The MacNeil/Lehrer NewsHour

Intro

ROBERT MacNEIL: Good evening. It was not a day of earth-shaking news today. In the Persian Gulf a British tanker was hit but only slightly damaged by Iranian missiles. OPEC oil producers met in Vienna; most want to keep prices and production down. Federal regulators decided not to make dealers disclose defects in used cars. Gary Hart said a second Reagan term would be a time of unprecedented danger. President Reagan suggested a second term would be good for the environment. Jim?

JIM LEHRER: In our table of contents for tonight a used car dealer from Ohio and a consumer advocate from Washington debate today's used car decision. Martin Feldstein talks about the storms and the substance of his two years as President Reagan's chief economist. A Justice Department official explains a new computer system designed to catch killers. And we look at a radio program from and about the prairie of Minnesota that has become a national institution.

MacNEIL: A British tanker today became the latest to suffer attack in the Persian Gulf war. The tanker British Renown was hit by two missiles fired by a jet warplane believed to be Iranian. One missile bounced off the deck, the other started a small fire which was put out. None of the crew were hurt. The tanker was in international waters and on its way to pick up the crude oil cargo from the Swiss tanker Tiburon, crippled by an Iraqi missile last month.

Despite the threats to Persian Gulf oil, the main preoccupation was oil glut as the oil producing nations opened their semi-annual conference in Vienna. Leaders of the OPEC cartel were reported agreed on keeping their prices low and production down because of the world oversupply of oil. But two nations were pressing for changes. Iran wants higher prices, and Nigeria increased production. Here is a report from Adrian Brown of Visnews in Vienna.

ADRIAN BROWN, Visnews [voice-over]: Major differences between the 13 nation members were surfacing even before the conference began. One of the most contentious points was the question of production quotas. Before the meeting Nigeria's Tam David West said he had full support for his bid to raise his country's output, while Saudi Arabia's Sheik Yamani told newsmen that there would be no change in the overall production ceiling and prices. And the question of prices is likely to be another topic for heated debate, with Iran reportedly planning to call for a $5-per-barrel increase in prices despite the present huge oil glut. The conference opened with an attack on European oil producers. OPEC's president accused Britian and Norway of destabilizing the world market and boosting output while OPEC producers were exercising restraint. He said that the much-publicized world economic recovery had yet to be reflected in an increased demand for oil.

MacNEIL: The State Department said today that the U.S. and Soviet Union will open new talks tomorrow on upgrading the hot line between Moscow and Washington. The hot line is a slow-speed teletype used to pass official information during crises. It's planned to install high-speed equipment, but could also transmit facsimiles and graphics. The State Department wouldn't say where the talks will be held, although it's assumed to be in Washington. The announcement was another sign of a slight thaw in U.S.-Soviet relations. Yesterday, it was disclosed, there will soon be negotiations in Moscow on a new cultural exchange agreement, and 12 days ago an agreement on economic, industrial and technical cooperation was renewed.

United Press International reported today that the dissident Soviet physicist Andrei Sakharov was being treated with mind-altering drugs in a Soviet psychiatric hospital. The agency quoted a psychiatric source in Moscow. The Nobel Prize-winning physicist has not been seen publicly since shortly after he began a hunger strike on May 2nd to pressure authorities into letting his wife travel to the West for medical treatment.

Jim?

LEHRER: President Reagan spent four hours on the Eastern shore of Maryland today, demonstrating what he said was his great interest in the environment. He observed some bald eagles through binoculars, and talked with watermen on Chesapeake Bay, one of the nation's major oyster- and crab-harvesting regions. And he denied to reporters that today's trip was political, aimed at overcoming his negative image on environmental issues.

Pres. RONALD REAGAN: I'm not doing it from that standpoint. I know you won't believe that, but we kind of, I think, took the lead in California, when I was governor, in the nation in the environmental movement, and this has always been a great interest of mine. And I just have to say, for whatever clue it might give you, I think that's been one of the best-kept secrets about me and this administration since we've been here.

LEHRER: Tomorrow Mr. Reagan goes to Theodore Roosevelt Island in the middle of the Potomac River to sign an annual and routine environmental quality report, and Friday he flies to Mammoth Cave in Kentucky to speak to a convention of recreational vehicle operators. His critics within the environmental movement are not impressed by this three-day blitz. Today, for instance, a new coalition group called Environmental Safety issued a 100-page attack on the administration's enforcement of toxic safety laws. Former HEW Secretary Arthur Fleming said the White House is out of step with the rest of the country on environmental issues.

ARTHUR FLEMING, former HEW Secretary: This is an important issue not only in connection with this particular area, but also in connection with the way in which our form of government actually operates. The people have expressed themselves; the Congress of the United States has expressed itself; the executive branch is falling down on the job in terms of implementing the laws that the Congress has passed in order to protect our people. And I feel that the people should be and will be aroused as a result of the presentation of the kind of facts that are set forth in this report.

LEHRER: The Environmental Protection Agency responded afterwards, saying the coalition report is based on out-of-date information. The agency claims most environmental laws are being obeyed. Robin?

MacNEIL: Walter Mondale said today he wasn't depressed by polls showing him running well behind President Reagan. In an interview on ABC's Good Morning America, Mondale said, "I've just come through perhaps the toughest nominating contest in recent American history.When that debate with Reagan starts, we're going to be picking up every day. This is going to be a fighting campaign.Mondale defended his series of interviews with prospective vice presidential candidates, which had been criticized by some Democrats, but a Mondale aide said no more interviews are planned right now.

