The MacNeil/Lehrer NewsHour

INTRO

ROBERT MacNEIL: Good evening. Tonight we'll be looking at several developments overseas, including Israel's currency devaluation and economic crisis, and the aftermath of the bombing that killed 16 Korean government officials. And as the Kissinger commission prepares to move into El Salvador, we profile the President, who thinks democracy can make it. Jim?

JIM LEHRER: We're also going to explore three arguments that are 100% domestic American -- whether bankruptcy is a proper and legal way out of labor contracts, whether children's cartoon programs have become nothing more than long commercials for toys, and whether the World Series of a game called baseball really matters.

MacNEIL: Police in Burma said today they had captured a possible suspect in the bombing on Sunday that killed 19 people, including 16 South Koreans, four of them cabinet ministers. The suspect was a Korean who lost one arm when he tried to blow himself up with a grenade to avoid capture. Burmese police also arrested two other Koreans, but one of them tossed a grenade and was killed by the police, and the second Korean escaped. The Burmese have not identified these Koreans as from the North or South. The South Korean government has blamed the bombing on North Korea. The bodies of the 16 Koreans killed in the bombing arrived back in Seoul today as thousands of Koreans attended demonstrations to express outrage and to blame the North.

The Pentagon said today that a Navy amphibious group carrying some 2,000 Marines is now on its way to the Indian Ocean from the Mediterranean. The movement comes amid threats by Iran to close the Persian Gulf and cut off the movement of oil tankers. The Pentagon would not comment on whether the force was being moved into position to meet any such Iranian move. The U.S. ships were part of the flotilla off the coast of Lebanon. The Iranian threats have followed delivery by France of five jet fighters with modern missiles to the Iraqis. Iraq and Iran have long been fighting a war between themselves. Jim? Israeli Economic Crisis

LEHRER: There were stories of politics and economics from the Middle East. The political development came from Lebanon, where efforts to convene a national reconciliation conference snagged over the meeting place. Walid Jumblatt, the leader of the Druse militia, rejected the palace of Lebanese President Amin Gemayel for the conference. He said through a spokesman the meeting should be held aboard a Greek ship flying a Lebanese flag somewhere off the coast of Lebanon. Gemayel has said he did not want the meeting held anywhere but his palace or in Saudi Arabia. There are to be further negotiations through intermediaries tomorrow.

The economic story is from Israel, where 12 hours after the new government of Prime Minister Shamir took over, a sharp austerity program was announced. Israeli currency was devalued, and government subsidies on bread, dairy products and meat were cut in half. The announcement sent thousands of Israelis flocking to supermarkets. Here is a report from Keith Graves of the BBC.

KEITH GRAVES, BBC: The bubble burst at dawn with an announcement following an all-night Cabinet session, and many Israelis forsook their breakfast to indulge in an orgy of pre-price increase buying. It had to happen: Israelis have been living in [unintelligible] for years, with 130% inflation, but with indexes in salaries and with most of life's necessities heavily subsidized. It was a recipe for an economic explosion, and it finally went bang this week with a run on bank shares and a rush to get out of Israeli shekels. The 23% deflation means that even unsubsidized goods are going up in price. By midmorning, many garages had run out of petrol. What caught most Israelis by surprise was not that it happened, but the speed of the happening. Cabinet ministers were called from a champagne reception to celebrate new Prime Minister Shamir's appointment to a midnight crisis meeting that decided on the emergency measures. The labor federation met this morning and said it would not tolerate measures that will hit the already hard-pressed lower classes worst. But most Israelis seem to accept the verdict of one newspaper editorial. "Today," it said, "we are paying the heavy price for the frivolous living of past years." Or, as one Cabinet source put it, "We've lived in Disneyland for too long. Now we're coming down to earth." He might have added, "with a bang."

LEHRER: What's happened to the Israeli economy and why is what we want to sort out now with Howard Sachar, professor of history at George Washington University here in Washington. He specializes in Israeli studies and has written extensively on modern Israel, its politics and its economy. Professor Sachar, what caused this economic problem in Israel right now?

HOWARD SACHAR: Several reasons, Mr. Lehrer. The first, of course, is the problem that effects many countries all over the world. This is a period of general recession, and of course Israel as a small, rather economically undeveloped country, has been affected by the shrinkage of the markets that have affected other countries. But of course there are more specific reasons that apply uniquely to Israel. One of them, plainly, has been the cost of the Lebanese war, which has been an economic illness and a psychological cancer for the country these last years -- last year and a quarter. And then, when you add to this the on-going problem of the occupation, which is costing them at least $1 million a day, you exacerbate the difficulties that already --

LEHRER: The occupation in Lebanon.

Prof. SACHAR: The occupation in the southern part of Lebanon which protects northern Israel.

LEHRER: Yeah.

