I tell them, well, why don't you try not working, not knowing when your next check is going to come, and see what you feel like, and a lot of people are really mad at the fact that we did get paid the first time, but they have to realize we're human beings, we have children, we have lives, we want them to keep going, and just because this is a political thing but we still need to live, and being government employees, we want to get paid.

MS. BRACKETT: Jackson says she has rarely left the house over the holidays, since it costs money every time she walks out the door. She did receive a check today for one week's pay for the week before the shutdown, though deductions were taken out for a full two-week pay period. And neither Jackson or any other government worker know when to expect the next paycheck.

MR. LEHRER: Now, how the government shutdown is playing around the country and to Charlayne Hunter-Gault.

MS. HUNTER-GAULT: Our eyes and ears on how the shutdown is being felt in places near and far are our regular regional commentators: Clarence Page of the "Chicago Tribune," Lee Cullum of the "Dallas Morning News," Patrick McGuigan of the "Daily Oklahoman," Cynthia Tucker of the "Atlanta Constitution," and William Wong of the "Oakland Tribune," and Mike Barnicle of the "Boston Globe." And, Clarence Page, let me start with you. Are you hearing anything like what we've just heard on the tape in your area about how this impact is affecting people?

CLARENCE PAGE, Chicago Tribune: Sure. The most poignant stories tend to be either those government workers who live from paycheck to paycheck and wonder when their next one is going to come, or tourists, people who use either government facilities like the museums here in Washington--one fellow came all the way from Chile to see the Vermeer Exhibit at the National Gallery, and it's closed, and students who come in by buses, you know, for their senior trip, who suddenly can't get into the Smithsonian, this sort of thing, or American tourists trying to get overseas with passports, you know, passport applications processing is held up. One of the more unusual stories, there are also those government workers who are judged essential, have to come to work. At the U.S. attorney's office in Chicago, one attorney was called back in early from a surgical medical leave and another was called back from a vacation in Hawaii. There was concern of whether U.S. Attorney Jim Burns, himself, could go to the Rose Bowl. He's a Northwestern alum, and they hadn't been in the Rose Bowl since 1948. But it turns out because he's a presidential appointee, he could go, but those who were not could not.

MS. HUNTER-GAULT: Mike Barnicle, what about your area, how are people feeling the effects up there in Boston?

MIKE BARNICLE, Boston Globe: [Boston] Oh, I don't know that they're feeling any effects of the shutdown, but I think, along with all the government workers, some of whom were outside the federal building here in Boston today protesting, trying to create some attention to their cause. In addition to the government workers, I think there are more and more people, average Americans, who would like to see the President, the Speaker of the House, and the Senate Majority Leader have to make the same choices as that woman in your last film piece did. They'd like to see them make the choice between a car payment and tuition, that these people live in an unreal world. They sit around a table in Washington, D.C., at the White House, having a government seminar, when they're not going off to some self-absorbed weekend retreat, Renaissance Weekend, playing golf, and they don't have to make the choices that average Americans have to make. I think a lot of people feel that way.

MS. HUNTER-GAULT: All right. Patrick McGuigan, how about in your area, people feel that way?

PATRICK McGUIGAN, Daily Oklahoman: [Oklahoma City] I think there's a lot to what Mike just had to say, I really do. I will say that the flip side is that those of us in the media need to continually keep at least part of the focus on the big picture. You know, this whole analogy that's developed of people living paycheck to paycheck, I think there's a lot of sympathy to that. The problem we have as a society and as a country is that we allowed our federal government to live from paycheck to paycheck. We're clearly too big at the federal level in terms of the size of our government. The Republicans have confronted that, and even newspapers as editorially liberal as the "Washington Post" were crediting the Republicans for that today. That's the big picture, and it's very important, but I think Mike put his finger on something in talking about these personal stories. They are poignant. I think they affect all of us, and people care about stuff like that, but we need to get there for the sake of those little children that were depicted in that one segment so that they don't have this mountain of debt facing them not only for their productive work time but for their children's.

MS. HUNTER-GAULT: Lee Cullum, is it affecting all of the people, including people where you live down in Texas?