Jesse Jackson said he wasn't interviewed because Mondale isn't seriously interested in a black running mate, and is responding to threats from Jewish leaders. In an interview with The Los Angeles Times Jackson said, "Look at the polls. It's clear if there was any scientific basis for making a vice presidential choice it would be me." He gave two reasons why he's not being interviewed. "If I'm not being considered, no black is being seriously considered. The other, of course, is that threats to Mondale by a significant number of Jewish leaders are very evident." A New York Times/CBS poll published today said that black registered Democrats preferred Mondale for president over Jackson by 53 to 31 percent. Mondale's other Democratic rival, Senator Gary Hart, was in Atlanta delivering a speech attacking Ronald Reagan. Speaking at Emory University, Hart said that a second Reagan term would be a time of unprecedented danger.

Sen. GARY HART, Democratic presidential candidate: Ronald Reagan has increased Soviet intransigence around the world, strained our relations with our European and other allies and failed to achieve any arms control successes whatsoever. A second Reagan administration would be a time of unprecedented danger for this nation and the world when a confrontational atmosphere could all too easily cause regional conflicts and crisis to escalate to an unwanted nuclear showdown.

MacNEIL: Hart and Mondale have reportedly worked out an arrangement for Hart's appearance at the convention next week. Hart will make a speech on Wednesday night, shortly before the delegates vote on their choice for president, a vote Mondale long ago secured enough delegates to win. But Hart said last night the people of the country and of the Democratic Party still believe he has the best chance to beat Reagan, and for that reason he would win the nomination. Jim? Used Car Rule: Too Tough or Too Soft?

LEHRER: The Federal Trade Commission voted down the so-called no-defects rule for used cars. It would have required dealers to put a sticker on a used car informing the buyer of a car's known defects. The vote was three to two against such a requirement, one of the three being the FTC chairman, James Miller, who explained his vote this way.

JAMES MILLER, chairman, Federal Trade Commission: This rule, I think gives an important protection. It warns them that you must get promises in writing, it warns them what an as-is sale is. It tells them basically who is going to pay for the repair of an automobile if it breaks down. If a dealer wants to warrant a car, then the consumer would know that. On the other hand, if it's sold as is, the consumer knows that they will be the ones to repair the car if it does break down. I feel that we've also refrained from over-promising the consumers. You know, one of the easiest things in the world is to propose a rule and promise it'll have a lot of very favorable effects when, in fact, we have considerable doubt or we don't know that to be true. And I think we've showed suitable restraint in this instance.

LEHRER: Before today's vote consumer groups staged a demonstration complete with a mockup of used car lot in front of the FTC. They strongly objected to the government's dropping the known-defect rule.

JAY ANGOFF, chairman, Public Citizen: The FTC now views the big problem in the used car market is the consumer's failure to find out the condition of the car. So it recommends just take the car off the lot to an independent mechanic. Well, that's going to cost money. First of all, the used car dealer is not going to be terribly happy about that. Secondly, it's going to cost money. So the FTC is saying, "We don't want any of these costs to come from the dealer; we don't want the dealer to spend any money. We'd be happier if the car buyer spent money and got a bad car in addition.

LEHRER: As Chairman Miller said a few moments ago, while turning down the known-defects rule, the FTC did vote to require a used car sticker which lays out who pays for repairs after the car is sold, suggests an independent mechanic check it out before buying, warns that all promises from dealers are meaningless and outlines what warranties may be in force. Robin?

MacNEIL: What practical effect will today's decision have on people buying used cars? We discuss that now with a leading consumer activist and a used car dealer. Clarence Ditlow is executive director of the Center for Auto Safety, a non-profit consumer group based in Washington. Charles Nicholson is a used car dealer in Canton, Ohio. He's a former president of the National Independent Automobile Dealers Association, and he joins us tonight from public station WTTW in Chicago. Mr Ditlow in Washington, in practical terms, what's today's decision going to mean for used car buyers?

CLARENCE DITLOW: Well, it's going to mean that the consumer will have a little bit more information about what warranties come with the car, but it won't tell the consumer what they want to know most -- is this going to be a good, reliable car and what defects are in that automobile.

MacNEIL: Mr. Nicholson, what practical difference is it going to make from your point of view to used car buyers?

CHARLES NICHOLSON: Well, I think that as an independent businessman no one's really looking for more rules and regulations in the marketplace. However, we're determined to look at this rule in a very positive light. Whether or not you agree with it or not, we must admit that the final product complies with Congress' original intent. At no time did Congress ever mandate a warranty.

MacNEIL: Mr. Ditlow, you would have preferred that the known-defects rule was passed. Explain why and why you're unhappy with this decision.

Mr. DITLOW: Now, we're unhappy with the decision because almost 10 million used cars are bought through dealers every year, and the consumers have very little information about whether or not there are defects in the automobile, and they don't have the technical expertise to check the car out. On the other hand, the dealer has a lot of knowledge, and what we're simply saying is to share that knowledge with the consumer and tell them what defects are in it so they can bargain on the price. If there is a defective transmission, let's lower the price a little bit so the consumer can pay for the repair in advance rather than afterwards.

MacNEIL: What would have been wrong with that, Mr. Nicholson?

Mr. NICHOLSON: Well, we have never opposed consumer-oriented legislation. In fact, we were in favor of truth in lending, truth in advertising and other consumer-oriented legislation. But those were -- had clearly defined goals, and they were workable and realistic. And in our opinion the known-defects provision of this was completely unworkable and we had real six main concerns with it.

MacNEIL: Why was it completely unworkable? Why couldn't it have been possible for dealers to tell customers what was wrong with a car?

