The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Monday, the Supreme Court said states may execute people who commit murder as young as 16. The court refused to curtail damage awards in personal injury lawsuits. A report says the government is under counting AIDS cases by a third. We'll have details in our News Summary in a moment. Jim.

MR. LEHRER: After the News Summary, we go first to the oil spill story [Focus - Oil and Water] with Coast Guard Admiral Clyde Lusk and Delaware Governor Mike Castle, then Part 1 of our series on high technology [Series - Hi-Tech Frontier], Paul Solman tells the story of the VCR [Series - Vanishing Video] and high definition television, Commerce Secretary Robert Mosbacher and Michael Dertouzos of MIT react. And we close with a Roger Rosenblatt essay [Essay - Dilemmas for Democracy].NEWS SUMMARY

MR. MacNeil: The Supreme Court ruled today that states may execute murderers who commit their crimes when they are as young as 16. In a 5 to 4 decision written by Antonin Scalia, the court said that executing a 16 year old murderer cannot be labeled cruel and unusual punishment because there's no national consensus against such executions. The court ruled separately that the Constitution does not categorically prohibit the execution of mentally retarded killers, but it said sentencing judges and juries must be allowed to take that condition into consideration. On a different matter, the court refused to put a cap on enormous damage awards in personal injury lawsuits. But the Justices left open the possibility that such a lid might be considered if presented in a different way. Jim.

MR. LEHRER: There were three large gobs of oil to clean up today in the coastal waters of the United States. One was in Galveston Bay in Texas, the second off the Atlantic Coast of Rhode Island, the third in the Delaware River near the Delaware-Pennsylvania line. Each was caused by a tanker accident. In Delaware, a South American tanker ran aground, spilling 800,000 gallons of oil. It was a Greek licensed tanker that hit a reef near the mouth of Naranganset Bay in Rhode Island. Four hundred and twenty thousand gallons of heating oil went into the sea. In Texas, a barge collided with a tanker, 250,000 gallons of fuel oil were spilled into the channel which connects Galveston Bay with Houston. There was reaction to the oil spills from the White House. Press Secretary Marlin Fitzwater said today better techniques for dealing with oil spills must be developed. He said the oil industry could do more than it is doing.

MR. MacNeil: Areport released on AIDS today said the government is under counting AIDS cases by as much as 1/3. The report by the General Accounting Office, the investigative arm of Congress, estimated that 300,000 to 480,000 Americans will have been diagnosed with AIDS through 1991. The Centers for Disease Control estimates are 185,000 to 320,000. One of the three Congressmen who asked for the study, Democrat Ron Wyden of Oregon, said the findings were frightening.

REP. RON WYDEN, [D] Oregon: I think what the really frightening part of this report shows is how little the federal government today knows about the AIDS epidemic. Now I hope that what this report is going to do is deliver a wake-up call to those in this country who refuse to recognize how serious this epidemic is.

MR. MacNeil: On the AIDS treatment front, the Food and Drug Administration today approved a drug called Gancyclovere for eye infections in AIDS patients. The FDA also approved wider distribution of an experimental protein designed to treat severe anemia in AIDS patients. The FDA said the two actions were part of a policy to get promising new drugs to AIDS patients more quickly. Pres. Bush took up the subject of violence against women today. He said that crimes against women won't stop until archaic and unacceptable attitudes change. Speaking to the American Association of University Women, Mr. Bush called for an end to what he called the war against women.

PRESIDENT BUSH: Whether it involves spouse abuse at home or violence in the street, these are evil acts that transcend racial and class lines. This war against women must stop. Fundamentally, violence against women won't subside against public attitudes change. We must continue to educate police and prosecutors, judges and juries. We must engender a climate where the message our children get, television and films, from schools and parents, is that violence against women is wrong.

MR. LEHRER: Organized baseball took the Pete Rose case to a higher umpire today. Baseball Commissioner Bartlett Giamatti appealed the decision yesterday by a Cincinnati judge that would delay a hearing on Rose. Today a 225 page report by Giamatti's special investigator was released by the court. It said Rose bet on baseball games during a three year period beginning in 1985, including those of his own team, the Cincinnati Reds. The report said he bet $2,000 per game between May and July 1987. Giamatti had scheduled a hearing on those charges today in New York. A three judges appeals court is expected to rule by the end of the week on whether the hearing can proceed.

MR. MacNeil: The Soviet Union said today that there was an explosion in one of its nuclear powered submarines near the Norwegian Coast. The Soviets said there was no loss of life, no leak of radiation, and no ecological danger. But Norwegian authorities said they would test the air and water around the site. The Soviet military confirmed that the sub was carrying nuclear missiles at the time of the accident. It was slowly heading back to its home port today escorted by several Soviet ships. Another Soviet nuclear submarine caught fire in the same area and sank in April, killing 42 crew members. Norway said that in both cases, as well as the recent collision of a Soviet liner with an iceberg, Moscow had failed to inform Norway.

MR. LEHRER: On the China story today, two prominent intellectuals and two major student leaders have escaped to safety. The Associated Press said the four were helped out by an underground railroad. The crackdown continued against the dissidents whoremain. We have a report from David Rose of Independent Television News in Beijing.