LEE CULLUM, Dallas Morning News: [Dallas] Well, Charlayne, I'd like to echo a little bit of what both Mike and Patrick said. Certainly here in Dallas, as Pat mentioned in Oklahoma, there are a lot of people who feel strongly the federal government should be reduced in size; however, I don't run into anybody who thinks this current way of operating is the way to do it. I hear conservatives saying this is not fair. I notice that we're not talking about faceless bureaucrats anymore. We're talking about real government workers, federal workers, and there seems to be a new respect for them. The "Dallas Morning News" had an editorial saying it might be a good idea if members of Congress took a pay cut, maybe half a paycheck, until they get this problem resolved.

MS. HUNTER-GAULT: So this is getting big--is it getting big coverage? Is that big coverage or--

MS. CULLUM: Oh, yes, it's getting daily coverage, and I think that there is a real shortness of patience where this is concerned and a real feeling that one group of people, the federal workers, are bearing to brunt of this very worthy crusade to balance the budget, this necessary crusade.

MS. HUNTER-GAULT: Bill Wong, what about your area, how are people feeling the impact of the shutdown?

WILLIAM WONG, Oakland Tribune: [San Francisco] Well, the folks in the Bay area in California are feeling very much the same way as, as other federal workers who are laid off across the country. And I think that we're seeing a growing level of both gloominess and anger and frustration on the part of people who are federal workers, who are furloughed at this point, and who can't bring in a paycheck when, when those of us in the private sector are being able to do so. And I would share the sentiment voiced that symbolically at least with members of Congress and the administration, who are continuing to work and to get paid, there is a growing, growing frustration level above that, that gap. I might point out that the people--there's a growing number of private sector people who are in areas where the federal offices are who are feeling the effects too, so it's no longer--

MS. HUNTER-GAULT: In what way?

MR. WONG: Well, you know, restaurant owners, coffee shop folks, stores that are nearby, a federal building here in Oakland. There are--federal workers are very important to at least the daytime businesses in downtown Oakland, and they're beginning to feel the effects of the shutdown.

MS. HUNTER-GAULT: Cynthia Tucker, what about in Atlanta, how are people feeling down there?

CYNTHIA TUCKER, Atlanta Constitution: [Atlanta] Well, Charlayne, most like they are all over the country. The most dramatic stories you hear, of course, are from federal employees whose paychecks are affected, but it's also true that many federal employees have begun to point out that the public good also suffers. The "Atlanta Constitution" had a letter to the editor from several employees of the Centers for Disease Control and Prevention, which is based here in Atlanta, scientists, physicians, researchers, who pointed out that when the government shuts down, the Centers for Disease Control may still be able to do the emergency work, but the old-fashioned, routine work of prevention is slowed down, perhaps dramatically, and that affects the public good over time. And I think many Georgians are beginning to understand that, and they are disgusted that President Clinton and Newt Gingrich and other leaders cannot sit down and come to some decisions on how to work out a budget. People here certainly want to see government spending cut back, but I don't think most citizens think that this is the way for our elected officials to conduct the public's business.

MS. HUNTER-GAULT: Clarence Page, are people being just--you mentioned the people not being able to see the Vermeer Exhibit, and of course, if you come all the way from Brazil, that's more than a mild inconvenience--

MR. PAGE: Right.

MS. HUNTER-GAULT: --but we're hearing stories, including the ones on the taped piece, that people are being more than just mildly inconvenienced, is that right? I mean, people, are many people that you know of or know about hurting as opposed to being just mildly inconvenienced?

MR. PAGE: Well, the longer this goes, the more people do hurt. One case, I have a friend in New York who's a kidney patient. He has to have regular dialysis. He needed some information from those Centers that Cynthia's talked about down there in Atlanta, Centers for Disease Control, and could not get the information because the office that he needed to contact was closed because of the shutdown. This is the sort of thing people run into, senior citizens, people who need an FHA mortgage insured loan processed, folks like that who need these government services suddenly find that they aren't there. The more that happens, the more that impact is spread from family to family.

MS. HUNTER-GAULT: Mike Barnicle in Boston, the people you mentioned demonstrating outside, I mean, did you get a sense that people were being mildly inconvenienced, or this was really starting to hurt people where they live?

