The MacNeil/Lehrer NewsHour

MS. WOODRUFF: Good evening. I'm Judy Woodruff in New York.

MR. LEHRER: And I'm Jim Lehrer in Washington. After our summary of the news this Thursday, we look at the $105 million verdict against General Motors, a Senate debate on gays in the military and the stormy troubled road to political and economic reform in Russia. NEWS SUMMARY

MS. WOODRUFF: A jury in Atlanta today found General Motors negligent in a fatal pickup truck crash and ordered a $105 million award. It will go to the parents of the 17-year-old killed in 1989 after the truck he was driving burst into flames when it was hit. The family's lawyers argued that the design of the fuel tanks made them likely to explode inside collisions. Almost 5 million pickups with the same fuel tank design are still on the road. The federal government is considering a recall. GM said the jury acted out of emotion and that it would file an appeal. It issued a statement saying it remained confident that a full examination of the facts would prove that the trucks are not defective. We'll have more on the story right after the News Summary. Jim.

MR. LEHRER: There were more good economic numbers out today. The Labor Department reported worker productivity rose 2.7 percent last year. The Commerce Department reported factory orders rose to a record level in December, up 5.3 percent for the month, 3.3 percent for the year. At the White House, President Clinton said the reports were good news but did not mean all was well with the economy. He spoke to reporters just before lunch with Vice President Gore.

PRESIDENT BILL CLINTON: What appears to be the case is that American productivity is up and that a lot of Americans are refinancing their homes or buying new homes because of low interest rates. But so far we're not adding jobs to the economy. And that's the critical thing. I think it means we need to take a real close look at the credit crunch for small business. I think it means we need to redouble our efforts on health care cost restraints because that's one of the things that's preventing small business from hiring more people. But if you look at the downsizing going on in a lot of these big companies, we still need a program which will help us to generate jobs and higher income jobs. And that's the focus that I've had for several months now.

MS. WOODRUFF: Mr. Clinton went to Capitol Hill today for the second time this week. He met with Democratic leaders on a variety of issues, including the economy, health care reform, his budget proposal, and campaign finance reform. Later Vice President Gore appeared with members of Congress to call for reforms in the way lobbyists do business. They spoke on Capitol Hill.

SEN. CARL LEVIN, [D] Michigan: The public has a right to know who is being lobbied, by who, and how much the people who are lobbying us are being paid to lobby. They have a right to know who is being paid to lobby the Congress and the Executive Branch. The loopholes must close. We in the Congress must do it.

VICE PRESIDENT GORE: We want this to pass. We are committed to forming the way our government does business, to put people first.

MR. LEHRER: The Senate debated the gays in the military question today. Democrats want a non-binding resolution supporting President Clinton's plan to review the homosexual ban in six months. Republicans want to make the current ban the law of the land. Both sides want their version attached to the family leave bill. We'll have excerpts from the debate later in the program. First Lady Hillary Rodham Clinton also went to Capitol Hill today. She met with Senate Democrats to discuss health care reform ideas. Mrs. Clinton is heading the administration's task force on the subject. After the meeting, she talked with reporters.

HILLARY RODHAM CLINTON: Major health care form legislation is essential to meet the economic demands as well as the human demands of this country. And any kind of change that will meet those demands in a realistic way will require people to do things differently. And I think that there will be a lot of work that will be done by the administration and by the Congress and by people interested around the country to explain the kind of system that is needed to overcome the obstacles that will understandably arise as people try to appreciate why we have to make these changes.

MS. WOODRUFF: Dr. Jack Kevorkian assisted in the suicides of two more people today. His lawyer said the 82-year-old man and the 73- year-old woman were suffering from cancer. Both died of carbon monoxide poisoning at a house in Leland, Michigan. It brought to 11 the number of suicides Kevorkian has assisted. Several earlier cases prompted Michigan to outlaw assisted suicide, but the ban does not take effect until April.

MR. LEHRER: President Clinton today ordered Sec. of State Warren Christopher to the Middle East to get the peace talks going again. He will leave February 17th. There have been no talks since Israel deported more than 400 Palestinians in December. A new round had been scheduled to begin next week, but was cancelled after the deportees rejected an Israeli offer for 100 of them to return. At the State Department, Christopher was asked if he was disappointed about the postponement.

WARREN CHRISTOPHER, Secretary of State: I think we're moving very well on that process. I think as you'll see over the next twenty- four or forty-eight hours that we are taking steps to make sure the peace process stays on track. The postponement of the multilaterals seem to be the wise and judicious course under the circumstances, but I think the process that was put forward on Monday to try to deal with the issue of the deportees is going forward just about as predicted. And I think that we will see the resumption of the peace process at an early date, and so I'm not at all discouraged or disappointed by the reaction we've had. I'm encouraged to think that we can get the peace process back on track in a very early time, and I want to emphasize that President Clinton and I are determined that this will happen.

MR. LEHRER: A spokeswoman for President Clinton denied today he was trying to derail the international peace plan for Bosnia. She said he would support it if all the parties agreed to it. But the Bosnian foreign minister said in Washington his government would not support the plan because it would reward Serbian aggression.

