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<v News Reporter>Tonight's guest commentary features Hobart Rowen, economic columnist for The Washington <v News Reporter>Post. He says there are good reasons to withdraw the favorable trade treatment China <v News Reporter>now receives from this country. <v Hobart Rowen>President Bush will be making a mistake if he renews China's most favored nation <v Hobart Rowen>trade status before China releases the hundreds of prisoners it took after <v Hobart Rowen>the Army's bloody crackdown last year in Tiananmen Square. <v Hobart Rowen>China in 1989 sold us 12 billion dollars worth of textiles, shoes, <v Hobart Rowen>toys, simple appliances and other manufactured goods. <v Hobart Rowen>They imported from us about six billion, mostly aircraft, fire products and fertilizers. <v Hobart Rowen>So they enjoy a 6 billion dollar surplus and are heavily dependent on what they buy <v Hobart Rowen>here, especially Boeing airplanes. <v Hobart Rowen>American businessmen are naturally anxious not to upset the apple cart. <v Hobart Rowen>China is a huge potential market, and its political leaders are already unhappy <v Hobart Rowen>with American sanctions imposed after Tiananmen, including suspension <v Hobart Rowen>of military sales, a freeze on liberalization of high tech exports <v Hobart Rowen>and a suspension of World Bank loans.
<v Hobart Rowen>A loss of MFM status would be the most significant of any of these sanctions. <v Hobart Rowen>Bush reportedly leans toward those of his advisers who believe that extension <v Hobart Rowen>of the MFM privilege, if conditioned to more human rights progress over the next <v Hobart Rowen>year, will encourage his softer approach by Beijing. <v Hobart Rowen>Others in and out of the Bush administration think that granting the MFM an extension <v Hobart Rowen>will demonstrate to the hard liners that they need change, making it more difficult <v Hobart Rowen>for reformers to come to power. <v Hobart Rowen>The way I see it, the Chinese leadership already has had a years since Tiananmen <v Hobart Rowen>to move toward a system of more open political rights, but hasn't done so. <v Hobart Rowen>Reliable reports indicate that hundreds of students and other activists are still <v Hobart Rowen>behind bars and have been tortured. <v Hobart Rowen>This country should not come down on the side of a government that condones <v Hobart Rowen>beatings and torture of dissidents. <v Hobart Rowen>Bush should not worry about American corporate profits in this case, but tell Beijing <v Hobart Rowen>it has 90 days to declare an amnesty for political prisoners or
<v Hobart Rowen>lose MFM privileges. <v Hobart Rowen>Either this country believes in human rights or it doesn't. <v Hobart Rowen>This is Hobart Rowen. <v News Reporter>In tonight's Money Files segment, Eric Shurenberg, senior writer for Money magazine, says <v News Reporter>the SNL bailout will pinch your pocketbook and, perhaps in a more subtle way than <v News Reporter>you might imagine. <v Eric Shurenberg>By now, you probably know that it'll cost taxpayers as much as 500 billion dollars to <v Eric Shurenberg>clean up the savings and loan mess. <v Eric Shurenberg>How will it affect your personal financial affairs? <v Eric Shurenberg>Well, strange as it may sound, the effect will be rather subtle. <v Eric Shurenberg>Let's start with taxes. Many reports have pointed out that the 500 billion dollar clean <v Eric Shurenberg>up works out to about 5,000 dollars per taxpaying household. <v Eric Shurenberg>Now, that sounds anything but subtle, but that sum is spread over 30 years and not <v Eric Shurenberg>all of it will come out of your tax bill. <v Eric Shurenberg>Most of it will be raised by new federal borrowing. <v Eric Shurenberg>The interest on which will come to roughly 10 billion a year. <v Eric Shurenberg>That averages only about a hundred dollars per family per year. <v Eric Shurenberg>And not all of that will come out of your pocket either.
<v Eric Shurenberg>Some will come out of corporate taxes and some may not come out of taxes at all, at least <v Eric Shurenberg>not right away. Congress may just tack it on to the budget deficit. <v Eric Shurenberg>You may have heard that it will be tougher for you to get a loan. <v Eric Shurenberg>Well, that's not necessarily true either. Even though hundreds of thrifts will close, <v Eric Shurenberg>there's still plenty of lenders eager to do business with consumers. <v Eric Shurenberg>But you may have to pay slightly higher interest rates and you would have otherwise <v Eric Shurenberg>because all the government borrowing will drive up rates in general. <v Eric Shurenberg>Likewise, you shouldn't worry that the SNL bailout will devalue your home. <v Eric Shurenberg>It is true the government does have to sell some 30000 residential properties taken over <v Eric Shurenberg>from failed thrifts. But most of these properties had already been for sale before the <v Eric Shurenberg>feds moved in, first by their owners and then by the thrifts that foreclosed on them. <v Eric Shurenberg>If your local housing market goes soft, it's not because the feds are dumping houses. <v Eric Shurenberg>It's because the area is overbuilt. <v Eric Shurenberg>Now, the point is not that we're somehow getting off scot free from the SNL fiasco, but <v Eric Shurenberg>rather that the steepest costs are those we'll never see. <v Eric Shurenberg>How do you calculate the cost of desperately needed investments in education that won't <v Eric Shurenberg>be made because the bailout preempted the money?