DAVID ROSE, ITN: Looking for 12 people in a country of over 1 billion really should be like looking for a needle in a haystack. But ever since the crackdown, Chinese State Television has tried to enlist its 600 million viewers as extra spies in this manhunt, this young woman praised because she informed on her brother when he fled home to try to find safety, this mother praised because she encouraged her son to give himself up to the police. The wonder is that they managed to escape from Beijing at all. The watchers are everyone at the main station. The army force people to empty their cases onto the concrete. They make snap arrests. These two may be petty criminals, but Chinese television's assumption of their guilt is total. Once on board the train, the searching and checking continues. This manhunt has virtually unlimited resources of manpower. Trying to get out of China is no easier. The airports are heavily policed and exit permits have become almost impossible to get. The relatives of the few who are allowed to leave know they may not be allowed to return. Any newspaper or magazine which might tell the truth is confiscated. These secretly taken pictures of alleged Taiwanese spies also show the Chinese's surveillance skills. The leading dissidents were certainly filmed in the same way.

MR. LEHRER: Chinese government newspapers reported today that the purge will expand. They said Communist Party members who supported the students would also be punished.

MR. MacNeil: Hungary's new Communist Party leaders said in an interview published today that Hungary was a new East Bloc country to recognize Western ideas of freedom. Regan Nyers, who became party leader in a reshuffle on Saturday, told the party newspaper that reform in Hungary unambiguously casts away the old concept of socialism. Hungary's reforms include a market economy and a multi-party system. Asked by the newspaper if Hungary now regarded Western freedoms as universal human values, Nyers said yes, and this is a new phenomenon in a socialist state.

MR. LEHRER: And that's it for the News Summary tonight. Now it's on to the oil spills, Part 1 of our series on hi-tech, and essayist Roger Rosenblatt on democracy. FOCUS - OIL AND WATER

MR. LEHRER: We go first to the oil spills. More than 1 million gallons of oil were spilled into U.S. waters over the weekend in three separate accidents; off Newport, Rhode Island, Friday afternoon a Greek tanker ran aground on a reef, dumping about 400,000 gallons of refined oil into Naranganset Bay; hours later in a ship channel connecting Galveston Bay with Houston, Texas, a barge carrying oil hit a freighter, sending 1/4 million gallons of crude oil into the water; then in the Delaware River between Wilmington, Delaware, and Philadelphia, 800,000 gallons of heating oil spilled after a South American tanker hit a reef in the Delaware River. The Coast Guard's No. 2 man, Vice Admiral Clyde Lusk is with us. He visited two of the three sites over the weekend. The Governor of Delaware, Mike Castle, is also with us. He joins us from public station WHYY in Wilmington. Admiral, to you first, let's start with Rhode Island. What happened there?

VICE ADM. CLYDE LUSK, Coast Guard: Well, essentially in clear visibility and in daylight, we had a Greek tanker that was coming up from the South which was en route to providence which was approaching Britain Reef and ran afoul of the reef, itself, causing very severe damage to its underwater body. Then they managed to get themselves off the reef.

MR. LEHRER: What, with oil coming out while they were moving?

VICE ADM. LUSK: Yes. Then our people, as I understand it, having been told of the accident, directed that they immediately anchor. And from there, of course, we went into the steps that we had to take to minimize the damage by removing oil.

MR. LEHRER: What's the status of the clean-up?

VICE ADM. LUSK: Well, first of all, the biggest problem was to immediately stabilize the loss, to try to keep the vessel from sinking, and that was indeed a problem for a while. We also had to worry about litering, and I might --

MR. LEHRER: About what, I'm sorry.

VICE ADM. LUSK: About litering.

MR. LEHRER: What's that?

VICE ADM. LUSK: Taking the oil that was aboard the tanker off so that there wouldn't be further loss.

MR. LEHRER: I see.

VICE ADM. LUSK: We had in this case a rather unusual incident in that we almost immediately federalized the spill. So rather than doing the usual procedures, relying upon the owner to take the necessary action to clean up, we took the action ourselves.

MR. LEHRER: What's the extent -- are you able to tell us what the extent of the damage has been up there to the beaches and --

VICE ADM. LUSK: We did fly over a number of times and I have had reports today. This oil is a very light oil fortunately. There was quite a bit of it that was lost, 420,000 gallons, and it did get into some sensitive areas.

MR. LEHRER: What do you mean sensitive?

VICE ADM. LUSK: Environmentally sensitive, ecologically sensitive areas. While the oil is light and therefore, has a certain amount that goes off in evaporation, and while that's good from the viewpoint of a fast clean-up, we do have that oil, a rather toxic oil and so there is bound to be a certain amount of damage to the very species that are there.

MR. LEHRER: Have you figured out yet what caused the tanker to hit the reef?

VICE ADM. LUSK: Our people doing investigation in all of these cases and we typically try to avoid making conclusions before they're done, but it's quite obvious to us from some of the things that we've heard that there is a human error involved here. I'm given to understand, and I understand it was the Governor of Rhode Island who interviewed the master of the vessel and the Governor told me that the master had indicated the pilot had not yet arrived aboard, the state required pilot, and that he, the pilot, had chosen to go into closer waters to meet the pilot, and there apparently was some confusion.

MR. LEHRER: Now the Texas accident near Galveston Bay, what happened there, a collision, right?

VICE ADM. LUSK: The Texas accident was a collision. We had a down bound tanker and it struck the barge that was in tow of a United States towboat. The tanker was of Panamanian registry and although I assume it suffered some sort of danger, but there was no loss of product from the tanker. However there was a considerable loss from the barge. They lost 252,000 gallons of No. 6, which is a very very heavy oil.