Prof. SACHAR: But as the commentator has indicated, there are problems that go rather further back in Israeli history, and I should say that they became particularly inflamed once Menachem Begin assumed power in 1977. One of the innovations that he introduced into Israel's economy, first of all, was to do away with many of the regulations and the restrictions upon the free flow of the market. This was a commitment that he had made to his essentially middle-class constituency -- at least part of his constituency comes from that group. And the result has been, therefore, that there has been a free flow of capital away from Israel. Previously this had been inhibited. Now he promised that this could take place; people could move their funds wherever they wished them to do. I may remind you, as an example, that the fall of former Prime Minister Rabin came about with his wife, you may remember, had --

LEHRER: Right. Had a bank account --

Prof. SACHAR: -- an illegal bank account in the United States, and it was an embarrassment to him; he had to resign. That could not happen today. There are no illegal bank accounts, substantially, abroad. Israelis can have them, as Americans can have them. This was part of the Milton Friedman school of philosophy that animated at least one component of the Begin government. There was yet an additional factor. For years many of the expensive import items that the wealthy in Israel could afford --

LEHRER: Like what?

Prof. SACHAR: Well, color television sets, for example, expensive automobiles. By and large, when I say those who are more affluent I am referring to the more Europeanized sector of Israel's population. But this was Utopia for the less fortunate element, for the proletariat, so to speak, and most of these people, or at least a large number of them, came from the non-European sector of the Jewish population of Israel. This is the constituency that elected Begin, and when he came to power as a result, he immediately decided to let this cornucopia of goods, of consumer goods, flow freely into Israel. This had to be affordable. The only way it could be affordable would be, of course, that the Israeli shekel exerted a certain leverage in the international monetary market. That, in turn, would not have been possible unless there were assurance within Israel that the dollars would not be too expensive. The way that was assured, in turn, was by Begin simply to pump dollars into the economy to insure, in a sense, that shekels did not become too expensive, that they bought a good deal of overseas goods. Well, all of these were really unrealistic policies. They were very realistic politically for him; they paid off politically very substantially. But it was pie-in-the-sky economics, and it is --

LEHRER: Now come home.

Prof. SACHAR: -- the consequence of it is now being paid for.

LEHRER: Do you believe that the austerity program that Mr. Shamir will put into effect tonight is going to solve the problem in the short run if not the long run?

Prof. SACHAR: It will help, and it's only the beginning, I'm sure, of what he's going to do. I can almost predict with a certainty that within the next few days or certainly within the next few weeks, you're going to see the second phaseof this austerity program. And that will be very tough restrictions upon the outflow of capital from Israel, of dollars from Israel. There has been a virtual atrophy of capital formation in that little country the last few years because people find better investments in the United States.

LEHRER: Is this financial crisis -- what word would you use to describe it in terms of its severity? Is the country on the verge of a collapse or of a major turmoil of some kind, or do you think they will weather it, or what?

Prof. SACHAR: If you were to ask that question 25 or 30 years ago, I should say that the question was almost surrealistic; they had been used to such difficulty in their economic circumstances -- far worse even than today. But it is an appropriate question now because people have been exposed to the revolution of rising expectations, and for those who have become accustomed to a much more easy-going way of life, this will be a very severe shock. It's not going to cause a revolution in Israel. It certainly isn't going to cause the expiration of the state of Israel. But what it very well may accomplish is the fall of this government sometime within the course of this year.

LEHRER: Professor Sachar, thank you very much. Robin?

MacNEIL: Here at home we turn to our educational beat. Whatever national agreement there may be that America's public schools still need improving, there is a lot of dispute over how to do it. Today a congressional task force tried to paper over one of the major sources of dispute -- whether better teachers should get merit pay. That idea has been a major feature of President Reagan's education proposals, but has been fiercely resisted by the largest teachers union, the National Education Association. The 21-member bipartisan congressional task force presented its conclusions at a press conference in Washington. The spokesman was the chairman, Democratic Congressman Paul Simon of Illinois.

Rep. PAUL SIMON, (D) Illinois: While there are few successful models of elementary and secondary merit pay plans, we encourage states and school districts to experiment with performance-based pay. There is potential for upgrading the profession by evaluating performance and rewarding excellence. But simply paying teachers for meritorious performance cannot solve the problems facing education. Merit pay is not the single key to improving the quality of education. The task force strongly urges school districts and states to raise the basic pay of teachers.

MacNEIL: Later at another Washington appearance, NEA President Mary Futrell repeated her negative feelings about merit pay.

MARY FUTRELL, president, National Education Association: -- told that thousands of good teachers are leaving the classroom for higher-paying jobs, President Reagan suggests merit pay for a fortunate few. Merit pay, tuition tax credits, budget cuts, prayer in the schools: these are short-sighted political responses that divert, not advance, genuine educational reform.

MacNEIL: The report of the task force said that the average annual wage of teachers was just under $19,000 last year, compared with $34,000 for engineers and $26,000 for accountants. The report urged local school districts to devote at least 3% of their budgets to the growth and development of the teaching staff. Jim?