Mr. NICHOLSON: Well, I'm glad you asked that because, in the first place, the number-one reason was that it was very difficult to ascertain what a defect was. There was a lot of vague and ambiguous terms such as "normal seepage" or "whine" in a rear end. At no time could anybody ever tell us how much seepage was abnormal, how much whine was allowed to come from a rear end of a car, if any smoke was allowed to come from a tailpipe, if any. It was literally impossible to enforce adequately. The commission would have had to prove that the car was defective. They'd have to prove that it was defective at the time of the sale and that the dealer knew about the defect at the time of the sale. Third, our concern was that it would incorrectly have a tendency to give a consumer a false sense of security because an absence of any listed defect would be interpreted by many consumers as that car was defective free. Four, it didn't allow for the normal aging process of a car. A 1972 model car had to pass the same strict Department of Transportation specifications as an '83 model used car did. Fifth, we felt that it would penalize a knowledgeable and astute dealer because he would mark his cars appropriately, and that would end up making his cars undesirable in the marketplace, and it would make ignorance bliss. Sixth, in many states, if you mark anything being defective on a car, you're giving the customer an implied warranty that everything else is okay.

MacNEIL: I see. Well, Mr. Ditlow, what to you say to all that, thatit wouldn't have worked?

Mr. DITLOW: It would have worked, and, as a matter of fact, in the state of Wisconsin we have an even tougher rule that's working, and we're finding that in the state of Wisconsin, which does in fact require inspection and a disclosure of hidden defects as well as known defects, and the FTC rule would have only required a disclosure of known defects, that rule in Wisconsin saves consumers on average about $400 per car versus what they're paying in the rest of the nation. And the rule is just simply a needed rule. It would not have created any warranty that's implied. It does not require an inspection of the automobile. It simply tells the dealer to look at your service records, look at your auction post-inspection, if you've had one conducted, look to see what other consumers have said about the car when they've taken it out and paid their hard-earned dollar to have it inspected by a diagnostic center, and tell the new consumer who's in there looking to buy it what all those things say, not to inspect the car.

MacNEIL: Mr. Ditlow, is it your argument, or your organization's argument, that there are a lot of used car dealers out there who are are unscrupulous and are knowingly selling lemons or cars with dangerous defects to American buyers?

Mr. DITLOW: The majority of used car dealers are good, honest businessmen, and that's the tragedy of the rule going down to defeat today. We're not after the good businessman, which is the majority of used car dealers.It's that unscrupulous minority for which the rule was intended and which will benefit good dealers because it will force the unscrupulous ones out of the marketplace.

MacNEIL: Do you have any estimate of how large the unscrupulous minority is?

Mr. DITLOW: The estimate is that about 15% of used cars that are sold have serious defects in them where they are known and consumers are in essence duped.

MacNEIL: What's your answer to that, Mr. Nicholson?

Mr. NICHOLSON: Well, we feel that there are better ways to identify automobiles with known defects or cars that's been involved with serious accidents or maybe been used commercial or anything else.

MacNEIL: Just first of all, do you agree with the 15% of cars being sold with known and dangerous defects?

Mr. NICHOLSON: I'm not real sure. I've never seen any studies on it. I would find that hard to believe. But it would be interesting to find out where that information came from?

MacNEIL: Well, from your point of view, how aan a buyer under these new guidelines be protected from the unscrupulous dealer?

Mr. NICHOLSON: Well, I feel that the basic thing that we must look at is that the rule that was passed today was a rule that complies with congressional intent when it was passed in the first place. It gives the consumers many more tools that they've never had in the past. For example, it gives them uniform rules, no matter what city they live in, no matter what state they live in. They can go from car lot to car lot, and they can determine which cars have warranties, which cars do not have warranties. If it has a warranty they can determine what parts it covers, for how long, who pays what on it. All that before they've spent a dime. It also reminds them very plainly that spoken promises are not enforceable and that they should get all promises in writing. It reminds them to ask if a mechanic's opinion is permissible. And, finally, and I think perhaps the even most important, it tells them in a no-nonsense manner that if the vehicle they're looking at is being sold on an as-is basis that they, the consumer, will have to bear the entire burden of the expense should a mechanical difficulty arise. And these are all tools that the consumer never had in the marketplace before.

MacNEIL: Mr. Ditlow?

Mr. DITLOW: Well, what we're going to see in the future is the fact that this rule provides so little protection for the consumer that we're going to see individual states moving ahead to mandate inspection, just like the state of Wisconsin does, and we're going to have little used-car lemon laws, just like we have new-car lemon laws, in the future.

MacNEIL: You say if offers so little protection. What about the point that for the first time it's going to be required that the warranty provisions are published with the car? Isn't that a good thing?

Mr. DITLOW: No, that is a good thing, but that's the type of information that is already most readily available to the consumer. Many states do, in fact, require that, and what consumers want to know is not what the warranty, but whether or not there's a defect in the car. And then that's the issue as to whether or not the car will provide reliable transportation, which is foremost in the consumer's mind, not the warranty.

MacNEIL: But you believe this is going to result in a lot of states passing statewide tougher laws, is that it?

Mr. DITLOW: There is no question in my mind that we're going to see state after state passing laws like Wisconsin has right now.

MacNEIL: Mr. Nicholson, what do you think about that?

Mr. NICHOLSON: My person opinion is is that frankly the consumer is going to be the real benefitor out of all of this because the used car business is a very competitive business, and the end result of this is is that because warranties are so visible now and such a part of the deal that you're going to find that warranties will become longer and they're going to cover more components as dealers strive to retain more of the market share.

MacNEIL: Mr. Nicholson? Mr. Ditlow. I'm sorry.

Mr. DITLOW: That may very well be true in terms of the competition, but I think that the ultimate competition is whether or not we're going to provide quality automobiles because we see that in the new cars quality is number one, and warranty is really more of a PR gimmick than is quality.

MacNEIL: Mr. Nicholson?

Mr. NICHOLSON: I just don't agree.

Mr. DITLOW: One final thing. I'd like to go back to what Mr. Nicholson's group proposed four years ago when the Federal Trade Commission was considering mandatory inspection, which is simply disclosure of known defects, because at one time his outfit was on record supporting essentially what the FTC has voted down today.

MacNEIL: Is that correct, Mr. Nicholson?