MR. BARNICLE: You mean, you mean the workers?

MS. HUNTER-GAULT: Yes.

MR. BARNICLE: Well, yeah, the workers have obviously been hurt. I mean, they've been economically crippled for a brief period of time, but in terms of the general public, you know, the last two weeks of the year and the first week of January really is sort of like August with snow. I mean, everybody is in sort of a lull, but there's something else going on here that is a little larger, I think, than just the furlough, and it's that the layoff of these government workers, there's a demonization of these people that's been going on in this country for several months now, led namely, I think, by these nuts on hate radio with their little radio shows each afternoon in various cities with drive time radio, and they go about saying that these people are all hacks, they're all non-essential, hey, your life hasn't been disrupted, why hire any of them back? Well, these are people's lives we're dabbling with here, people's lives that we're fooling with, and this has, in part, been played out by the Speaker and by the President and Sen. Dole, who have sort of indicated there's really not that much urgency to getting these people back to work when, in effect, the three of them, with the three of them, you have a combined total of almost 70 years of grabbing federal paychecks.

MS. HUNTER-GAULT: Is that--is that happening out there where you are, Pat McGuigan, that these workers are being demonized and unfairly in your view?

MR. McGUIGAN: I think there's always some of that in political debate. You know, we had a front page story the other day about the workers at the Veterans Administration deciding to just go ahead and keep working in the hope that eventually they will be paid, as has been indicated by the leadership. I think there's a lot of respect for them as a result of making that decision. There's one thing I want to interject, and that is I think it's very important to remember the President's role in all of this, including in the acceleration in the level of rhetoric. When his chief of staff was calling Republicans in Congress terrorists and referring to an allegorical gun being placed at the President's head, I'd say that contributed a little bit to the sharpening of some of the rhetoric. It might be time now for people, as Russell Kirk, a great conservative thinker, used to counsel, remember, politics is the art of the possible. And I think it's time for the Republicans in Congress and the President, mutually, to reach that conclusion.

MS. HUNTER-GAULT: Is this--is this impact a big deal in your newspaper, in the media in your area?

MR. McGUIGAN: Oh, yes. There's absolutely no doubt about that. Out here in Oklahoma, as all of you may know, there's a significant military role, including retired military people, so the impact of the Veterans Administration, even though that's an agency that's often criticized, it is the primary health care provider for a lot of people, so that's had an impact, and people are paying attention. I think folks here are conservative, but they'd like to see this get some kind of resolution.

MS. HUNTER-GAULT: Bill Wong in California, is this getting big coverage? Is it a big deal in the media out there?

MR. WONG: It's not the lead story anymore, because there seems to be a daily dose of frustration that is hardly any news anymore, but I might say--

MS. HUNTER-GAULT: Excuse me, the impact on the people, I mean, are these stories about people living from paycheck to paycheck, I mean, is that sort of thing getting more play?

MR. WONG: I don't think it's getting any more play than it had a couple of weeks ago. It's getting, you know, steady play, if you will, but I might just mention one sort of relative minor inconvenience for people who, who celebrate at the, who on an annual basis celebrate at the Yosemite National Park a special Christmas and a New Year's dinner which had to be canceled this year, and while this may not be the biggest deal in the world, I'm sure that the federal government officials did not get winning points from people who had made reservations and paid their money for that dinner.

MS. HUNTER-GAULT: All right. Well, Bill Wong, Lee Cullum, Cynthia Tucker, Patrick McGuigan, Mike Barnicle, and Clarence Page, thank you.

MR. LEHRER: Still to come on the NewsHour tonight, Russian economics, a Gergen dialogue, and the legacy of Arleigh Burke. FOCUS - CAPITALISM UNLEASHED

MR. LEHRER: Now, a Russian economics story. Our business correspondent, Paul Solman of WGBH-Boston reports.