LEHRER: The Supreme Court put a closer on a piece of Cold War history today. The Court refused to review the 1950 perjury conviction of Alger Hiss. Hiss, a former State Department official, was convicted of lying to a federal grand jury when he denied being a Soviet spy. Now 78 years old, Hiss had asked the Supreme Court to clear his name, claiming as he has from the beginning that he was innocent. He spent 44 months in prison on the perjury conviction. The Court also refused to hear an appeal by former Congressman Richard Kelly, who was convicted of taking a $25,000 bribe in the Abscam scandal. Kelly, a Republican from Florida, was shown on FBI video tapes stuffing his pockets with hundred-dollar bills given to him by an FBI agent who was posing as an Arab sheik. Kelly claimed he was the victim of a crime manufactured by the government, but a lower appeals court said the FBI hoax was legitimate. Now Kelly faces a sentence of up to 15 years in prison. Robin? Bankruptcy and Labor

MacNEIL: In Houston today, employees of Continental Airlines asked a court to dismiss the airline's petition to reorganize under the bankruptcy laws. The dismissal motion was filed by unions representing pilots, flight attendants and ground workers. The unions claim that Continental is abusing the federal bankruptcy laws to break labor contracts. Tim Powell, a flight attendant at Continental, recently had this comment on the bankruptcy petition.

TIM POWELL, Continental flight attendant: I think it's a union bust, pure and simple. Frank Lorenzo is trying to bust this union. He's trying to bust all the unions. He wants no unions on the property. We think that he is -- we have offered him hundreds of millions of dollars in concessions; he's turned it down at every step of the way. And we just feel it plain and simple a union bust by the president of this company.

MacNEIL: In Congress last week Henry Duffy, president of the pilots union, broadened the charge.

Capt. HENRY DUFFY, Airline Pilots Association: The entire structure of labor management relations in this country is being jeopardized by the actions of Continental Airlines. Instead of being a last resort, bankruptcy has become a haven for scoundrels seeking to break legally binding contracts with their employees.

MacNEIL: Continental President Frank Lorenzo saw it quite differently.

FRANK LORENZO, president, Continental Airlines: -- and in fact for the last year continually went to our unions to try to get them to understand that we had to have an immediate change. In fact, as recently as three, four months ago we were turned down by the pilots in a request for about a $45-million change in the pilot costs.

MacNEIL: Meanwhile in Washington today, the Supreme Court heard arguments in a case which could determine what happens in the Continental case. Today's case involves a small New Jersey building supply company called Bildisco. The Teamsters Union local claims the company unfairly broke its labor contract by reorganizing under Chapter 11 of the bankruptcy laws. So far, lower courts have ruled that Bildisco was within its rights. The National Labor Relations Board also comes into the case, claiming that the company violated labor law, and the AFL-CIO has filed a brief supporting that. The lawyer who wrote that brief also represents the Airline Pilots Association against Continental. He is Bruce Simon, a partner in the New York firm of Cohen, Weiss and Simon. On the Bildisco case, Mr. Simon, how important is it?

BRUCE SIMON: Well, the entire issue, as to the extent to which the bankruptcy laws can be used to override and supplant labor relations policies is, in my judgment, the most significant challenge to the social contract we have in this country, which establishes free collective bargaining as the mechanism for adjusting the basic conflict that's potential between workers and employers. And if you have the availability of the bankruptcy code and bankruptcy courts as an alternative mechanism for dealing with labor relations problems, you have violated one of the fundamental precepts of our social system. In our judgment the case before the Supreme Court and the case that was filed today in Continental, while proceeding on slightly different tacks, address the same basic issue, which is the extent to which a company can misuse or abuse the bankruptcy code to achieve an illegitimate labor relations purpose; in effect, taking the bargain that it made across the table in fair and open collective bargaining, ripping up the result of that bargain, imposing unilaterally terms and conditions of employment as much as 50% less than the bargain they reached, and attempting to use the bankruptcy code to hide behind to achieve that result.

MacNEIL: Now, are you saying that bankruptcy can never be used as an excuse for breaking a labor contract?

Mr. SIMON: Yes, this is our position --

MacNEIL: Never, absolutely never?

Mr. SIMON: That's the position the AFL-CIO has taken in Bildisco. That is the position that we have taken and will advance in Continental Airlines as well. And while the position may sound extreme, it is only a reflection of the general awareness that in reaching this accommodation between working people and capitalists in our society, that there are occasions when those interests will result in a breach. We have strikes, despite the fact that they cause disruption. That's a price that society -- our society and our government -- have agreed it is reasonable to pay in order to permit free collective bargaining and the exercise by each side of their legitimate economic weapons to fulfil.

MacNEIL: What if the alternative for a company is to go out of business?

Mr. SIMON: There is always an alternative for someone to commit suicide. In our judgment, neither unions representing working people who want to work more than anything else, nor employers who want to make money more than anything else, are going like lemmings to go flipping themselves up onto the beach and die. The system is designed to permit those contesting forces to meet across the table and negotiate in good faith a solution to their problems.

MacNEIL: How pervasive is this problem, as you see it, and is it spreading?

Mr. SIMON: It is spreading. It began a few months ago with Wilson Foods in the Midwest. It spread then to a non-labor issue, but in another instance in which businesses are seeking to misuse the bankruptcy code, and that's the Johns Mansville attempt -- a rich, very powerful corporation, certainly by no means bankrupt or insolvent in the traditional sense, to try and use the bankruptcy code to avoid liability for lung cancer people. Continental is the third such instance. The problem is that, like the breaking of the dike --

MacNEIL: And Eastern management threatened bankruptcy --

Mr. SIMON: That's is correct. Eastern management -- and almost any significant employer today in a highly competitive field -- will use it as a threat in bargaining regardless of the basis upon which they're making an argument of that nature. The problem is that, like most weapons, if it's lying there available to be used, someone is going to use it.

