The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight a look at the falling national unemployment rate; a report on the booming job market in California's Silicon Valley; the second of our conversations on global warming; political analysis by Mark Shields and Paul Gigot; and some perspective on issues raised by the firing of a pro-athlete who assaulted his coach. It all follows our summary of the news this Friday. NEWS SUMMARY

JIM LEHRER: The nation's unemployment rate dropped to a 24-year low last month. The Labor Department report said today it was 4.6 percent in November, the lowest it's been since October 1973. Bureau of Labor Statistics Commissioner Katherine Abraham said a burst of job growth was the cause.

KATHERINE ABRAHAM, Commissioner, Bureau of Labor Statistics: Retail employment grew by 105,000 as strong holiday hiring boosted employment in department stores and in miscellaneous retail establishments, which include a whole set of things, among them gift shops, bookstores, and catalogue sales outlets. Eating and drinking places had its first large increase since July. Furniture and home furnishing stores also contributed to the retail employment rise, as did automobile dealers and service stations.

JIM LEHRER: We'll have more on this story right after the News Summary. President Clinton backed away from a report he was considering a 1998 tax cut. He said he has examined a number of tax plans but has not embraced a specific proposal. He was asked about a New York Times story today based on an interview he gave. Mr. Clinton told reporters this afternoon the federal budget must be in black first before he could call for tax cuts.

PRESIDENT CLINTON: We don't want to spend money we don't yet have. The thing that has driven this economic recovery is getting interest rates down, getting investment up, creating a framework in which the American economy could grow, so before we make any unduly rash decisions about the future, let's make sure that we're taking care of the economy because that's the best thing you can do for Americans' incomes, is to give 'em a strong economy.

JIM LEHRER: The President named several member to a Medicare commission today. Congressional Republicans announced their choices on Monday. The panel must report back to Congress and the President by March 1999, suggesting ways to keep the system solvent as baby boomers retire. The World Trade Organization issued a preliminary ruling today against the United States in a dispute over Japan's photo film market. Eastman Kodak claimed Japan blocked fair access to its markets to protect Fuji Film, Kodak's principal competitor. Trade Representative Charlene Barshefsky said the U.S. would consider other options, including unilateral sanctions against Japan. A final WTO ruling is expected early next year. Secretary of State Albright met in Paris today with Israeli Prime Minister Netanyahu. She said she pressed him on how much West Bank territory he will yield to Palestinians. Netanyahu said he didn't give any maps or percentages. They spoke to reporters after their meeting.

BENJAMIN NETANYAHU, Prime Minister, Israel: We're dealing here with a decision that will affect Israel and its neighbors and the Middle East, not for a year or two but for a generation and possibly generations. We approached these deliberations with the greatest sense of responsibility, understanding the gravity of what it is that we're dealing with, what it is that we're deciding.

MADELEINE ALBRIGHT, Secretary of State: I emphasized to the prime minister, as I will emphasize to Chairman Arafat when I meet him tomorrow, that time is not on the side of those who would make peace. If Israel and the Palestinians are prepared to take bold decisions, we will be by their side every step of the way.

JIM LEHRER: Albright will travel to Geneva tomorrow to meet Palestinian Leader Arafat. At the global warming summit in Kyoto, Japan today representatives from China and India criticized the U.S. for not doing enough to curb greenhouse gas emissions. China's delegation leader said developing countries were being asked to make unfair sacrifices in order to support the luxury lifestyles of the United States and other rich nations. We'll have another in our conversation series on global warming later in the program. Russian authorities today charged an American engineer with espionage. Richard Bliss was arrested 10 days ago after he surveyed land in the southern part of the country using satellite equipment. The Russian Intelligence Service accused him of spying on an off-limits area. He was working for a San Diego telecommunications company hired to install a cellular telephone system in the region. U.S. officials have insisted Bliss is not a spy. The space shuttle Columbia is back home. It touched down today at Cape Canaveral under clear dawn skies. A cockpit camera captured the landing approach. In a 16-day science mission the astronauts successfully tested some new tools, but a $10 million satellite malfunctioned moments after they deployed it and had to be retrieved by hand during an emergency space walk. It was transported back today for more analysis. And that's it for the News Summary tonight. Now it's on to the sinking unemployment rate, a job boom in Silicon Valley, a global warming conversation, Shields & Gigot, and misbehaving athletes. FOCUS - BOOMING BUSINESS

JIM LEHRER: We'll discuss the new national unemployment rate after this report on the job boom in Northern California by Spencer Michels.

SPENCER MICHELS: A few months ago Barry Parr quit his job designing web sites at a high-tech firm in Northern California. Now he's unemployed, living in Silicon Valley, and not very worried about his future.

BARRY PARR, Job Seeker: Companies are expanding. 3 Com has a huge campus; Sun just built an enormous campus; Cisco is buying a huge amount of space in San Jose; and so the bit companies are expanding quickly and smaller companies are kind of moving in to fill up the spaces that they've left behind.

SPENCER MICHELS: Parr has every reason to be optimistic. Silicon Valley--that 50-mile-long stretch of real estate south of San Francisco, home to 7,000 electronic and software firms--is in the midst of a production and employment boom that places it in the forefront of the U.S. economy. The Department of Commerce recently reported that Santa Clara County, where Silicon Valley is located, now leads the nation in exports, outpacing New York and Detroit. Exports have grown 81 percent in three years and make up 5 percent of the U.S. total. Today, high-tech accounts for 45 percent of U.S. industrial growth. Even the economic crisis in Asia has hardly been felt here yet, though it is being carefully watched. At Cisco Systems--where they make devices to connect computers with each other and with the Internet, in other words networking, Chief Executive Officer John Chambers says the valley is riding high.

JOHN CHAMBERS, CEO, Cisco: I think you're in what I would like to refer to as the Network Technology Revolution. It will have every bit as much impact on our country and the changes in society as the Industrial Revenue of almost 100 years ago.