MS. WOODRUFF: U.S. and United Nations commanders in Somalia ordered the country's warlords today to hand over lists of their weapons and soldiers. The commanders described it as the logical next step in a cease-fire plan agreed to last month by 14 Somali factions. The government of Cambodia today barred U.N. peacekeepers from observing fighting near headquarters of the Khmer Rouge guerrilla group. The government has refused to withdraw its troops from the region unless the United Nations forces the Khmer Rouge to disarm. The Khmer faction agreed to do so under a U.N. peace plan, but so far has refused to follow through. The government launched an offensive against the Khmer Rouge position two weeks ago over what it claimed were territorial violations of the peace agreement.

MR. LEHRER: And that's it for the News Summary tonight. Now it's on to the $105 million damage verdict, the Senate debate over gays in the military and the rough road to reform in Russia. FOCUS - ROAD HAZARD?

MS. WOODRUFF: We begin with today's big jury award in the General Motors fuel tank trial. As we reported earlier, GM was found negligent in the death of 17-year-old Shannon Moseley. The jury ordered $4.2 million in compensation and $101 million in punitive damages. Moseley was killed in 1989 when his pickup truck was hit by another vehicle driven by a drunk driver and it burst into flames. The family argued that the design of the fuel tank was flawed and that GM was aware of it. The Moseley truck had fuel tanks outside the truck's frame, just like almost 5 million other GM trucks on the road today. The automaker changed the design in 1988. GM called today's verdict "a crushing blow," and said the jury acted on emotion, not fact. The company said it will file an appeal. To tell us what happened and why we are joined by Fred Graham, the chief anchor and managing editor of Court TV, which has been carrying the GM trial, and Don Gonyea, the Detroit correspondent for National Public Radio. Fred Graham, first to you. What is it exactly thatGM was found guilty of doing today?

MR. GRAHAM: Of designing a pickup truck in which the gas tanks were outside the main frame, Judy. There have been very few trucks ever designed that way. There is only one other I know of in the United States very briefly, so that when it was hit from the side there was nothing except the skin of the truck to protect it, and according to these allegations, it tended to burst into flames. The lawyer for the plaintiff asked the jury to award $100 million to punish GM, and that jury came back and they stuck their thumb in GM's eye by awarding more than he asked for, $101 million.

MS. WOODRUFF: Now why was the plaintiff successful? Because there have been other cases I've been reading this afternoon, similar truck -- same truck design, similar cases, not exactly the same but similar, where we didn't have this enormous sort of an award.

MR. GRAHAM: They settled those cases. This is the first trial, and these people, the Moseley family, Tom and Lane Moseley said we won't settle, we want a trial, because we want to expose what's happened. Now, you see in these settlements part of the arrangement is GM pays money but they seal the evidence so that the public is not told what happened. The public knows now.

MS. WOODRUFF: So you're saying that before this even though there were suggestions and hints and allegations out there, there wasn't the evidence that we had and that came out in this trial.

MR. GRAHAM: Evidence came forward, for instance, there were two key parts of evidence here. One was a so-called "turncoat witness," a safety engineer within General Motors, who came forward and said, they lied to me. I've been going out and testifying, saying these trucks are make. They were making secret tests, he said, that showed they weren't. And there was some evidence, and this is going to have to be developed, that there had been a decision among the management at General Motors not to move as fast to correct this as they should and simply pay the damages, that cost effectiveness was to pay off. Now an interesting thing happened. Today when the lawyer for GM, Fred Bartlett, stood up to make his statement to the jury on damages, he said, "I promise you that there will be an investigation within General Motors to see if anyone lied."

MS. WOODRUFF: He said this after the verdict.

MR. GRAHAM: No. He said it to the jury. He had to argue -- he was arguing to the jury not to impose heavy punitive damages.

MS. WOODRUFF: But let me -- just to clarify this point about these secret tests, what was it that the former GM was saying happened?

MR. GRAHAM: He was saying that a series of secret tests, some twenty or thirty, in which actual crashes were conducted, a car was run into the side of these trucks, models of these trucks, and he said he found out about this after a lot of --

MS. WOODRUFF: He was working at GM at the time but did not, was not told about it.

MR. GRAHAM: He was working at GM, and he was supposed to be on this issue. GM's answer to that was they were doing a series of tests testing the cars as well as the trucks and that it was not focused on this particular thing.

MS. WOODRUFF: Why do you think the plaintiff's case was believable? Was it because -- was this engineer, the former engineer --

MR. GRAHAM: Yes, he was obviously key to it, but also there were eyewitnesses who saw this crash, who said that fuel spilled out. There was a puncture in the top of the tank there that was exposed. They said they saw the young man screaming inside the cab of his truck and trying to get out, and the jury, the defense by GM was that the wreck, this young man's pickup was hit by a drunk driver, then that the drunk driver killed him immediately and that the fire was irrelevant.

MS. WOODRUFF: And the jury chose not to believe that?

MR. GRAHAM: Obviously.

MS. WOODRUFF: Now let's turn to Don Gonyea in Detroit. $101, $105 million, what is that going to mean for GM? They called it devastating, something like that.