MR. LEHRER: What's the status of the clean-up?

VICE ADM. LUSK: Well, that one is totally different, and I might say that three different accidents, if nothing else, they show the three different types of environmental challenges that you have. This one was a very heavy oil which was fortunately confined in a rather small strip of waterfront that probably was about a mile in length. And so there's an awful lot of resources being brought to bear. We're very encouraged that that spill will be fairly readily cleaned up.

MR. LEHRER: Human error?

VICE ADM. LUSK: It looks like it is another case of human error.

MR. LEHRER: Was the weather good? I mean, these guys just ran into each other?

VICE ADM. LUSK: Well, I know they were having, there was a tropical depression that was in the area and I'm not sure whether there was interference as a result of that or not, but certainly there was a potential for interference there.'

MR. LEHRER: All right. That brings us to Delaware, No. 3, and I want to bring the Governor in on this. First, Admiral, what is your understanding of just what happened in the Delaware River?

VICE ADM. LUSK: Well, here was a single vessel incident. We had a Uruguayan registered vessel, the President Rivera, I believe, that was upbound, was going to discharge product.

MR. LEHRER: Upbound meaning going North, right?

VICE ADM. LUSK: That's correct, sir. And he went aground. Now he had a United States --

MR. LEHRER: We have a map up there, Admiral, as you can see, in- between Wilmington and Philadelphia, sorry.

VICE ADM. LUSK: They had a state registered pilot aboard and they through some sort of an error that has not yet been fully developed and that I simply can't give details of yet. There was some sort of a misadventure and the vessel struck a portion of the river that caused damage to it.

MR. LEHRER: What did it hit?

VICE ADM. LUSK: As I understand it, there was -- and the facts haven't fully been developed -- but as I understand it, an anchor was dropped while the vessel might still have been moving, causing the vessel to swerve and do damage to part of its underbody.

MR. LEHRER: Governor, is there anything you can add to that, and first of all as to what might have happened?

GOV. MIKE CASTLE, Delaware: [Wilmington] Well, I think the description of what happened, Jim, is quite accurate. As far as we can understand, there was a miscommunication between the pilot and the captain, perhaps a language barrier. The anchor was apparently dropped from all that we can learn so far, at least by speculation. It did cause the boat to swerve. We have a fairly soft bottom, sort of a silt bottom. I'm concerned that this kind of boat would have its hull ripped open that easily. Quite frankly, I think it's one of the larger solutions we need to look to with the oil companies and the oil shipping companies that are applying that trade in our waters, particularly in the Delaware River and Bay, which is a major depository of all the oil trade that goes up and down the East Coast. That concerns me.

MR. LEHRER: Give us your assessment of what the damage has been up there, Governor, in that area?

GOV. CASTLE: We had another severe oil problem about three years ago, Jim. And it was quite different.

MR. LEHRER: I remember that.

GOV. CASTLE: It was lighter oil and it was spread wide. This is a very heavy oil. I think it's called No. 6 fuel oil. And it's in sort of --

MR. LEHRER: Do you agree with that?

VICE ADM. LUSK: That's correct, yes.

MR. LEHRER: Go ahead.

GOV. CASTLE: It's sort of a globular form, if you will. It's large and it's basketball size or bigger globs of oil that you may find floating. And it's taken a lot of almost hand to hand combat to deal with it. In fact, we've had our National Guard out today which has added to the manpower that has been dealing with it. It doesn't lend itself as well to the different booming operations and such that normally work when you have an oil slick. You really have to go after it and take it out of the water. And to be honest with you, we've been very concerned about the lack of the manpower which has been out there, not the fault of the Coast Guard, but the Coast Guard has to go back through the shipper, who goes back through their insurer, goes back to their lawyer and then finally they send people out. We were told this afternoon that there were supposed to be 100 people and 20 boats out there. We counted no boats and perhaps 20 people at about the same time. It's our own volunteers who are making the difference.

MR. LEHRER: There are no boats out there cleaning it up at this time?

GOV. CASTLE: There have been boats but there were few boats at the time they told us there were 20 boats out there. I went over it yesterday afternoon in the helicopter and saw very few boats there. I think the federalization process the Admiral referred to which was brought in in Rhode Island is not only a good idea for Delaware. In fact, we're requesting that for right now. In fact, we're in the process of filing those papers at this point. It's a good process I think for any oil spill automatically if it is a large oil spill. It simply allows the Federal government to come in with its resources and its ability to get things done and really get the job done. And instant action is needed. It was needed in Rhode Island, we need it here, and we need to speed it up and I think that's the best way to do it.

MR. LEHRER: What's going on up there, Admiral? Why would the Governor go and they say there are going to be 20 boats, 100 people, and there are no boats?

VICE ADM. CLYDE LUSK, Coast Guard: Yeah. That's a difficult one to explain. When I flew over it on Saturday, it was certainly obvious that we were dealing with a strange type of oil spill, one that I hadn't personally encountered before.

MR. LEHRER: You mean these balls?

VICE ADM. LUSK: Well, here we had No. 6 oil, which as the Governor correctly pointed out, is very heavy, going out, and as I understand it, it's moving in the water at about a meter below the surface, and so its being heavier, a specific gravity slightly heavier than water, it's going under the water.

