The MacNeil/Lehrer NewsHour

MS. HUNTER-GAULT: Good evening. I'm Charlayne Hunter-Gault.

MS. WOODRUFF: And I'm Judy Woodruff. We are both in New York tonight, and after the News Summary, we begin this special NewsHour with a look at Clintonomics, the Clinton economic plan and whether it can solve the nation's economic woes. Next, we have a Newsmaker interview with South African leader Nelson Mandela, and finally back to the race for the White House and today's resignation of a top adviser in the Perot campaign. NEWS SUMMARY

MS. WOODRUFF: Bill Clinton's long journey from Hope, Arkansas to his rightful place as the standard bearer of his party will be complete tonight. Later this evening, the nearly 5,000 delegates on the floor of Madison Square Garden will give the self described "comeback kid" the opportunity he has long sought to beat George Bush in November and end the 12-year Democratic drought at the White House. When he formally gets the nomination later tonight, the 45-year-old governor will have successfully ended challenges for the top spot by four rivals, endured a firestorm of allegations over his personal life, and engineered a relatively harmonious national convention, often the exception rather than the rule for Democrats. Earlier today, he spoke about why hardships in his own background would help him lead the nation. He made the comments in a joint interview with Robert MacNeil, Jim Lehrer, and Tom Brokaw.

GOV. CLINTON: We need a President who can feel the pain and imagine the promise of America. You don't have to have come from humble roots to do that. John Kennedy and Franklin Roosevelt both had a remarkable ability to identify with ordinary Americans in their struggle, but I don't think it hurts anything to have actually felt some of that pain, yourself.

MS. WOODRUFF: Gov. Clinton also talked about the sacrifices he sees as necessary to ensure a better future for the country. He said upper income Americans over 65 would have to give up some of their current health care benefits and other entitlements so that more money could be invested in the nation's young people. He said he would work to create a sense of generational equity. The full interview will run on a joint convention coverage with NBC which begins at 8 PM Eastern Time on most PBS stations. New York Gov. Mario Cuomo will deliver Clinton's nomination speech which will be followed by the traditional roll call of the states. Cuomo, himself, has been regarded as a possible Presidential contender ever since his rousing address to the 1984 Democratic Convention. He decided not to enter the '92 campaign. And Al Gore today gave California delegates a possible preview of the vice presidential acceptance speech. He renewed his attack on Bush administration environmental policies. He also took the administration to task for its response to the latest reported rise in the number of jobless Americans.

AL GORE: Their top strategist was quoted on the front page of the Washington Post as saying that the meaning of the new economic statistics was we're going to have to run an even meaner campaign. What we want in this country is not more politics. What we want is a change in direction. We want jobs. We want environmental protection. We want a future that we can hand to our children with pride and dignity!

MS. WOODRUFF: Gore will deliver his acceptance speech tomorrow night just ahead of Bill Clinton. One of Ross Perot's top advisers, Ed Rollins, resigned today. Rollins said disagreements over how to run the campaign led him to quit. The longtime Republican strategist had signed on, along with Democrat Hamilton Jordan as co-manager of the Perot campaign in early June. Charlayne.

MS. HUNTER-GAULT: African National Congress President Nelson Mandela met with Bill Clinton this morning. A Clinton spokesman said the candidate wanted to learn more about the political violence that has torn through South Africa's black townships over the last several months. Mandela is in New York to ask an emergency session of the United Nations Security Council for an investigation into the violence that has claimed more than 12,000 lives since 1984. Mandela said he also wants UN peacekeepers to monitor the situation. The ANC has claimed government security forces are behind the unrest. The government today began withdrawing some of those forces from the township. It, in turn, has blamed ANC leaders for fomenting some of the violence with inflammatory speeches. Mandela also said today he would like sanctions reimposed and criticized the Bush administration for lifting them prematurely. We'll hear more from Mandela later in the program. Iraq today demanded the United Nations rescind all resolutions against it. In a letter to the Secretary General, it complained it has complied with all its obligations and called the UN sanctions "an attempt to harm a great people." That prompted a veiled warning this afternoon from the U.S. State Department Spokesman Richard Boucher who said the Iraqi statement put at risk the cease-fire that ended Operation Desert Storm.

MS. WOODRUFF: Supreme Court Justice Clarence Thomas is considering an appeal by a pregnant woman who brought the French abortion pill into the United States. The drug, RU-486, has not been approved for use in this country and was immediately confiscated by U.S. Customs officials. Yesterday, a federal judge ruled that the government had acted for political reasons and must return the pills to the woman. An appeals court blocked that ruling. Justice Thomas can act alone on the matter or he can refer it to the full Supreme Court. It is the first legal battle over the pill which is legal in Britain and France. In Wichita, Kansas, abortion opponents demonstrated peacefully outside an abortion clinic, following yesterday's arrest of 51 people. One year ago in Wichita, more than 2,700 protesters were arrested during six weeks of demonstrations.

MS. HUNTER-GAULT: Pope John Paul II underwent a four-hour operation today. The Vatican reported he was conscious and doing well after having a benign tumor removed from his colon. Doctors also removed his gall bladder after discovering stones. The 72- year-old Pontiff was expected to remain in the hospital for about 10 days.

MS. WOODRUFF: NATO warships will begin patrolling waters off Yugoslavia tomorrow. They have been sent to the Adriatic to enforce the United Nations embargo against Yugoslavia imposed for its role in the fighting in Bosnia. That fighting continued today as citizens of the Bosnian capital negotiated for the United Nations evacuation of Sarajevo's wounded children. Michael Nicholson of Independent Television News reports on the Bosnian capital, Sarajevo.