SPENCER MICHELS: A major leader in this overheated Silicon Valley economy has been Intel, designer and maker of microprocessors or chips, the brains of a computer. Every year, those chips have gotten more powerful, and the rest of the valley has produced software that can take advantage of that power. Abram Miller is director of business development for Intel.

AVRAM MILLER, Vice President, Intel: I think that the technology of Silicon Valley, the technologies of Intel, which are semiconductor technologies, are really the fuel for the 21st century. We're really in the very beginning stages of learning how to apply this type of technology to the economies worldwide.

SPENCER MICHELS: Cisco's CEO points to his firm as an example of how innovation and brain power-- playing off the power of semiconductors--have led to incredible growth, high paying jobs, and a worldwide impact.

JOHN CHAMBERS: We were a company with only $70 million in sales just seven years ago, and today we are at $6.5 billion in sales. Approximately half of that is exported outside of our country. If you look at the economic impact on our employees, the average salary here at Cisco is $70,000. We give stock options to everybody in our company, and the average employee who's been with us for over a year has an appreciation in there and exercise stock options of over $150,000.

BARRY PARR: I've got a meeting over in Palo Alto at 10--

SPENCER MICHELS: With those kinds of rewards possible, Barry Parr enjoys looking for a new job. He has posted his resume on the Internet and has had what he calls a remarkable response, though, as yet, no job.

BARRY PARR: There are about--oh, I don't know--about a dozen web sites on-line where you can actually for a job. For example, if I want to look at this vice president of the marketing job, I can click here and there's a description and an E-mail address that I could actually send my resume to.

SPENCER MICHELS: It even lists the salary there, doesn't it?

BARRY PARR: Yes. The salary range on this one is $100,000 to $125,000 a year plus a bonus.

SPENCER MICHELS: Is that high or low?

BARRY PARR: I'd consider that job.

SPENCER MICHELS: You'd consider that job.

SPENCER MICHELS: The need for top personnel is so acute in Silicon Valley that this firm, Netscape, has posted signs in its hallways and has promised rewards for its employees who bring in key workers. Netscape is an Internet software maker which didn't exist three years ago but now employs 2300 people.

SPOKESMAN IN MEETING: It appears that by hook or crook we were within 3 to 5 percent of the--

SPENCER MICHELS: Netscape is locked in a monumental battle with much larger Microsoft over Internet browsers. The company was co-founded by 23-year-old computer scientist Marc Andreesson who is now 26 and looking for new employees.

MARC ANDREESSON, Netscape Co-Founder: Netscape needs to find smarter, more and more smart people. We increasingly need to go look at acquiring other companies in order to get those people.

SPENCER MICHELS: Are you saying that you would acquire a whole other company, even though you don't care about their product, just to get access to their personnel?

MARC ANDREESSON: Absolutely. Yes. Recruiting is our biggest challenge, and it's the biggest challenge of most of the companies in the valley. So if you want them to leave their startup where they've got stock options to come to work for you, you probably have to buy their company.

SPENCER MICHELS: Pluris is one of those startups, housed in a nondescript Silicon Valley building. It's a three-month-old company and not yet the object of a takeover. Inside, nine employees are working on a software idea to speed up Internet connections by several thousand times using a device called a router. For every Cisco and Netscape that graduates from startup to established company there's a new flock of starts poised to expand.

VADIM ANTONOV, Pluris: There is no such thing as a genius in one area.

SPENCER MICHELS: Vadim Antonov funded Pluris after emigrating to Silicon Valley from Russia. He was told he'd never find financing for his idea, but eventually Gill Cogan, a venture capitalist with Weiss, Peck & Greer, helped arrange $3 million in capitalization.

GILL COGAN, Venture Capitalist: What you're seeing with Pluris is at the very high end o the risk spectrum because it's a startup; they're just beginning to grow; they don't have any management in place yet-- they have a very good, strong group of technical people--and so the risk for a company such as this is quite high; however, one of the things that the venture groups bring, in addition to the capital, is the management and the ability to recruit additional people. And so, over time, that risk, if we all do our parts, gets reduced.

SPENCER MICHELS: Thirty-two-year-old Antonov embodies the optimistic spirit of the valley. He calls himself a citizen of the People's Anarchy of the Internet, and he says the Internet is driving the demand for computers, software, and telecommunications.

SPENCER MICHELS: You came from Russia. Did you know about Silicon Valley before you came here?

VADIM ANTONOV: Yes, of course. Everybody knows, at least everybody who knows anything about computers. It probably is the best place in the planet. It's the best climate; the best food; and the most interesting people.

SPENCER MICHELS: And what about for the work you want to do?

VADIM ANTONOV: For any serious computer person going to Silicon Valley is like going to Mecca for a Muslim. It's like the place where you have to be.

SPENCER MICHELS: The question is: Can Silicon Valley maintain that kind of atmosphere? Until 40 years ago, the Santa Clara Valley--as it was called--was sparsely populated and agriculturally based. The surrounding hills were rural, with an occasional estate here and there. The economy consisted mainly of orchards--prunes and apricots. Today there's hardly an orchard to be found. This one will soon be gone. The fruit trees have been replaced with homes, apartments, and condos, which are usually sold before they're built. Home prices jumped 14 percent from a year ago and now average more than $315,000. The area's new millionaires have bid up prices as well for extravagant executive houses that dot the hillside surrounding the valley.

BARRY PARR: The prices are scary and the process is scary as well. I mean, that, you know, a house will go on the market, and you've got make an instant decision about whether or not you want to buy it and how much you want to spend for it. I mean, it's more like an auction atmosphere than it is like, you know, any other kind of market.

SPENCER MICHELS: Whether the boom that is causing those high prices will last and for ho long is what the gurus of this valley and their investors must calculate. Plus, they must cope with the gyrating stock market and, more recently, ailing Asian economies. Continuing problems there could eventually cut into Silicon Valley exports. The giant chip maker, Intel, had sales of $21 billion last year and profits of $5 billion. But in the last quarter those figures were lower than anticipated, causing stock prices to fall. More recently, Intel's stock fluctuated wildly, like the rest of the stock market. Nevertheless, Intel's Abram Miller points to the company's growth of nearly 20 percent a year as evidence of the boom continuing.