MR. LEHRER: So how do you get it out? How are your volunteers getting that out of there, Governor?

GOV. CASTLE: The volunteers are getting it out mostly at the shore level. That's the unfortunate part about it. We're waiting for it to come into the boons where we get it out a little bit.

MR. LEHRER: I see.

GOV. CASTLE: But our National Guard is posted along the shore and when it comes in, they try to wrestle with the problem as soon as they can. I was there today. They were actually using shovels and picking it up in absorbing towels and trying to straighten it up that way.

MR. LEHRER: How wide is the river where this happened?

GOV. CASTLE: The river is probably a wide where it happened. New Jersey is on the other side of the river. The configuration of the river and the tide is such that it's mostly washed up in Delaware, a little bit in Pennsylvania. I can't say enough by the way for Gov. Casey and Gov. Kean, even Gov. Shaeffer of Maryland, all of whom have offered their help. They've been outstanding.

MR. LEHRER: Admiral, what about the Governor's point that when you have a big oil spill, it ought to just immediately become a federal deal?

VICE ADM. LUSK: Well, there are those who propose that and it might well be that legislation comes along that causes that to happen. We're presently operating under the legislation that was passed a number of years ago.

MR. LEHRER: Sure.

VICE ADM. LUSK: And that basically says that it's the owner's responsibility, and it sets up a mechanism whereby the federal government, the Coast Guard in this case, EPA in other cases.

MR. LEHRER: What's EPA?

VICE ADM. LUSK: The Environmental Protection Agency.

MR. LEHRER: Oh, the Environmental Protection Agency. I've never heard it called "EPA" before. That's a new one on me.

VICE ADM. LUSK: Sorry. Shouldn't use acronyms.

MR. LEHRER: That's all right.

VICE ADM. LUSK: But the deal is that the federal government will oversee the actions of the responsible individual, and when we find that those actions are inadequate, then we can federalize. We -- I'm not really aware of the state of the potential for federalization in that particular spill but if as the Governor points out, if there is simply not enough action being taken on the part of the spiller, then obviously the stage is set for federalization.

MR. LEHRER: Governor, what's the state of harm up there now? What's being hurt and how badly is it being hurt?

GOV. CASTLE: We feel fortunate that way. I just found out that 35 Canadian geese were found to be affected, although not yet having died from this in a laguna someplace right near where the spill took place. We have not had a lot of apparent damage. I know of no fish kills. We've protected Pea Patch Island, which has houses, by the way, an old historic fort that was used during the Civil War that has a rookerie there and we wanted to make sure that those birds that were nesting were protected. We are very very concerned, but we've had a tremendous number of volunteers and our National Guard are protecting the shore lands so we can't really say that there's a tremendous amount of environmental damage at this point. But one of the concerns in this particular leak is because as the Admiral pointed out it is below the surface of the water is that more may have leaked than was originally anticipated, and for that reason may surface some place. So we are watching for that. We are beginning to conclude some three days later that perhaps that is not going to happen, which by the way may reduce the total gallonage of the leak from the original estimate, but we still have our fingers crossed on that, we're not out of the woods yet.

MR. LEHRER: Admiral, finally, let me ask you a general question. You said all three of these are very different and yet they all happened at the same time. We've had the one in Alaska. What's called this rash suddenly of all these oil spills?

VICE ADM. LUSK: I don't think it's a sudden rash that's been caused by a particular incident. We have about 12, that's on average, 12 spills of in excess of the 100,000 gallon loss type every year. That has held for the last few years. We have, of course, thousands of oil spills, but we only have about 12 a year of this size. We just happen to have I like to hope three of them that occurred on one weekend.

MR. LEHRER: Have most of them in the past been caused by human error and by people running these boats?

VICE ADM. LUSK: The vast majority of our casualties are caused by human error in one way or another.

MR. LEHRER: Well, Admiral, thank you, and Governor, thank you both for being with us.

MR. MacNeil: Still to come on the Newshour, Part 1 of our weeklong series on the hi-tech challenge and essayist Roger Rosenblatt on democracy. SERIES - HI-TECH FRONTIER

MR. MC NEIL: Next tonight we begin a week long series on the battle for the future, the High Tech Future, that will help determine U.S. living standards and power in the world in the years ahead. In a few moments we will talk with Commerce Secretary Robert Mosbacher and MIT Professor Michael Dertouzos but first part one of our series on the High Tech Frontier. Business Correspondent follows the story of a device found in most American homes these days. A device that was once stamped, Made in the USA. That device is the video cassette recorder.

MR. SOLMAN: This ad for Matsushita National Batteries symbolizes Japan's approach to the High Tech Race. Taking the long view. U.S. companies may lead in basic scientific research but research is not the same as development. Taking a new technology step by step to the market place. In high tech that could require a very long term approach. We are about to show you this long term approach in a typical high tech industry video recording and you will see that the video technology it self was less important than Japan's long term approach to making and marketing the VCR. Historically Japan's strength has been the development of U.S. technology but today Japan id challenging the U.S. in basic research as well and the concern is that if Japan pulls ahead on the high tech ladder in both research and development America may simply be unable to catch up. At the annual Broadcast Convention in Los Vegas you can see Japanese firms pulling ahead in research. These days they are pioneering new technologies like HDTV, high definition television, but our story is how they got this far and no where is that more clear then in the story of video recording. An American Company, Ampex, invented the video recorder but went on to loose the 15 billion dollar VCR market. Today not one American company makes or markets VCRs. The world leader is Panasonic a division of Matsushita.