MR. SOLMAN: Judging by the recent vote in which the Communists got by far the largest share, the Russian electorate would rather be red than reformed, that is, economic reform was widely repudiated at the polls. These days, however, the best hope for a free market economy in Russia might lie with people far from politics, people like Michael Taratuta. This is the opening sequence of one of the most popular TV shows in Russia, "America with Michael Taratuta." Twice a month, host and producer Michael Taratuta's half-hour TV magazine acquaints some 30 million Russians with such hallmarks of American life as Halloween and McDonald's. [Russian in background] Regularly, Taratuta explains the American way of business to viewers who'd been taught the evils of capitalism for 70 years.

MICHAEL TARATUTA, Russian Journalist: I know that all my stories which deal with the workings of capitalism, market economy, are very welcomed. They are very popular. An example: I did a story why airports in this country are money makers, and why airports in Russia have always been money spenders. This tape became educational material to ticket officers at the Russian airports, just as an example.

MR. SOLMAN: At one level, the ambition of these segments is modest, to simply show how business works, but at another level, Taratuta is actually trying to salvage capitalism at what may prove, given the recent elections, a critical moment in Russian history. Fearing possible consequences of a return to the past, Cold War with the West, civil war at home, Taratuta, among others, has turned to TV to influence the attitudes of everyday Russians by teaching them how to cope with free markets before it's too late. To do this, Taratuta uses a down-home approach. To illustrate how a small business scrapes by, for example, he featured his own, explaining how he produces the show from a temporary base in San Francisco, his daughter, Katya, helps him with reporting and translation, his wife, Marina, helps with the Russian voice-overs, his Russian cameraman, Vladimir, doubles as his graphics department, all part of an effort to make economics accessible to the everyday viewer of Russian TV, which makes perfect sense, says Taratuta, since it was TV that helped soften Russian attitudes toward the West and market economics in the first place.

ANNOUNCER: It's 8 at night in America and 7 in the morning in the Soviet Union.

MR. SOLMAN: In a sense, it all began with these so-called space bridges in the early 1980's in which Americans and Russians hooked up by satellite for joint TV events that played to mass audiences in both countries.

["WHERE HAVE ALL THE FLOWERS GONE" BEING SUNG IN RUSSIAN]

MR. SOLMAN: The emcee on the Russian side, Vladimir Posner, introduced American treasures like John Denver to the Russians.

VLADIMIR POSNER: John, you didn't think we'd let you get away without singing a song, did you? Come on, where's the guitar? [applause]

MR. SOLMAN: As TV continued to open up, images of Western products and wealth flooded in [McDonald's Commercial in Russian], and Russians bought what they saw, both figuratively and literally.

MICHAEL TARATUTA: Russians were used to that what is said to them officially--officially means through television and the print--it is checked many times and it affects when it comes to real things, not--propaganda, political propaganda, that's true, and when they saw commercials on television, then they saw some stories on television, they just believed it.

MR. SOLMAN: Western ads promised paradise, that your dreams would all come true. As a result, the Russian image of capitalism went through a dramatic about-face. The likes of Santa Claus now represented the free market, doling out goodies while contentedly swigging Coca-Cola. Of course, images like these didn't describe real capitalism anymore than the Communists had, but viewers didn't know that. They were infatuated with the glitz of America and its marketplace. Unfortunately, the selling of capitalism on TV soon got out of hand. Russians were sitting ducks for scam artists and swindlers blanketing the airwaves with happy-go-lucky ads like this one. To beat the system, the ad said, all you had to do was invest your life savings in stock, just like Americans do, and here was a great stock to buy, a company called MMM. What exactly was MMM? The ads never said. Instead, they promised fantastic profits, a monthly return of one and a half times your money, and, promised the ads, early investors wouldn't believe their eyes.

MICHAEL TARATUTA: You first got great return. Another group got return again, and that continued for a while, maybe a year or two years. And that was glamorized on television in their commercials. They were saying, we did money for ourselves and we can do money for you, and that worked.

MR. SOLMAN: The point is behind the glamor of ads like these was the oldest financial scam in the books--the chain letter or ponzi scheme that promises riches but runs out of money as soon as it runs out of suckers. Taratuta did a piece about MMM, trying to sober up his audience about the free market, and to put the ads in context, he used noted American economist Hyman Minsky.