<v Eric Shurenberg>Who knows how fast the economy would have grown had interest rates not been inflated by <v Eric Shurenberg>bailout borrowing? <v Eric Shurenberg>We may not be able to read the SNL crisis in our family's bottom lines, but we'll pay <v Eric Shurenberg>for it. all right. I'm Eric Shurenberg. <v News Reporter>As we have been telling you nightly, the Persian Gulf crisis has been sending <v News Reporter>international markets on a roller coaster ride for the past several weeks. <v News Reporter>Well, in tonight's commentary, Adam Smith, author and host of Adam Smith's <v News Reporter>Money World, looks at what that could mean for the economy. <v Adam Smith>Investment professionals are used to asking questions and running scenarios. <v Adam Smith>Where does the market go if the Fed eases? <v Adam Smith>What happens to interest rates if a recession last more than two quarters? <v Adam Smith>Well, I just spent the afternoon at such a scenario session and the scenarios are wilder <v Adam Smith>than any I remember, because now they're not just financial, they're political. <v Adam Smith>For example, what happens in the Middle East scenario when Saddam goes back to <v Adam Smith>Iraq and that scenario all comes back down as OPEC pumps more, the market sees <v Adam Smith>its lows this fall. But Saddam still has his poison gas and his army that
<v Adam Smith>hangs over the market scenario, not likely. <v Adam Smith>Scenario two: a shoot out. <v Adam Smith>One of our members said you can't have that much build up and momentum without something <v Adam Smith>breaking the tension. I don't necessarily agree, but the shoot out scenario <v Adam Smith>is very volatile. Oil could go from 40 dollars to a whole uh 61 <v Adam Smith>dollars in a shoot out. The big Saudi shipping terminal is only 10 minutes flying <v Adam Smith>time from Iraqi held airfields, and that is seven million barrels a day. <v Adam Smith>That shoot out scenario would have oil spiking. <v Adam Smith>The markets would drop like a stone. The world would shutter, but oil would drop again in <v Adam Smith>six or eight months. Why? Because at sixty one dollars, demand would plummet. <v Adam Smith>Other fuels would appear. <v Adam Smith>Scenario three, Saddam disappears. <v Adam Smith>He's voted out of office. The embargo works. <v Adam Smith>Bullish. Then you're back to the effects of the whole Saddam event. <v Adam Smith>Cost of the build up, the loss of the peace dividend and so on. <v Adam Smith>And eventually this scenario will come about. <v Adam Smith>Saddam won't be there in 5 years.
<v Adam Smith>But how quickly this happens and what happens after become the governing factors. <v Adam Smith>None of the Middle East scenarios are as bullish as the 1980s when we had declining oil <v Adam Smith>prices and disinflation. <v Adam Smith>There are very exciting long range phenomena at work that are bullish. <v Adam Smith>The cooperation of the Soviet Union and the US are of just historic importance <v Adam Smith>and actually more important than any single dictator. <v Adam Smith>If the current ruckus was about two countries in the Centra- Central African jungles, we <v Adam Smith>would forget it. But meanwhile, we're all hostages because of our need for oil. <v Adam Smith>I'm Adam Smith.
The Nightly Business Report
1990 Selected commentaries
Producing Organization
WPBT-TV (Television station : Miami, Fla.)
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The Walter J. Brown Media Archives & Peabody Awards Collection at the University of Georgia (Athens, Georgia)
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"Unlike most other news programs, The Nightly Business Report still finds time for commentary on a regular basis (five nights a [week).] Delivered by some of America's top economists and business observers, these two-minute commentaries often focus on the events of the day, but they also pause to take a look at the 'bigger picture' -- issues of a non-immediate nature that confront the American economy. "We are submitting a sampling of such commentaries. In the first, Hobart Rowen, Economics Columnist for the Washington Post, takes a controversial stand -- arguing against renewing favorable U.S. trade treatment for China in light of that nation's continued suppression of political dissidents. The second, by Eric Schurenberg, then Senior Writer (now Editor) of Money magazine, examines the Savings and Loan industry bailout. But rather than talking in macroeconomic terms, he takes this issue down to the level of most viewers -- asking what it will mean in terms of their pocketbooks. The third, by Adam Smith (pseudonym for George J.W. Goodman, author and host of Adam Smith's Moneyworld), projects into the future. He sets forth three possible economic scenarios emerging as a result of the Kuwait invasion crisis. "All of these commentaries are representative of the thought-provoking unconventional wisdom presented by Nightly Business Report commentators. (In addition to the three listed above, other regular contributors include Lester Thurow, Tom Peters, Alfred Kahn, Charles Schultze, Kevin McCormally and Hank Gilman. The Nightly Business Report also reserves the spot on each Monday for guest commentaries from alternative voices to provide an even wider spectrum of opinions). It should be noted that some of these commentators have been delivering their messages on The Nightly Business Report for nearly a decade, with very positive response. "We hope you will agree to recognize the Nightly Business Report's decision to deliver different viewpoints as an integral part of its daily presentation."--1990 Peabody Awards entry form.
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Producing Organization: WPBT-TV (Television station : Miami, Fla.)
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The Walter J. Brown Media Archives & Peabody Awards Collection at the University of Georgia
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Chicago: “The Nightly Business Report; 1990 Selected commentaries,” 1990, The Walter J. Brown Media Archives & Peabody Awards Collection at the University of Georgia, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC, accessed June 8, 2023,
MLA: “The Nightly Business Report; 1990 Selected commentaries.” 1990. The Walter J. Brown Media Archives & Peabody Awards Collection at the University of Georgia, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Web. June 8, 2023. <>.
APA: The Nightly Business Report; 1990 Selected commentaries. Boston, MA: The Walter J. Brown Media Archives & Peabody Awards Collection at the University of Georgia, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Retrieved from