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ROBERT MacNEIL: Good evening. Syria and the United States have clashed again; Syrians fired at U.S. planes and U.S. Navy guns shelled the Syrians in a day of widespread violence in Lebanon. We'll have details. And as the United States dollar breaks more records in Europe, we examine why and what it means to Americans. Jim Lehrer is off tonight; Judy Woodruff's in Washington. Judy?
JUDY WOODRUFF: Also tonight, Robin, as the holiday season approaches, so does concern about a year-round problem, drunk driving. We talk to the secretary of transportation and see how one state deals with the problem. And we visit with a stockbroker who doesn't fit into the Wall Street image -- an actor, playwright and director who now makes the American Stock Exchange his stage.
MacNEIL: There was another episode of attack and counterattack between the United States and Syria in Lebanon.Two U.S. F-14s flying over central Lebanon were fired on but not hit by Syrian units who loosed at least two missiles and a barrage of anti-aircraft fire. Shortly afterwards two U.S. ships offshore, the cruiser Ticonderoga and the destroyer Tattnall opened up on the Syrian positions. The Syrians, who said they will fire on any U.S. jets flying over their positions, accused the U.S. of premeditated aggression. Speaking at the Washington Press Club, Defense Secretary Caspar Weinberger gave the U.S. version.
CASPAR WEINBERGER, Secretary of Defense: They returned safely to the Independence from which they had come, and then in keeping with the previously announced policies, the American ships fired 15 and 20 rounds of 5-inch naval gunfire on the firing positions. And that's just exactly what we said we were going to do. We have still got the perhaps rather old-fashioned notion of not trying to inflict any damage on occupied areas, if we can possibly avoid it -- towns and villages and things of that kind. And so we try in every way to carry that out with the most appropriate response, and today the most appropriate response to the area from which this fire came seemed to be naval gunfire.
MacNEIL: There was other violence in Lebanon today. Machine-gunners in West Beirut ambushed a French patrol, killing one paratrooper. An Islamic group claimed responsibility. Bombs exploded at two Christian churches in Beirut, injuring three people. In southern Lebanon a bomb blast wounded two Israeli soldiers in the town of Sidon. In northern Lebanon Israeli gunboats shelled the part of Tripoli where Yasir Arafat's PLO forces are gathered awaiting evacuation. The Israeli command reported accurate hits on Palestinian positions. Arafat's aides said PLO forces returned the fire and hit one of the Israeli ships.
Meanwhile, in the Persian Gulf state of Kuwait, the death toll in yesterday's bombing of the U.S. Embassy and other targets rose to five. Iran denied any connection with the attacks, for which a group called the Islamic Holy War claimed responsibility. Teheran radio said these attacks have no connection whatsoever with the Islamic Republic of Iran. In Washington, administration officials said the attacks were connected to the Iran-Iraq war, and intended to warn Persian Gulf states not to back Iran. In Portugal, Secretary of State Shultz was asked about U.S. retaliation for the Kuwait attacks; Shultz said the means exist to retaliate, but he declined to say whether the United States intends to do so. He said information about the Kuwait attack is flowing in, but the he'll wait for more secure information before he makes any further comment. Judy? U.S. Dollar in the World Market
WOODRUFF: In the busiest pre-Christmas shopping season in several years, it turns out that retail sales went up last month twice as much as expected. At 1.9% it was the largest gain since last May, and made it eight months out of the last nine that sales have increased. Economists said people feel more confident this year because of the drop in unemployment and predictions of a strong economy through the winter. That news about retail sales helped send the U.S. dollar climbing even higher on world currency markets. The dollar set new records, hitting all-time highs against the British pound, the French franc and the Italian lire. The pound was hit especially hard after word spread that Britain might knock a dollar a barrel off the price of its North Sea oil. Dealers said that dollar-traders expect interest rates to remain high, or go even higher, which would make dollar investment attractive. They also said some traders were buying up dollars and moving out of other currencies because of the bombings in Kuwait yesterday, which aroused new fear that war might break out in the Middle East. Robin?
MacNEIL: For a view of how much the stronger dollar affects Americans, we have first Fred Bergsten, assistant secretary of the treasury for international affairs in the Carter administration. Mr. Bergsten is now with the Institute for International Economics in Washington. Mr. Bergsten, what reasons do you give for why the dollar is suddenly rising again?
FRED BERGSTEN: I think there are two basic reasons. One, that you already referred to, is known as the safe-haven attraction of the dollar -- when events are unsettled in Kuwait or other parts of the world, people tend to put their money in dollars because it's viewed as the safest haven. The other reason, and what I think is the bigger reason though, is the continued high interest rate level in this country. As you also noted, interest rates now look like going up again, and that's pulling more money into the dollar and pushing our currency to very high levels.
MacNEIL: In your view, are foreign traders reacting merely to impressions, or do they have good justification for doing what they're doing?
Mr. BERGSTEN: Well, they have good justification in the short run; those two factors that I mentioned are serious, and markets are quite rational to take them into account. The problem is that when the dollar is pushed so high, American industry becomes uncompetitive in world trade.
MacNEIL: I'd like to go into that in a second. Can I just ask you, by how much do you think the dollar is overvalued at the moment?
Mr. BERGSTEN: About 25%, compared with the underlying competitive position between the U.S. and other countries. That means that we're essentially taxing all of our exports by about 25%, and we're paying a subsidy of about 25% on all imports coming into the country --
MacNEIL: But as I recall -- excuse me interrupting again -- but as I recall, didn't you say, back several months ago when we were discussing the subject on the program, that the dollar was overvalued by 25% then?
Mr. BERGSTEN: Yes, and it dipped off a bit after that time, particularly against the Japanese yen, and has come back up. You're right in saying that the dollar hit some highs today against European currencies: however, it has weakened somewhat against the Japanese yen since we last talked and the average comes out just about the same.
MacNEIL: Now, what are the effects of this overvalued dollar, in your view, on the U.S. economy?