MacNEIL: And you fear that it could become quite a popular weapon unless the Supreme Court stops it, is that --

Mr. SIMON: No question in our mind that this represents a real, direct, widespread effort to destroy the sanctity of collective bargaining agreements, and the bargain that we made when we sat down at the table.

MacNEIL: Thank you. Jim?

LEHRER: The other side of the argument, now, from Stephen Cabot, also an attorney who specializes in labor-related cases. But his clients are the managements of companies involved in bankruptcy and other matters concerning unions. Mr. Cabot, is the Bildisco case as important from your perspective as it is to Mr. Simon's?

STEPHEN CABOT: Absolutely. What I think it does, it casts for management and labor a certain reality that I believe to some extent both management and labor lost in the '50s and the '60s and the '70s. Labor and management only found themselves with their backs to the proverbial wall because labor overreached and management succumbed. And now we finally see a feasible alternative, as opposed to a company going into Chapter 7, which would the the economic death to which Mr. Simon referred.

LEHRER: That's voluntary bankruptcy, where the whole thing just goes down the tubes?

Mr. CABOT: Absolutely.

LEHRER: Liquidated. The company is just liquidated.

Mr. CABOT: Just liquidated. And now the courts are providing companies and unions and employees the opportunity to create an economic sanity for which jobs and more jobs will be made available at a rate where society as well as the company can perform in a competitive environment. No longer will we see companies faced with no other feasible economic alternative.

LEHRER: But Mr. Simon says that it's become a tool for union busting, to go into the bankruptcy courts.

Mr. CABOT: Oh, to take the position, Mr. Lehrer, is almost -- to view it that way is like Alice in Wonderland. It's ridiculous. Firstly, all that the bankruptcy law does under Chapter 11 is to create a situation where a contract which is onerous and burdensome -- where a company can't live with it if it is to survive -- is going to be abrogated. But not unlike any other executory contracts. And the union is still there. The union hasn't been busted. This is AFL-CIO rhetoric to confuse the issue. We're not talking about union busting; we're talking about creating economic sanity. To preserve jobs.

LEHRER: But he says it violates fundamental precepts of our society -- a union contract with management on wages and other things, and the company can go in and say, "Forget it."

Mr. CABOT: Well, I think that's silliness. Firstly, if we have any honesty and integrity with respect to our court system, we know that decisions are not going to be made simply precipitously. We know that those decisions by management, if unilaterally taken under the bankruptcy laws, are going to be reviewed by courts and scrutinized very very carefully, and that all that we're talking about -- and I think we're maybe missing the issue. And Mr. Simon has used some rhetoric to, I believe, camouflage the issue. Let me put it this way. Are we trying to save jobs? Are we -- do we want to put companies where they have no other alternative, where Chapter 11 is unavailable, where contracts can't be abrogated and where Continental Airlines, Eastern Airlines and others will simply go out of business? I think and I hope the answer is that we, management and labor, are going to work, not to be adversarial, but to preserve jobs.

LEHRER: Is it your view, then, that if the Supreme Court should rule against your side that there would be catastrophe in all of these areas? What would be the consequences?

Mr. CABOT: Well, I think the consequence will be, if we take the case of companies like Continental Airlines, that we will find more Chapter 7 bankruptcies or liquidations. For this reason: why should a company like Continental, by way of example, suffer losses over the last four, five years of over one-half a billion dollars when they could take their assets, go out of business, liquidate, and take monies and distribute profitable dollars to shareholders? Why not do that as opposed to taking money and -- literally the proverbial analogy -- to taking the match and lighting the dollars and letting them burn? Continental found itself in a non-competitive situation, no way out, losing money. The only alternative was to go to the courts and hope that the courts and the unions will pull together to come up with a method to save the company and to save the jobs.

LEHRER: Thank you. Robin?

MacNEIL: Mr. Simon, let's take these points one at a time. First of all, he says this is not union busting, it is just creating economic sanity.

Mr. SIMON: Well, if our system was based upon substituting a judicial system for collective bargaining, then I could understand the argument. The fact of the matter, however, that our basic thrust is to have collective bargaining between unions and employers across the bargaining table, not to walk into a bankruptcy court and have the bankruptcy court determine what labor conditions should be in this country. It is not a question of suicide or not suicide, but a question as to how you address an ill patient. And the addressing of that issue under our system is to be addressed in the labor relations framework, not in a bankruptcy court, which is used to dealing with debtor-creditor problems, dealing with companies that are sick, not companies like Continental that, the day they file in bankruptcy, boasts of the fact that they have $50 million in the bank. That's not a company that needs access to the bankruptcy court, and that's not a legitimate use or a substitution of the bankruptcy court for free collective bargaining.

MacNEIL: That's the nub of their complaint, isn't it, that this is the, as they would argue, abuse of the bankruptcy laws, that companies which are not at death's door are going there and seeking the protections of bankruptcy -- against not only their other, traditional creditors, but the demands of their unions under the contract.