AVRAM MILLER: I don't see an end to this boom. I think that first of all because we're inventors, we're working with raw material, it's like, you know, it was like the discovery of electricity and the use of electricity, or oil, or, you know, gas, or anything. We have a fundamental thing, but like nothing else that's ever existed, fundamental demand for Silicon technology, for microprocessors, is virtually insatiable.

SPENCER MICHELS: But Netscape's Marc Andreesson isn't so sure.

MARC ANDREESSON: I think we do wonder if and when the current boom, which has been sort of far in excess of anyone's expectations, will at least taper off a bit.

SPENCER MICHELS: Andreesson says that today's chips may be powerful enough for most uses, thereby slowing down demand for microprocessors. He also is worried that the bubble could burst as venture capitalists back too many startups.

MARC ANDREESSON: There's a very limited number of good ideas coming out every year, and then there's a very limited number of really skilled managers who are capable of building companies, so your typical venture capitalist these days is having trouble finding enough good deals to put money into.

SPENCER MICHELS: But it's the optimists who point to the fact that every week 11 new companies join the thousands already here that want to take part in this new industrial revolution. FOCUS - ON THE JOBS

JIM LEHRER: Phil Ponce has part two of our look at jobs, today's unemployment figures.

PHIL PONCE: Job growth was unexpectedly strong in November. New numbers show the U.S. unemployment level dropped to 4.6 percent. The number of people entering the job market grew while employers added 404,000 workers to their payrolls last month. To tell us more about it we're joined by labor economist Audrey Freedman; her firm consults with manufacturing and service-oriented companies. Welcome, Ms. Freedman. First of all, just looking at the big picture, where are these jobs coming from?

AUDREY FREEDMAN, Labor Economist: Well, that's the interesting thing. The growth is really throughout the economy. There are only small sectors that are shrinking, apparel manufacturing, for example. But the growth is in manufacturing. It's in construction, and it's especially in services, and particularly in business services. Now, those business service employees are obviously working for other businesses, and they may be working for a manufacturing company, providing bookkeeping and accounting work, or providing office backup, or even working on production lines. So the growth is really extensive throughout the economy and much more than was expected.

PHIL PONCE: We just saw a report on the growth of high-tech industries. Is that fielding a big part of it, in your opinion?

AUDREY FREEDMAN: Oh, that's part of it, but it's much more widespread than that. Yes the high-tech growth has been notable for some time, but this is really throughout the entire economy. The only place where I would say it won't continue would be in automobile manufacturing because the world really has seen a great deal of over-production there, and I don't think that growth, which did take place last month, will continue.

PHIL PONCE: Four hundred and four thousand new jobs. What had conventional wisdom been predicting?

AUDREY FREEDMAN: About 200,000. And I think one of the reasons why that it wasn't so high and that it turned out to be double or a little bit more than double what was expected is because really many economists didn't think that you could find employees; that we were really tapped out. But what happened was the labor force grew in response to opportunity. The labor force grew over for 450,000 and filled those jobs as they came on-stream. Opportunity brings people out and brings people into the labor force and also offers second jobs to people who want two jobs if they can make it.

PHIL PONCE: Ms. Freedman, what kinds of jobs are people talking about, low level mainly, mid level, upper level jobs?

AUDREY FREEDMAN: All over the scale, all over the scale. The jobs in business services are professional and technical work, but they're also clerical work, and some of them are even production worker jobs, and they're materials handling and materials moving and trucking. The economy is just buzzing along and buzzing along in such a way that the job growth is widespread not only throughout all occupations and industries but also geographically. We don't have the great pockets of unemployment or the extremes of some places being strong growth areas and others being very weak or shrinking. It's really spreading throughout the country now. Opportunity is really everywhere. Yes, of course, we have the tightest labor markets in the Midwest, and a lot of that's manufacturing work, or attached to manufacturing. But generally throughout the whole economy there's growth and strength.

PHIL PONCE: And what can you tell us about the quality of the jobs in terms of wages and benefits, things like that?

AUDREY FREEDMAN: Well, really, what's been happening is employers have raised wages somewhat in order to attract workers, but what they're being is very, very careful about how they raise wages and very, very inventive in the way that they attract employees into the work force. They try to find a niche where they can appeal to people who aren't working, or people who have one job but would take another, given the right hours and the right opportunities, or students who might come in for second jobs, not being students but working at night, working on weekends, or older people who may have retired. Employers are trying to devise ways to get these people to come into their work force without raising wages because they can't raise wages too much, or they won't be able to compete.

PHIL PONCE: And what about the concerns that happen when unemployment is so low that it's going to trigger wage inflation, which, in turn, will have an impact on inflation in general? Do you see any evidence of wage inflation?

AUDREY FREEDMAN: No, it has not happened. For years now we have been threatened, oh, we're going to have terrible wage inflation as the unemployment rate comes down. It really hasn't happened. And it isn't happening now. The hourly wage figures that come out every month, of course, do show about a 4 percent increase there, but that's affected by the amount of overtime in the economy, and overtime, of course, is at time and a half or even more time--more than time and a half. And so the figures are somewhat biased. Those are monthly figures. And, yes, they're quoted and yes, there was a 4.1 percent increase this month annualized in hourly wage rates. But, again, it's not the best figure, and we do not have wage inflation generally. What we have is high levels of employment, high levels of overtime, high levels of factory hours, in fact, some of the highest we've ever had, and we have the highest labor force participation we've ever had.

PHIL PONCE: How about in the inner city, are the numbers in the inner city where unemployment among young people particularly tends to be so high, are the numbers there improving?

AUDREY FREEDMAN: Yes, somewhat, but not as much, and among black workers, for example, the unemployment rate remains about twice to two and a half times as high as it is among white workers. That's been true historically, and it remains in that situation. I think we're pushing some people from the inner city into the work force by cutting off welfare, or at least threatening to cut off welfare. Whether that continues and whether it's a very strong trend I can't say at this point.