Mr. BERGSTEN: Well, the most immediate effect is on our trade balance. I think it's now widely acknowledged that the U.S. trade deficit next year will hit at least $100 billion.
MacNEIL: Meaning the amount we buy from overseas countries, as compared with the amount we sell them?
Mr. BERGSTEN: That's right. We will be importing from abroad at least $100 billion more of goods than we sell abroad. And when you take into account, in addition, our earnings on services transactions, we will still have a huge current account deficit -- trade in goods and services -- about five or six times as high as it has ever been. That, in turn, means something like two million job losses; a decline of something like one to one-and-a-half percentage points off the economic recovery, which is strong now, but may need some help next year. And, in short, it's undermining the industrial and productive base of our economy.
MacNEIL: How does the trade deficit lead to American job losses at a time when jobs are being created in the economic recovery?
Mr. BERGSTEN: Well, total unemployment is declining, and declining rapidly. But the trade losses show up in two ways. One is that imported products continue to come in very rapidly in a number of industries, like steel, automobiles, footwear, apparel, and a whole range of industries where foreigners are taking advantage of that price advantage to sell here in this country. That means that Americans who would otherwise be producing those goods for sale in our domestic market are left out of a job.Likewise on the export side; Caterpillar tractor, Wang labs, Hewlitt-Packard, many of our best firms would be doing even better, in terms of sales -- in this case, sales abroad -- were it not for the overvalued dollar. They, in turn, would then be employing many hundreds of thousands of more Americans, and the unemployment rate would look even better. Remember, unemployment is still at a very high level, even though it's come down sharply.
MacNEIL: Yeah. Briefly, Mr. Bergsten, what do you think the Reagan administration should be doing about the value of the dollar?
Mr. BERGSTEN: Well, clearly the fundamental policy problem is to get interest rates down. In turn, I think that requires getting the budget deficit down because the prospect of unending budget deficits in the range of $200 to $300 billion a year, "as far ahead as the eye can see," to quote OMB director David Stockman, simply keep enormous pressure on the money market. That keeps interest rates high and continues to suck huge amounts of international capital into the dollar. I think only with a decisive reduction in the prospect for the budget deficits can we get interest rates down and see the dollar come back to a more balanced, competitive level.
MacNEIL: And in the short term?
Mr. BERGSTEN: In the short term I'm not optimistic that's going to happen; therefore, we may have to turn to some second-best policy devices, like dealing directly with these huge capital movements that are swamping the trade flows themselves.
MacNEIL: Thank you. Judy?
WOODRUFF: For the perspective of the Reagan administration on these questions, we have with us the number-two man in the treasury department. It's Deputy Secretary Mr. Tim McNamar. Mr. McNamar, would you agree with Mr. Bergsten here that a strong dollar is hurting the U.S. economy?
R. T. McNAMAR: No, I wouldn't agree that it's hurting the U.S. economy. In fact, people said that the strong dollar was going to hurt the U.S. economy this year, and obviously the economy has done very well. Fred is focusing on trade; that's only a part of the picture. Capital flows -- he mentioned safe haven -- certainly I agree with Fred on that. The dollar has become a safe haven. You notice that with the bombings in the Middle East and all, gold didn't go up as it traditionally did; the dollar got a little stronger. People prefer to hold dollars because of the soundness of our economy. Because they know that we are a stable democracy, and they know that they can have a good return on it. In fact, we're creating jobs; we've created over three million jobs this year. I don't know where Fred gets his two million jobs that are lost, but I guess I'd like to debate him on those numbers sometime.
WOODRUFF: Well, that's my next question. I mean, he is saying two million jobs are lost, largely because of this beefed-up -- or problems in the export market.
Mr. McNAMAR: Well that doesn't really seem to hold true, though, hoes it, Judy, because we know that imported automobiles, as a percentage of total automobiles sold in the United States, are declining right now. The Japanese have a voluntary quota on. We know that while there's been some increase in steel imports, total demand for steel -- domestic and imported steel -- is not as high as it was in, say, I think, '78 or '79. So even if you took away the foreign imports,I think that the calculation is frankly faulty.
WOODRUFF: Well, what about his -- he used to the figure one to one-and-a-half percentage points off the gross national product increase?
Mr. McNAMAR: Well, I don't think you can suggest that's true either, because jobs in manufacturing account for about 28% of the jobs we have today, and about 72% of those jobs are in service industries. That would include, for example, all the people who work on imported cars or in financial institutions, and they benefit most from lower inflation, and the dollar -- strong dollar has helped contribute to lower inflation.
WOODRUFF: Well, you know, if you're sitting out there at home right now, and you're not an economist, how do you know who to believe? I mean, you both look rather credible, I mean, how do you substantiate what you're saying?
Mr. McNAMAR: Well, I guess I would look at some facts. If you go back, for example, to January of '81, when we cam to office, the dollar has appreciated about 22% against a basket of currencies -- the deutschmark, the yen, the franc, and so on. At the same time, U.S. interest rates have come down 7%; the difference between our interest rates and foreign interest rates have come down about 4-1/2%, and the real -- that is, after inflation -- change is down about four. We've gone from 12%, 13% inflation in 1979 and 1980 to 2.7% this year, and projections next year in the 3-5% range. And yet the dollar's gone up 22%. We've lowered interest rates, and yet the dollar's gotten stronger. We've lowered inflation; the dollar's gotten stronger.
WOODRUFF: But you would agree, though, that the big deficit -- these $200 billion deficits we're facing for the next several years -- are going to have, are having an effect on the dollar?
Mr. McNAMAR: They are one of the factors. If you'll recall, Fred's first factor that he mentioned influencing the strength of the dollar was the safe haven in the U.S. economy. We do want to reduce the budget deficits, and we are going to reduce them. But monetary policy, inflationary expectations, the deficit, a whole variety of factors. Confidence -- you look at retail sales today. The American people are more confident; people are more confident in the U.S. economy than they are in some of the European economies currently.