Mr. CABOT: Oh, I understand that, and I've listened to that rhetoric for years. And Mr. Simon's premise would work very well in Labor Law, course 101, in the textbooks. But the fact of the matter is that companies like Continental are in bankruptcy because the world of labor relations, as it knew it and as we may think of it, failed. Continental would not be in bankruptcy if the collective bargaining process had worked. When Continental, for example, went to the labor unions and said to the labor unions, "We have a problem," not a day before they filed, but weeks and months before.All that Continental received from the labor unions was "no, no, no." And, as Mr. Simon knows, under federal labor law, in that particular situation the unions had the right to say to Continental, "Open your books, fella. We'd like to see what the true facts are." The unions never asked for the true facts. They would rather use economic muscle, like in the case where the flight attendants were negotiating, by threatening to strike. Continental then faced, with the unions saying, "We're not going to concede, we're not going to capitulate, and, more than that, we're going to strike you," Continental now, since the collective bargaining process having failed, was left with one of two alternatives, as I see it: one, file under Chapter 11 and hope to remain alive, or simply tell the unions, "See ya' later, fellas," and go into Chapter 7 and liquidate. For me, Chapter 11 is something that I would think the unions would have applauded since jobs now -- at least some of them -- have been preserved.

Mr. SIMON: The problem is that's simply not an accurate reflection of the facts. In August of 1982, the Airline Pilots Association granted to the company $100 million in labor concessions -- admitted by the company at every level of the proceeding and in its most recent SEC filing. The flight attendants, the day before the Chapter 11 was filed in this case, told the company that they would give it $42 million in relief, more than they asked for. The pilots, by official action of their master executive council -- the highest body representing the Continental pilots -- two days before the bankruptcy, told the company that it could have whatever economic relief was necessary in order to ensure profitability and did ask specifically that the books be opened so that question could be addressed and so that the issues could be pointed. The fact of the matter is that the company, for its own purposes, determined not to engage in that collective bargaining, not to engage in the process that had been over $100 million successful 12 months before, but chose to use the bankruptcy courts in order to displace the union as a collective bargaining representative. Those are the facts.

MacNEIL: We can't settle this argument here, but am I right that you both agree that whichever way the Supreme Court decides is going to have enormous consequences on labor relations and on the health of companies in the future?

Mr. CABOT: Absolutely.

Mr. SIMON: I consider it the single greatest threat to collective bargaining since the passage of the Wagner Act 50 years ago.

MacNEIL: And you don't consider it that?

Mr. CABOT: Well, I tell you, I think Mr. Simon, hopefully, in the years to come will begin to see that there will be a sane economic reality to what I hope will come from the Supreme Court decision.

Mr. SIMON: Talk about Alice in Wonderland --

MacNEIL: We'll come back to that. Jim?

LEHRER: There was a major crime development today. Fifteen men, described by federal officials as the Who's Who of organized crime in the Midwest, were indicted in Kansas City. They were charged with skimming nearly $2 million from Las Vegas casinos. Among those charged were the alleged leaders of crime syndicates in Chicago, Kansas City and Milwaukee. The indictment grew out of a five-year FBI investigation that included the use of court-approved wiretaps. And we'll be back in a moment.

[Video postcard -- Sudbury, Vermont] Alvaro Magana Profile

MacNEIL: Henry Kissinger said today that his commission on Central America would not talk to any group engaged in guerrilla warfare. Kissinger said this as he and other members of the commission arrived in Costa Rica, the second stop on a six-nation tour of Central America. They were in Panama yesterday, and before leaving, Kissinger said they would consider recommending increased U.S. aid to the region. His statement today that the commission wouldn't meet any guerrilla group appeared to preclude talks with the Salvadoran rebels, at least in El Salvador. Tomorrow the commission moves on to El Salvador to continue its fact-finding.There, among others, they will be meeting El Salvadoran President Alvaro Magana. Recently, on special assignment for us, Charles Krause made this profile of the President, whose faith in the possibilities of democracy for El Salvador remain strong.

CHARLES KRAUSE [voice-over]: El Salvador is a country whose political leaders traditionally walk a dangerous tightrope. There is no safety net when a president falls or is pushed from the high wire. Alvaro Magana has been walking the presidential tightrope here for almost a year and a half. A lawyer and University of Chicago-trained economist, Magana became president last year for only one reason: he was the one man in El Salvador acceptable to the army, the country's center and right-wing political parties and to the United States. Whenever he appears in public, Magana risks his life. Whenever he makes a major decision, he risks his government. So far, almost miraculously, he's kept his balance and his job. By all accounts, Magana has survived as president by using the logic and negotiating skills he learned in law school, combining them with the shrewdness of a banker, which he once was. Add to that a large dose of personal charm, and the self-confidence of a professional gambler.

ALVARO MAGANA, President of El Salvador: I don't know -- I know many people who didn't believe that my government was going to last so much, but even in January when we had that Ochoa Parliament that was a seige parliament, probably the only serious military problem I have ever had, I knew there was going to be a solution. I don't know, maybe I'm optimistical or I believe I'm lucky. I have never lost in my life. I am not going to lose now. I'm sure of that. I believe that has given me confidence.

KRAUSE: Do you like being president?

Pres. MAGANA: It is very difficult to like to be president in time like this. Maybe 10 years ago it was very nice, but now is -- there are so many difficulties.