HYMAN MINSKY, Bard College: They were saying, I know how to make money, give me your money, and I'll make money for you. When you hear that, run.

MR. SOLMAN: As it turns out, MMM is only one of many such scams that have capitalized on post Communist naivete in Russia.

MICHAEL TARATUTA: So many people lost their money--just a great number--my mother lost money.

MR. SOLMAN: Didn't you tell your mother, Mom, this is a lousy idea?

MICHAEL TARATUTA: My brother is a banker. He told my mother, never do this, but she didn't want to listen to him. She'll listen to the majority of her friends.

MR. SOLMAN: Taratuta's program is not the only attempt to hike Russia's financial IQ. There are now "how to" shows like this goofy explanation of what stock's all about. [Russian TV Show Segment in Russian] The show next demonstrates that you can't use stock certificates as currency. There was even a documentary on MMM and other such schemes showing how so many Russians lost their life savings when these frauds inevitably collapsed. Meanwhile, the victims have been reduced to fighting amongst themselves as they line up in hopes of recovering some tiny fraction of their money. No wonder Russians have become so cynical about the West and its fabled free market. Arguably then, this is where Russia's at at the moment--the centrifugal force of capitalism, people pursuing their own self-interest--has been unleashed, but the laws in infrastructure needed to control that force aren't yet in place. More than a century ago, sociologist Emil Durkheim wrote that if societies didn't adopt strong laws and institutions before opening up their markets to capitalism, the free market free-for-all might actually tear those societies apart. Today, economist Andrei Shleifer, an adviser to the Russian government, thinks the problem Durkheim identified is alive and well, all too well.

ANDREW SHLEIFER, Harvard University: The problem in Russia is that the kinds of things that, as you said, bind the society together, the kind of function that the government needs to perform to let the market economy function in terms of a safety net, in terms of law and order and so on, are not provided, and until they are provided, you're going to have a very difficult time.

MR. SOLMAN: Meanwhile, Taratuta says his father exemplifies the mood that expressed itself in the recent Russian elections.

MICHAEL TARATUTA: He says that what is happening now in Russia is so inhuman, that it's so difficult for so many people to live, and he associates that with capitalism, and I'm afraid that he's not alone in this kind of thinking.

MR. SOLMAN: With all this, big surprisethat the Russian electorate is disenchanted with economic reform, and that reform's champions, like Prime Minister Viktor Chernomyrdin, received such a chilly reception at the polls. DIALOGUE

MR. LEHRER: Now, a Gergen dialogue. Tonight, David Gergen, editor-at-large of "U.S. News & World Report," engages Andrew Delbanco, humanities professor at Columbia University, author of The Death of Satan: How Americans have lost the Sense of Evil.

DAVID GERGEN, Editor-at-Large, U.S. News & World Report: In the book, you say, "Our culture is now in crisis because evil remains an inescapable experience for all of us, while we no longer have a symbolic language for describing it." Could you provide a couple of examples of what you mean by that in today's context, and how that compares to how we might have dealt with evil before?

ANDREW DELBANCO, Author: Well, I think, David, millions of Americans have been very struck, for instance, by this ongoing trial of the Menendez Brothers, which promises to be one of the endless legal spectaculars of our time, and people have been fastened on it, I think, rightly, as the symptom of what I'm trying to describe here, where we have a defense based on the notion that there's a history of abuse, there's a background of abuse that explains the horrific act for which these young men are on trial. It seems to be--it seems to touch that button that so many people feel that we seem to have lost a sense of where individual responsibility begins and ends, where an old word like "sin" doesn't seem to apply to an event like that anymore.

MR. GERGEN: But primarily what's happened is that we had a belief in evil, we could identify evil when we saw it earlier in our culture, we could say that is an act of evil, we had some sensibility about what that was, and we could describe it. And now that sensibility has been--has largely vanished, that in the popular culture in particular we tend to look at say the Menendez Brothers, what happened to them when they were children, does that explain it.