WOODRUFF: But on the deficit again. Are you satisfied right now that the administration is doing everything it can to keep that deficit down?
Mr. McNAMAR: I'm satisfied right now that the administration is doing everything it can to try to see federal spending reduced, because it's federal spending that is the problem. Government spending that is --
WOODRUFF: But Congress has cut just about everything that --
Mr. McNAMAR: No, they haven't.
WOODRUFF: -- is politically possible to cut, hasn't it?
Mr. McNAMAR: No, thy haven't. They really haven't. If you look at the budget resolutions that the Congress passed in the House and the Senate, they didn't meet their spending targets. They didn't meet the outlay targets that they had set for themselves, that they said would be credible, and yet the Congress went and appropriated more money than they said they wanted to in the budget resolution. Now, you know, we've got to work with the Congress to reduce spending further.
WOODRUFF: All right. Thank you. Robin?
MacNEIL: Mr. Bergsten, Mr. McNamar doesn't believe any of your argument, starting with the fact the while the dollar has gone up 22% while interest rates and inflation were coming down substantially.
Mr. BERGSTEN: Well, inflation and interest rates clearly have come down. Where I would differ with him on those facts is on the comparison between U.S. interest rates and foreign interest rates. It's the differential between U.S. and foreign interest rates that determine whether people are -- have an incentive to move money into the dollar or out of the dollar. That differential, as I read it, particularly in terms of long-term rates, has stayed about the same. That's particularly true when you look at real long-term interest rates --
MacNEIL: And it would be the differential which would attract the flow --
Mr. BERGSTEN: It's the differential, not the level that counts. Clearly, as inflation comes way down, as it has over the last three years, interest rates also come way down, in absolute terms.
MacNEIL: How about that, Mr. McNamar, that the differential has stayed the same?
Mr. McNAMAR: No, the differential has not stayed the same, because our inflation rate has come down so high. Indeed, I agree with Fred, that part of the cause for the dollar's strength is the improvement that we have had in the long-term interest rate differnential in real rates. That is, the anticipated rate of inflation, the anticipated interest rate vis-a-vis another currency -- for example, Japan. Japan has interest rates which are very low, they're administered or artificially set by the government, and they have not moved with the market. As a result, Japan has lost about -- oh, this year, around $17, $18 billion net, which has come to the United States for investment. If you're a Japanese investor, a pension-fund manager, for example, of an insurance company, wouldn't you want to invest in the U.S. stock market -- it's gone up 50% since last August. You've also had appreciation of the dollar. That's a pretty good rate of return.
Mr. BERGSTEN: Robin, since Tim agreed with my point on that, let me try another one. As to the impact on jobs in the economy that Judy asked about, I was simply making a mathematical point. I think everybody agrees, and I notice Tim at least didn't disagree, that the trade deficit is going to $100 billion or more next year. It was $25 billion back in 1980. That's a deterioration of $75 billion or so in our trade balance. That equals about 2-1/2% of GNP, which simply means that we've got 2-1/2% less GNP than we would otherwise have. I don't gainsay the recovery. The recovery right now is enormously impressive; I think it's going to continue for some time, and it's very strong. I'm not trying to deny any of that --
MacNEIL: Mr. --
Mr. BERGSTEN: I'm simply saying that it would be even better if we did not have this adverse trade situation --
MacNEIL: But in answering that, Mr. McNamar, could you tell us whether you think that the rising in larger trade deficit doesn't matter?
Mr. McNAMAR: No, I think that, over time, you should have an equilibrium, a multilateral equilibrium, not vis-a-vis any one particular country. But remember that our trade deficit this year -- I think about 85% of it -- is simply caused by imported oil. We import somewhere around 2.5 billion barrels of oil a year, so if you had, for example, a $4 drop in the price of oil, that would take $10 billion off the trade deficit right there.
MacNEIL: Well, Mr. Bergsten, what's your comment on that?
Mr. BERGSTEN: You have to look at the changes, though. The level of our oil imports are now about $20 billion lower than they were two or three years ago. We've gotten imporvement from the oil picture. That means the deterioration in manufactured goods and everything else is even greater than I'm saying.
MacNEIL: Mr. --
Mr. BERGSTEN: And what counts is what changes from year to year, not the absolute levels.
MacNEIL: Mr. McNamar, do I understand you correctly that, as you sit with your colleagues in the treasury now, and see the dollar go up this week, you're not particularly worried about it, and you don't see an immediate need to do anything about it, like intervening, buying currencies.
Mr. McNAMAR: We don't see any sort of a disorderly market that would indicate that if we were to intervene it would have anything other than the most transitory effect. The summit nations at Versailles commissioned a study by the seven nations there to test the impact of intervention in the foreign currency markets, and the conclusion that came out of that study, which was adopted at the following year in Williamsburg, was that it really had very marginal and temporary effect. What is needed is more of an underlying policy convergence in these major industrial countries. We are working on those kinds of things; for example, we announced, at the time that the President was in Japan, a working group to improve the yen/dollar relationship, not by some artificial means, but by addressing the underlying fundamental problems, and since then, as Fred said earlier, the yen, in fact, has appreciated vis-a-vis the European currencies, and little bit -- it has stayed relatively calm on the dollar.
MacNEIL: Mr. Bergsten, do you think they should be intervening at the moment?
Mr. BERGSTEN: I think they certainly should be intervening --
MacNEIL: Intervening means buying currencies, right?
Mr. BERGSTEN: In this case, the U.S. would be selling dollars to buy yen, deustschmarks, and these other currencies that are hitting record levels --
MacNEIL: And you think they should be doing that now?
Mr. BERGSTEN: I think they clearly should be doing it in order -- at least to keep the situation from getting much worse. I agree with Tim in the sense that you cannot turn a fundamental trend by direct intervention; what you can do, though, is keep this competitive disadvantage we have from getting much, much worse.I think they should have been intervening much more over the last couple of years, and certainly should be doing so now.