KRAUSE [voice-over]: Perhaps the key to Magana's political survival is the role of honest broker and elder statesman that he's played since becoming president. He's flatly rejected any suggestion that he become a caudillo; that is, that he try to remain in office beyond elections to be held early next year.

Pres. MAGANA: This is the way that many dictatorships -- how they start, and I don't like that kind of thing, and this is why I have not been a strong president in the usual tropical sense, because not only my personality, but I believe in democracy. I will always believe and I never felt that I was going to have the opportunity and, as a matter of fact, I have already come to realize that I was not going to see democracy in my country in my life, but now I have the opportunity to do something. I'm not going to spoil it.

KRAUSE [voice-over]: Francisco Quinonez is coordinator of El Salvador's government peace commission and leader of PPS, the Salvadoran popular party.

FRANCISCO QUINONEZ, PPS leader: I think that under the circumstances, under the fact that he doesn't belong to any political party, under the tremendous pressure that has been put onto the government and particularly to him because of all the different parties moving along and trying to get a bigger share, let's say, of the -- oh, of the power, I think he's done extremely well.He is the president, no two ways about it.

KRAUSE [voice-over]: Magana was born 58 years ago on a coffee plantation near El Salvador's border with Guatemala. By birth and by conviction he's a member of the country's social and economic elite. But long ago, he says, he began to believe that economic and political reforms were necessary to avoid the armed conflict now underway. Magana says the greatest obstacle to peace is extremists on both the right and left. But neither side is monolithic. Despite the guerrillas' current military offensive, he believes the conflict may eventually end at the ballot box.

Pres. MAGANA: The problem I think they have is that the people that is in charge of military operation, after they decide that there will be a military solution, they don't want to have a political solution because how could they explain the three years of killing? It doesn't make sense. But I think sooner or later you could keep the pressure on the military few, and they will come to the conclusion that it's better to try to use the democratic process for power.

KRAUSE [voice-over]: Alberto Arene is a U.S. representative for the FDR-FMLN, the guerrilla forces fighting in El Salvador.

[interviewing] Do you as a representative of the left agree with President Magana's analysis?

ALBERTO ARENE, FDR-FMLN representative: We are united for a political solution, and when we said that we want peace and democracy through a negotiated settlement, it's not only the unarmed groups that are saying that, but all the alliance as a whole. There has not been yet a political solution to the conflict, and unless there will be a political solution, the war will continue.

KRAUSE: What does the FDR-FMLN's opinion of President Magana?

Mr. ARENE: He don't have any power, and also, the forces he represents are in an alliance with the extreme right-wing people in that government, and that doesn't permit him to put his well intentions -- his good intentions into reality.

KRAUSE [voice-over]: Magana's official day normally begins at 8 a.m. at home. El Salvador's military high command may have an appointment to discuss the war over coffee. Magana is a modest man. His ashtray collection, for example, is one of his prized possessions. Journalists have learned that one way to gain access is to bring the president a new ashtray from a hotel or restaurant in some exotic part of the world. In the morning Magana may spend a few moments with one of his three sons or three daughters before leaving for the presidential palace. There, he meets with ministers, important businessmen and the United States congressmen, senators and ambassadors who take up much of Magana's time. A few weeks ago, President Reagan's envoy to Central America, Ambassador Richard Stone, was in San Salvador for one of his periodic four-hour visits.The visit reminded Magana of a story. He told us that at home in his garden there's a turtle that also comes and goes without warning. So he's named the turtle Stone, although Magana didn't tell us what he's nicknamed the Ambassador. Last June, Magana visited Washington, where he was warmly welcomed at the White House. But he was also closely questioned by congressional opponents of increased aid to El Salvador.

Pres. MAGANA: They keep pressing me on the human rights problem.There is no point of discussion. I agreed with them on the human rights movement, definitely. The only thing that we have difference on point of view is that I would like that they realize that it is not easy to solve the problem overnight or in a very few months.

KRAUSE [voice-over]: For a man under the gun, Magana is surprisingly calm about the complicated issues and almost insurmountable problems he faces: trying to govern El Salvador in the midst of civil war, negotiate with the guerrillas, and pacify both domestic and foreign critics of his government without a power base of his own. Part of his inner strength comes from an incident in 1956. He was returning from Europe aboard the Andrea Doria when it collided with the Stockholm and sank off Nantucket Island.

Pres. MAGANA: This was very interesting experience in the sense that I changed my attitude on life -- very much that affecting me because, you know, when I was coming from Europe I was 29, and I had been studying all my life. And then I come to realize that I had not produced anything. I had not given anything. I have not even had a goal in life as a student. And so I change all my values and I start trying to give something.

KRAUSE [voice-over]: Despite the obstacles before him, Alvaro Magana has a clear vision of what he would like to give El Salvador: peace, economic recovery and democratic elections that he hopes will end once and for all the bloodshed that is tearing El Salvador apart. It is, he admits, an almost impossible task.

KRAUSE: What would you like to be remembered for in your country?

Pres. MAGANA: Oh, something that still have not happened: to give free elections, to have a stable and a strong government after myself, because I'll be the one that start democracy in El Salvador.