Commercial: Douglas is going away to camp. Who is going to program the VCR. Panasonic understands.

MR. SOLMAN: Panasonic understands alright and has for decades. By patiently developing American technology Japanese firms commercialized the home VCR thus living up to Panasonic's motto Slightly Ahead of its Time. But let's look back at time and see how America lost the VCR. Thirty five years ago the company ahead of its time was Ampex. It was 1955 when Ampex and American Industry were riding high. Ampex was audio recording. The technology that would lead directly to video tape but already there were signs that short term thinking was blurring the company's focus on technology. The Founder of Ampex, Alex Ampotitoff was an engineer, a technologist but his successor George Long was a banker installed by investors to look after the bottom line. Long's Corporate cheerleading typifies the spirit of the era, Don't worry be happy talk. Ampex like much of American Industry was beginning to play to its stock holders.

SPOKESMAN: There are so many fantastic things that these amazing Ampex reorders can do that we wanted to bring as much as possible first.

MR. SOLMAN: The new Ampex Management was making quick profits selling the World's first audio tape recorder to the likes of Big Crosby at $20,000 a machine. When a group of Ampex engineers working on their own invented the video recorder the company saw a second source of short term profits. It sold huge expensive machines to the TV networks but Ampex ignored the mass market. Cheap reliable home video was too many years in the future. By contract Japanese managers like Sony President Akio Morita were interested in the video recorders long term potential. In the 50s Morita asked to see Ampex's new video plant.

ROBERT PAPPAS, Former Ampex Executive: Boy he was like a kid in a candy store. When we took him in there his eyes were practically bulging out.

MR. SOLMAN: Vice President Robert Pappas was order to show Morita around.

MR. PAPPAS: I thought that was incredible. I couldn't quite understand the logic to that. There is a man heading, a competitive type out of Japan who was technically oriented himself but I had my orders so I did what I was told to do.

MR. SOLMAN: But the point isn't that managers like Morita a physicist stole American technology. Its that they understood how technology progressed and got cheaper if you worked at it long enough. In addition Japanese managers didn't rely on the stock market so they didn't have to worry about impatient investors. So in the 50s the Japanese began their long climb. The high tech race was underway and while America was far ahead Japan was more far sighted. Because their top executives understood technology the Japanese could see its long term potential. Because Japanese investors would wait for their returns money was available to invest long term. U.S. Managers sitting pretty played the game of business by American rules. They could satisfy short term investors with short term profits and so they did. The 1960s. At Ampex they were all smiles about a new more compact video recorder. The work of among others the engineer on the left John Streets.

MR. STREETS: This is a video tape recorder that Ampex had in production in 1963.

MR. SOLMAN: This recorder cost $15,000 back then. Next to it today's Japanese video cassette recorder $219.95. Ampex engineers like Streets were sure that with the same basic technology you could eventually make a small cheap machine but only Japanese engineers got the go ahead and the money to constantly redesign and remanufacture this American product. Ampex in the mid 60s already preferred quick profits to potential.

MR. STREETS: That is when I actually left. Walked out.

MR. SOLMAN: In a huff?

MR. STREETS: Not in a huff. I said if you don't want us to do the kind of things that I think we can do, you know, I'll go look for an opportunity somewhere else and I did.

MR. SOLMAN: In fact most of the video team left Ampex whereas in Japan companies and their engineers were committed to each other for the long haul. He in the 1960s America was comforted by the images of the Japanese as quaint copy cats whose Westernization seemed to be proceeding right on schedule. Learning to relax American style they hardly posed an economic threat but behind the stereo types companies like Sony and Matsushita were not simply mimicking American technology but constantly improving on it. Those who actually visited Japan discovered a production oriented economy. They marveled at dedicated employees who took low wage, few vacations and generally sacrificed for the long term good of the group. It was hard to imagine an approach more foreign to American. Little individualism, fierce corporate loyalty, a team built for tomorrow not today. So Japan's climb was made possible not just by technical executives and long term investors but also Japan's constant improvement of U.S. technology and a corporate culture of loyalty and sacrifice. Americans were more short termed sometimes looking no further ahead then lunch. Few Americans realized that Japan was on the map much less on the move. By the 70s a video breakthrough had been made by a group of Ampex engineers. The World's first video cassette recorder. Life Magazine devoted its center spread to the inventions potential but for Ampex the breakthrough came to late. Its audio business on the wane the Company felt that it needed quick profits not long range projects. It invested and lost millions in pop musicians, Broadway Shows, quick fix ventures that it knew little about. When it had nothing left to invest Ampex abandoned the VCR.

MR. PAPPAS: When you are trying to stay alive financially from minute to minute the long term is not there for most companies. They are looking at the short term.

MR. SOLMAN: As for Japan in the 1970s American's would watch footage like this and convince themselves that Japan's Westernization was still on track. Their younger generation looked just as interested in the immediate gratification as America's. In fact Japan's GNP had tripled in a decade. The Japanese were beginning to consume but at work they were as long term as ever. Still patiently improving the design and manufacture of American products. Still investing for the future.

MR. STREETS: I think that the Japanese have certainly shown that they are prepared to invest much more hundreds times more than American Investors are over a much longer period of time. American investors typically is looking for a 60 percent return in 60 months and the Japanese are apparently prepared to look for a much smaller return over many many years.