MacNEIL: Do you have a brief comment on that, Mr. McNamar?
Mr. McNAMAR: Yeah, I'd like to ask a question to Fred.I don't know how he calculates this competitive disadvantage that we have, or how he knows exactly what the right level of so-called currency exchange rates are. For example, on the yen, I see estimates from 180 to the dollar to 230 -- that's a 20% variation --
MacNEIL: Can you ask him that question privately? because we've come to the end of this segment. Thank you both very much for joining us.
Mr. McNAMAR: Thank you.
MacNEIL: Judy?
WOODRUFF: The White House today threw a little cold water on Treasury Secretary Regan's prediction yesterday that the President's upcoming budget proposal will contain standby tax increases. Spokesman Larry Speakes told reporters that Regan is speaking for Regan, and that the President has not decided on reviving the standby plan. Speakes conceded, however, that the treasury secretary probably has an educated guess on what the proposed budget would contain. And on Capitol Hill, two economists endorsed the idea of tax increase, and said that they are so necessary, they shouldn't be contingent on anything, like the spending cuts that Regan mentioned and that were part of the Reagan budget plan last year. Conservative economist Herbert Stein said the conditions that call for a tax increase are here; you don't have to wait. And liberal Alice Rivlan, the former director of the congressional budget office, said that merely passing a tax increase would signal investors and the public that Congress is serious about deficits. Both Stein and Rivlan testified before the Senate Finance Committee hearings that are being held to highlight the dangers of big deficits.
We'll be back in a moment.
[Video postcard -- Gunsight Canyon, Utah] Drunk Driving
WOODRUFF: A presidential commission today recommended that the legal drinking age nationwide should be raised to 21. The National Commission on Drunk Driving unveiled its report after more than a year-and-a-half of study, and while it did not call on Congress to pass national legislation, it did propose that Congress cut off all federal highway aid to any state that didn't adopt the 21-year-old minimum. The commission's recommendations were presented at a White House ceremony, as the President proclaimed this National Drunk and Drugged Driving Awareness Week.
Pres. RONALD REAGAN: A drunk or drugged person behind a wheel of an automobile isn't a driver. He or she is a machine for destruction. The American people have paid the bill, seen the damage and felt the heartache, and I think they're saying, enough. Last year, when we observed National Drunk and Drugged Driving Awareness Week. I said that if we worked hard enough, we'd make progress. We have.Twenty-two states and the District of Columbia have enacted tougher drunk driving laws, and, in part, because of those actions, last year the highway death toll in America did drop, and the total drop was 10%. And the credit for this great achivement goes to you here today, and to thousands of others throughout our country who have so diligently pursued community and legal action to end drunk driving. Your most important contribution has been a change in public attitude. Today drunk driving isn't a bad habit to be excused, it's a crime to be stopped.
WOODRUFF: The commission also recommended a series of state and local actions aimed at reducing the death tolls on our nation's highways, more than half of which are alcoholrelated. Among the proposals, mandatory fines for first offenders, a 90-day license suspension, plus either assignment to 100 hours of community service, or a 2-day minimum jail sentence. The commission also favored so-called "dram-shop" laws which would make anyone who sells or serves alcohol to drunks liable for the consequences, even if the server is in a private home. Robin?
MacNEIL: In calling for a national minimum drinking age, the President's commission noted that so far only 19 states have such standards. One state with a lower minimum drinking age is Arizona. Today the governor of Arizona, Bruce Babbitt, said he favors the idea of raising the age, but objects to the threatened cur-off of federal highway funds for non-compliants. Arizona is one of many states which have toughened up drunk driving laws in the past two years. Kwame Holman has a report on what Arizona has done and how it's worked.
KWAME HOLMAN [voice-over]: It was stortly after the bars closed one night last week when the Arizona highway patrol stopped this van. The vehicle had been weaving through traffic, and the officer suspected that the driver had been drinking.
HIGHWAY PATROL OFFICER: Where you coming from?
ROBERT: A local bar down on --
OFFICER: That's why we stopped you, Robert, you're drifting back and forth. How muchyou been drinking tonight?
ROBERT: Oh, I had a couple of beers --
OFFICER: You had more than a couple. Now what I want you to do is follow the penlight with your eyes. Just move your eyes, nothing else, okay? Just follow the penlight, please, Okay. Stand right there, please. Just give me this hand. I am placing you under arrest for driving under the influence of intoxicating liquor.
HOLMAN [voice-over]: The driver was taken to the highway patrol station for a breathalyzer test to determine his level of blood-alcohol.
OFFICIAL: Okay, I want you to take in a deep breath, blow out in the mouthpiece. Blow, steadily, continuously. Just keep blowing 'til the machine stamps. Keep the machine going. Just keep blowing 'til the machine stamps. Keep it going.
HOLMAN [voice-over]: He was found to be legally intoxicated, and he went to jail. This is Arizona, a state with one of the toughest drunk driving laws in the nation. Under the 17-month-old law, if a driver is convicted of driving while intoxicated, or DWI, no plea-bargaining is allowed, and a mandatory minimum sentence is imposed by a judge. For a first offender, the minimum sentence is 24 hours in jail, a 30-day license suspension and at least a $250 fine. On the second DWI conviction, the violator must spend at least 60 days in a county jail, and his license is suspended for a year. It is with the third conviction that the Arizona drunk driving law becomes perhaps the toughest in the nation. The driver must spend a minimum of six months in the state prison; he loses his license for at least three years, the can be fined up to $150,000. He also becomes a convicted felon, a first-time experience for most DWI offenders. Arizona governor Bruce Babbitt was instrumental in getting the drunk driving law passed.
Gov. BRUCE BABBITT, (D) Arizona: This is a classic law-enforcement model. It is a classic application of deterrence, of saying that our first job is to reduce the fatalities, to get the drunks off the highway. The one proven method of doing that is to devise punishment to match the gravity of the crime. To lock people up, and to make it so distasteful, so disruptive that people will change their behavior.