MR. NICHOLSON: The people pushing hardest for a United Nations evacuation is a handful of volunteers calling themselves "The Children's Embassy," citizens of Sarajevo, Bosnian and Serb, Muslim and Christian.

WOMAN: Planes are coming every day, every day -- and coming with humanitarian help -- and they are going away empty and that's very sad.

MR. NICHOLSON: But the U.N. cannot under its present mandate allowing returning relief flights to carry children out, nor, it says, could it guarantee the children's safety without a cease- fire.

SPOKESMAN: The fact of the matter is cease-fires, I don't think the word exists in the vocabulary in Bosnia-Herzegovina.

MR. NICHOLSON: The road to the airport, the one the children would have to take, is highly dangerous, with people killed and wounded all the time. But, it is argued, with U.N. flags and conspicuous U.N. protection, it could be done. The food convoys into town do it every day. Many agencies, including the International Red Cross, say the children are better off treated in Sarajevo, even though, as we saw today, hospital wards are now overflowing into the corridors. Meanwhile, like six-month-old Kamal, who lost his leg and his mother in a grenade explosion, they wait for somebody somewhere to make a decision.

MS. WOODRUFF: The leader of Bosnia's Serbs proposed a cease-fire at a new round of peace talks in London. The offer was dismissed by Bosnian government officials and there was no let up in a Serb offensive against the Moslem City of Gorazda. The city of 70,000 is the last Moslem stronghold in Eastern Bosnia. The Serbs have vowed to capture it within days.

MS. HUNTER-GAULT: That's it for the News Summary. Still ahead, can Clintonomics work, Nelson Mandela, and the resignation of a key Perot adviser. FOCUS - CLINTONOMICS

MS. HUNTER-GAULT: Tonight at the Democratic convention, Bill Clinton will officially become his party's candidate for president. One of the biggest problems he would face if he's elected is this nation's lagging economy. A lot of people want to know if he's capable of turning it around. Last month Clinton gave American voters a fairly specific idea of how he would try. He released an economic blueprint called "Putting People First," or "Clintonomics" for short. Can his strategy work? We asked a Clinton advisor and two experts after this explanation from our special business correspondent Paul Solman.

MR. SOLMAN: The vision of New York this week, Democrats from all over the country streaming into Madison Square Garden. We however were being led in a some what different direction.

IRA MAGAZINER, Clinton Economic Adviser: Thirty-five years ago I used to travel this as a kid in from Rhode Island every weekend and it takes as long today to travel that route as it did thirty- five years ago. [referring to subway]

MR. SOLMAN: Clinton economic advisor Ira Magaziner was taking us immediately below Madison Square Garden to get across his vision of inferno, an America in decay that Clintonomics is designed to fix by investing fifty billion dollars a year for four years in among other things our infrastructure.

MR. MAGAZINER: Why can Japan, France, Germany, and Scandinavia make the investment and not us? The answer is because they have a long-term vision for the future and they understand that once you make that investment you get thirty, forty, fifty years of a good economy. We lack the vision. We have to get a pay back in a year or two or we're not willing to invest.

MR. SOLMAN: The Clinton economic team sees glimpses of our future in places like Japan which is pulling ahead by government investments in for example transportation technology.

MR. MAGAZINER: The train that carried the Rhode Island delegation to the Democratic convention yesterday was almost an hour late on a three hour trip, and it sat with the electricity out and the air conditioning out for about twenty minutes just outside the station before people finally got out. Tempers were beginning to flare there.

MR. SOLMAN: When we tried to interview people after a long morning commute, tempers began to flare here as well.

ANGRY MAN: Come on. Move it out of here.

MR. SOLMAN: Rather than try to ignore the advice of seasoned New Yorkers, Magaziner quickly took us out of Pen Station for an above ground view of the Clinton plan for infrastructure.

MR. MAGAZINER: Also with highways, we waste about two billion hours a year stuck in traffic congestion in this country, two billion hour. Think of all the gasoline that that uses up, think of all the pollution that spills off into the air, think of what it does to people's waste of time. If we had good mass transit in this country, if we had highway systems that they call intelligent highways where you could feed back to cars who had sensors in the cars, information about where congestion was, you could cut back dramatically, save time, save energy, and save pollution. They're investing in those things in Europe, they are investing in them in Japan, and we're not doing it here, that's what I mean by infrastructure.

MR. SOLMAN: Clintonomics aims to invest in new bridges, no friction trains, smart highways, and communications highways as well. This is North Carolina, where the state's investment in an information highway system of fiber optic cable now connects researchers many miles apart, making them more productive, attracting businesses to the state's golden triangle. Clinton wants to run cable across America to match similar efforts in Europe and Japan. Meanwhile, back in convention city, we've been passed off to another of Clinton's economic advisers, New York investment banker Roger Altman. Here at the Audubon Ball Room at 165th and Broadway where Malcolm X was assassinated is another aspect of Clintonomics, the public private partnership, in this case to build a biotechnology facility here using Columbia University faculty who work right across the street.

ROGER ALTMAN, Clinton Economic Adviser: Historically the federal government has played a leadership role in investment, especially in emerging technologies like this, like biotech. So it's an historical and natural role; we just have not been doing enough of it.

MR. SOLMAN: The model here is that public funds, in this case New York City's, have provided the initial riskiest financing to clean up the building, negotiate with a hostile community, and so on. Private investors at far less risk will then put up the balance to actually move in, set up shop, and resurrect the place.

MR. SOLMAN: And that's part of the Clinton economic vision?