PHIL PONCE: And speaking of trends, is there any way to know whether this big increase that we saw in November is a glitch, or is it part of something that's more akin to a trend?

AUDREY FREEDMAN: Well, I don't think it's going to continue at this pace. One month doesn't make a new trend. We still have a growing economy. The threats to the economy are not internal. I think there is certainly a threat of overproduction in the rest of the world, and there's certainly a threat coming out of the Far East because if those economies collapse, as they might do, we could not be immune to the effects of the after effects. That's a long way off for us. And so we still have growth ahead of us, perhaps not growth at this pace. This is a wonderful pace, but it can't be sustained.

PHIL PONCE: So do you think unemployment could go down even further?

AUDREY FREEDMAN: It might. It might, and without wage inflation. That's the great message of this recovery; that we have not had wage inflation and we have had falling unemployment rates and a great deal of opportunity, and the labor force has responded. You know, we are the most adaptive economy in the world, and we work harder than other people in the world because we come into the labor force when we want to work, and that's what's happened this month. That's why numbers are so surprising.

PHIL PONCE: One of the things you alluded to was the number of new workers entering the job market, including retirees and homemakers. What does that tell you?

AUDREY FREEDMAN: Well, it really tells you that employers are trying to be inventive and flexible in the way they attract workers, and workers respond to the flexibility, saying, yes, I would like a part-time job, or I would like a job if the hours can be arranged in such a way that I can do the other things that I need to do in my life. And that's really why the labor force grew. We are adaptive. Americans like to work, but they would like to work on their own terms, and they aren't necessarily demanding more money. They're asking for good working conditions, good management, and flexible hours. And they're getting it.

PHIL PONCE: Audrey Freedman, thank you for joining us.

JIM LEHRER: Still to come on the NewsHour tonight global warming, Shields & Gigot, and bad-behaving athletes. CONVERSATION - CLEARING THE AIR

JIM LEHRER: Margaret Warner continues our conversations on global warming.

MARGARET WARNER: Tonight, we get a corporate perspective on global warming, the issue that representatives from more than 150 countries are now discussing in Kyoto, Japan. Fredrick Palmer is CEO of Western Fuels Association, an energy cooperative that supplies coal to electrical power plants in the Western U.S.. Coal is a major source of the greenhouse gas emissions that the Kyoto conference is seeking to limit. Western Fuels helps fund scientific research skeptical of the dangers of global warming and also is lobbying against emissions caps. Mr. Palmer, is there such a thing as global warming?

FREDRICK PALMER, Western Fuels Association: There is a concern over global warming. There are computer models that project catastrophic global warming fifty or a hundred years from now, but observations from satellites and weather balloons over the last twenty to forty years suggest that there is not human-induced global warming.

MARGARET WARNER: And that, of course, is the underlying premise on which Kyoto is based, that already there's a discernible human influence on the climate.

FREDRICK PALMER: There has been a statement made by scientists with the UN to that effect, but the Rio treaty, itself, is not based on that statement.

MARGARET WARNER: You're talking now about the treaty--

FREDRICK PALMER: Right.

MARGARET WARNER: --from 1993, wasn't it?

FREDRICK PALMER: Yes.

MARGARET WARNER: On which this conference is based.

FREDRICK PALMER: Right. The treaty is based on computer models, on projections from flawed, flux- adjusted computer models that predict apocalypse fifty to a hundred years from now.

MARGARET WARNER: Let me see if I can find if there's some agreement. Now, the advocates of this theory say it's indisputable that carbon dioxide levels in the atmosphere are up 30 percent since the pre- industrial age.

FREDRICK PALMER: Correct.

MARGARET WARNER: And that the temperature of at least the Earth is one degree higher in the last hundred years.

FREDRICK PALMER: I'll accept that.

MARGARET WARNER: You do?

FREDRICK PALMER: Yes.

MARGARET WARNER: But then what you don't accept is what, the computer projections showing that this is going to continue and accelerate?

FREDRICK PALMER: In the last hundred years we've come out of a little ice age. And the middle of the 19th century was the end of the little ice age. We don't want to return to the little ice age. The Vice President went to Glacier National Monument, stood in front of a glacier that has been melting for 100 years in a part of the country that's had no warming, according to the ground-based records there since 1900, and said this is being caused by humans. That's not right. It's being caused by the fact that we're coming out of a little ice age.

MARGARET WARNER: Do you think that any of the increase in temperature we've seen is caused by humans?

FREDRICK PALMER: I personally think that if there is any impact by humans thus far, it's been very, very small. Most of the warming that has been detected since the 19th century was before the buildup of greenhouse gases. Since the buildup of gases in the early 1950's, weather balloons say very little warming since 1979, when the satellites have been up, there's actually been global cooling. And satellites are the best measurement of temperature for the globe.

MARGARET WARNER: Now, I don't want to get too scientific here, or technical, but are you talking about the difference between the temperature on the actual surface of the Earth and what's measured up in the atmosphere?

FREDRICK PALMER: Yes. The ground-based temperature record shows some warming, but the ground- based temperature record is captured in cities where the thermometers are in the middle of concrete and glass, tainted by the urban heat island effect. Also, large parts of the globe, the oceans and the deserts, are not representative of ground-based temperature records. They use the same cities that have the urban heat island effect as a proxy for oceans and deserts. So the ground-based records are not the records we need to look at. It's the satellites.

MARGARET WARNER: All right. Last scientific question. The overall theory of global warming is that because you have this buildup of carbon dioxide and other greenhouse gases in the atmosphere, you're trapping heat.

FREDRICK PALMER: Correct.

MARGARET WARNER: Do you think--and you accept that there is some increase in those gases--

FREDRICK PALMER: There is increase.

MARGARET WARNER: Are you saying then you don't think that has any impact on the temperature of the Earth?