HOLMAN [voice-over]: But how effective is this drunk driving law in deterring Arizona's number-one cause of death? Take the case of Les McElroy. A loan officer for a Phoenix bank, he was arrested after leaving happy hour at a nelghborhood bar. That arrest led to McElroy' third drunk driving conviction and his first stint in the Arizona state prison. We asked McElroy if six months in jail would change his drinking habits.
LES McELROY, convicted drunk driver: That's question that I've dealt with quite a bit, and to be quite honest, I'm really not sure. I can't foresee not ever drinking again, but I know it would be nowhere like it used to be.
HOLMAN [voice-over]: McElroy and 172 other inmates are housed in the only state prison in the nation designed specifically for the convicted drunk driver. But here at Aspen Hall, the emphasis is on taking the drunk driver off the road, not on solving his drinking problem. McElroy thinks that defeats the purpose of the law.
McELROY [voice-over]: From talking to people and being around people, you know, in the same situation, I'm just not convinced that that many of them are going to stop drinking, and I think a lot of them, after they get out and start drinking again, then eventually they'll get behind the wheel again.
HOLMAN [voice-over]: Admitted alcoholic Arlin Troutt says he's been a heavy drinker for most of his life. He is one of the few prisoners here who attends voluntary Alcoholics Anonymous meetings.
ARLIN TROUTT: I felt that, you know, that it's helped me. It's helped my attitude; it's helped everything. I don't have no intentions of ever drinking again.
HOLMAN [voice-over]: Governor Babbitt says the Arizona law is working, in getting the drunk driver off the road and as a deterrent to others who might drink and drive.
Gov. BABBITT: No matter who you are -- whether you are rich, poor, banker, salesman, young, old -- your facing a mandatory six months in jail is going to keep this problem under control.
HOLMAN [voice-over]: Superior court judge Joseph Howe has sentenced hundreds of drunk drivers. He says the law is not working -- in the prison or on the highway.
JOSEPH HOWE, superior court judge: If the alcohol problem, for instance, is related to self-esteem, then prison is the best way to destroy whetever is left in that particular defendant. If the alcohol problem and the driving problem is one that might be solved by some training, none of that is being done. Once the newness of the law wears off in the public mind, and six months in prison becomes more or less a routine response to the repeat-offender, the public will get numbed to it, and the deterrent effect will be lost.
HOLMAN [voice-over]: The statistics support Judge Howe's argument. While statewide, drunk-driving fatalities have decreased, in Phoenix, the state's largest city, alcohol-related fatalities have increased recently. There's concern here that the initial impact of the law has begun to wear off. The law appears to be effective only if people are so conscious of the penalties that they won't drink and drive. Recognizing that, the state has launched a new media campaign to remind the public of the consequences of drunk driving.
OFFICER [anti-DWI announcemant]: Relief from DWIs. Easy. J -- A -- I -- L.
ANNOUNCER: Now, it's the law. Arizona's tough on drunk drivers. Don't drink and drive if you want to stay out of jail. A message from the governor's office of highway safety.
HOLMAN [voice-over]: The ongoing public awareness campaign has added to the already high cost of enforcing the law. Overcrowded jails have put pressure on the state budget. Additionally, there are nearly 5,000 drunk driving cases pending in the Phoenix area alone. And county jails are under a federal court order to ease overcrowding. A new county jail is under construction and more are on the way, but officials have been warned that they may be forced to release some prisoners early.
[interviewing] Doesn't this law increase overcrowding in Arizona jails?
Gov. BABBITT: The answer is yes. It exacerbates the problem, and it poses directly the question of whether or not we are willing to pay to build correctional facilities to handle this problem.
HOLMAN [voice-over]: So far Arizonans have been willing to pay the cost to try to stop the slaughter on their highways. Warden James McFadden says the money is well spent.
JAMES McFADDEN, warden: People may not feel that this was [unintelligible] cost-effective. But if a member of your family is killed by a drunken driver, you'll feel that institutions of this type are sorely needed.
WOODRUFF: One Reagan administration official who has been in the forefront of the push for tougher drunk driving standards and their enforcement is Elizabeth Dole, secretary of transportation. Mrs. Dole, we've just seen the experience in Arizona. Do you think, from what you've seen, that tougher laws like those in Arizona work? That they really do deter people from drinking and driving?
ELIZABETH DOLE: Yes, Judy, I really do. We are certainly supporters of tougher laws as well as tougher enforcement, and no question, the statistics that I have seen across the board seem to indicate that this serves as a real deterrent. Community service is one option as an alternative to the mandatory jail sentence. We find, too, that another very effective deterrent is the revocation or the suspension, in appropriate cases, of the driver's license. As I understand, there is in Arizona still some instances where the driver's license is not totally suspended or revocated, but rather there is some restricted driving that is permissible.
WOODRUFF: But what about, though, that there is concern, and we saw this raised in this story, about throwing a lot of people in jail for drinking and driving is going to lead to overcrowded prisons, and that's a whole new problem that state officials are going to have to contend with. Would you agree that it does set some precedents that are problems?
Sec. DOLE: Well, I think it really is a matter that state by state is going to have to be taken into consideration. In terms of overcrowding of jails, this is a little out of my immediate area of responsiblity, but of course, the option of having community service as an alternative to the mandatory jail sentence is a possibility. In addition, certainly, I have seen statistics and information that indicates that the mandatory sentence for the repeat-offender is something which really serves as a deterrent, and it, overally, is going to keep people out of jails rather than putting them in.
WOODRUFF: Okay, why don't we get back to that in a minute. Let's talk about the report today of the President's Commission on Drunk Driving. One of their most controversial recommendations, I think you would agree, is that funds to states for building and repairing highways should be cut off for those states that don't raise the minimum drinking age to 21. Do you agree that that's an appropriate measure?