Mr. NICHOLSON: I think we've been pretty clear, the fact that we have never opposed legislation that's going to be very positive towards the consumers. At that time we felt, like everybody else, that this was a solution, that it was workable and it was realistic. But tests have shown, and every person who has rendered an opinion of it from the staff of the FTC has stated that why idealistic and why we'd all like to see it, the known-defects provisions as submitted was completely unworkable and unenforceable.

Mr. DITLOW: But 42 states -- the attorney generals from 42 states out of 50 supported the known-defects, and they can scarcely be discounted, because they are the pre-eminent body enforcing consumer protection laws in the states throughout the United States.

MacNEIL: Well, we have to leave it there, gentlemen. Mr. Nicholson, thank you for joining us in Chicago --

Mr. NICHOLSON: Thank you.

MacNEIL: -- from Canton, Ohio; Mr. Ditlow, in Washington.

Mr. DITLOW: Thank you.

MacNEIL: Jim?

LEHRER: Still ahead on the NewsHour tonight, we hear Martin Feldstein tell us of the pleasures and perils of being Mr. Reagan's top economist. We look at a new computer system that has joined the fight against serial killers, and we join in the celebration of a radio program called "A Prairie Home Companion."

[Video postcard -- Bryce Canyon, Utah] Feldstein Reflects

LEHRER: Tomorrow it becomes official. Donald Regan and Larry Speakes won't have Martin Feldstein to kick around anymore. It will be his last day as chairman of the President's Council of Economic Advisors, the last day to be a problem over deficits, interest rates and so on for Regan, the secretary of the treasury, and Speakes, President Reagan's chief press spokesman. Feldstein had been an economics professor at Harvard University before taking the Washington job two years ago, and he will be so again in September. He is with us now. Dr. Feldstein, you must be grateful to be shed of this and be on your way back to Boston. Is that correct?

MARTIN FELDSTEIN: Well, I'm going to miss this, and if Harvard University leave policy had permitted me to stay another year, I would have liked to stay another year.

LEHRER: What will you miss about it?

Dr. FELDSTEIN: Well, I think there are going to be some very important things to be done next year in terms of economic policy, and I'm sorry that I won't be able to continue to work for the President.

LEHRER: Do you think that that would have been your option? If Harvard would have agreed, do you think that the White House and the President would have agreed?

Dr. FELDSTEIN: Well, there's no way to know that at this point?

LEHRER: But there's some way -- I mean, you must have picked up some signals, did you not?

Dr. FELDSTEIN: No, not at all, because from the very beginning I knew that I was going back at the end of these two years; the White House knew that also; the President knew that.

LEHRER: Looking back on the episodes that involved Speakes and that involved Donald Regan and apparently some other anonymous types in the White House, do you feel they did a number on you, they treated you unfairly?

Dr. FELDSTEIN: Well, I think that they did misrepresent my positions because basically I've been a strong supporter of the President's own policy from the very beginning. And I think that there was occasionally an attempt to portray me otherwise.

LEHRER: Where did it go wrong? I mean, why would they do that?

Dr. FELDSTEIN: I'm not really sure.

LEHRER: But what effect did it have on you? What were they trying to prove?

Dr. FELDSTEIN: Well, I don't really know that. I don't think it had much of an effect. I think it created a lot of press hoopla that perhaps distracted attention from the serious substance, but I don't think it really changed anything very much.

LEHRER: But when you have the secretary of the treasury publicly disagreeing with you, one time most recently saying your economic assessment, telling the Congress of the United States to ignore it, throw it away, it doesn't mean anything, that was telling you something, was it not?

Dr. FELDSTEIN: Well, I think he lost his cool that day. But basically, although Don Regan and I disagree about the way the economy operates -- on some aspects of that, anyway, about the impact of deficits on interest rates on trade -- we do agree about the importance of bringing down the deficits. There's no quarrel about that in the administration.

LEHRER: But he didn't want you to go out and say publicly that deficits had any effect on interest rates, right? Wasn't that the party line that he wanted you to follow?

Dr. FELDSTEIN: Well, that was his view, and of course I believe that budget deficits have quite a substantial effect on interest rates and on our trade deficit and on the character of demand.

LEHRER: Now, Larry Speakes, who is the official spokesman for the President of the United States, Larry Speakes never goes to a White House briefing unless he's been briefed himself. He said at one of these briefings that he was about -- he implied very strongly that it was time for you to go, intentionally mispronounced your name, ridiculed you in the name of the President.

Dr. FELDSTEIN: Well, I don't think in the name of the President, and I don't think that was Larry's finest day.

LEHRER: Well, now, why would he do something like that?

Dr. FELDSTEIN: Well, that's one of the great mysteries that I will end up never knowing.

LEHRER: You mean you never asked him? You never said, "Hey, Larry, what are you doing this to me for?"

Dr. FELDSTEIN: No, I never did ask him that question.

LEHRER: Why not?

Dr. FELDSTEIN: Well, that just isn't -- I just thought that it was best to let that drop, and I think that -- I think it was clear that the reaction to it, very negative --

LEHRER: You got the best image of reaction.

Dr. FELDSTEIN: -- in the White House -- within the White House and elsewhere, and I think Larry realized that at the time, and I do think it really did get blown way out of proportion and suggested that there were conflicts between me and the President that really didn't exist and that the President didn't perceive and that I didn't perceive.

LEHRER: Well, speaking of the President, when all this happened, when you had the Regan incident, then you have the Speakes incident, did President Reagan either talk to you in person or on the phone and say, "Hey, Dr. Feldstein, those guys aren't talking for me, you're my man"?

Dr. FELDSTEIN: Well, I don't really want to talk about --

LEHRER: Sure.

Dr. FELDSTEIN: -- the specifics of it, but the President did reassure me that he wasn't going to let that nonsense continue.

LEHRER: Directly? He told you those guys weren't talking for him?