ROGER ALTMAN: Yes, yes, that if the government is prepared to work more closely with the private sector, and for that matter with universities and others that are relevant, that relatively smaller amounts of public money -- not tiny amounts, but smaller amounts -- can draw out or induce multiples of that in terms of investment.

MR. SOLMAN: Investment is supposed to be the cornerstone of Clintonomics, investment in infrastructure, technology, and people. The short-term goal is to create more jobs. Long-term the program relies on education, job training, apprenticeship, ways to develop America's human capital. It's a theme Clinton picked up from another economic adviser, Robert Reich, who emphasizes that in a global economy the only way for a nation to compete, even the U.S., is to develop and invest in what it's got.

ROBERT REICH, Clinton Economic Adviser: Money now sloshes across borders almost at the speed of an electronic impulse. Factories and equipment can be set up anywhere, global corporations are putting the most modern factories all over the world. The only factories or production that are relatively unique to a nation on which the future standard of living of a nation's people uniquely depend on number one the people, their skills, their insights, their education, their capacities to work together, and number two, the infrastructure.

MR. SOLMAN: Clintonomics bills itself as a $200 billion investment strategy in people and infrastructure in order to promote economic growth. And that says the campaign is a break with the Democratic platforms of old.

MR. MAGAZINER: The Clinton plan is different than more traditional programs in that the spending programs are investment programs, investments in education and training, investments in infrastructure, creation which will put people backto work. They are not programs which are simply transferring income from one group to another. Also, the Clinton plan calls for an end to the welfare system. It says to people who are on welfare we will give you two years of training, of child care, of assistance, but after two years, you've got to go to work. That's very different than a traditional Democratic program which simply would have put more money and more money and more money into welfare.

MR. SOLMAN: There are plenty of other particulars in the 22-page summary of Clintonomics; civilian conversion of the defense industry, investment in the environment, trade policy, you name it. And behind virtually every proposal, advisers say there is a more substantial document written by experts in each field, 50 pages on health care alone. But most of us just don't have time for such details even though redesigning an economy, however modestly, has got to be an incredibly detailed job. Even Magaziner, when he tried to boil down the health care proposals for us, was hard pressed to make them short and simple enough for television.

MR. MAGAZINER: Let me just think about this for a second. I've got to find a simple way to --

MR. SOLMAN: We shot the park as Magaziner tried to streamline the program for the general public, to explain the limits on medical spending, insurance, and drug company reform, paperwork reductions. The nuances would have taken at least another NewsHour. So, instead, we took Magaziner to a final New York landmark to pose a somewhat broader question, how to pay for all this, given the federal deficit. This is the debt clock which keeps tabs on how deeply America is in hawk, a mere $4 trillion these days.

MR. SOLMAN: How's the Clinton clan going to address that number the speed at which our national debt is rising?

MR. MAGAZINER: The Clinton plan is going to cut the speed of that rise in half within four years. It's taken 12 years for the Republicans to run the deficit up to 400 billion a year. The Clinton plan is going to cut it down to about 140 billion a year during the course of four years, but you can't eliminate it without doing ruin to the country in such a rapid period of time.

MR. REICH: Where is the money coming from? It's coming from cuts in national defense. It's coming from increasing taxes on the people at the top, the top 2 percent. Remember, these were the people who had their taxes cut by the Reagan and Bush administrations. These are the people who got most of the benefits from the expansion during the 1980s. They're doing very, very well. They should contribute.

MR. SOLMAN: So the campaign claims it will cut the deficit by raising the top income tax to 36 percent, raising corporate taxes, cutting defense, and finally trimming the federal bureaucracy.

MR. MAGAZINER: A hundred thousand jobs in the federal government will be cut over the next four years. The administrative costs will be cut by 3 to 4 percent a year, and a whole series of programs that are unnecessary and wasteful, which he has identified specifically, are going to be cut over the next four years to solve the problem.

MR. SOLMAN: Now, of course, the Clinton program does have its critics right and left. From the right comes the traditional attack, that this is old-fashioned "tax and spend," that the market must be allowed to run free, that government invariably messes things up. From the left, comes an opposite charge, that Clintonomics doesn't go far enough, that it's basically business as usually. But to most observers watching the convention, the economic program should at least seem consistent in its emphasis on investment and it should sound like a break from the Democratic rhetoric of the past.

MS. WOODRUFF: This afternoon in an interview with the NewsHour and NBC News, Clinton himself responded to charges that his plan would also inevitably require higher taxes on middle class Americans.

GOV. CLINTON: The difference between my program and the Republican program, which has not produced growth, is that my program is tied to investment; Increased investment in the private sector, where most of the jobs are created, thank goodness, and increased investment of public funds. One of the little noticed developments of the last twelve years, Tom, is that while we have almost quadrupled the deficit, we've actually reduced our investment in the things that create jobs in America. So I think this investment, a million new jobs a year for four years, will create a lot of growth, much more -- perhaps we've even been modest in our estimate of growth. In addition to that, I think we have to recognize that for the last twelve years taxes have consistently been raised on the middle class and lowered on the very wealthy. And I think what the first thing we've got to do is get ourselves on a level playing field, develop a sense of shared sacrifice and shared burden, and go forward from there. I would be astonished if we didn't make the deficit reduction targets that we're trying to make because I think that an investment strategy will produce growth in America. It always has. It's just that we haven't done it in a long time.