Sec. DOLE: Well, that's something that we want to look at. This report has just been presented to the President today. Of course, the President is very enthusiastic about the commission and the work that they have been doing over a number of months because he regards this as a major problem in our society. And so we want to take a very serious look at all of their recommendations.
WOODRUFF: But do you, as a federal official, think that this would be an appropriate role for government?
Sec. DOLE: Well, that is something which, as I say, we want to take a look at. We have not made a determination that highway funds should be cut off. We feel that, as far as possible, we want the states to move in this direction. We find that, for example, with the age 21 requirement, 19 states have moved; there is a lot of momentum in that direction now, and so we feel that the state should be given an opportunity to put that law into effect themselves. If on doown the road that momentum is not continuing, then that's something that I would want to take a look at.
WOODRUFF: Well, why should it left up to the states? I mean, this is a national problem. Isn't this one of those occasions when it is appropriate for there to be some kind of a national standard. It's a life or death issue.
Sec. DOLE: Oh, it's a very serious issue.We have 20,000 deaths a year -- 25,000 rather, at the hands of the drunkdriver, and it's something that we are determined that we're going to keep the momentum going and we are very pleased at the consciousness-raising which has occurred across this country, that people are no longer willing to tolerate lax laws and lenient judges. But I think when the momentum is moving in the direction of states taking action -- you do have 19 states that have raised their drinking age to 21; you have 39 states that have mandatory sentences for the repeat offender. A number of states have the mandatory sentence for the first offender. You have all 50 states that have laws with regard to suspension or revocation of a drivers license. Another aspect of this --
WOODRUFF: But why --
Sec. DOLE: Excuse me -- is the use of the safety belt, as the best offense against the drunk driver. Forty-one states have passed laws with regard to a child's safety seat, to protect children. So the momentum is going. And the --
WOODRUFF: But the government could speed up --
Sec. DOLE: -- local matter, Judy [crosstalk] It's a local --
WOODRUFF: That's my question, why is it a local matter, why shouldn't --
Sec. DOLE: It's a local and state matter. Well, this is where you have the police force, where you have -- all of those who are involved in enforcement, whether it be those who are involved in issuing licenses. It's a matter of all of them working together, as we see it, bringing the entire community to inter-play on this in terms of your -- support of your grass roots organizations, private sector, the police. We are working with police right now in some states with regard to --
WOODRUFF: Even though --
Sec. DOLE: -- sobriety checks.
WOODRUFF: Excuse me. Even though a federal action could move this all much more quickly than is being done at the state and local level --
Sec. DOLE: Well, I think the thing to focus on is that there is a great deal of activity at the state level. Twenty-two states just this past year have passed tougher laws, as well as the District -- 38 states altogether. And when you see the momentum and the amount of movement, and it is basically a local matter, I think that, you know, that's where it's belongs. That's where the problem --
WOODRUFF: All right, well let me ask you, overall, what you think of the overall recommendations from the commission. Which do you think are the best, and do you think they were as strong as what you expected them to be?
Sec. DOLE: I think the report is very well done. I have a great respect for the members of the commission, as well as of course the chairman, John Volpe, who is one of my predecessors as secretary of transportation, and I think they are very, very conscientious people, highly respected, who have done a very fine job. We're going to take a close look at all of their recommendations. But I feel, for example, Their emphasis on safety belts, the child's safety seat, more involvement with the local grass roots organizations, having the person who causes the problem pay for it, in terms of fines and penalties, that would provide for increased and tougher enforcement, up and down the line rehabilitation services, and all of the things that are involved because of the drunk driving problem -- they've made a number of very good recommendatons, as well as their mandatory sanctions.
WOODRUFF: All right. Think you very much for being with us, Secretary Dole.
Sec. DOLE: Thank you.
MacNEIL: Now a story from our medical beat. The medical world has been expecting the announcement of plans to implant a second artificial heart in a human being, but that was thrown into doubt last night when a special committee at the University of Utah, looking at medical and ethical issues, refused to approve guidelines for a second operation. The guidelines were proposed by Dr. William DeVries.
[voice-over] It's been just over a year since the historic operation on Dr. Barney Clark was performed by a surgical team headed by Dr. DeVries. Dr. Clark, a retired Seattle dentist, survived 112 days, before he died March 23 of multiple organ failure. Since then a mortorium on another operation has been imposed by the hospital's ethical panel. But at the same time, scientists have continued research efforts to improve on the device that was implanted in Dr. Clark's chest. That device is known as the Jarvik-7, after its inventor Dr. Robert Jarvik. Although the Jarvik-7 heart functioned relatively well, it had a major drawback in that the patient had to be permanently tethered to a cumbersome 375-pound air compressor. A much smaller power-pack for the artifical heart has since been developed and has been successfully used on animals. Dr. DeVries and Jarvik hope to use it, at least on a part-time basis, on the next human patient.
[on camera] That was one of the changes that the doctors had hoped the university's medical ethics committee would approve last night.The doctors are also seeking permission to operate on a patient who is healthier than Barney Clark was at the time of his operation. The panel did not explain its objections to the plan, saying they were confidential. DeVries also wouldn't comment today, although he was reported to be very angry. Panel members say they will meet with DeVries possibly as early as Thursday to try to iron out their differences to pave the way for a second operation.
Meanwhile, doctors in Britain have devloped a method of detecting heart disease by using a combination of radioactive material and computer imagery. James Wilkinson of the BBC has details.