ANDREW DELBANCO: Well, you know, this is a culture with very, very deep roots in what we call the Judeo-Christian tradition. If you go back about 200 years to the famous Puritan minister Jonathan Edwards, who is probably best known as a hell-fire preacher, you find him speaking in ways that are eerily appropriate for these concerns. He says, for instance, that most ordinary people are not interested in what determines the will, that is, to translate it into our terms, most ordinary people are not interested in saying that behind the abuser there's another abuser, that the abuser was abused, and behind the abuser of the abuser there's another abuser, because if you go in that direction, down that chain, you end up nowhere, and you end up, as Edwards says, in a situation where no one would be blamed or commended for anything. That religious insight about individual responsibility, I think, is a very powerful one, and I think it's unfortunate that the language of religion has been mostly ceded to people on the right. I think that that religious insight is important for American liberalism as well.

MR. GERGEN: This is perhaps unfair to ask you since you've written a whole book about the history of these beliefs, but how did we get from there, Jonathan Edwards, to here, very briefly?

ANDREW DELBANCO: Well, religious faith has had a hard time in the 20th century, for a lot of reasons, the rise of science, horrific events that seemed to challenge people's conviction that there was a God and a transcendent value in the universe. But I think also one can speak of certain specific historical events. For my generation, I think there's no doubt that the trauma of Vietnam has had a great deal to do with creating a situation of moral bewilderment. I think, for example, a famous Pogo cartoon, I think it came out in 1970 for the first time, which played on Adm. Perry's remark after the Battle of Lake Eerie in the War of 1812, where he said, "We have met the enemy and he is ours," the Pogo cartoon, the motto on the Pogo cartoon is, "We have met the enemy and he is us," is the sense that we seem to have veered from a certain confidence that we could identify evil in the world, our opponents, our enemies, and we've come, instead, to a kind of corrosive sense that all those old patterns don't hold anymore, that we have no claim or right to make these moral judgments, that, in fact, the problem is with our society.

MR. GERGEN: And you in your book now make the point that we seem to have two sensibilities; one is this culture of irony, as you call it, the one that arises out of that sensibility of say of a Pogo cartoon or the David Letterman response to culture; and then the other more fundamentalist group. Can you talk about those two sensibilities?

ANDREW DELBANCO: Yeah. I think we live in a therapeutic culture in the sense that no one is to blame. Everything is a symptom. At the same time--and that's true for many Americans--we use words like secular and maybe sometimes liberal to describe that end of the spectrum. At the same time, we have this resurgence of what we call fundamentalism, sometimes evangelicalism, and the problem with that view, whose motives, I think, I understand, but the problem with that view is that it tends to see evil as always outside the self, always as the other, the immigrant, the abortionist, someone who doesn't believe the same things that one believes. There's plenty of language of evil, plenty of talk about the devil, but the devil is always outside the self, which is not, I think, how the Judeo-Christian concept of evil is best understood.

MR. GERGEN: And you go back to the notion of Adam and Eve as helping to explain the Judeo-Christian concept. Can you talk about that a second?

ANDREW DELBANCO: Well, what I like so much about the story of the fall is what it says is that, look, the notion that there's any garden, any bucolic paradise where there is no serpent, is a fantasy. It's naive to believe that. It's naive to believe that that force out there that we call evil doesn't exist. Some Americans believed that about Hitler for a time, and they believed it about Stalin for a time. It's naive. So let's be realistic. Let's recognize that evil is out there. At the same time, that story says, evil has the capacity to infiltrate into ourselves; we are liable to temptation; we have to look within ourselves and ask, what is our complicity, what is our connection with this force outside ourselves? Our best public figures, our best writers and our religious leaders, I think, have tried to remind us of that, I think particularly of Abraham Lincoln, who spoke so candidly and so much from the heart about the evil of slavery. He hated slavery, as he put it, but he always refused to demonize the slaveholder. He always insisted that Americans were inheritors of a tragic history, and that Northerners, as well as Southerners, had to face their complicity in this tragic history.

MR. GERGEN: So that there's a dual set-up, a sense of responsibility, and that's where you think we ought to be heading?