Dr. FELDSTEIN: Well, I really don't want to get in more detail. What I've said is accurate. The President did reassure me of that.

LEHRER: The question of the job of the chairman of the Council of Economic Advisors. There's no question -- I think it's unprecedented for an man that job or a person in that job to get as much before the public eye as you have, and as a result there's been a lot of discussion of the job, and the question of whether or not it's possible to be a "honest economist" and an advisor in a political situation at the same time. What's your feeling about that, having just gone through it?

Dr. FELDSTEIN: I think it definitely is. I think that's what the President deserves, and I think that's what I tried, and I think my predecessors have tried to give him.

LEHRER: You have no problems with that?

Dr. FELDSTEIN: I had no problems with that at all. I think that it's very important that the President's economic advisor, the chairman of the council give him straightforward, unvarnished, honest advice. And as far as public discussion, I never really disagree with the President publicly, but I didn't feel any temptation to do so. I really did support what was his position. If you look at what the controversies were about -- I'm sure some of our listeners are asking, "What is this fellow saying?" If you look back at some of the controversies last year, I was continuing to support the President's budget. It was a balance of spending cuts and a standby tax increase.

LEHRER: Yeah, but he had already backed off of that.

Dr. FELDSTEIN: No, he hadn't. No, some of those anonymous White House aides had backed off of it, but when Larry Speakes was asked on his behalf and when he was asked in press conferences, he continued to reiterate his support for that. And there were some Treasury staff people who also, from the very beginning, were opposed to that idea. But the President continued to support it until very close to the end of the year when it became clear that there was no hope that Congress would do anything of that sort, and then he moved to develop the possibility of the down payment for this year, and again there were people who opposed --

LEHRER: That's the $50-billion bill.

Dr. FELDSTEIN: That's right. Well, it's part of a larger package; it probably, when it all gets added up in the end, will be about $150 billion, but as you said, part of it has been enacted already. And there were those in the administration who opposed it, who opposed it before the President signed off on it because they thought it was bad policy and bad politics to do something like that in an election year, but the President really wanted to get something going on reducing the budget deficits.

LEHRER: Wasn't that really at the heart of most of the rankling you did of folks, that you said occasionally you've got to raise taxes, or somewhere down the line you've got to raise taxes -- wasn't it raise taxes that sent them up the wall?

Dr. FELDSTEIN: Well, I reminded them that we had a budget in 1983. It was a balanced packaged; it had spending cuts, and it also had the standby tax, and this year as part of the downpayment package we made it very clear from he beginning that we were prepared to go along with the balancing, but you're right. There was those who just didn't want to hear that, and they didn't want to do that because they would have been prepared to go on with large deficits. But that was not the President.

LEHRER: No, but the President at the same time was saying we're not going to raise taxes. I mean, he's the one who led the charge about not raising taxes, did he not?

Dr. FELDSTEIN: Not raising taxes alond and not raising tax rates on individuals, but additional revenues through closing tax loopholes were something that he said in the State of the Union could be part of a package that would lower the deficit and give us the down payment.

LEHRER: Well, he said that in the State of the Union, but the implication was that he'd backed off of that afterward and that you were the only one who thought that he hadn't backed off.

Dr. FELDSTEIN: Well, I don't see how anybody can really hold that because we now have that legislation. The administration did work to negotiate it both with the Republicans and the Democrats in the Congress and to get us that down payment, which -- a good chunk of which has now been enacted by the Congress.

LEHRER: So you just deny this charge that you were not a team player, right?

Dr. FELDSTEIN: Well, I'm not sure what a team player means. I believe that I continued to support the basic policies that the President had and to give him straightforward advice. There were other people in the administration who might have liked me to say this or that, but that's a very different matter from he support of the President.

LEHRER: Have you thought about whether you'd ever want to come back to Washington some time and play with the federal government again?

Dr. FELDSTEIN: I'm sure at some time in the future it's something that would interest me --

LEHRER: What kind of thing would interest you now, based on your experience, where would you like to -- I don't mean specific jobs, but I mean, anything that strikes your fancy?

Dr. FELDSTEIN: No, I think whatever that is, it's certainly not an immediate issue that I have to think about, although --

LEHRER: Well, I know, but I was just wondering -- I mean, sometimes people have said they've been in an advisory role and their taste is to want to come back and implement something. Did you get bitten by that?

Dr. FELDSTEIN: No, I wouldn't put it that way. And I think the way the federal government works, the President really is the ultimate decision maker on all of the key economic questions, and so it's not -- there isn't that much delegation of authority for the big economic issues.

LEHRER: Let's look ahead. Everybody's talking now, including the President -- he told -- he says interest rates are coming down in the United States. Are they?

Dr. FELDSTEIN: Well, I think you have to distinguish between short-term interest rates and medium- and long-term interest rates. I think that medium- and long-term interest rates can start down once the financial markets come to have some confidence in the fact that this reduction in inflation is here --

LEHRER: Medium- to long-term meaning a year --

Dr. FELDSTEIN: Five years --

LEHRER: Five, six years?

Dr. FELDSTEIN: -- interest rates, and 10-year mortgage rates, long-term bonds. I think once the financial community comes to accept that we really have made permanent progress on inflation, and I believe we have, and that there really is a commitment to go on dealing with these budget deficits, and I believe there is that commitment in the administration.

LEHRER: You really believe there is?

Dr. FELDSTEIN: Absolutely. You don't hear anymore in this administration people talking about learning to live with the deficit or growing our way out of the deficit. There really is a clear commitment, and it's been there, I think, since the State of the Union, to get the down payment and to follow on through. And when the financial markets believe that, then I think we can see medium and long rates coming down.

LEHRER: When one of the nicknames that stuck on you was Dr. Gloom, did that bother you?