MR. SOLMAN: In 1978 Matsushita introduced a portable video recorder to the U.S. market. Years of patient investing were about to pay off but the payoff would extend well beyond the profits from the VCR. Former Ampex Executive Richard Elkus.

RICHARD ELKUS, Former Ampex Executive: So the Japanese developed the market for video cassette recorders. In doing that they ended up by advancing the state of technology of video tape recording beyond anything that had occurred up to that point in time. And the ultimate result was that they allied what they did with video tape recorders with what they were doing in cameras, what they were doing in calculators, what they were doing in audio tape recorder, what they were doing in video cameras, what they were doing in television generally so that today they dominate all of those markets. Each one helping the other.

MR. SOLMAN: Japan today. In the streets of Tokyo you see the new breed and hear how Western the Japanese have finally become. But we've been seeing the same thing for more than 3 decades now and as this PBS Documentary so vividly shows even the new anthropoids as they are called still exhibit the old long term approach. group effort towards a common goal. Back at the Broadcast Convention the American Company Ampex is still hawking its wares. These are top quality products and they have still got the Ampex label even if they are made abroad. In fact the so called Ampex Products here will be engineered by Sony. Made from Sony kits.

MR. STREETS: About half of the products that Ampex ships today are products that were designed by Sony, they were manufactured completely by Sony and they have an Ampex badge on them.

MR. SOLMAN: Current Ampex Management wouldn't appear on camera but they say only 12 percent of sales comes from Sony products and they claim that Ampex recently purchase in a leveraged buyout is at last lean, mean, and ready to take on the Japanese. Skeptics, however, how Ampex loaded down with debt from the buyout could be in any position to invest for the future. Here in Los Vegas the future is HDTV. And if you needed any more proof that the long term matters and that America is now skating on thin ice just look at the Sony display. HDTV is a new frontier, one that the Japanese have spent 25 years investing in. In HDTV the Japanese are ahead on America's turf basic research as well as Japan's old specialty of commercial development. And if in HDTV and otherpromising new technologies Japan is ahead in both research and development what chance does America have. It reminds Richard Elkus of Ampex around 1970.

MR. ELKUS: For Ampex at that point and time it was a major expense that didn't give them the rate of return that they felt that was essential for their short term needs. I can understand it. I am not sure If I wouldn't have done the same thing myself. The fact of the matter is that today high definition television in the horizon is ten years away but the building blocks are being put in place today to insure the market of 10 years from now and the market from 10 years from now will not only effect entertainment it will effect all the computers, telecommunications, the media, and other markets.

MR. SOLMAN: Even assuming Richard Elkus is right questions remain. how much should America invest in HDTV? What about investing in all the other new technologies that might become crucial in the future? And finally will America ever really be able to match Japan's approach to the high tech ladder.

MR. MacNeil: Joining us now in Washington is Robert Mosbacher Secretary of Commerce and one of the key figures in developing and coordinating policy on HDTV and other new technology. And in Boston Michael Dertouzos, Director at the Computer Science Laboratory at MIT. Professor Dertouzos is also Chairman of the MIT Commission on Industrial Productivity which recently issued its finding in a book titled Made in America. He joins us from Public Stations WGBH. Secretary Mosbacher is America doomed to loose the HDTV Competition as it did the VCR.

SECRETARY MOSBACHER: I don't believe so Robin. I believe that we are beginning to wake up to the fact that America is in one big World competition and private industry in this country is beginning to think in terms of competing not only in HDTV which is just a part of the total picture but in an all new and major electronics is going to follow on from HDTV.

MR. MacNeil: What are the lessons that you have learned as you have studied this problem before and since you have come in to Office. What needs to be done to turn this around for the United States?

SECRETARY MOSBACHER: Well I think that we in the Government need to clear the underbrush out of the way so that the private sector can get into this. It must be a private sector lead operation. But the Government can do several things. It can make it easier for private companies to get together in groups, consortiums. We can make it more exciting for them and helpful through tax dispensations. Through what the President has already recommended in lowering the capital gains rate which makes people think longer term, creates jobs and also gives people the incentive to work on putting new capital together. It lowers the capital costs.

MR. MacNeil: I am going to come back to you in a moment Mr. Secretary. I'd like to ask Professor Dertouzos, the MIT study could you tell us what the factors were that you think still apply to American industry that caused the United States to lose the VCR market?

PROFESSOR DERTOUZOS: Yes I think the video clip that we saw illustrated two of the 6 factors that the MIT Commission found and the two factors that it illustrated were first the short time horizons that dominate many of our companies and second difficulties, technological difficulties that we have in carrying ideas in to products. Not so much the high tech end of it but the medium tech. Carrying the idea into production. These are two of the factors that we had a match but we found four more factors in our study which did not come up in the video clip except perhaps indirectly.

MR. MacNeil: And what are those other factors?