JAMES WILKINSON, BBC: The new technique enables doctors to see the heart at work. Doctors have used radioactive chemicals for this before, but the unique thing about radioactive gold is that the radioactivity doesn't last long in the body, only a matter of seconds. It's therefore safer for the patient, and doctors can use it repeatedly during a testing session to get a succession of pictures of the heart at rest and during exercise. The patient sits with his chest pressed against a scanner. He is then set to work pedalling on an exercise machine. The radioactive gold is collected from a special generator and instantly transferred to a tube in the patient's arm and injected. The gold goes traight to the heart where its radioactivity can be monitored by the scanner. The doctors take several pictures in quick succession. The computer reconstructs these pictures into a moving picture of the beating heart.This is what a normal heart looks like when a person is exercising; that is considerable movement at the base of the heart. A moderately diseased heart moves much less. By examining these pictures, doctors can tell, for example, which parts of the heart wall are most at risk of a coronary thrombosis, and where to graft a new vein. In a grossly abnormal heart, there's hardly any movement at all. This patient is in serious trouble. The technique can sometimes spot heart disease which can't be diagnosed by other methods.
WOODRUFF: Three executions are scheduled to take place in the South this week. In Georgia, the state board of pardons turned down a last minute appeal by John Eldon Smith who was convicted of murdering his wife and her ex-husband. That clears the way for Smith to die in the electric chair on Thursday. Another Georgia death-row inmate, Alpha Otis Stephens, who was found guilty of Killing a contractor, is scheduled to die at the Georgia State Prison at Jackson tomorrow evening. Both convictions have been upheld by the U.S. Supreme Court. And in Louisiana, Robert Williams is to die tomorrow morning in the electric chair at Angola Prison, for killing a guard in a supermarket robbery. The Supreme Court has refused to stay his execution. Meanwhile, Wayne Williams, the Atlanta photographer accused by police of killing 24 young blacks between 1979 and 1981, today broke a long silence. He told a news conference he had been wrongly accused and connected with a series of heinous crime and said that he was disappointed at a Georgia court decision to deny him a new trial.
We'll be back in a moment.
[Video postcard -- Little River, Tennessee]
WOODRUFF: Poland today marked the second anniversary of the imposition of martial law. Lech Walesa donated the Nobel Prize that his wife picked up over the weekend in Norway to Poland's holiest shrine. Walesa placed the Nobel medal before the Black Madonna of Czestohowa. A short time later, Walesa and his family were picked up by police who questioned the labor leader for two hours before letting him go, with orders to show up tomorrow for more interrogation. And the spokesman for the government of General Jaruzelski rejected Walesa's call in his Nobel speech for talks between the outlawed Solidarity union and the government.
Turning now to a final look at today's news. U.S. battleships off the coast of Lebanon shelled targets in the mountains near Beirut. The raid was in retaliation for attacks this morning on U.S. reconnaissance planes flying over Beirut. In Tripoli, Lebanon, the pressure on PLO chairman Yasir Arafat and his men continued; Israeli gunboats shelled the PLO forces, claiming accurate hits. A national commission has called for new laws making 21 the legal drinking age in all 50 states; it's part of a major campaign against drunk driving. And on the world's financial market, the dollar soared to new heights, sparking more debate over the impact of federal deficits. Robin? Interview with Melvin Van Peebles
MacNEIL: But it was not a very interesting day on Wall Street today. On the New York Stock Exchange there was active trading, but no big up or down movement of prices. Over on the American Stock Exchange, our economics beat found an interesting personal story, and we close tonight with a report by Charlayne Hunter-Gault on a very unusual trader.
CHARLAYNE HUNTER-GAULT [voice-over]: If ever there was a metaphor fit for a man, then long-distance running is it for Melvin Van Peebles. From his roots on the Southside of Chicago, to his starring role in a movie he wrote, directed and produced, to the floor of the American Stock Exchange, where he is the only black floor trader, Van Peebles has been on a kind of endless marathon, running to rise above race, as a writer, entertainer, and now, a businessman. Running deliberately against the conventional and the predictable. In all these endeavors, the 51-year-old Van Peebles has often found that he is the first black, or the only black, to be there. Sometimes that has hurt. Other times it has helped. Since Van Peebles is so unpredictable, no one who knows him is surprised that he ended up, at least for now, on the floor of the American Stock Exchange. But still, the springboard he used to get there was not exactly uour usual springboard.
He started out as a writer in Paris. There, he published several books in French. He returned to the United States in the 1960s as a French delegate to San Francisco Film Festival. There he made his directorial debut with a film called Story of a Three Day Pass. It was one of the first films written and directed by an American black. As usual for Van Peebles it was a little ahead of its time.
[clip from "Story of a Three Day Pass"]
ACTOR: Somebody had to get promoted. Why not me?
ACTOR'S ALTER EGO: Why not you? Why you? Because you're the Captain's [unintelligible] colored boy. You are the Captain's Uncle Tom, baby.
ACTOR: I'm not the Capain's Uncle Tom.
ACTOR'S ALTER EGO: Well, anyway, he thinks you are his Uncle Tom. He trusts you, and you know what the Captain means by trust. If he can't trust you, boss --
WHITE BOSS: I'll bust you or any other man I find I can't trust.
HUNTER-GAULT [voice-over]: Van Peebles' first notoriety came in the early 1970s with a movie called Sweetsweetback's Badass Song.
1st ACTOR [clip from "Sweetsweetback's Badass Song"]: Anybody can tell you that don't add up to a dollar. That adds up to a dollar and a dime.
2nd ACTOR: No, I haven't seen Sweetback.
3rd ACTOR: I haven't seen the cat.
HUNTER-GAULT [voice-over]: It was a film about a hustler on the run. Van Peebles wrote, directed and produced it. And he ended up playing the lead, because given his budget, he says, he couldn't afford anybody better to play the part. He also financed the movie himself, when no one would back him. So when Sweetsweetback grossed $14 million, Melvin Van Peebles became a rich man.But that, too, came at a price.
MELVIN VAN PEEBLES: With Sweetback, after the film was completed, only two theaters in the entire United States would show it --
VAN PEEBLES: Only two theaters. Well, they said, well, black movies had never made money. I said, well, you've never made black movies; you've made fantasies of what you hope black people like, which had very little reality, black movies. Well, my maide had liked it, they would say. However, once the cash registers start ringing, this again is the irony of fate. Since no one would make a deal with me, where they could have had -- I would have given them great terms. Once the cash registers started the other way, and they came back to make a deal, I could make more draconian terms. So, once again, I fell into the pot. Now, my producing, owning, directing the whole thing; I mean, I owned the whole franchise. I don't think they were just quite ready for that.