Dr. FELDSTEIN: Well, I think I now understand it a little better than I did before. It seems to me that politicians are all -- tend to be optimists. Anybody who tries to give a more balanced, more realistic picture could easily be, by comparison, stuck with that label. And it's designed to discredit economic advice --

LEHRER: And you just proved a point, did you not, on interest rates? I mean, the optimist would say interest rates are coming down, period, and you would add, yes, maybe over the long haul, but in the short haul you were implying and saying that they are not going to come down. And that's -- somebody would say that's --

Dr. FELDSTEIN: The facts are what the facts are, and what the financial markets are telling us and so on.

LEHRER: Okay. Dr. Feldstein, good luck back at Harvard, and thank you for being with us tonight.

Dr. FELDSTEIN: Thanks very much.

LEHRER: Robin?

MacNEIL: Investigators for a U.S. government agency said today that the crew of an Air Canada plane waited too long to land after it caught fire last year. When the Canadian airliner did land at Cincinnati airport on June 2nd, 1983, 23 passengers died from smoke inhalation. The fire started in a lavatory in the rear of the Douglas DC9, apparently because of a short circuit in an electric motor. In spite of heavy smoke in the cockpit and damage to the navigational instruments, the captain landed safely, and the other 23 people aboard got out unharmed. Today investigators for the National Transportation Safety Board said the pilot should have acted at least three minutes sooner and landed at Louisville instead to Cincinnati. The investigators said the pilot lost valuable time by asking questions of the crew members who were fighting the fire and reporting to him they thought they were getting it under control.

In Spain the custom of running the bulls through the streets of Pamplona resulted in two serious injuries today, the fourth of a week-long festival. According to the custom, six bulls and six steers were released from a corral and went charging along a 995-yard course that runs through the streets of Pamplona and on to the bull ring. Those who dared to run with them were able to keep clear until one bull slipped and fell. The bull behind the one that fell then stopped and went after one of the runners, a 23-year-old American paratrooper named Townsend, on leave from his base in Italy. Townsend was gored in the left leg, a 16-inch slash from knee to thigh. Tonight the young American's condition was described as very serious. A British runner was also gored today, and he was reported in serious condition as well. To Catch A Killer

MacNEIL: In Washington the Justice Department today announced a plan to deal with what it sees as a growing problem, an increasing number of unsolved and similar murders by so-called serial killers. The administration's plan calls for setting up a center for the analysis of violent crime. It would be run by the FBI and would use computers to provide state and local police with information about similar types of violent crimes. One of the officials who made the announcement is James Stewart, director of the National Institute of Justice.

Mr. Stewart, how big a problem are serial crimes?

JAMES STEWART: Well, Robin, they're a considerable problem when you consider that there are 22,000 homicides that occur in the United States each year, and 5,000 of those are unsolved. Somewhere in the vicinity of some percentage of those unsolved are the serial murderers, and those are the people that move around from jurisdiction to jurisdiction that have not been identified either as multiple murderers or as persons responsible for the crime. The reason that's been a problem, really, is it's a different level of investigation than police are usually used to.

MacNEIL: What percentage of unsolved crimes may be committed by serial murderers?

Mr. STEWART: Well, at least some fairly large portion of that 5,000 that are still unsolved each year, and that might be up as high as 1,000 or 2,500. The reason we don't know for sure is that there is really no way to identify a pattern. Frequently you'll have a person with a body next to the side of the road with no apparent motive.In another area, which may be two states removed, you may have another person who now is in a lake. There may be some information that can link those two together that previously looked unrelated. What we're trying to do, really, is create a model like the National Centers for Disease Control that's in Atlanta, where doctors and public health people send information to be analyzed. It's analyzed and then reported back like, for instance, Legionnaire's Disease was a good example of the use of that.

MacNEIL: So is this a fairly new discovery that serial murderers are not as rare -- I supposed most of it is thought that a serial murderer is a rare occurence, a rare type of criminal. Is this a new discovery, that it's much more frequent than thought before?

Mr. STEWART: Well, we can think of a couple that come to our mind that received a lot of publicity, like the Ted Bundy case, where he moved across from state to state. Recently the Chris Wilder case, the Ken Bianchi as the Hillside Slayer and a number of others that are beginning to get more and more attention. Previously they tended to slip through the cracks. When they were arrested, it was usually for one local crime, one local murder. They may have, in fact, an entire string. We're now discovering the relationship between those strings of what we thought were previously unrelated --

MacNEIL: How are you discovering that?

Mr. STEWART: We're doing that through some research. What we have done is we, through the National Institute of Justice, have sponsored the FBI and other researchers to go to the prisons and places where we have mass murderers and serial murderers currently incarcerated and interviewed them in depth. And we have a 60-page document, and we spent a considerable amount of time not discovering why they do it, discovering how they do it so we can find out how did they escape police detection, how did they get the person out of the shopping mall undetected, how did they select their victims? Were they at the scene of the crime when the police were there? Were they in the crowd?That's very important and valuable information for the police themselves to have as investigators.

MacNEIL: Have you found things in common among serial murderers that lets you generalize about them?

Mr. STEWART: We have found several things in common about them. One of the things that comes as somewhat of a surprise is they are very intelligent, typically; they get along very well and they seem fairly friendly and usually have a reason to be in one area or another. And so you have a stranded vehicle or if you happen to be in a crowd at the supermarket but you're not attached to somebody, they can establsih a relationship with you and then go ahead, get you to a location and then kill you and then move on, and the police really have no information at that place to locate and identify and trace the serial murderer. Usually in the past -- I was chief of detectives in Oakland, and many of the murders that we investigated typically were solved in the first 36 or 72 hours. The reason for that is because usually there's a motive and a person that knows the individual.

MacNEIL: And most murders, is it not still true, are committed by somebody very close or related to or very closely related to the victim?