MR. GONYEA: Well, they will certainly appeal this award and hope to either eliminate it entirely or whittle it down some. It comes at a time when this company is racking up huge losses still. I mean, they're on the road to recovery, good many analysts say. In fact, they may have kind of stemmed the tide of losses in North America, but, nevertheless, in the next couple of weeks we're expecting them to report their fourth quarter losses totalling around $20 billion. 100 million on top of that sounds like a drop in the bucket, but still this is a company that has to watch its cash flow, and this is a significant amount of money. Now a lot of people say the reason that GM has been fighting efforts to get them to recall these trucks voluntarily is because that alone would have cost them oh anywhere from 1/2 billion to a billion dollars. So they are very concerned about cash flow at this company in Detroit.

MS. WOODRUFF: Don, how long have there been efforts out there to get them to recall? I know that just last fall, what is it, the Center for Auto Safety made a very public appeal on these trucks.

MR. GONYEA: That is to date, that is to date the most concerted effort. There have been calls every time one of these trials has come up, you know, over the past decade or going back even further than that.

MS. WOODRUFF: But just to be clear, Fred, you said there has not been a trial before on this specific design. They were always settled --

MR. GRAHAM: This is the first trial on this issue. What's happened, there have been cases filed, and probably they approached the trial date at time but they always settled. This is the first litigated case.

MS. WOODRUFF: Don, what is -- what's going to be the impact then of the case, not just of the award that this jury granted, but of the case on the company? What are they going to have to do at this point?

MR. GONYEA: Well, I'm sure GM is at this very moment rethinking its strategy. This is no doubt going to bring other people out of the woodwork. There are, as we said, some five million or so of these vehicles still out on the road, and a lot of people have been involved in accidents with them. I've talked to some people who have said that they decided not to pursue a lawsuit against General Motors because they had heard from the National Highway Transportation & Safety Administration that these trucks met the federal standards. So these people said well, if they met the standards, I don't have much of a case. My guess is that people who fall into that category will now be thinking about bringing a case on their own, especially with these 100 million dollar awards being handed out.

MS. WOODRUFF: Well, that is part of GM's argument, is it not, Fred Graham, that the trust did meet federal safety standards?

MR. GRAHAM: Yes, but you know that doesn't dispose of it. It's one of these matters where in Georgia, as in most states, if the jury finds that despite the fact that it met federal standards it was unsafe, then they owe damages.

MS. WOODRUFF: Don Gonyea, you were saying that the company had been resisting a recall because of the cost. What is this? I mean, are thereball park figures available on the cost of something like that?

MR. GONYEA: Ball park figures, but a hundred, two hundred dollars per vehicle to either have a new tank installed somewhere, you know, in the center within the frame rails or to have some other kind of adaptation made to the vehicles. And if, again, if you just do the math, 100 times 5 million is 500 million or 1/2 billion, and it goes up from there if the cost is actually more than that per vehicle. The other key things for General Motors is, as always in the car business I mean public image and the public's perception of your vehicles is key, and if people start to not trust General Motors and start to think, you know, that they did this on their trucks, maybe that Seville or that other car I'm interested in isn't as safe as it might be. That's the kind of thing that can have people hesitate just enough to go buy a Ford or a Chrysler or a foreign made car. And that can cost GM marketshare, which they certainly don't want here.

MS. WOODRUFF: Now that was -- the question that I wanted to ask was: To what extent can GM say this was a particular problem, that down the road if they decide that this was a particular problem with a particular vehicle, and everything else that we do is above board and safe and to be trusted and so for?

MR. GONYEA: They've got a massive PR problem on their hands now. People have seen footage of these trucks exploding. There have been reenactments in some programs that I've seen, and they really do need to work hard to allay fears that people have out there. And this verdict will make their job that much harder I think.

MS. WOODRUFF: Didn't GM's former chairman, Robert Stemple, testify in this case?

MR. GONYEA: He did, indeed. There were, I guess, two former GM employees who testified; one, the engineer Mr. Graham referred to earlier, Mr. Elwell, the safety engineer, and Robert Stemple, who was in court for several days, and he staunchly defended the safety record of these trucks and General Motors in general. He said this company is very concerned with safety and would never compromise the safety of those who would buy and ride in GM vehicles.

MS. WOODRUFF: But, Fred Graham, you were watching the trial and watching the presentations. When GM said today this verdict was decided not on facts but on emotions, do they have a point?

MR. GRAHAM: Well, you never know what motivates the jury and obviously the plaintiff's lawyer attempted to stir all of the emotion that he could in terms of sympathy for the family of this young man who was burned to death and ire against General Motors. But that doesn't make it an effective verdict and legally it's very, very rare that you are going to overturn a judgment based on an allegation of a jury being swayed by emotion. Based on what I saw -- and I saw almost all of this trial as we anchored it on Court TV -- it appeared to me that it was tried very well by two very good lawyers and an extremely capable judge. And I would be very much surprised to see this overturned. I don't see any obvious flaws.

MS. WOODRUFF: Legally, what has to happen to these cases that you have pointed out have been settled until now out of court? Can people then bring those back up again?

MR. GRAHAM: No. And, you know, the irony here is that the estimates are that it cost about $100 million to settle these cases that have been settled already, and there were numerous, numerous of them. Well, you can just divide out if this one brought $105 million and they paid $100 million when they settled all these other states -- cases, they've been settling them, well, the price just went up in a major way as we just heard. And I think that General Motors is going to find it much more difficult to settle these trials. Now that they've had the testimony out in the open about what was done by General Motors, other lawyers have ammunition now.