HUNTER-GAULT [voice-over]: The financial success of Sweetsweetback enabled the Van Peebles to stage one production after another in the 1970s. Musicals like Don't Play Us Cheap, straight plays and films. And despite some mixed notices, he managed to keep his productions afloat through his promotional and dealmaking skills.Critics praised him for his gifted, contentious writing. But those who know him well talk about his talent for numbers.
VAN PEEBLES: I'm familiar with math. I have [unintelligible] a mathematician --
HUNTER-GAULT: I thought you were an English major. --
VAN PEEBLES: Yes, but I flew just as many years as a navigator. And I have almost a PhD in astronomy from Holland. And -- which was -- I was studying, what we call, celestial mechanics, which is the study of orbits and probabilities and all that. So there is that quality, which is always there. When in Holland I was doing math, people who knew me couldn't imagine that I was doing entertainment. People who know me in entertainment find it rather startling that I do math. I would say the great through-line in all of this is entrepeneurship, that is, I'm too lazy to work and too nervous to steal, so I have to come up with some way of staying alive.
HUNTER-GAULT [voice-over]: The jump from Broadway to Wall Street came at the urging of a good friend, Dr. Henry Jarecki, who heads up a trading firm in precious metals.
VAN PEEBLES: Henry and I had a bet, and it was one of my shows. And Henry put up $100,000 in one of these shows that we were doing, and the bet was if the show hadn't turned around in a certain length of time, I'd go to work on Wall Street.
HUNTER-GAULT: You became a trader on a bet?
VAN PEEBLES: Yup. And as a matter of fact, I adore it; I enjoy it a great deal.
HUNTER-GAULT [voice-over]: Van Peebles holds a seat on the exchange and is associated with a firm called Timber Hill, Inc. Henry Jurecki is one of its investors. I asked Van Peebles, just what do you do?
VAN PEEBLES: Well, a trader is like what you do in most [unintelligible] to be successful. You buy cheap and you sell dear. What happens is, specialists, the person who deals in the option of the stock, has to give you a price at which you can sell it, and a price at which you can buy it. Now he doesn't know if you want to buy or if you want to sell. That's the essence of what goes on.
HUNTER-GAULT: But it's whole different world, isn't it? I mean, from the world --
VAN PEEBLES: It's a completely different world from any of the -- from any world I have been in. There's a great bond of camaraderie and of helpfulness that goes on down there. There's a great ritualization to let off steam of what might be the pressure or the anger of the thing.
HUNTER-GAULT: Do you have a specific philosophy or a system that you trade under?
VAN PEEBLES: Whim. Same as everywhere else.
HUNTER-GAULT: What's the system for it?
VAN PEEBLES: Oh gosh, hey. I wouldn't discuss the system. I mean, it's like saying, how do you know the combination of your safe. That's my system.
HUNTER-GAULT: But you do have a system?
VAN PEEBLES: Well, I'm alive.
HUNTER-GAULT [voice-over]: Van Peebles has been working on the Amex trading floor for more than a year now, but that doesn't mean he's given up the other parts of his life. He's just finished acting in a new movie being made by director Robert Altman. He maintains his own business organization for his theatrical pursuits and various other deals. So breakfast meetings at his New York apartment are a daily occurrence. Van Peebles also manages to write almost every day, and he still composes music in his own unique way, according to the numbers.
VAN PEEBLES: I didn't have anybody to help me, so I just numbered all the keys on the scale. 'Cause I couldn't remember them all, and I just write, play the numbers. And somebody said later, oh yes, that's a D minor with -- that's interesting, that's interesting. They write it down, and I saw it and I play it. When I'm working at the piano, you're worrying about should it be this key or that key or should it be this chord, should it be that chord. It's all nuance, but on the floor, it is all absolute precision, you know where you stand. In five seconds, when a guy says, I'll give you an eighth, or I'll give you a quarter -- it's an eighthor it's a quarter. I mean, it's very cut and dry. Which is like a breath of fresh air.
HUNTER-GAULT: You've taken an awful lot of chances that very few people would have taken. What makes you so confident that you can survive?
VAN PEEBLES: When I was coming up, everybody who had ever made it was white. Santa Claus, Jesus Christ, Ralph Bunch. I never saw a blood look like anybody or act like anybody that I knew coming off the block. A lot of times, people see me, or hear me, and they don't feel particularly put off. They feel that, well, he did it, I can do it. I had to diversify, just as any other conglomerate, to survive, because when my work was considered political at the time, because it was considered violent, not a violence, of course, that got immediately got copied by everyone else using my formulas to make money. I've never been offered a job in the entertainment industry. After Sweetback, all the jobs I had to make myself. Now, 12, 15 years later. What do you know? It's beginning to come around.
MacNEIL: Just your average stockbroker. Good night, Judy?
WOODRUFF: Too lazy to work and too nervous to steal. Good night, Robin. That's our NewsHour for tonight. I'm Judy Woodruff. Thank you and good night.
The MacNeil/Lehrer NewsHour
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This episode of The MacNeil/Lehrer NewsHour reports on the following major stories. The program begins by reporting on what the increasing value of the United States dollar in the world market means to Americans. Judy Woodruff follows with a report and recommendation that the legal drinking age be raised to 21, in an attempt to curb deaths caused by drunk driving accidents. Charlayne Hunter-Gault concludes the program with a profile on Melvin Van Peebles, a self-made independent writer/director/actor whos also the only African-American stock trader on the floor of the New York Stock Exchange.
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Chicago: “The MacNeil/Lehrer NewsHour,” 1983-12-13, NewsHour Productions, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC, accessed June 25, 2022,
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