ANDREW DELBANCO: Precisely so. I think, forinstance, of the place of the tobacco companies in our culture, which use all the technological and psychological insights of advertising to persuade people that smoking cigarettes is, is good for you socially and sexually and in every other way, and then when a smoker dies an agonizing death of lung cancer 20 years later, the view is, that's a personal responsibility, that's an individual responsibility, that person made a choice. Well, yes, that person did make a choice, but there's also a collective responsibility in the way we are with each other. And I think it's that balance that we've lost. That balance, to my mind, is what liberalism at its best is all about.

MR. GERGEN: Finally, let me bring you to the--you quote John Wesley, who said some two centuries ago, or is thought to have said two centuries ago, that where there is no devil, there is no God. Is that also what alarms you about today's culture?

ANDREW DELBANCO: Evil and suffering and pain are part of everyone's lives. As human beings, we need stories to explain to ourselves why this is a part of life. And a culture is coherent, I think, to the extent that it has a common story. It doesn't have to be a univocal story. It certainly doesn't have to be the old story we had in this country which left out so many Americans from the, from the tale, but there has to be some common ground for understanding where in the end we stand, and if there are things that are worth fighting for and even dying for. Without such a story, I think, we run a risk of really fundamental fragmentation as a culture. And I worry about that a great deal.

MR. GERGEN: Thank you very much.

ANDREW DELBANCO: Thank you. FINALLY - IN MEMORIAM

MR. LEHRER: Finally tonight, the death of Admiral Arleigh Burke, a World War II hero, who went on to run the U.S. Navy. He served a record six years as chief of naval operations in the 1950's. He died yesterday at age 94. Joining us now to talk about Burke and his legacy is the current chief of naval operations, Admiral Mike Boorda. Admiral, welcome.

ADM. MIKE BOORDA, Chief of Naval Operations: Thank you.

MR. LEHRER: Sir, is the Navy of today, your Navy, different because of Arleigh Burke?

ADM. BOORDA: It's a very different Navy because of him. He brought us from World War II technology into the modern era. He was the CNO, Chief of Naval Operations, who decided that we would have nuclear submarines. He was the CNO who decided that we would have missiles, all kinds of missiles. He was--although he was a destroyer officer, obviously, he's renowned for that, he was a great proponent of Naval aviation, and, in fact, from time to time got himself in some trouble for pursuing that really hard during- -

MR. LEHRER: Where did all this come from, for instance, the interest in nuclear-powered subs and surface ships and all of that? Was that as a result of his being told to do it, or was it his own idea, or a combination?

ADM. BOORDA: My reading of Adm. Arleigh Burke and my reading of the history about him and knowing him in his later years, tell me that he never needed to be told anything. He was aggressive. He, he saw the possibilities in the future. In fact, he wrote really probably our first strategic paper of the modern era for the Navy, and he is well renowned for that, but early in his career, he went off to post graduate school and he got a degree--the actual degree, I think, came from the University of Michigan, in explosives and in technology, and that never stopped driving him. But I think he was a visionary in all kinds of ways.

MR. LEHRER: He was a visionary and yet he was also a hero. He was considered a real, legitimate hero of World War II, was he not?

ADM. BOORDA: He was.

MR. LEHRER: What did he do, Admiral?

ADM. BOORDA: Well, he was a squadron commander. He'd had his destroyer command before World War II, and then in World War II, he found himself in a desk job. He didn't like that a lot. Then he asked for combat duty, and he got it in spades. He went out to the Pacific and after some other actions early in his tour, he participated in the actions around Bougainville, and there he, he in two really decisive battles, he, one, stopped an invasion, and two, at Cape St. George then destroyed many enemy ships. The tally that you read in various books about Arleigh Burke are one cruiser and nine destroyers, a submarine, some other small ships, and at least thirty aircraft all in one battle, so he--

MR. LEHRER: And he got the Navy--

ADM. BOORDA: --was a great hero.

MR. LEHRER: And he got the Navy Cross, which is the No. 1 medal in the Naval service.

ADM. BOORDA: Next to the Medal of Honor.

MR. LEHRER: Second to the Congressional Medal of Honor, and he got he Distinguished Service Medal, and he got the Silver Star. I mean, he got everything--

ADM. BOORDA: And the Purple Heart too.