MS. WOODRUFF: All right. Well, Fred Graham, Don Gonyea, thank you both for being with us. Jim.

MR. LEHRER: Still to come on the NewsHour tonight, the gays in the military debate and rough tough times in Russia. UPDATE - BATTLE LINES

MR. LEHRER: Next tonight the Senate debate over gays in the military and the compromise worked out last week by President Clinton and Senate Armed Services Committee Chairman Sam Nunn. That agreement was to wait six months before issuing an executive order lifting the homosexual ban while the Senate holds hearings on the issue. Here are excerpts from today's debate which centered on amendments to the Family Leave Act.

SEN. TRENT LOTT, [R] Mississippi: After three days of struggling, the Republicans have secured from the Democratic leader an opportunity to have a vote on this issue. But let's make clear what that vote is. If you as a Senator think that homosexuals and lesbians should receive special status in the military then you will lead to vote to table the Dole amendment. If, on the other hand, you think that allowing homosexuals in the military will reduce military readiness and effectiveness, you should vote no on the motion to table the Dole amendment. Make no mistake about it, the vote on the question of whether or not to allow now homosexuals in the military is a vote that you will cast on the Dole amendment. Now it will be on a motion to table but clearly that is where the issue will be decided today.

SEN. SAM NUNN, Chairman, Armed Services Committee: Mr. President, the Mitchell amendment does not change the existing policy at the Defense Department excluding homosexuals from serving in the armed forces. A vote for this amendment is not a vote to permit homosexuals to serve in the armed forces. What the Mitchell amendment does is to endorse the six-month review period of this entire issue which was announced last Friday by President Clinton. What it does do is to say that neither the Congress nor the Executive Branch is going to take any final determinative action on this issue at this time. Instead, both the Congress and the Executive Branch should spend the next six months carefully reviewing the basis for the current policy and the consequences of potential changes in that policy.

SEN. ROBERT SMITH, [R] New Hampshire: Mr. President, simply put, this process is a sham. Although the President has decided to defer final action for six months, it's a foregone conclusion that he will, in fact, overturn the ban. He's said it. Thus, the so- called comprehensive hearings on this issue that Senator Nunn will chair are really nothing more than a formality that will have no impact on the outcome. The President has made up his wind and no wisdom or testimony to the contrary is going to be considered. I, for one, object to it. And judging by the abundance of phone calls, faxes and letters raining in Capitol Hill, a lot of the American people do as well.

SEN. HOWELL HEFLIN, [D] Alabama: Mr. President, I arrived today to address the issue of the military's right to make homosexuality a disqualification to serve in the armed forces. And I think if anyone questions the premise that personnel in the military occupy a different status than the status accorded American non-military citizens, the military is not a democratic institution. The military must operate from an authoritative basis that discipline and command prevail over a large number of individual rights. Many constitutionally protected rights are not available to its members. The military involves a quasi-caste system. An individual's right to freedom of speech, freedom of assembly, freedom of protest, and other fundamental rights are greatly curtailed because of the unique demands of national security.

SEN. JOHN GLENN, [D] Ohio: What you're trying to do is take people down to a common denominator of that person's body and mind and psyche and try and divest that person of all civilian retention of the idea of rights and the freedom of speech and freedom of assembly? Unheard of to give up those rights. In the interest of what? In the interest eventually you hope of winning battles. And I think that's why when we, when the Joint Chiefs have some honest concerns, and I don't know whether I will eventually vote with the Joint Chiefs on this at the end of all this or not, or whether at the end of our hearings where we really investigate all of this the Joint Chiefs may in fact be willing to say, well, okay, maybe time has changed, maybe we have a new day now in the military and maybe we should consider some of these things that we could not consider back a decade or two decades or four decades ago, now maybe is a time when we can consider some of these things, and we have to look into all aspects of this.

SEN. CAROL MOSELEY-BRAUN, [D] Illinois: The simple truth is that this debate is not about military capability at all. It is about irrational fears and prejudices. It is about civil rights and leadership in a democratic society. The issue today, Mr. President, is simple. Do we move forward as a society, recognizing the talent and dignity of all of our citizens, or do we allow our differences to pit one American against the other and take this country down a painful road that we have traveled before?

MS. WOODRUFF: The Senate was expected to vote on the amendment and on the overall Family Leave Bill later tonight. FOCUS - HARD TIMES

MR. LEHRER: Boris Yeltsin is still the president of Russia and he is still the center of the economic and political storms that hound his country's road to democracy and reform. Today, for instance, he took his cabinet to the public woodshed, accusing them of following reckless and contradictory policies. We explore the various storms now, beginning with this report from the city of Ivanovo by special correspondent Simon Marks.

MR. MARKS: In the town of Ivanovo, Vladislav Tikhomirov is still king. Driven around in a limo, the former head of the local Communist Party, is now chairman of the Regional Council. He works from the same office as he did before. And though there have been political changes elsewhere, he's one of Russia's old rulers. He's fighting hard against the new orders from Moscow and expresses contempt for the government's program of reform.

VLADISLAV TIKHOMIROV, Ivanovo Council Chairman: [speaking through interpreter] In my view, reform in our country is stripping people of what little they have. The people are losing out, and it's not just some five or ten percent, but the majority of the people who are losing out because of these changes. So the question arises why we need these twists and turns in reforms if they harm the majority of the population and worsen their lives.