FREDRICK PALMER: I think over time there will be a modest impact on the temperature of the Earth. I think there will be some modest warming. What is ignored by the scientific community that is behind the treaty by the administration, by Carol Browner, who talks about CO2 as a pollutant, is that it's not a pollutant. CO2 is benign limiting nutrient that for plants, agriculture, and forests, a buildup of greenhouse gases of CO2 in the atmosphere is something that should be welcomed and not feared. The impact will be benign in that we will have more productivity in agriculture; we may have some modest warming, but warm is good; ice ages are bad.

MARGARET WARNER: So that's one reason, obviously, that your industry is opposed to the emissions caps that the administration--

FREDRICK PALMER: That's is correct.

MARGARET WARNER: --and other industrial countries want to see.

FREDRICK PALMER: Right. This is a bad treaty; it's a bad theory; and it's a bad idea.

MARGARET WARNER: Now, the administration's proposal--and there are many on the table--is actually to roll back worldwide these emissions to 1990 levels. What would that cost, do you think, for the United States?

FREDRICK PALMER: It would take an equivalent of a carbon tax. Actually, they're talking about emissions trading of two to three hundred dollars per ton of carbon. The studies that I have seen that I think are persuasive suggest between the year 2001 and 2020 we'd lose 3.3 trillion dollars in overall economic growth. The average family would have a present cost to them of $30,000. They would have a present value cost. They would have reduced income over time of $1500 to $2000. Their energy bills would go up 50 to 100 percent. Soccer moms would get out of mini-vans; truckers would be put out of business. The American economy depends upon cheap, affordable electric energy and fossil fuels. And this treaty is aimed at taking that away from our economy.

MARGARET WARNER: Now, your opponents, those on the other side, say every time new environmental regulations are proposed, the industry always says the sky is falling, it's going to cost a fortune, and then-- whether it's clean air or clean water--in the end those really doomsday scenarios aren't borne out and, therefore, that these projections aren't particularly credible. What do you answer to them?

FREDRICK PALMER: Well, I live--or I do business in parts of the country outside of the beltway, outside the big cities. I promise you that the American people outside of the big population centers depends upon fossil fuels for their way of life. I promise you if you make fossil fuel scarce and expensive, you will hurt farmers, small business, people on fixed income, lower middle class people, poor people. You will devastate large parts of the country.

MARGARET WARNER: But what they're saying is it doesn't have to be that much more expensive. For instance, they say the industry is not really taking into account the kind of genius of American technology; that the U.S. becomes a leader in environmental technology. That's why earlier environmental changes haven't been as expensive as originally feared.

FREDRICK PALMER: The genius of the American economy has been produced by the availability of affordable fossil fuels, affordable energy. The genius of the American economy is to take these fossil fuels and to convert them into electricity, for example, to power our factories, to give us the quality of life that we enjoy, to let you and I sit here tonight in this magnificent room with these lights on, to have this conversation. This is a positive good. Fossil fuels are good and not bad. We want to use more of them. We want to use them cleanly and efficiently, but more of them. They are trying to prevent a speculative bad fifty or a hundred years from now by eliminating something that is a positive good today, and we say that is profoundly wrong.

MARGARET WARNER: Now, and they say on the speculative bad, they acknowledge that we don't really know how bad, in their view, it would be but that because carbon dioxide, once it's up in the atmosphere, really doesn't disappear for a hundred years or more, that by the time the buildup gets enough-- high enough to prove it--it's almost too late to do anything, or it will be incredibly expensive. I mean, they're essentially saying it's their bet against your bet. And I guess what I'm asking, why should the American people think you all are right about the future versus them?

FREDRICK PALMER: Well, we have to live our lives based on what's in front of us. We live our lives based on what we know, what we can see. We have to go by scientific observations. What they--they talk a lot about the precautionary principle in terms of changing our lifestyle today to prevent something their flawed computers say might happen fifty or a hundred years from now. The true scientific precautionary principle is this: All of the scientists that I have talked to agree that we are in-between ice ages. I debated a man on climate change in Florida last week. He said, unless we do something, we'll have another ice age. The only thing you can do to prevent another ice age is to put more CO2 in the air. The true precautionary principle is to let industrial evolution of humans continue on the path that it is in, to let our lifestyles develop so we have longer lives, more wealth, our health is better by utilizing fossil fuels. So we reject the theory. It's a flawed, bad theory.

MARGARET WARNER: All right. Well, thanks, Mr. Palmer, very much. FREDRICK PALMER: Thank you. I enjoyed it.

JIM LEHRER: And we'll continue our conversation series on global warming next week. FOCUS - POLITICAL WRAP

JIM LEHRER: Now, some political analysis by syndicated columnist Mark Shields, Wall Street Journal columnist Paul Gigot. Mark, the big news of the week, Attorney General Reno's decision on Tuesday not to seek an independent counsel to pursue the fund-raising calls by President Clinton and Vice President Gore. How does it look to you three days later, after the decision?

MARK SHIELDS, Syndicated Columnist: After the decision, no big surprise, Jim. I think it was advertised, and delivered as advertised. And I don't think the political fallout is as clear as some people wanted at the outset. The Republicans seemed to declaim and were upset about and went quite public with it. Now, they'll have Attorney General Reno and FBI Director Freeh up at the Burton Committee next Tuesday there to explain their decisions, which they won't do. December in Washington is a very slow time. And we like hearings. There aren't many hearings. And they'll both say they'll do the job.

JIM LEHRER: That'll be it?

MARK SHIELDS: That'll be it.

JIM LEHRER: That will be it, Paul.

PAUL GIGOT, Wall Street Journal: Well, I--contrary to Mark, I don't think the Republicans reacted strongly--all that strongly at all. What they did, I mean, I thought the New York Times was a lot more angry with Janet Reno than the Republicans were. And--

JIM LEHRER: What's your reading of that? Why did they respond? If you're right in your theory, why did they respond so meekly?