Mr. STEWART: They are and most of those are solved through that traditional means.But now the kind of fearsome murder, that person who lurks in the darkness, who will strike what appears to be at random, from place to place, that's the kind of murder that strikes most fear into us.

MacNEIL: Well, how will this computer center work to help local police?

Mr. STEWART: Local police will, because of the research done by the National Institute of Justice, will be able to fill out a form describing the crime scene. It'll have five pages of characteristics.That will then come in and be screened by two well-known nationally experts in homicide, Terry Green and Pierce Brooks, who worked on the Atlanta homicides. It will then go into a computer; statisticians and behavioral scientists will then try to cross-check those. So it'll route really three levels of checking. The two steps we have to go through right now is to pilot-test that form on actual crime scenes involving homicides and the second thing is we really have to train our local police in how to use the form, how to report it in the common language, so we can compare one serial murder or one particularly vicious crime with another.

MacNEIL: Is it putting it too simply to suggest that then the computer is asked and produces, if the men themselves, the investigators themselves don't know. "Oh, hey, look. There have been a number of similar crimes," and then you tell the local police about those?

Mr. STEWART: Yes, we would put the local police in touch with, say, for instance, you had something in Oklahoma; you might also have one similar in Louisiana.So you'd put the local police in Louisiana in touch with the people in Oklahoma. Now, just as an example, some of our serial murderers have been caught because of an overdue parking ticket.But it's getting that information together and then relating it, really, to the other ones that appear to be unrelated in the past. We don't know how many serial murderers there are. We do know that there are 5,000 that are currently unsolved and we suspect that a large portion of that can be helped by this kind of analysis.

MacNEIL: How much will this cost?

Mr. STEWART: This will cost $2.5 million a year. The National Institute of Justice and the Office of Justice Assistance is really paying for the first year, because this is the result of a year-long planning effort that has gone into it, and we are also buying the computer software and paying for the local police who will actually come into the FBi to provide that investigative expertise.

MacNEIL: And when will it be operational?

Mr. STEWART: It will be operational, fully operational, a year from today. It will be partially operational in the fall, where we will begin -- we're currently looking at 70 serial murders. We suspect that we will be fully operational; we will look at every unsolved vicious homicide that's reported during and entering this period.

MacNEIL: Well, Mr. Stewart, thank you very much for joining us.

Mr. STEWART: Robin, thank you very much.

[Video postcard -- Prescott, Arizona]

LEHRER: Again, today's top stories. A British tanker was attacked by an Iranian jet in the Persian Gulf. The damage was not considered serious. OPEC ministers continued their meeting in Vienna; analysts say oil prices are not expected to rise. President Reagan spent the day demonstrating his interest in the environment in general and the problems of Maryland's Chesapeake Bay in particular. Walter Mondale says he's on track with his search for a vice president, but he won't say when he'll name his running mate. One Democrat considered a possible vice presidential candidate took his name out of the running late today; Arkansas Senator Dale Bumpers said he does not want to be considered for the job. And the Federal Trade Commission rejected the so-called known-defects rule for used cars.Robin? "A Prairie Home Companion"

MacNEIL: We close tonight by noting that "A Prairie Home Companion" has just celebrated 10 years on the air. In that decade this unique musical variety show on public radio every Saturday night has developed a cult following, and a fictional community of Lake Woebegone, Minnesota, which it celebrates, has acquired an extraordinary reality in the minds of listeners. So strong is its appeal that this weekend people traveled from all over the country to Minnesota to celebrate and to meet "A Prairie Home Companion" 's creator, Garrison Keillor. Brendan Henehan of public station KTCA in Minneapolis-St. Paul produced this report.

BRENDAN HENEHAN, KTCA [voice-over]: Saturday afternoon in St. Paul. The sun is shining and there is quite a nice breeze, so why in the world would these Minnesotans choose to spend this afternoon on the lawn of the state capitol in front of an empty stage? Well, oddly enough, they are listening to a radio show.

GARRISON KEILLOR, creator of "A Prairie Home Companion" [singing theme song]: "Well, look who's coming through that door/I think we met somewhere before . . . /Hello love, where oh where in the world you been so long/I missed you so since you been gone, hello, love."

HENEHAN [voice-over]: If anything in American broadcasting today can be called truly unique, it is "A Prairie Home Companion." After all, how many radio programs do you know that celebrate their 10th anniversary like this? And how many are forced by their own popularity to conduct public press conferences.

REPORTER: You say the the population of Lake Woebegone is 5,000, would you say?

Mr. KEILLOR: I think it's a little under 1,000.

HENEHAN [voice-over]: Or photo opportunities? Or network news interviews?

REPORTER: How did you start "A Prairie Home Companion?"

Mr. KEILLOR: Well, I was working as a freelance writer here in St. Paul, and --

HENEHA [voice-over]: And how many radio programs today can you name that could have transformed a little-known Minnesota writer into something aproaching a national folk hero?

REPORTER: When you walked onto the stage 10 years ago to do that first performance, did you have any idea that it would take off the way it has in the last 10 years?

Mr. KEILLOR: No, I didn't have any idea when we began, and I didn't have a whole lot of interest in it taking off. It was something that we did for fun.

HENEHAN [voice-over]: From its modest beginning a decade ago "Prairie Home Companion" is now heard all across the United States each Saturday night on public radio. In the course of these past 10 years it has become a very popular program; so popular, in fact, that for its 10th anniversary broadcast people flocked to St. Paul from all across the country to see the show and perhaps to try and visit for just a moment the fictional Minnesota town that Keillor calls home.

[interviewing] You just came from Texas?

PEGGY HANNIGAN, Texas: I finally made it to Lake Woebegone.

HENEHAN: Do you think you're here?

Ms. HANNIGAN: Yeah. It's wonderful, just like I pictured it.