MR. MARKS: Vladislav Tikhomirov is one of a growing number of politicians in Russia's provinces who say President Yeltsin is on the wrong track. Under their rule, towns like Ivanovo remain steeped in the politics of the past. Even Lenin still looks down on the weekly council meeting as people bring their grievances to the attention of the local political boss.

VLADISLAV TIKHOMIROV: People come to me with the most basic questions. The first thing they ask is about work and what will happen to them tomorrow, then what will happen with housing, what about community services? They want to know how they're going to provide them with heating, gas, electricity, questions of everyday importance.

MR. MARKS: The reason for this disquiet can be seen here on the shop floor of one of Ivanovo's 45 textile factories. Textiles are the town's life blood, in the past, processing a limitless supply of cotton sent from the Southern republics of the Soviet empire. Now those republics are independent. Trade relations have changed and they're selling their cotton elsewhere. As a result, one weaving machine in four is switched off in Ivanovo, and production has plummeted to levels not seen since the 1940s. Factory Director Tamara Loiznikova has worked in Russia's textile industry for 40 years. After spending a lifetime trying to attain the Soviet state's production targets, she says it's painful to watch as the factory dies.

TAMARA LOIZNIKOVA, Factory Director: [speaking through interpreter] I feel this pain not only in the factory but also at home. Even at night I think about how to get things moving again. And as I walk through the factory, I see the anxiety in the workers' eyes as they ask: Will we close down, will there be enough work? People want to work.

MR. MARKS: Nikolai Danilov for the first time in his life is worried about keeping his job. Raised in Ivanovo, he went straight from school to the factory. Now his working hours are being shortened, his income is falling, and he fears for his family if he's laid off completely.

NIKOLAI DANILOV, Factory Worker: [speaking through interpreter] What are we going to live on? We have families to bring up and children to feed. They want to eat. They don't understand that there's no cotton. Cotton or no cotton, they still ask for bread.

MR. MARKS: At the other end of the factory floor, his wife, Eda. Neither she nor her husband have been trained for any other work. Though a few factories elsewhere are adapting to turn out new products, the production lines in Ivanovo remained geared to textiles alone. Fresh recruitment has been suspended. For the first time, Ivanovo is turning workers away.

EDA DANILOV, Factory Worker: [speaking through interpreter] I used to go back home and tell the girls to come and work here and have a good time. I'd say the work's hard, but then work is work wherever you are. Now there's no attempt to attract people because we at the factory are already thinking that we ourselves might not be needed tomorrow.

MR. MARKS: So far the factory has been kept alive by cash credits from the government. But now Tamara Loiznikova and her management team have been told the life line from Moscow is being cut. The government says uneconomic factories can't be propped up and mass unemployment will become a fact of Russian life, a concept Tamara Loiznikova finds difficult to comprehend.

TAMARA LOIZNIKOVA: [speaking through interpreter] What is left to us from socialism? Socialism gave us not only bad things but good ones as well. It was socialism that made us care about people. That is why we're trying to keep people at work. Otherwise, where would they go? They're part of us.

MR. MARKS: Closing the factories in Ivanovo means more than creating unemployment. It means cutting people off from the cradle to grave benefits that employment in Russia brings, benefits like a free kindergarten for the children of factory workers, nearby housing in apartment blocks owned by the factory, free medical facilities for all employees. The factory even contributes to the cost of workers' funerals. At the local council, Vladislav Tikhomirov says the government in Moscow doesn't understand the social consequences of its free market policies.

VLADISLAV TIKHOMIROV: [speaking through interpreter] At stake today is the well being and even the very existence of nearly 2/3 of the population of our region, especially the working population and their families, the women and children. The very existence of our region is at stake.

MR. MARKS: More than a year after the collapse of the Soviet Union, there is little visible change on the streets of Ivanovo. The Lenin quotations and Communist murals are still in place. The ideas that gave rise to them have not given way. The political authorities here are focusing their efforts on preserving Ivanovo's existing economic structures, the vast production lines of the Soviet era. There's been little emphasis placed on the development of small, privately owned businesses, and Ivanovo's few entrepreneurs say the town's politicians have done little to encourage capitalism to take root. A local beauty parlor is among the handful of businesses that have been privatized. Though a few Russian towns are moving ahead with reform, beautician Lana Shubert says the authorities in Ivanovo are suspicious of free enterprise. She says they only want to save the factories to preserve their own positions of power.

LANA SHUBERT, Beautician: I've come up against people who will stop at nothing to keep their position. They have power which is important. They have money and all the privileges that go with it, none of which we have. They listen to us, smile and nod, but they're not hearing us. It's like the blind talking to the deaf.

MR. MARKS: Those in charge in Ivanovo reject the notion that they're deaf to the message of reform. They say by moving slowly they're acting in the best interests of the town. The town, they argue, has been betrayed by the government in Moscow.

VLADISLAV TIKHOMIROV: We hear the accusations and criticisms that we're hampering reform in the provinces. I'll tell you then that either the reforms do not answer the aspirations of people in the provinces, or they're being carried out clumsily.

MR. MARKS: Factory managers agree, saying the government is creating problems, not solving them.