MacNEIL: Our reporter was Charles Krause. In El Salvador today a rebel spokesman said -- I'm sorry, yesterday, that the top leftist political organizer had been tortured and killed by a rightist death squad. The leader was Victor Manuel Quintanilla, former mayor of the town of Usulutan. He was the highest member of the Democratic Revolutionary Front, the rebels' political wing, living in El Salvador. His body was one of four found on a highway outside San Salvador. Jim? Ruben Zamora Interview

LEHRER: Talks between the left and government in El Salvador have stalled. A few days ago Reporter Krause was in Managua, Nicaragua, where he talked with Ruben Zamora, one of the Salvador rebels' key negotiators. Zamora is a member of the guerrillas' political diplomatic commission.

CHARLES KRAUSE: Are events in Central America getting out of control?

RUBEN ZAMORA, Salvadoran rebel leader: What we could say is that the escalation of the tensions in Central America has been growing a lot in the last few weeks. One hand, you see the three military governments of Honduras, Guatemala and El Salvador getting together and trying to rebuild the Condeca -- that is a military alliance in Central America. Secondly, you see the attacks of the counterrevolutionary forces in the Honduran and Costa Rican borders stepping up against the Nicaraguan revolution, and as well you see that the hour is troubled in El Salvador, the administration is becoming more and more vocal, calling for a military victory for their own side. For instance, the statement made publicly by Fred Ikle recently called clearly for a military victory for the government forces.

KRAUSE: Can there be a negotiated settlement in El Salvador?

Mr. ZAMORA: Well, you know, Charles, four or five weeks ago I was more optimistic about those possibilities, but recently what we see is that the peace commission of the Salvadoran government went to the meeting in Bogota, and after that meeting it seems that they are backing away from dialogue. And Friday last week President Magana made a statement saying that the only alternative that is left is the military one. The peace commission said to the press after our meeting with them that because we do not have the elections in February next year there is no possibility of dialogue. In that sense it seems to us that they are backing away from the road to dialogue and negotiation. And that's why I am not at this moment so optimistic about the possibilities. But it seems to us that we have to keep trying. We have to keep with this idea that the conflict in El Salvador could be resolved through dialogue and negotiation. And two or three months after, new opportunities are going to be opened.

KRAUSE: Do you expect direct U.S. military intervention?

Mr. ZAMORA: As an immediate threat, we don't see it coming. But what we see is that the United States -- government, of course, -- is putting all its eggs in the military side of the conflict. And in that sense, the dynamic of the conflict is leading to further and further involvement of the United States is our internal affairs. That's why we see that, say, in the medium-term future, the United States government is going to face a very tough alternative -- either to send the boys to prop up the Salvadoran army, or to assert the military defeat in El Salvador.

KRAUSE: Would your side accept a ceasefire in place as the first step towards ending the war in El Salvador?

Mr. ZAMORA: In relation to the ceasefire, our position is that in a process of negotiation one of the things that has to be dealt with is precisely the ceasefire. When the ceasefire is going to come it seems to us that a more practical way to achieve it is probably it will go step by step in a ceasefire, during the process of negotiation. And in that way helping the process of political negotiation with the development of a ceasefire. There are very many practical reasons why to start with a total ceasefire will be too risky, even for the process of negotiation.

KRAUSE: Why?

Mr. ZAMORA: Why? Because the war in El Salvador is this type of irregular warfare. That means fighting is spread all around the country, and in that sense it's very difficult to draw a line between the two sides. That's why if we go for a total ceasefire from the very beginning, it could be that we start to discuss where the lines are between the two sides, and we could spend two, three or four years discussing just that and not going into the real matter of the negotiation.

LEHRER: According to a leftist radio broadcast heard today in El Salvador, fighting has intensified because of tomorrow's visit by the Kissinger commission. And we'll be back in a moment.

[Video postcard -- Quechee, Vermont]

LEHRER: A children's television group raised a classic chicken-or-egg question today. Which comes first, the toy or the television cartoon series? And they answered it with a 16-page complaint to the Federal Communications Commission, charging it's definitely the toy and that many of the new children's cartoon programs are now nothing more than program-length commercials for those toys. The complaint claims the children are being exploited by such programs, which are built around toy or video game characters.Peggy Charren, head of Action for Children's Television, summed up the complaint this way at a Washington news conference.

PEGGY CHARREN, Action for Children's Television: There are at present eight Saturday morning network children's shows based on toys or other products. ABC has "Munchhichis," "Pac-Man" and "Rubik the Amazing Cube." CBS has the "Biskitts," "Dungeons & Dragons" and the Saturday "Supercade Show" which includes "Donkey Kong," "Donkey Kong, Jr." "Frogger," "Pitfall" and "Q*Bert." NBC has "The Shirt Tales" and "Smurfs." And there are six children's television specials or miniseries orprograms in syndication that are based on toys or products -- "The Care Bears", "The Charmkins," "G.I. Joe," "He-Man and Masters of the Universe," "Herself the Elf" and "Strawberry Shortcake." Someone has to let broadcasters know they cannot get away with turning children's television into the big sell. It is time for the FCC to enforce its very own policy in this area. This is just the tip of the iceberg. There are at least eight other toys or products being developed for children's TV specials or series.