MS. WOODRUFF: For more on Clinton's economic proposals and whether they will work as he says they will, we talk to three Democrats. Economist Robert Shapiro is a Clinton advisor. He is also Vice President of the Progressive Policy Institute, a research group tied to the Moderate Democratic Leadership Council, which Governor Clinton headed for eighteen months until August of last year. David Gordon is an economics professor at the new school for social research in New York City. He was an advisor to Jesse Jackson in the 1988 campaign. And Isabel Sawhill is a senior fellow at the Urban Institute. She joins us from a studio on Capital Hill. Isabel Sawhill, is this plan going to do what Governor Clinton is saying that it's going to do, and is it not going to require higher taxes in the middle class, as Governor Clinton told us today that it would not?

ISABEL SAWHILL, Economist: Judy I give this plan generally very high marks. It's specific. It is not vague and rhetorical as so many plans often are. It does focus on growth which is exactly what is needed right now, and I like the fact that it is fiscally responsible, in the sense that everything that is proposed in the plan is paid for. Now it's true that the plan doesn't do a lot to get the deficit down. It certainly doesn't balance the budget, and I'd like to see a little more deficit reduction, but generally I think it's a good plan.

MS. WOODRUFF: So that's you're only complaint with it, that it doesn't get the deficit down as much as you would have liked. Otherwise you think it will do what Governor Clinton is saying it will do?

MS. SAWHILL: Well, we could all make a variety of small proposals for changing it here or there, and I think you have to realize that at this point in the campaign it really wouldn't be appropriate for Governor Clinton to spell out absolutely everything he's going to do in great detail. He's gone further than certainly any other candidate already, and so I might have some, have some advice for him, in termsof some modest changes, but I think the general thrust is good.

MS. WOODRUFF: But you think it would bring the deficit down 150 billion in the next four years. You accept those figures?

MS. SAWHILL: Well, the deficit is going to come down --

MS. WOODRUFF: Anyway.

MS. SAWHILL: -- regardless of what Clinton might do as president. The projections that are made by the Congressional Budget Office and the other official numbers keepers show the deficit falling over the next four or five years as a result of the recovery of the economy, and some of the obligations that we have from Savings and Loan bail out will end.

MS. WOODRUFF: What I'm asking is is about his projection.

MS. SAWHILL: Well the projection is in a fiscal projection, but I don't think he can take credit for what is going to happen as a result of the natural recovery of the economy. There isn't a lot in the plan, itself, in terms of new action to bring down the deficit.

MS. WOODRUFF: Rob Shapiro, is that correct, not a lot new in there to bring the deficit down?

ROBERT SHAPIRO, Clinton Adviser: Well, it really is a basically new approach to the budget and to the deficit. All new spending, all the new investment spending is paid for with spending cuts. All the revenue decreases, the family tax credit and also the tax credit for business, the R and D tax credit, are paid for by revenue increases. If the last two administrations had paid for all of their increases in spending with spending cuts, and all of their tax cuts with tax increases, we wouldn't have a deficit today.

MS. WOODRUFF: But what about the question about the 150 billion over four years? She -- Isabel Sawhill is saying as you heard, this is going to happen anyway; Governor Clinton can't take credit for it.

MR. SHAPIRO: Well, the fact is that the deficit is a symptom, it's a symptom of two things; of spending and tax policies, which have been out of balance, and we're addressing that with this balanced approach, and it's also a symptom of slow economic growth, the substandard performance of the economy, not only for the last four years, but really for the last twenty years, although most seriously in the last four years. So the center -- the center of Governor Clinton's economic program is not to address the symptom, which is the deficit, but the disease, which is slow growth, by investing in the elements that make the economy grow, that make firms more productive, and make individuals more productive.

MS. WOODRUFF: So you're saying the deficit is not -- reducing the deficit is not a centerpiece of this plan?

MR. SHAPIRO: What is -- what is a centerpiece of this plan is economic growth and fiscal discipline.

MS. WOODRUFF: And those are harder things for the public to get a to get a handle on, would you not agree, than just saying well, we're going to bring the deficit to here within a certain period of time, and taxes, of course?

MR. SHAPIRO: That -- well that may be, but I think what the public really cares about, what families and workers care about, and what firms care about is how fast the economy grows, how healthy economic life in this country is, and what they want is an administration with a plan to make economic growth and productivity more healthy.

MS. WOODRUFF: I want to ask you about that in a moment, but David Gordon is the thrust of this plan on the right track? Are they moving in the right direction?

DAVID GORDON, Economist: I -- I want to give it about a B-, maybe a B. There are certain things about it that I welcome. One thing is that unlike the last two Democratic presidential candidates, this program and Bill Clinton takes the economic problems very seriously, and says that people are being hurt, and the slogan put people first is very welcome to me. I also welcome the very strong initiative to try to return the government to an active role in the economy, and I welcome the proposals on infrastructure, but I really have two very serious concerns about the program. And -- and in that respect, no it doesn't go far enough. One is that I think the strong emphasis on the beleaguered middle class can be very misleading and is probably misguided. It may be informed about politics, and if so, one should be clear about that. But the implication, not the unexplicit statement, but the implication in much of the program is that it's the middle class that has been hurt worst over the last twelve years of Reaganomics. It's just not the truth. Take any indicator you want to look at. The further down in the income distribution you go, the harder hit people have been. The middle class has not fared well, but working people and poor people below the middle class have suffered much worse, and in his rhetoric at least, but as I want to suggest in a second, also his program, the Clinton program, Clintonomics doesn't do much to address the problems of those people who have been hurt worst.

MS. WOODRUFF: And as I understand it, you believe there ought to be more job creation in his plan, that there ought to be more to strengthen unions, labor unions, increase the minimum wage?