TAMARA LOIZNIKOVA: It seems to me that the government doesn't know the state of affairs on the ground. We, the directors, are far from resisting reforms. On the contrary, we're doing all we can to pull the workers out of this abyss.

MR. MARKS: Every Friday, Ivanovo's next generation dances the night away at the Palace of Culture of the textile workers. The local factories provide the venue for the town's disco, but Ivanovo's teenagers have little confidence that they'll provide much work. Seventeen-year-old Ala Familiva is due to join the work force next month. Like many, her dream is to get out of town.

ALA FAMILIVA, Teenager: [speaking through interpreter] We'd like to travel, to go abroad and see the world, but we're stuck here in Ivanovo. Except for the odd trip to Moscow, we don't go anywhere or see anything.

MR. MARKS: Those raising a family in Ivanovo, like the Danilovs, say even ifthey wanted to move, there are few options available. Their skills are of little value in any industry other than textiles, and there are few factories looking for workers anywhere in Russia. The Danilovs say when unemployment comes to Ivanovo, it will come to towns across the country.

NIKOLAI DANILOV: [speaking through interpreter] What will the young people do? Where can they go? There are the same problems in every town. There's nowhere for them to run. It is the same situation everywhere, so why look for something different?

MR. MARKS: The new thinking in Moscow is bringing a growing chorus of disapproval from Russia's provinces. The new government says towns like Ivanovo should learn from those regions that have embraced economic change. The old style local rulers say that's not possible, arguing that for Ivanovo, the social cost of reform is simply too high.

MR. LEHRER: Now some reflections on the overall situation for Russia and its President, Yeltsin. They come from Leon Aron, a Russian-born Yeltsin biographer, who is a resident scholar at the American Enterprise Institute, Peter Reddaway, professor of political science and international affairs at George Washington University, Ellen Mickiewicz, a professor of political science at Emery University, a fellow at the Carter Center in Atlanta who went to Russia with former President Carter last November, and Marshall Goldman, professor of economics at Wellseley College, associate director of the Harvard University Russian Research Center. Mr. Reddaway, the question that report from Russia ended with is, is the social cost of reform too high? What answer do you see to that?

MR. REDDAWAY: What I can say with certainty is that the Russian people are deeply divided on this. They were deeply divided at the beginning of the reform, and they are still divided. What we see is the Russians moving in the last few months increasingly against democracy. The word "democracy," the word "democrat" have become swear words in Moscow.

MR. LEHRER: Because of the situation we just saw in the Simon Marks report?

MR. REDDAWAY: Yes. Because they are linked with the notion of trying to carry out three radical deep revolutions all at once, a revolution in the political system, a revolution in the economic system, a revolution in the society. And the whole society is suffering from a sort of massive overload of change when at least half the society is not sure whether it wants to change at all. And that is giving rise to enormous conflict in politics and government as a whole has become gridlocked. The regions are finding they get no support from the center. The center wants to take from them but it doesn't want to give them anything back. And so the regions in desperation are tending to try to go their own way. Two or three of them have actually declared independence from Moscow, and Moscow has not had the political will to punish them and to bring them back into the country. Many, many regions are passing all sorts of legal acts, laws in complete contradiction of central laws. Again, the center does nothing to punish them. The procurator general listed 16,000 such local laws that have been passed in recent months and the center does nothing about it. So you have legal anarchy.

MR. LEHRER: Do you see anarchy, Mr. Aron?

MR. ARON: Well, I think --

MR. LEHRER: The same kind of anarchy that Mr. Reddaway sees?

MR. ARON: Well, I think Peter and I, we know that -- we disagree on the extent of the political problems associated with the reform, in other words to what extent people do want itor don't want it. I think part of the problem and here I agree with Peter, part of the problem is that there hasn't been a venue for people to actually have a say in the reform, and that is why Russia is gripped not by just the economic crisis, which we've all seen, it's gripped by four crises. It's gripped in addition to the economic crisis by constitutional crisis, by the crisis of legitimacy because all the political institutions are in fact inherited from the regime, including presidency and including parliament. They were all elected under Communists and the federal crisis to which Peter alluded. The solution is not to try and go to Ivanovo or Nizhnivokgo or any other places. the solution is to give people an opportunity to have a say, which is why I think either through referendum or through the constituent assembly or some sort of national actions, Russia will come to some sort of a national consensus. I think --

MR. LEHRER: In other words, your analysis of this is that it's not so much that things aren't going well or whatever, it's the public does not, the people of Russia do not feel they're involved in wherever it's going.

MR. ARON: Well, things are going very rough.

MR. LEHRER: Okay.

MR. ARON: So you can't expect a country that started from such a low -- and people forget that in 1990/91, before they embarked on a reform, inflation was already 100 percent.

MR. LEHRER: Now it's over --

MR. ARON: That's right. Well, the economic crisis has been there since early '80s. But what I think is happening is that Yeltsin has spent most of his popularity on the first year of the reform, most of the legitimacy. That legitimacy has to be removed. People have to have a say as to what political solution or what economic policy they would like for the government to pursue. In the absence of this --

MR. LEHRER: What if they say we don't want any more reform?

MR. ARON: Then, then the reform should stop. But then you get political stability. In the moment they're shadow boxing. Yeltsin is shadow boxing with the parliament. Neither is sure as to what exactly the people of Russia would support.