PAUL GIGOT: I really don't understand it. I mean, some would explain why all the press--you know, they don't want to be meanies and they'll say it's too tough, and other people say, well, Janet Reno--we don't want to pick on her. I really don't understand it because if you don't have two ways to hold an executive account, one is legally, and Janet Reno I think has taken that off the table, at least for the President and Vice President. Maybe some other people will be investigated, but I doubt that they will in the end. The other way is politically, and that means that you've got to say--you've got to fight this out at the political realm where you begin to find out what you can in Congress, and you investigate the Justice Department. They're not going to interview John Huang one year after he became the centerpiece of this whole thing; that the public integrity section admits they haven't even interviewed him yet. So it's a puzzle to me, and if they don't, I think what's going to happen is there's a real danger for Republicans that the Democrats could turn the tables here next year, change the subject to campaign finance reform, and the Republicans could find themselves in 1998 getting blamed because President Clinton broke the campaign laws in 1996.

JIM LEHRER: Wow!

MARK SHIELDS: First of all, I think that's a big leap; they broke the laws. I mean, I think--we get lawbreaking--I think I've made the case before that there should be an independent counsel. I believe that--I believe that the law was broken several places by several different parties. But let's get one thing straight. Do the Republicans overreact? Sure, they overreact. I counted three Republicans, elected office holders, as well as several conservative penmen on the Republican side, accusing Janet Reno of acting like John Mitchell and the Nixon Justice Department. Let's get a couple of things straight here. John Mitchell--John Mitchell was convicted of perjury, obstruction of justice, and lying to the FBI. Now, we all do this stuff by simile and metaphor and allegorical, and everything else. John Mitchell stands alone. He took LaRue and Marty and two of his prized assistants with him convicted of it. So I mean Janet Reno is not that. She is not a puppet of the Clinton White House. She could be wrong in this, but she's no John Mitchell.

PAUL GIGOT: Well, she's no John Mitchell, that's true. She hasn't been thrown into jail yet, but I think you can begin to make--

MARK SHIELDS: Yet?

PAUL GIGOT: Excuse me. You can't--you can begin, if you're a Republican, I think, to make the case that she's not independent; that this Justice Department has not done a capable job of this investigation; you do have a politicized Justice Department, which isn't doing the people's business of making politicians accountable.

JIM LEHRER: All right. Speaking of accountable, what about Louie Freeh the director of the FBI, what'syour reading of that situation now. Just to refresh everybody's memory he felt that Janet Reno should have appointed an independent counsel, wrote a memo to that effect to her, and now, of course, they want this thing to come out next Tuesday. But both Freeh and Reno have said, you ain't readin' this thing. But anyhow, what's your reading of the Freeh thing?

PAUL GIGOT: Well, he's going to be brought up and asked to explain the differences. Mark is probably right about what he'll say but the question is, do the Republicans somehow get this memo, which would explain a lot? The Justice Department looks like it's not going to release it, so it'll have to find some other ways. Maybe they can subpoena it--maybe parts of it if they include grand jury evidence.

JIM LEHRER: Has it been linked to the press? Has--

PAUL GIGOT: The summary has.

JIM LEHRER: The summary, but not the memo, itself?

PAUL GIGOT: Not the memo, itself. I think the difference between the director of the FBI and the attorney general does give the Republicans an opening to say--a political opening to drive a wedge and say, well, what is the real story here and at least make some political hay with it, and they ought to.

MARK SHIELDS: Louie Freeh is the director of the FBI. Six months ago Republicans--I mean, the majority of Republicans were calling for his scalp on Capitol Hill. You name the offense--whether it was Howard Shapiro, his counsel at the FBI, whether it was--whether it was the files, whether it was the FBI being--their laboratory not being well run--he was a bum. Now, he's the pinup boy because he disagreed with Janet Reno. And Louie Freeh is a pro; he's a professional. Louie Freeh is not going to go into a committee. If he's going to leave, he's going to leave on his own terms. He's going to leave with his own dignity and his own self-respect, and he's not going to go in there and spill the beans before a congressional committee. He's going to say what he has said; I've made a recommendation, the final decision is the attorney general's. Do I think that Janet Reno made the right decision based upon what they're looking at, the phone calls, yes. Why were they looking at the phone calls? They were looking at the phone calls for a very simple reason. The Republicans made a big thing out of the phone calls. They said these phone calls have to be investigated. Is there grounds for independent counsel? Yes, but it's probably on subject matter, rather than individual activity. Janet Reno in the first Clinton term as attorney general went to the Hill and asked to expand the independent counsel power to include subject matter. If it were subject matter and she was turned down, there would be an independent counsel today.

JIM LEHRER: All right. Another subject. Dick Gephardt's speech, the House Minority Leader took some obvious hits at the President at Harvard. Old Democrats versus new, what versus what?

PAUL GIGOT: A little bit of that. I was--I thought the most fascinating thing about this speech, apart from the needles at Vice President Gore and the President--was the criticism--

JIM LEHRER: There were some--there's no point in repeating them, but there were some obvious needles at both the Vice President and the President.

PAUL GIGOT: There sure were. But there was a substantive critique as well, and I think this is the most meaningful part of it, which was--got to the issue of scope. What a lot of Democrats--what frustrates a lot of Democrats about the Clinton administration is that while it's been successful in staying in office, it doesn't really propose a lot of things that get them excited. It's--if you have an eight year presidency and you're the Social Democratic Party and your agenda--and you're proposing things like 48 hour hospital stays and family leave to take your job to the vet, that does not echo of the Social Security law or of Medicare. And you see a lot of this criticism is just too small. It's what Mark once said was the agenda--was the equivalent of valet parking, a pretty good line.

MARK SHIELDS: Thanks.

PAUL GIGOT: Dick Gephardt wants them to--wants the Democrats to start thinking bigger, both in terms of 1998 to get the vote out for the congressional election, and then beyond looking to 2000, let's stand for something. Let's move the agenda and the country in our direction.

JIM LEHRER: How do you see it, Mark?

MARK SHIELDS: I think it was about 1998.

JIM LEHRER: '98, not 2000?