LEHRER: Ms. Charren then displayed some examples, first, the "Pac-Man" TV show. [show clips] Then the commercial for "Pac-Man" cereal. [commercial] Another example, the "He-Man" TV show. [show clip] And the commercial for "He-Man" toys. [commercial for Mattell product] Ms. Charren's complaint brought an immediate response from Edward Fritz, president of the National Association of Broadcasters. He said in a written statement that today's action was "an outrageously short-sighted and overly idealistic approach." He rejected the premise that broadcasters are not interested in quality programming for children, and warned against asking for government intervention in programming content. Robin?

MacNEIL: In case you missed anything, here again are the main points in the news.

Israel's new government devalued the currency and removed price subsidies, creating a wave of panic buying.

Burmese police captured a Korean who may have helped plant the bomb that killed four South Korean government members on Sunday.

At home, a congressional task force said merit pay is only part of the answer for better teaching.

The Supreme Court refused Alger Hiss a review of his 1950s perjury conviction. Jim?

LEHRER: Finally, some closing words about an event that is very special to some, totally irrelevant to others. It's the opening game of the World Series tonight between the Baltimore Orioles and the Philadelphia Phillies. They are both professional baseball teams. The Orioles are champions of the American League; the Phillies of the National League. Their meeting is called the World Series because a series of games will decide which is the world champion of baseball. After game one tonight, they will continue to play until one team has won four. Thus there could be as few as four games played, as many as seven. Why should anybody care? Good question, one we cared enough to ask Roger Angell of The New Yorker magazine, generally known as the man who writes about baseball more elegantly and eloquently than all others -- for the bored and disinterested as well as the rabid and enthralled.

ROGER ANGELL, baseball writer: I often talk to people who say, "I don't care anything about baseball," and "Baseball doesn't mean a thing to me." And they often say it defiantly or sometimes rather unpleasantly, but I get the sense that they feel left out, that they don't belong. Baseball really is a wonderful way to belong. It's a very important way to belong. It's an artificial invention; it's a game; it's a professional sport.It's done for money by very highly paid professionals. And on the face of it it seems ridiculous for grown men and women to attach themselves to a team and to care as much as this. But it's hard for any of us to care nowadays about anything, and I think if you're able to care about what happens to the Orioles or what happens to the Royals or what happens to the Indians or -- I should mention some National League teams as well, but -- the Giants, any of these teams, I think you're lucky. And I think the people who can't -- somehow haven't found a way to care about baseball, I'm a little sorry for them because they're outside of something that does mean so much. There's a writer in Boston, Mike Barnicle of The Boston Globe, editorial writer, who said a wonderful thing once. He said, "Baseball is not a life-and-death matter, but the Red Sox are," and he had it exactly right.

SPORTSCASTER: Little soft pop-up. Petrocelli will take it. He does! The ballgame is over! The Red Sox win! And what a mob on this field! They're coming out of the stands from all over.

Mr. ANGELL: Baseball is a very linear sport. First one thing happens and then another thing happens, which may be why writers like it so much. You can see things begin to happen. Later on you can go back and see why something happened, which you can't always do in other sports. But this piling up of tension, it's like -- baseball is -- in some ways it's like reading. It's the same -- the same feeling of the early chapters being necessary. And sometimes they're boring, but you know, if you're in the hands of a good writer, in the hands of a good ballgame, that you need these early chapters in order to get ready for the tension and the resolution that's coming at the end.

One of the playoff games that was played last week, the deciding playoff game, the fourth playoff game between the White Sox and the Orioles, had exactly that. Nothing happened. There was no score for nine innings. And I was at the other city so I watched it on television, but I couldn't sit still. So many things were happening, and yet you could begin to see which team was going to win. I was almost positive by the end the Orioles were going to win because of certain turns of events. And those zeros were unbearably exciting.

The World Series is, along with the Kentucky Derby, which may be a little older in terms of years, but it is really our oldest great national sporting festival. The World Series used to be it before the other sports came along -- professional basketball and professional football. And I think for most people it still has that special autumn feeling, that autumn and the World Series just sort of go hand in hand. I think that there are players playing today who are as good as players who have ever played. I mean, Pete Rose will be in this World Series, who by every record is the great singles hitter of all time, and certainly nobody has ever played baseball the way Pete Rose plays. I don't meant that he's better than anybody else ever, but there's an absolutely unique mark and stamp he puts on the game -- the way he plays a base, the way he turns a base, the way he attacks a ball, the way he looks back at the umpire when he takes a pitch.

The two teams playing in the World Series this year are different because it is obvious that the Phillies have paid a lot of money for established stars, and they're getting them for a few years and it's fair enough to say that in the old sense they're trying to buy a pennant. I don't think that this is a disreputable way to conduct business at all. It is a business. The Orioles have gone about it the other way. They have the most admired baseball organization, next to the Dodgers, along with the Dodgers, have the most admired organization. They teach baseball the same way at the lower levels, and all the way through they teach players how they want them to play. If there is a lesson to be learned -- I don't think there's a lesson or a moral to be drawn from this World Series, I don't believe in drawing morals from sports -- but it is fun to think about what these old professionals are going to do against these young professionals and the other way around.

This to me is the essence of this particular World Series.

LEHRER: Good night, Robin.

MacNEIL: Good night, Jim. That's our NewsHour for tonight. We'll be back tomorrow. I'm Robert MacNeil. Good night.