MR. GORDON: The second main concern I have is that the program really doesn't address one of the most important, one of the central problems, failures of the U.S. economy. It does address government in action. But what it doesn't talk about is the reckless inefficient, almost rapacious way that the private sector operates in this economy. Private sectors are top heavy, inefficient, and wasteful, laden with bureaucracy. They pay their workers nothing and they try to get economic performance out of the workers by whipping them with a stick. And we've got to address those problems. There are ways we can address those problems. And the Clinton program, though it talks about the problem of jobs and it talks about the problem of low wages, does not propose proposals that will really address those.

MS. WOODRUFF: Rob Shapiro, doesn't he have a point?

MR. SHAPIRO: No, I really think we have a real disagreement here. Our view is that the best way to help poor people and working poor people is to give them the means to become more productive in the same way that middle class Americans need the means to become more productive and that's continuing training as a right. That's access to college education if you are willing to pay the country back with community service as a right. That's apprenticeship tracks for the half of all young people who don't go on to college as a right. That's fundamental reform of the welfare system to provide education and training.

MS. WOODRUFF: But what about his point that the plan overly emphasizes the extent to which the middle class has been hurt? His point is that it's the lower income groups in our country who have been hurt the worst in the last 12 years.

MR. SHAPIRO: We really believe that the problem with the U.S. economy is really very systemic, that if you look over the last 20 years, if you track the basic measures of the economy, how fast it grows, how much we invest, how much productivity increases, all of these capacities have ratcheted down and are hurting middle class people and poor people. It's the same phenomenon. The economy has been performing in a substandard way. It cannot help poor people without helping middle class people by giving them all the means to be more productive.

MS. WOODRUFF: Isabel Sawhill, are those kinds of solutions that David Gordon is talking about realistic in this political climate?

MS. SAWHILL: Well, I have to agree with Rob Shapiro that the overall problem here is that we've had a very slow rate of economic growth and if we don't have a big enough pie, then redividing it is not going to help a whole lot. I think we really do need to focus on the growth issue. Let me give you my favorite factoid, if you will, about this, and that is that if we had had as fast a rate of productivity growth in this country in the '70s and '80s as we had in the '50s and '60s, every family in America -- this includes poor families, rich families, and middle class families -- would have had about 40 percent more income than they do now. That's on the order of twelve or fifteen thousand dollars at middle income level. That's a lot of money. And that's the problem that we need to focus on.

MS. WOODRUFF: I understand that, but Rob Shapiro, I want to bring up the points that I've read, a number of economists, granted, don't come from where you're coming from philosophically on this, but their point is, and I'm referring both to Bob Samuelson, who writes for Newsweek and the Washington Post, and Martin Feldstein, who was a former chairman of the Council of Economic Advisers, their point is that they question whether the growth in investment that Gov. Clinton is talking about is going to produce the growth, whether spending a few more dollars in Head Start or strengthening primary schools or various other things, environmental improvements, are going to bring the kind of results you're looking for within a short period of time. They're talking -- they're saying it takes decades to get these results.

MR. SHAPIRO: Not in other countries, and it won't take decades here. Economic common sense and economic logic tell us that the only way to raise the trend growth rate of the economy is to invest in the things that make the economy grow faster, the things that make people and firms more productive, education and training, the infrastructure that binds the markets together, research and development, and while I respect certainly Marty Feldstein and Bob Samuelson, six Novel Laureates have endorsed the plan because they do see this as really carrying out the basic theory of how to get an economy to grow faster.

MS. WOODRUFF: David Gordon, what about that point?

MR. GORDON: Well, I agree with Isabel Sawhill that the central issue and in many ways with the Clinton program, the central issue is productivity growth. But there are two ways -- if we compare the U.S. economy over the last 20 years with, again, Europe and Japan, there are two ways of getting corporations and workers to improve their own contributions to productivity growth. Yes, we need investment, and yes, we need skills training, but we also need effective corporate management and we need workers who have a commitment to improve their own productivity. The United States compared to Europe and Japan has used a club to beat its workers to get productivity out of it, my factoid for the moment. You compare the U.S. with Germany and Japan, 12 percent of employment in the United States is administrative and managerial employment; Germany and Japan, 1/3 that. We have top heavy bureaucracies, workers with no protection, and that's not an effective way to promote productivity growth.

MS. WOODRUFF: Just quickly, Rob Shapiro, is that -- why doesn't the plan address that? We've got less than a minute.

MR. SHAPIRO: Well, I think the plan does address that, in fact, and the governor has spoken consistently about making work organizations, as well as the government, more flexible about eliminating ineffective middle management ranks and involving workers in a much more flexible workplace, but in order to do that, you have to provide ongoing training for workers and flexibility for companies.

MS. WOODRUFF: And it won't mean higher taxes for the middle class.

MR. SHAPIRO: No, it will not.

MR. GORDON: I just wish that if the governor had been saying that, it would go into the plan as well.

MS. WOODRUFF: All right, David Gordon, Rob Shapiro, and Isabel Sawhill in Washington, thank you all. Charlayne.

MS. HUNTER-GAULT: Still to come, Nelson Mandela and a political problem for Ross Perot. NEWSMAKER

MS. HUNTER-GAULT: Next tonight, a Newsmaker interview with African National Congress Leader Nelson Mandela. As we reported earlier, he is here as part of an Organization of African Unity Delegation asking the United Nations Security Council to look into the violence that has claimed lives and stalled talks aimed at achieving a multiracial democracy in South Africa. He spoke late this afternoon at the United Nations.