PROFESSOR DERTOUZOS: Well first of all we found pre occupation with out dated strategies. One of them is mass production. We are still clinging in many companies in producing identical goods. Identical cars, identical appliances where as the best companies world wide have moved to niche strategies and to smaller runs of flexible customizable products. We tend to be parochial. That is another outdated strategy. We look to the United States for the source of technology and for selling those things. Company tried to sell sweaters abroad and shipped a huge quantity thinking they would sell there as well as they sell here and they didn't because there are different ways of looking at things abroad. Beyond that we tend to neglect human resources especially at the kindergarten through 12 level. The United States today somewhere is between 5th and 15th in high school level competency in science, in math, in general literacy and these people in the work force will have to deal with more sophisticated equipment that customizes production and at the same the education is going down. So there is a very tight link between education, general education on one hand and productivity. And another factor part of the human resources is the on the job training. We found that in this country we tend to be narrower on the job training and a lot of its remedial. Just correcting what didn't happen in high school. Whereas abroad and in the best of the companies in this country the on the job training creates broader people who can do a lot more in terms of suggestions, repairs and improvements. And finally a lack of cooperation both within companies. Designers will toss a product to production. Production finds bugs with it and tosses it back and we have a ping pong that delays the introduction of the product to the marketplace. Also lack of cooperation between the company and its suppliers and then when we come to Government, while we can not pin point any specific policies of Government that are at fault from our study we found that Government and industry seemed to be almost at cross purposes. Each going their own way.

MR. MacNeil: Secretary Mosbacher listening to that list does the Bush Administration agree that the MIT symptoms are the symptoms that must be addressed?

SECRETARY MOSBACHER: Largely we do and we think that there is much that can be done by Government, as it mentioned earlier. Clearing away the obstacles so that the private sector and industry can get after it. I think there has been long delays when businesses made applications for certain things that Government gets lost in inter agency discussions on things. It is one of the things that I am dedicated too and the Commerce Department is, is being able to give people quicker answers and positive answers unless there is a specific reason or law that precludes their moving ahead.

MR. MacNeil: What specifically do you intend to do in the Administration to make it easier for companies to get together to form the kind of groups or consortia that you mentioned?

SECRETARY MOSBACHER: We are this particular point reviewing several easing of anti trust law. Legislation pieces that are being either put together in the Administration or in conjunction with the Legislators. We have not come down on one thing that is the right way to go but we see that we must move in that direction so that our companies can compete with these huge companies from all over the World. We found out that this one World as far as competitive market and that we can't afford to think in terms of not letting our companies together. Not only in research and development but also in manufacturing. If we are going to compete on an international basis with big big conglomerates from all over World. Many of which are integrated vertically as well as horizontally.

MR. MacNeil: Professor Dertouzos would eased anti trust laws help create better cooperation among companies and would that be a positive step?

PROFESSOR DERTOUZOS: Undoubtedly but as I said before we found that while in some cases the anti trust laws we misapplied in other cases they were applied properly and they served their purpose. So I don't think that the answer lies so much in specific policy as in both Government and industry and I should add the education institutions of this nation under going and under taking some rather wrenching changes. Stimulated and lead by this nations leadership.

MR. MacNeil: Secretary Mosbacher some of these things are really fundamental to the business and wider culture of this country, aren't they. I mean, for instance, the emphasis that piece and the MIT Study point too on the short term profitability in the minds of shareholders and people who are in risk capital and therefore in the minds of managers. You can't wave a wand and get business suddenly to start long term because if they did somebody would be in taking them over immediately. How do you answer that problem.

SECRETARY MOSBACHER: I think, Robin, more and more people are beginning to see, and I am talking about the leaders in business, are beginning to see that to compete they have to think longer term. They have to think that they are in this competition in not a protected environment which is just competing with other American companies but they are in business with the companies as you saw Japan and Europe and they need to not only think longer term. They need to think quality. They need to think export. Only the biggest companies have thought about exporting because the market is not the U.S. market. It is a World market.

MR. MacNeil: Do you see signs that as the Secretary says are beginning to recognize this Professor Dertouzos?

PROFESSOR DERTOUZOS: Yes as a matter of fact in our Study we did some 500 to 600 interviews and among those companies that we interviewed we found quite a few in this country that we called the best practiced companies and they are almost indistinguishable from the Japanese and the European best practiced companies in that they have already have undertaken these changes. However, these kinds of changes do not seem to defuse either rapidly or widely. In other words other companies around the country don't seem to be readily adapting them. And we think that we understand why this may be the case.

MR. MacNeil: So do you think that Government has a role to play in helping them?

PROFESSOR DERTOUZOS: We think Government has a role to play but again I think industry has perhaps the lions share and then the educational institutions must also come in. And there are a lot of things that we can do but, as I said earlier, there are wrenching changes, they are not easy. The kinds of imperative that we call for in our Book, for example, will require quite a bit of attitudinal change.

MR. MacNeil: Secretary Mosbacher if American industry does not adapt quickly enough to this situation. What are the consequences for this country?

SECRETARY MOSBACHER: Well frankly I think they are fairly dire because if we are not going to be competitive particularly inthe high tech, the areas that you were showing whether it is VCR or HDTV and in the Semi Conductor, Super Computer area and in the later incidently. In the Super Computer area we are number one in the World. We need to open markets for our Super Computer makers. In the Semi Conductor area we see good signs as a new company called U.S. Memories that is just being formed with seven semi conductor makers or users thinking in terms of how to move for the future so that they can get together and these are the things that are beginning to take shape. Now we haven't got a broad enough spread on this but we do see that companies are thinking about it and analysts must start thinking in terms of long term and the people who are running companies and running this country are beginning to see that we must be competitive because impinges on our military capabilities as well as our competitive capabilities in commercial areas.