MR. LEHRER: And the Purple Heart. And the Purple Heart. What was the--how did those two qualities go together? Here's a man of vision, the man who was interested in technology, and yet also a man of courage. That must be a rare thing to see.

ADM. BOORDA: You know, we commissioned a class of ships named after him, and it was really unusual when the Secretary of the Navy decided that because he was still alive, and you normally don't do that. But the Secretary decided it, Adm. Burke gave his permission, and we now have a class of ships named the Arleigh Burke Class. His wife, Bobbie, still alive, is the sponsor of that first ship, the USS Arleigh Burke. And when he stood up on the podium on the day they christened the ship the Arleigh Burke, he said, and quite an elderly man then, he said, "This ship was meant to fight. You better know how." Those were the words that came out of his mouth. Well, he knew how to fight, and he also knew what people would need to be able to fight appropriately and win. And so he combined those two things and gave us a great Navy.

MR. LEHRER: Where did his nickname "31 Knot" Burke come from?

ADM. BOORDA: He had two speeds, I think, stop and as fast as you can go.

MR. LEHRER: I see.

ADM. BOORDA: And his sailors loved him for that. I think the engineers might have said "31 Knot" Burke with a different sound to it, because he worked them hard to go that fast.

MR. LEHRER: But in Naval terms, what does that mean, 31 knots?

ADM. BOORDA: That's real fast for a destroyer. It's real fast for a surface ship, and Arleigh Burke developed before World War II some new destroyer tactics. Instead of putting ships in a line and fighting in the old way, Arleigh Burke used speed and maneuver, and he went fast. And that's where it came from. Thirty-one knots is one of the flank speeds that's real quick. There's an interesting story--I don't know how true it is--that some of his ships once went through a mine field, and of course, he was asked by his boss, "What were you doing when you went through that mine field," in probably the way I just asked, and he said, "About 31 knots."

MR. LEHRER: [laughing] What--

ADM. BOORDA: I don't know if that's true. It's a great story anyway.

MR. LEHRER: It doesn't matter if it's true at this point. Based on yourown experience, obviously, you're a different generation, but also you did meet him and what you heard about him and all, what was his persona like? What kind of man was he?

ADM. BOORDA: I was with him on Saturday, this last Saturday, just for a few minutes at the hospital. And he was tired, and it was time for him to be allowed to rest, and I saw him in October, at his birthday, we had a really good time.

MR. LEHRER: His 94th birthday?

ADM. BOORDA: Yeah, yeah. And just this last October, a lot of the former CNO's were there, he was--it was a little harder for him, but he was in the conversations, and he was enjoying it, and he was witty, but I think there's one story I'd like to tell.

MR. LEHRER: Sure.

ADM. BOORDA: And that is, I became the CNO and a week or two later, I said, I wonder if all the other CNO's--I don't call them old anymore--the ex-CNO's--could come in and maybe I could get some advice and some experience from them, so in they came, and we were sitting there at the conference table, and I was feeling very humble. I mean, these were guys I couldn't get an appointment with, and Arleigh Burke was sitting on my right--

MR. LEHRER: Wow!

ADM. BOORDA: --and he is truly my hero. And it's going to be hard to say he was. I think "is" is the right term. And I was kind of full of myself, and I said, "Well, gentlemen, this is a really exclusive club, and I'm proud to be a part of it." And Arleigh Burke looked at me--this was a man then 92 years old--and he said, "Well, son, just remember you're the junior member." So even--he kept that wit and--

MR. LEHRER: Yeah, yeah.

ADM. BOORDA: --he was loved. He was, he was trusted, and he earned the trust. Just a great man.

MR. LEHRER: All right. Admiral, thank you very much.

ADM. BOORDA: Thank you. This has been a pleasure. RECAP

MR. LEHRER: Again, the major stories of this Tuesday, balanced budget talks resumed at the White House following the New Year's break. The Senate passed by voice vote a measure to send federal employees back to work, but it was not certain the House would also pass it tomorrow. Before we go tonight, a follow-up to Jeffrey Kaye's report last Friday on Northwestern University's first trip to the Rose Bowl in 47 years. As some of you may know, Northwestern lost to the University of Southern California yesterday. The score was 41 to 32. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.