MR. MANDELA: It is more than clear to us that this violence is both organized and orchestrated. It is specially directed at the democratic movement, whose activists, members and supporters make up the overwhelming majority of its victims. It configures a cold- blooded strategy of state's terrorism intended to create the conditions under which the forces responsible for the introduction and entrenchment of the system of apartheid would have the possibility of imposing their will on a weakened democratic movement at the negotiations table.

MS. HUNTER-GAULT: Earlier today, I spoke with Mandela and asked him if he wanted the United Nations to help restart the peace talk as well as investigate the violence.

MR. MANDELA: The special representative will be concerned explicitly with the question of violence. The report by the special representative must be made to the Secretary General of the shortest possible time and because we expect the Security Council on the basis of our report by the special representative to send a powerful monitoring mission to South Africa which will be able to remain South Africa for up to six months to do a first class job.

MS. HUNTER-GAULT: To monitor what?

MR. MANDELA: To monitor violence. When the regime is carrying out its task of maintaining law and order and saving lives, that is the most critical situation facing the country today, to prevent innocent people from being slaughtered by faceless individuals as a form of gaining political advantage by the regime and its surrogates.

MS. HUNTER-GAULT: What does that give you? What kind of time does that allow you? What could happen in that interim?

MR. MANDELA: Well, as far as the question of violence, we would like to put an end to violence, and the reason I would like the mission, itself, which is now monitoring violence to remain there is because violence as assumed an alarmingly larger dimension and we think that the -- that violence can only be stamped out by a - - with assistance of a monitoring group which will have the sufficient time to address the question and to recommend measures which will be effective in putting an end to that violence. If they are able to do it in a shorter time, welland good.

MS. HUNTER-GAULT: If that group hits the ground, would that be enough for you to, and the ANC to restart the constitutional talks that you've broken off with the government?

MR. MANDELA: Definitely not because the two are separate. It is true that the current violence also affected the climate for negotiation, but ever since the two are totally different. Unless the regime is prepared to address the demands that were made on constitutional negotiations, we'll not return.

MS. HUNTER-GAULT: Yesterday, President DeKlerk announced that he was dismantling the police unit that the ANC has accused of fomenting violence such as we saw in Boypatong with all of the deaths that occurred from it. How far does that go towards meeting your demands?

MR. MANDELA: I regard that as a raw maneuver intended to mislead the Security Council.

MS. HUNTER-GAULT: Done simply for the face of it?

MR. MANDELA: Well, firstly, we must be struck by the timing of this move. It is made a day before the Security Council discusses the question of violence, so it's a smoke screen by DeKlerk to try and create a favorable impression to the international community that he is taking action on the question of violence, at the same time not offending the sinister forces which are fueling this violence. What we have demanded is that not only must this element, these hit squads be disbanded, they must be sent out of the country. What he has done, according to him, is that he has disbanded them and integrated them to the -- in the security forces, the promise of the army -- why must they do that? Because in our view, that is just a cover. They are going to continue the same activities. Why must we keep in our security forces elements which have got a notorious record insofar as the violence is concerned?

MS. HUNTER-GAULT: President DeKlerk has accused elements within the ANC of also trying to disrupt the talks. Is there any truth to that?

MR. MANDELA: He must -- if he thinks that elements in the ANC are responsible for violence, he must arrest them. If he says that there are elements in the ANC that want to sabotage the talks, we would like him to give us evidence.

MS. HUNTER-GAULT: So you reject that?

MR. MANDELA: We are -- of course, we reject his accusation. We have said so in our reply to him.

MS. HUNTER-GAULT: Excuse me. Let me just switch to the United States for a moment. You met this morning with Bill Clinton. What was your impression of him?

MR. MANDELA: I was tremendously impressed by him and his commitment towards democratic values. I came out with the impression that he has got the ability to lead the Democratic Party.

MS. HUNTER-GAULT: Is that an endorsement?

MR. MANDELA: Well, the Democratic Party has supported the struggle against repression in South Africa over years and I was happy to meet him and to be assured that that support would be continued.

MS. HUNTER-GAULT: Did you ask Mr. Clinton for anything either now, during the campaign, or should he become the President?

MR. MANDELA: No. What I have said to Mr. Clinton is that we would like sanctions to be reimposed. We of course appreciate the difficulties of reimposing sanctions, but if that is within his power and that is possible, we would like them to be reimposed.

MS. HUNTER-GAULT: Is this a request you're also making of the Bush administration? Because there are some who have interpreted your meeting with Gov. Clinton and possibly speaking at the convention as a slap at Bush for not being tougher on the DeKlerk government.

MR. MANDELA: No. We, ourselves, are trying to refrain from doing anything which might be regarded as interference in the internal affairs of the United States of America. The difference between ourselves and the Bush administration on the question of sanctions has not affected our relations. Our relations are still very close. When they made the move for an emergency session of the Security Council, I phoned President Bush and I must say that he was very forthcoming and I believe that he has done his best to ensure that the meeting of the Security Council does take place. Our relations are very close and as far as we are concerned at the ANC, we wanted to improve the relations and will refrain from doing anything that might jeopardize that. That is our position.

MS. HUNTER-GAULT: Well, Mr. Mandela, thank you.

MR. MANDELA: Well, you're welcome, Charlayne. Thank you.