LOREN WILLEY, Michigan: We always listen to the program. I listen to it in the garden or in the woodshop and we love it, and we feel like we're citizens, really, of Lake Woebegone.

Mr. KEILLOR: Oh, hello, everybody, and welcome to "A Prairie Home Companion," our 10th-anniversary show, a benefit to save the world, Too.

HENEHAN [voice-over]: Each week "A Prairie Home Companion" delivers a mixture of folk music, story-telling and offbeat small-town humor.

ANNOUNCER: Join us now for another exciting episode in the life of Jack Armstrong, the normal boy, as we hear Jack say --

"JACK ARMSTRONG," the normal boy: Dad, could I go out tonight to a movie?

"DAD": [mumbles]

"JACK": But that's no reason.

HENEHAN [voice-over]: But by far the most popular part of the show is the news from Lake Woebegone, when Keillor fills listeners in about the goings-on in his fictional hometown of Lake Woebegone, Minnesota, a community of characters which, while fictional for all the rest of us, appear to be very real for Garrison Keillor.

Mr. KEILLOR: Those people always used to wonder whatever I was going to do for a living, and then when they found out how I was going to earn a living, by talking about them, they were sorry they asked.

[being interviewed] I grew up in an island of people. I always loved that island, even though I live in St. Paul and loved cities and don't think I could live there or live that life again, I've always thought that it was more my fault than the fault of that life, which is a life that I talk about on the radio, about Lake Woebegone.

HENEHAN [voice-over]: Although Garrison Keillor is often called a humorist, it's quickly apparent that he takes Lake Woebegone quite seriously, and so do his fans. Just what is it about this show that appeals to so many people? To many fans, "Prairie Home" is pure nostalgia, a remembrance of a happier, earlier time.

MIKE DEGNAN, Minnesota: It's something maybe that we -- that we all remember about our own pasts and where we have been. Maybe not where we exactly want to be, but we're glad that we have been there.

CATHY CRESSY, Rhode Island: Songs, in the summertime especially, were always really important in our family. My father knew tons of them, but they're not the kind of thing that you really remember. And then when you hear it on the radio, you can think about your own family singing the songs instead of seeing the visions that a television set brings for you.

QUAINTANCE EATON, New York: I come from Wichita, Kansas. I think anybody can relate to Lake Woebegone because it's a fairy tale, you see? And everybody has to have a fairy tale in his life, don't you think?

Mr. KEILLOR: It used to be that when I told people where I was from they would give me an odd look at say, "Oh, it gets cold there, doesn't it?" And now when I tell them where I'm from, they say, "Yeah," they say, "seems to me I read a story in the paper about that. That's that mythological town, isn't it, on that nostalgia show on the radio?" I guess the answer is yes, it does get cold there.

HENEHAN [voice-over]: But Keillor spends a lot of time fighting the notion that the show's appeal is purely nostalgic.

Mr. KEILLOR: People can be nostalgic about their years in the army, knowing that they're beyond the age when they could be drafted and made to go back and live it again. I'm not particularly nostalgic for Lake Woebegone because if this doesn't work out for me, if something happened to me, I'd have to go back, see?

Of course, I was brought up to be skeptical about these things, and you would be too if you'd ever gone to the Mist County Fair on a hot afternoon in July and watched about 10, 12 young men compete in the pie-eating contest to see who could eat the most coconut creme in 10 minutes, you'd realize there's a dark side to winning and success.

HENEHAN [voice-over]: And, as much as "A Prairie Home Companion" appears on the surface to be a sunny celebration of childhood memories. Keillor's own attitudes about childhood are much more ambivalent.

Mr. KEILLOR: There's a darker side to childhood. To me childhood is filled with darkness, with terrible fears of being abandoned and of being unloved and fears about the unknown, about the dark and about the worldbeyond the island where you live. I could never get up with a straight face and to a monologue about childhood as a sunny -- as a sunny period that people ought to be nostalgic for.

HENEHAN [voice-over]: But does it bother Keillor that he has such a very different interpretation of Lake Woebegone than many of his listeners? Not at all. That means he's doing things right. Different interpretations, he says, are in the very nature of radio.

Mr. KEILLOR: Radio is something for them that is better, far better, than it every could be for us sitting on stage. It really is. But we didn't make it that way, see? the same as those performers who I listened to when I was a boy were not as grand and as warm and as close to me as I imagined that they were. You see, that was my -- that was my creation. Radio is a listener's creation.

Mr. KEILLOR: Sometimes I feel so borning and so full of guilt. Why was I born in Scandanavia? The food is bad, winter is unbearable; the theology is enough to break a man's heart.

ACTOR: Join us now as your friends at Kierkegaard Hardware present "Lutheran Whispers."

HENEHAN [voice-over]: But while for Keillor "A Prairie Home Companion" is not a program rooted in nostalgia, in at least one sense it has indeed reacquainted its listeners with an earlier, simpler time, a time of bicycles and radio.

Mr. KEILLOR: There was a period when I grew up when, if you saw an adult riding a bicycle they looked strange because, see, the automobile replaced the bicycle. Only poor people would ride a bicycle. a self-respecting adult would ride in a car, and the bigger the better. See, the bicycle was an anachronism. Well, we have a way of recovering things that were let go, and I think radio is one of them.

[singing] "Well, has your family tried 'em, Powder Milk?/Has your family tried 'em, Powder Milk?/Well, if your family's tried 'em --

HENEHAN [voice-over]: According to Keillor, "A Prairie Home Companion" will continue on the air for just as long as it remains fun to do, but Lake Woebegone, he adds, will live on forever, with or without Garrison Keillor.

Mr. KEILLOR: Well, if your family's tried 'em, you know you satisfy 'em/they're a real hot item, Powder Milk." Powder Milk Biscuits! Get you a big box of'em, the big blue box with the picture of the biscuit on the cover.

MacNEIL: Good night, Jim.

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