MR. MacNeil: I may just say parenthetically that another one of our reports in the series this week is on the subject that you mentioned Super Computers. Professor Dertouzos what did you see as the consequences for the people of this country if the message doesn't get through fast enough?

PROFESSOR DERTOUZOS: Well the verdict of our Commission that we are indeed in serious trouble. Not so serious that we can not get out it but serious enough if we do not then our standard of living will become worse relative to that of other countries which means that we will become in relative terms impoverished relative to other countries.

MR. MacNeil: And if you had one thing that you said that would be the most important thing that could be done immediately and tackled immediately what would it be?

PROFESSOR DERTOUZOS: Well we have of course five things that we need that must be done and a menu from which you can chose one. You have to do all five of them in our opinion if we are to get ahead and regain the productive edge but perhaps the most important of these seems to be the education. The education of our people at the kindergarten through 12 level and on the job.

MR. MacNeil: Does the Bush Administration, Secretary Mosbacher, agree that is a priority?

SECRETARY MOSBACHER: Absolutely. Education will lead to better quality, better products, more competitive thinking. We need not only to educate the top end where we have engineers who have the capability to compete. And incidentally engineers who are not just interested in being in the lab and developing new products but taking them to the manufacturing level where we can produce them capably. And we also need on the other end of the spectrum to stop the drop out rate in schools. We need to have high school graduates who have the ability to, at least, read and write enough to follow instructions and be good members of the work force.

MR. MacNeil: And thank you very much Secretary Mosbacher and Michael Dertouzos of MIT. Part two of the series tomorrow. ESSAY - DILEMMAS FOR DEMOCRACY

MR. LEHRER: Finally tonight some thoughts on democracy from essayist Roger Rosenblatt, Editor of U.S. News & World Report.

ROGER ROSENBLATT: If Congress really is going to hell in a hand basket, where is democracy going? These have been weeks of pain and satisfaction in the West. Poland in its astonishing election has begun to throw the rascals out. The Soviet Union is trying to do the same. When 100 representatives from the Baltic States walked out on General Secretary Gorbachev, all mouths fell open. To walk out on a Soviet Leader, where were the machine guns and the gulags? Even China, clamping down as hard and ferociously as it can now, will never round up all the students, can never arrest and shoot all the protesters. Tiananmen Square is quiet as a grave, but in the homes of China, brooding and waiting is an idea that saw the light of day and will see it again for a longer shot before the century is out. Bet on it. But then ask what does America do in the meantime? I don't mean what does America do with economic sanctions in China or modulated encouragements in the Soviet Union and Poland? I mean, what does America do with itself? There are, after all, a few problems in the democracy. Crime, for one. A record 627,402 men and women were in federal or state prisons at the end of 1988, an increase of 7.4 percent over 1987. The increase translates into a need for more than 800 new prison bed spaces per week. And crime connects to drugs. Between 53 percent and 79 percent of men arrested for serious offenses in 12 major cities tested positive for illicit drugs. Take education next. 25 to 30 percent of all American high school students drop out before graduating. Of those who do graduate from high school, one out of four has the equivalent of an eighth grade education. Of 3.8 million 18 year old Americans in 1988, fully 700,000, 18 percent, had dropped out of school, and another 700,000 could not read their high school diplomas. Among minority students, illiteracy is as high as 40 percent. By the year 2000, minorities will make up the majority of the school age population in 10 states. Add to that the fact that 20 to 27 million adults lack the basic reading, writing and math skills required by the modern job market, and you understand what is called the skills deficit. Other problems in the democracy: Health. The growth of AIDS cases is slowing, but 58 percent of the patients reported with AIDS have died. The U.S. ranks nearly last among industrialized nations in infant mortality. 37 million Americans are without health insurance. Aging. The number of Americans over 65 will grow to 50.3 million in 30 years. The Environment. The U.S. is a main contributor to the greenhouse effect. The U.S. continues to permit the export of banned chemicals. The U.S., which gets most of its crude oil by tanker, has not yet developed the technology to clean up oil spills such as the one that destroyed Alaska's coastline. The economy? The deficit now stands at more than $150 billion, roughly double what it was in 1980. Poverty. Poverty is growing, child poverty and the working poor particularly. Housing? Between 550,000 and 750,000 Americans are homeless. There's more. But that's enough to chew on. Is all the news bad? Hardly. If prisons are overcrowded, it signifies that more serious offenders are going to jail. Unemployment is up a bit lately, but way down from where it was nine years ago. Real take home pay is up and the economy keeps expanding. But note, almost all the good news is short-term and the bad news is long-term. Crime, health, aging, education, the environment, they cast an immense threatening shadow over the country. In a time when democracy is sentimentalized as we watch surging crowds in the Soviet Union, Poland, and China, one may forget that the fruits of democracy are not merely voices raised for freedom. They are the tasks one does to use freedom for the good of everyone, the old, the poor, the ill, the homeless, the ignorant. Turn outside these days and sing a song of freedom, but look homeward too. There's an awful lot to do. RECAP

MR. MacNeil: Again, the main stories of the day, the Supreme Court said the states may execute people who commit murders when they're as young as 16. The court refused to put a limit on damage awards in personal injury lawsuits. A report by the General Accounting Office said the government was under counting AIDS by as much as a third, and on the Newshour, the No. 2 man in the Coast Guard said he believed this weekend's oil spills in Rhode Island and Galveston were caused by human error. Good night, Jim.

MR. LEHRER: Good night, Robin. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.