MS. HUNTER-GAULT: South African foreign minister Pik Botha is expected to present the government's case at the United Nations tomorrow. FOCUS - '92 - CAMPAIGN

MS. WOODRUFF: The political storm that rocked Ross Perot's unannounced campaign for the White House today's resignation of co Campaign Manager Ed Rollins. Rollins is a top Republican Strategist who joined the Perot effort with great fan fare earlier this spring. Rollins explained his resignation at a press conference this afternoon in Dallas. He told reporters: "Mr. Perot and I see two different ways of getting to the Presidency." We look at the political implication of the Rollins resignation with our regular political analyst David Gergen of US News and World Report. He is joined by Larry Barrett of Time Magazine and from our sky box overlooking the Democratic National Convention at Madison Square Garden Carl Leubsdorf of the Dallas Morning News. David what is behind all of this?

MR. GERGEN: Well I just had an opportunity to talk with Mr. Perot a few minutes ago before we came on the air and there are some irreconcilable difference both in approach and general tactics for the campaign. He said look I really wanted to run and have always wanted to run a bottoms up campaign. One up from the people. Ed represents from his way of thinking a more convention campaign top down. And it made some big differences. Now he didn't say this but others have told me that Ed Rollins and Ham Jordan and others have been terribly worried that he has been sinking in the polls and they think that he is losing momentum. He has been losing momentum for the last few weeks. They feel it could be irreversible unless he gets into the race, announces, gets some advertising on the air and gets his economic program out. They have gone through a series of dates when they thought he was going to announce. Each one of those dates has been scrubbed and they feel that we need to get moving. He feels wait a minute we have something else going on here and I don't want to play that game. He doesn't want to play by their time table and I think frankly as one of this people told me he doesn't like to be handled. He is politically an innocent in many ways and he needs handlers and he needs the advise of some one like Ed Rollins but he doesn't like it. He is not accustomed to it and he rejects it in many ways.

MS. WOODRUFF: But Larry Barrett surely they discussed going into this whole arrangement the fact that it was a volunteer bottoms up organization as David just referred to it and they were talking to somebody who is used to running a campaign from the top down. Surely that was discussed.

MR. BARRETT: Every campaign organizations goes through phases and moving from one to phase to another is always awkward. I think we have just seen the all time awkward championship being acted out here. Mr. Perot is extremely idiosyncratic. He wants to do things his way. You can't run for President your way. It is not like building a new company or competing against IBM for a new contract. You have to bend. In fact, you have to bend to be President unless you are going to break. I think this particular development even though most citizens throughout the country don't care who is your campaign manager but I think this is a serious development because look at the things that Mr. Perot does not have. He does not have a running mate. One his rivals does, both of his rivals do as of tomorrow. He does not have his program out there and now he doesn't have half of his management team. He doesn't have his commercials written, he doesn't have an announcement date. I think the electorate can tolerate only so much unorthodoxy. So it does look for the moment at least that the wheels have come off his vehicle but they can be put back on.

MS. WOODRUFF: Carl Leubsdorf in and of it self how much does it really matter that campaign managers come and go you can say? Does it really matter?

MR. LEUBSDORF: No that isn't what matters. I think what matters is and I am sure the point that Ed Rollins made very strongly within the organization was that they had only limited time to put together a coherent operations and take advantage of this great boom in public opinion that Mr. Perot without doing very much except appearing on television. And I think there is a feeling that he may be had squandered the last month. He came into the primaries with a lot of voters saying they favored him over Bill Clinton, over George Bush and instead of sort of building and then he had the announcement of Mr. Jordan and Mr. Rollins which gave him a boost and then nothing. And I know that Ed Rollins felt they ought to take advantage of that time to get on the air with the media. You will remember they had engaged Hal Reiny, a top media man, who worked in the Reagan Campaign. He did some work for them and then he was dismissed. And it was obvious that Rollins wanted to go at a faster speed than Mr. Perot did fearful that unless they established Perot in more viable solid way before the two national conventions he would be in big trouble. And you see what is happening now in the polling.

MS. WOODRUFF: You mean that he is dropping?

MR. LEUBSDORF: He is dropping and what is happening according to Peter Hart the Democratic Pollster who was at a breakfast I was at this morning is that so called Perot Democrats. The People who were leaning to Perot who basically were Democrats are beginning to go back to the Democratic party and that is what he is losing.

MS. WOODRUFF: Let me turn to David Gergen here. But again David surely this was discussed ahead of time? I mean, what is it that Ed Rollins didn't realize was going to happen? What was it that Ross Perot didn't realize about this whole campaign?

MR. GERGEN: You may recall when Ed Rollins and Ham Jordan announced. Ed said that he only had about five hours of conversation really did not know the man. I frankly think they did not have their signals as straight as they might be on how this would unfold. I think that Ed felt that he was walking in to a situation in which he and Ham Jordan could really run the campaign. What he found as others have found who worked with mr. Perot is that Mr. Perot runs his own effort. He does not like that and I think that they did not have their signals straight. I frankly think that this is a terrible blow to the Perot Campaign. I think that it could possibly be a fatal blow. They say tonight Mr. Perot says, Tom Luce says he is still running but I would say two weeks from now we should come back and take a look at that question. I am not as convinced tonight as I was three or four weeks ago that he is going to run.

MR. LEUBSDORF: Judy one of the rules of Presidential politics is that it is harder than any one ever thinks it is. We've seen Senators and Governors over the years who have gone into Presidential races and have discovered as Bob Kerrey did this year, John Glenn another year, Howard Baker, how hard it is, so it's hardly surprising that Ross Perot, a man who's never been involved in electoral politics, would find it very difficult, and I think that's one of the things that's happened.

MR. BARRETT: The falloff in the top line of his poll figures isn't surprising or necessarily terminal. You see waves in these poll figures. Four years ago at this time, Dukakis was 17 points ahead of George Bush.