MR. LEHRER: Dr. Mickiewicz in Atlanta, what's your analysis? What's your diagnosis of the situation that exists right now?

DR. MICKIEWICZ: [Atlanta] Well, I think certainly that people don't have any interest or particular respect for any one named democrat or patriot or communist or anybody who's in the central organs of government because they haven't produced any payoffs. That's why --

MR. LEHRER: So you would agree then with Mr. Reddaway that in some places democracy is a swearword?

DR. MICKIEWICZ: Well, but I don't necessarily think that that's the true definition of democracy. I think the endless talking in, in public sessions, without being able to implement any real policies down at the level of people is being equated with government in general. And that's why I think that if you ask people to participate, I think you hit it, they will probably say, we don't want any of these talkers, right, left or middle, but what we do want are individuals with some kind of specialized pragmatic experience, preferably people we know from our districts and from our regions. And I think that is what has to be rebuilt at a very slow tempo but very solidly.

MR. LEHRER: So you agree with Mr. Aron that stability should be the No. 1 priority now or at least something that works?

DR. MICKIEWICZ: But I don't think at the national level, i.e., I don't think it can be accomplished with a national referendum. The questions that might be ona referendum include people's opinions on whether there should be a bi-camera legislature, a uni- camera legislature, when there should be elections, what the nature of the Executive should be. These are not notions that people are going if they even turn out to agree on and to understand meaningfully. I think one has to start rebuilding rather at the regional level.

MR. LEHRER: Marshall Goldman, do you see chaos the same way that the other three do?

MR. GOLDMAN: Well, I think I see it, but I'm not sure I see it exactly the same way.

MR. LEHRER: All right.

MR. GOLDMAN: I think what you have to do is produce results not so much in trying to decide what kind of government you want at this point. I think what they want to do is see goods being produced. I think they want to be able to see there's a change taking place, and if you're going to close down some of those factories, there has to be the development of brand new factories and brand new shops, private farms that have goods in the shop. Ukraine has done something very interesting just recently. They couldn't fight the issue do you want to set up private farms. That's ideologically a nightmare because some of the hardliners, some of the old Communists still say we can't take our land and make it private. So what they did was very simple. They said everybody has a garden in the rural region, let them simply double the size of the garden. Those gardens all over the country produce almost twenty to twenty-five percent of the food already, and if you double the size, well, then that's an indication that you're going to have more production, more goods, things of that sort. I think you've got to focus on the economy, and that's probably why I'm an economist.

MR. LEHRER: Yeah.

MR. GOLDMAN: But talking about the referenda at this point, what the Russians say is they, indeed, do make fun of the words "democrat" but they say, talk, talk, talk. Yeltsin issues decrees. Yeltsin talks just like Gorbachev talked before him, and nothing gets done, and that's really the dilemma.

MR. LEHRER: So from your point of view at least, it wouldn't really matter what the ideology is, we the people are, what they spout, what they talk, as long as they got something done, is that --

MR. GOLDMAN: I don't want to go that far because you could have, you know, there is growing in that society hardliners, hardliners fascists, proto fascists, a return to communism. I certainly don't want to say the only thing that's important is results. I'd like to see the democratic reforms continue but I'd like to see them continue in a context where you're also coming to grips with some of those powers. The trouble is you know for 70 years they did everything they could to make sure the society would not be converted either to a democracy or a market economy, and I think part of our problem, part of their problem is we want instant gratification. And I think we have to appreciate the fact that this is a long, drawn out process and things, the concept like shock therapy convey the image, whether it'll be painful for a little while, and then everything's going to be okay. I don't think it's going to be okay that quickly.

MR. LEHRER: Mr. Reddaway, what is your reading of, of this situation for Yeltsin, and you say the center, everybody, I think all four of you agree that there's great suspicion even though Yeltsin is so popular in a popular way, there's great suspicion of everybody who is running things now. What's your analysis of what this situation is, and his ability as president of the country to make the changes that would produce results in a good way or a bad way? I mean, is he really in charge right now?

MR. REDDAWAY: I think increasingly he's not really in charge. I think that he's made a lot of mistakes, very important, strategic mistakes, over the last year or so. I think it was a mistake to jump to such a radical economic reform strategy as the so-called "shock therapy."

MR. LEHRER: Why was that a mistake?

MR. REDDAWAY: I think it was a mistake because Russia was not ready culturally and politically and economically for such radical change. There was not the infrastructure, things like insurance systems, banking systems, private entrepreneurship. Those things were not, as it were, there and ready to go. And to develop those you need five, ten years. And those are just not there in Russia. And then Mr. Yeltsin made another important mistake, which is not developing his political base. He decided that it wasn't necessary to have a political party supporting him. He changed his mind about that last December and said he suddenly thought it was a good idea. But what was notable was that nobody rushed forward to say they wanted to form that party because by that time it's too late; he's too unpopular.

MR. LEHRER: Mr. Aron, you're, in fact, writing a political biography of Boris Yeltsin now. Do you agree that in retrospect his shock therapy now -- we also need to keep in mind that most of the people on the outside, outside of Russia, were saying, give him shock therapy. Everybody was encouraging him to get in there and get democratic very quickly. In retrospect, was that a mistake?