MARK SHIELDS: Dick Gephardt, quite frankly, is not a kamikaze pilot. He's not on a suicide mission. He's a very practical, very successful politician. He's not going to take on a President of his own party who's at 65 percent approval with the public and 91 percent approval with Democrats, with Democrats in the country. I mean, what he was laying down, in my judgment, was we have to have going into '98 differences. As one fellow Missourian of his once said, Harry Truman, "The country doesn't need two Republican Parties." And I think more than the President he was taking on what I'd call a leadership council, the Democratic Leadership Council, and the Dick Morris' centrist approach. In both our political parties, Jim, there's sort of a tradition. Paul has even acknowledged this, the Republican Party. The militant partisans in one party always want the other party to nominate somebody in the middle. That's why liberal Democrats always thought the Republicans ought to nominate Nelson Rockefeller or Howard Baker or John Anderson. The militant partisans of the party don't want those people, but the militant partisans of the other party do. Same thing with the Republicans--said Democrats ought to nominate Sam Nunn for President or Chuck Robb or Scoop Jackson of Washington. The reality is that Dick Gephardt is trying to say to the Democratic Party for us to win in '98, to have a shot at winning back the House, we've got to draw differences, and I think probably the patient's bill of rights, taking on HMO's and that is where it's going to begin.

JIM LEHRER: Okay. We're going to end right here. Thank you both. FINALLY - FOULED OUT

JIM LEHRER: Finally tonight the firing of a basketball player and the issue of bad behavior by professional athletes. Kwame Holman begins.

KWAME HOLMAN: Yesterday the National Basketball Association suspended Latrell Sprewell from the league for a year for attacking his coach on Monday. It is the longest suspension ever handed out by the NBA. A day earlier, the Golden State Warriors terminated the $32 million contract of the three-time All-Star Guard and leading scorer on the team. During a practice on Monday Sprewell had a verbal confrontation with warriors Coach P. J. Carlisimo and afterward attacked him twice over a period of 20 minutes and threatened to kill him. In a statement announcing Sprewell's suspension, NBA Commissioner David Stern described the incident this way. "First, he choked him until forcibly pulled away. Then after leaving practice, Mr. Sprewell returned and fought his way through others in order to commit a second and this time clearly premeditated assault. A sports league does not have to accept or condone behavior that would not be tolerated in any other segment of society." Before the league acted, the 27-year-old Sprewell spoke to a San Francisco area television station.

LATRELL SPREWELL, Suspended NBA Player: First of all, I want to apologize to my fans and my family and friends of mine who saw this, and there's definitely not something that I condone but it did happen, this mistake I made, and, you know, I'm just trying to move forward right at this point.

KWAME HOLMAN: Teammate Brian Shaw, who witnessed the incident, also spoke prior to the suspension.

BRIAN SHAW, Golden State Warriors: Yes, he made a mistake, and yes, he should pay for the mistake that he made, but, you know, termination of a contract after a two-day period, when the incident happened, you know, that's like getting into a fight and then giving, you know, the death penalty.

KWAME HOLMAN: Converse athletic shoes also canceled its endorsement contract with Sprewell this week after originally saying it would not. P. J. Carlisimo is a former major college basketball coach. He coached another professional team before taking over the Warriors. Several players at both levels have said they've experienced difficulties with Carlisimo. The NBA Players Union said it will appeal Sprewell's suspension and the termination on his Warriors contract. While Sprewell's act is unprecedented, violent confrontations are not new to professional basketball. In last year's NBA playoffs a bench clearing brawl erupted between players for the New York Knicks and Miami Heat. Nine players were suspended from selected playoff games. Also last season, the Chicago Bulls' Dennis Rodman head-butted a referee who had just ejected him from a game. Commissioner Stern suspended Rodman for six games for that incident and for 11 games later in the year after Rodman kicked a photographer. Veteran NBA player Buck Williams been coached by P. J. Coach Carlisimo and several other coaches. Williams says today's young players are different from his teammates of years ago.

BUCK WILLIAMS, NBA Veteran: Now it's a different way. It's a different player. And I think what's happening, you know, in our environment, in our society, is sort of--it just reflects what's happening in NBA. I mean, a lot of the players are young and sort of misunderstood. And it takes a very special coach, and it takes quite an understanding organization to try to deal with the new athlete.

JIM LEHRER: And now to Elizabeth Farnsworth in San Francisco.

ELIZABETH FARNSWORTH: For more on the latest incident and the larger questions it raises we are joined by C. W. Nevius, a sports columnist at the San Francisco Chronicle and Paul Hewitt, head basketball coach at Siena College in Albany, New York. He's a former college player who's also been assistant coach at Villanova and at the University of Southern California. Thank you both for being with us. Tell me, Chuck Nevius, fill this out for us. What led up to it and fill out the facts of the incident a little bit.

C. W. NEVIUS, San Francisco Chronicle: Well, I think the important thing to point out, it's been building for quite a while. Latrell Sprewell and P. J. Carlisimo had had a series of problems. There had been a confrontation. He'd been late for practice. He'd been benched. All these things that happened, it built up. P. J. Carlisimo is a very demanding coach. These players have spoken to this over and over. And frankly, Latrell Sprewell had had the run of the organization a year ago. He had a very lax system, took more shots than anyone. He was basically in charge of the team. This was a huge change for him. He badly wanted to trade. So things were working at odds. This incident at practice was not a huge surprise for it to happen. The fact that it went from verbal abuse to physical confrontation is what made it different.

ELIZABETH FARNSWORTH: And just describe a little bit more about what happened in the incident itself.