MS. WOODRUFF: There's a poll out tonight that shows -- ABC- Washington Post -- that shows --

MR. BARRETT: Shows Clinton well ahead.

MS. WOODRUFF: -- Clinton well ahead of Bush.

MR. BARRETT: The polls taken this week mean very little. But if we look into the fine print, you discover over a series of polls that up until mid June when you asked voters how much they knew about Perot, his stands and his personality, each month that figure was going up. But between June and July, it went stagnant. In other words, he wasted that month -- he didn't tell the voters anything more about himself other than repeating his earlier sound bites. And I think that's very important. A campaign has to evolve in phases. He didn't build on his own opportunity.

MS. WOODRUFF: But of course during that period he was also hit with all these stories about investigations and research done on people who would --

MR. BARRETT: He allowed those stories to be the Perot story because he didn't add any innovation, he didn't add any next step about what he would do about this or that, or who his running mate might be.

MR. GERGEN: Judy, I think Carl Leubsdorf put his finger on the right point and that is it's extraordinarily difficult for someone who's never been in politics before, particularly someone out of business, to make this leap. The last time someone tried to do this, of course, it was George Romney. He had been head of American Motors out in Detroit, was elected with a citizens movement to become governor of the state. He was running for President early in 1968; he was ahead in all the polls. And then he went to Vietnam and he came back and he told one television reporter in Detroit, "I was brainwashed in Vietnam," and his campaign effectively ended. I think that the series of stories that you just talked about is very important to the psychology of this campaign, and that is I think they were a real shock to Mr. Perot. I think he felt, you know, wait a minute, I want to talk about issues, I want to talk about the country, what is all this stuff, a lot of this stuff I've never heard of, and I think --

MS. WOODRUFF: You can see that in some of his interviews with the press --

MR. GERGEN: That's right.

MS. WOODRUFF: -- when he was uncomfortable --

MR. GERGEN: Someone who knows him well told me, you know, he was really hurt by all that. He felt, you know, this isn't, this isn't what I thought this was all about. I'll tell you this. He doesn't - - I assume he still will run, but if he doesn't, there are going to be a lot of disillusioned people out there who felt we should be able to have a third person in this race.

MR. BARRETT: He never trumped those negative stories with his own initiatives.

MR. GERGEN: I agree with that.

MS. WOODRUFF: Carl Leubsdorf, if the Perot candidacy is on shaky ground, is that good news for Bill Clinton, or for George Bush, or is it too early to tell?

MR. LEUBSDORF: It's a little too early to tell. You hear a lot of talk among Democrats here that they hope that the Perot campaign does not, as they put it, crater too soon, because they see, especially in Southern states, that he is making Clinton competitive with Bush in states where the Democrats have not been competitive since Jimmy Carter ran.

MS. WOODRUFF: Why is that, because he's splitting the white vote --

MR. LEUBSDORF: That's right.

MS. WOODRUFF: -- with George Bush, with President Bush?

MR. LEUBSDORF: That's right. He's getting more white votes than black votes. You know, he's a rich Southern businessman with a military background and that's naturally going to appeal more to white Southerners than to black Southerners.

MS. WOODRUFF: David, would you agree with that, with that assessment?

MR. GERGEN: Yeah. The Clinton people three weeks ago told me that they assumed that in the end that Ross Perot would get about 12 to 15 percent of the electorate, he would be a candidate with 12 to 15 percent, and based on that, they would win the election. If he's out of the race, a lot of that 12 to 15 percent may go to Bush.

MS. WOODRUFF: So you agree it's bad news for Clinton?

MR. BARRETT: Exactly the number they have in mind. The Clinton people want Perot between 10 and 15 percent and they figure at that level he's taking mostly from Bush. In fact, one of your guests on an earlier segment warned Clinton's advisers as he left the set, murmured, "I hope Perot doesn't pull out." And he was being very sincere. He was --

MS. WOODRUFF: That would be Bob Shapiro. We'll go ahead and name him to answer this --

MR. BARRETT: They're saying this left and right. I don't think there's any secret, because that's what the numbers told them, that when you get to Perot's base of somewhere between 12 and 15 percent, I mean, his hard core people are mostly defecting Bush voters. The top of his hunk until now has been a mix of potential Clinton voters or potential Bush voters.

MS. WOODRUFF: The less committed voters, in other words?

MR. BARRETT: That's right.

MS. WOODRUFF: But just quickly again, David, the next two weeks, important for his candidacy?

MR. GERGEN: I think absolutely critical. The psychology of whether he really wants to do this, I think he's going to hear from his volunteers that they really want him in the race. The volunteers have been telling me they didn't want the handlers, they thought the campaign was running great before he hired the professionals; they would rather have a very unorthodox campaign. But it's hard to regain momentum after this.

MS. WOODRUFF: Carl Leubsdorf, David Gergen, and Larry Barrett, thank you all for being with us. RECAP

MS. HUNTER-GAULT: Again, the main story of this Wednesday is the race for President. At Madison Square Garden this evening, Bill Clinton will officially become his party's choice to unseat George Bush in November. The 45-year-old Arkansas governor will get the nod from the nearly 5,000 delegates gathered at the Democratic Convention here in New York. Good night, Judy.

MS. WOODRUFF: Good night, Charlayne. That's our NewsHour for tonight. We'll be back tomorrow night with anotherspecial edition and Robert MacNeil and Jim Lehrer will be here shortly to anchor our special joint PBS/NBC coverage of the convention, beginning at 8 PM Eastern Time on your local public television station. It will include the Bill Clinton interview in its entirety. I'm Judy Woodruff. Thank you and good night.