MR. ARON: Well, no, I don't think so. I think you have to look at what they had to start with, what the situation was in the second half of 1991, with shops absolutely empty, with the money not worth anything because there was nothing to be gotten with it. The first time with the Gaidar/Yeltsin reform money worked. People started working for money. The inflation had -- and here we are getting into the political arena -- is because the parliament kept injecting more and more billions, first billions, then trillions of rubles into the already inflation prone economy in order to bail out enterprises such as this in Ivanovo, whereby, you know, in Ivanovo, by the way, there are other factories which instead of military uniforms for which Ivanovo worked for 70 years started to produce something more jovial and something more consumer-oriented, and those factories, in fact, are doing very well. So I think that given the situation in which Yeltsin found Russia in the second half of 1991, liberalizing the prices, and that's the only, in fact, thing that Yeltsin managed to do precisely because his political mandate ran out, I think that was extremely important, and it may be that because of that even with some minor deviations from the reform course, I think Russia is going to stay on it, provided that there is a political infrastructure around the reform, that they manage to build something that would contain the social pressures that reform produced.

MR. LEHRER: Dr. Mickiewicz, from your perspective, is this a serious crisis here that we're talking about? I mean, is it possible that this whole thing could disintegrate over the next several weeks or months with Yeltsin or without Yeltsin? What's your -- when you look and look at it from the most dire point of view, what do you see?

DR. MICKIEWICZ: Well, what hits one immediately is the situation of the dependent populations. As you know, there's been an actual decrease in the Russian population due to higher infant mortality and lower birth rates. There is diphtheria. In some other republics there is cholera, anthrax rampant. I think the situation of children and old people is dire, and I think international assistance would be very, very important. There has been no safety net. I think that's very important. And then I think the whole question of how Yeltsin handles the regions, whether he will employ real state craft in terms of taxation, in terms of negotiation, so that he lets them maximize what they can do, because the more production that they produce, the more can be sent to Russia and sent to the center and distributed as needed. So I think the object is not so much to punish regions for what they are doing, but to find reasons to let them do as much as they possibly can. The young people are benefiting, not very young, but young, entrepreneurial types are benefiting very much from this new process. And I think the important thing would be to enable them to enjoy the fruits of and contribute the production to the country as a whole.

MR. LEHRER: Marshall Goldman, how would you classify yourself in terms of being an optimist or a pessimist about how this thing is going to run its course?

MR. GOLDMAN: I'm afraid I'm a pessimist. As somebody said, maybe I've got a tourniquet tied around my heart. I think that the task is so overwhelming, you know, societies don't all collapse and disappear. Something obviously will continue but it's going to be a period of suffering. The enormity of trying to introduce a new set of laws, a new set of institutions when there was a void, when, indeed, it was against the law even to think this way, is just overpowering, and it's a rich country. But as rich as it is, even Ross Perot would have trouble trying to work his way out of this kind of mess. Even Hillary, for that matter, would have that kind of problem. What you've got to do is to get people to work. You've got to get them to work because there's something in it for them. Now the Chinese did seem to do much better -- now maybe the Chinese didn't give as much democracy as we would like - - but they did turn over the land or let at least the peasants take the land and begin producing, and they gave them something in return for that. And they started gradually, and then they also brought in investment, although the investment didn't come from outside until much later. So it is, we know theoretically it's possible to do. And I would say that Yeltsin maybe deserves a better break than we're giving him right now. It's not only that his government did introduce some price flexibility but that he also began the process of privatization. I just wish they had begun that process sooner and not only talk about privatizing the state sector but generate brand new industry, brand new businesses, brand new private farms. That's happening in some areas in the country. In Nizninovgorad, if your reporter had gone there, he might show a very different kind of thing.

MR. LEHRER: Mr. Aron, you're more optimistic than that.

MR. ARON: Well, again, let me reiterate the Russian political system now is too worn out, tattered, too weak and increasingly weaker by day to sustain for much longer the social pressures.

MR. LEHRER: In other words, what we have been reporting, what we have been talking about cannot continue much longer?

MR. ARON: That's right, without some sort of political stabilization, and I think that's stabilization can only come through the government, including the presidency and other institutions going back to the people and, in essence,asking them to vote.

MR. LEHRER: Mr. Reddaway, in a word, do you agree that this cannot go on much longer?

MR. REDDAWAY: I do agree it can't go on much longer. I have great admiration for all the Russians who've taken a lot of initiatives, but I think the pressures towards disintegration are so strong -- we've not mentioned corruption in this discussion -- I'm afraid that's a very serious factor. You have a massive asset stripping process going on, stripping the country of its assets, and all sorts of crooks are gaining from it. The Russian people and the government are gaining very little.

MR. LEHRER: All right. We have to leave it there. Thank you all four very much. RECAP

MS. WOODRUFF: Again the main stories of this Thursday, a jury in Atlanta said General Motors' fuel tank design was to blame for a fatal pickup truck accident. It ordered GM to pay $105 million to the victim's family. The government reported that worker productivity rose 2.7 percent last year and factory orders advanced 3.3 percent. And President Clinton ordered his Secretary of State to the Middle East later this month to get the peace talks back on track. Good night, Jim.

MR. LEHRER: Good night, Judy. We'll see you tomorrow night with Gergen & Shields, among other things. I'm Jim Lehrer. Thank you and good night.