C. W. NEVIUS: They were doing a shooting drill. P. J. suggested that he put some more pep on the pass. It was a very minor thing, but he said, "I don't want to hear that from you." And Carlisimo saw this as a challenge and began to advance to him, to talk to him. And Sprewell said, "Stay away from me. Don't come up on me." And when he did, it--the two of them began to go back and forth. Sprewell put his hands on his throat, and there was a confrontation at that point. He was pulled away, was told to leave practice. He did, was gone for 20 minutes, changed clothes, come back, and took a swing at the coach, missed him. But that's the thing that David Stern was talking about, is this second one couldn't be called passion or heat of the moment. This was definitely premeditated. And that's what I think concerned everyone. There was some concern P. J. Carlisimo was telling friends, he was afraid that he'd gone back to get a gun. So I mean, it's a panicky situation. As it turns out, that was not the case, but even so, Sprewell had said, "I'll kill you." So we're talking about a very serious situation that really disturbed everyone. And I think the league felt at that point they had to make a very strong stand. And that's what they did.

ELIZABETH FARNSWORTH: Paul Hewitt, what's your reaction to this incident?

PAUL HEWITT, Basketball Coach, Siena College: [Albany, NY] Well, you know, it's obviously unfortunate, but I don't think Latrell Sprewell left the Warriors or the NBA any other recourse. I don't think that they acted in concert. I thought the Warriors did what they had to do in terms of firing a player who was breaking down the chain of command and the system that you have in place, set in order to feel the successful team. He blatantly challenged the authority of P. J. Carlisimo, and I think what David Stern, the commissioner of the NBA, had to do was, he couldn't afford to have somebody who did something so drastic hook on with another team in the NBA, possibly one of the teams that could contend for the title, and that would give him the largest stage in basketball in the world, if he were to hook on with a team like say the Chicago Bulls or the Miami Heat or the San Antonio Spurs, and was in the championship round in June. I just think that would be a huge black eye for the league.

ELIZABETH FARNSWORTH: And, Mr. Hewitt, what about the criticism that this is such an extreme punishment when the Lakers--Kermit Washington broke another player's jaw and just got a 60-day suspension?

PAUL HEWITT: Well, there's a big difference in the Kermit Washington case. I think what happened, if I remember correctly, in the Kermit Washington situation there was an all out fight between the Houston Rockets and the Los Angeles Lakers, and Kermit Washington was in the middle of a millet when Rudy Tom Janovich, the player he hit, ran up suddenly behind him--and it was almost a reflex action--he turned around and struck Rudy Tom Janovich in the face. That is a heat-of-the-moment type reaction. I think what Mr. Sprewell did by leaving practice and coming back to attack Coach Carlisimo again is totally different, and especially when you're talking about a player versus a coach.

ELIZABETH FARNSWORTH: Chuck Nevius, you heard Buck Williams say that the players, that this is a different situation now. Is it--has--have professional sports changed, is it just more violent?

C. W. NEVIUS: Well, I think they have changed, but I think I'm reluctant to jump on the bandwagon with the idea that it's simply money. I think all the coaches are going to make less money than the players. It's just a fact of life in professional sports at this point; that coaches have to be able to handle the players and motivate the players, and put 'em together as a team and make them work together as a team. And I don't think that'll ever change. That's going to have to happen. There is a dialogue to be entered, which was that P. J. Carlisimo is extremely demand; he has been somewhat abusive. There are players of his who have said this. That would be a point we could make. At the University of Colorado we had Lou Campanelli. The players felt that he was going beyond his bounds as a coach. There were complaints. It was a process. He was removed as coach. Unfortunately, that dialogue was thrown out the window as soon as Latrell Sprewell put his hands on the coach. And then it became a simple employee/employer, you can't attack your boss.

ELIZABETH FARNSWORTH: But I'm asking more generally, is it true that the sports are more violent?

C. W. NEVIUS: I don't think that they are more violent. I think that the biggest change is what we're doing right now, television. I think it's videotape. I think we're seeing these incidents. When we saw Mike Tyson bite the ear of Evander Holyfield, when we saw Michael Westbrook, the Washington Redskins football player, repeatedly pounding a player who was unconscious or laying on the ground, defenseless, it enraged everyone. If we had a videotape of this incident, I'm sure things would have happened much more quickly. And that's what I think happened here, is there was such an outcry nationally that the original punishment was only a 10-game suspension. As this became a bigger issue nationally I think the Warriors suddenly realized we've got to do more, and they did.

ELIZABETH FARNSWORTH: Mr. Hewitt, do you think these kinds of incidents are more common?

PAUL HEWITT: No, I think this is totally an isolated situation. I think generally that people were involved in athletics in our country--you know, they practiced good sportsmanship. I think they listened to the coaches because they understand that in order to have a successful organization or a successful team, you know, everyone's got to have roles defined and the person who defines those roles is the coach. But I don't think this is the trend, or something that is becoming more commonplace in American sports. I think this is completely an isolated situation.

ELIZABETH FARNSWORTH: Mr. Hewitt, how do you explain the fact that this has become such a big story, the story about the Warriors?

PAUL HEWITT: Well, I think C. W. pointed to it. I think there is so much coverage when you talk about, you know, all the other--you know--outlets that are covering this story--the CNN's, the ESPN's, you know, all the local stations that are covering it--it's become nationwide and I'm sure a global issue by now.

ELIZABETH FARNSWORTH: And, Chuck, what happens next? What options are open for Sprewell now?

C. W. NEVIUS: Well, it's going to be very interesting. I think that the Warriors are not exactly sure of their legal footing, to be honest. The idea of firing a player is not really--the bylaws aren't really set up for this. So I think the question of what will happen with the $22 million that he's still owed is going to be very interesting. He'll serve a one-year suspension. At the end of that time I don't think there's any question that a team will pick him up. He's a very, very--he's a three-time all star. He's a terrific player. Some team will pick him up. But I don't think he'll ever make the kind of money he was making with this contract, with a four-year, $32 million guaranteed contract. This will follow him. His endorsements have gone down. It'll be a problem for him. So I don't think it's going to--people are suggesting he'll get off scot-free after a year, and I don't think that's the case at all. It will definitely stay with him.

ELIZABETH FARNSWORTH: Well, thank you both very much. RECAP

JIM LEHRER: Again, the major story of this Friday was the nation's unemployment, which fell last month to 4.6 percent, a 24-year low. We'll see you online and again here Monday evening. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.