The MacNeil/Lehrer NewsHour

MacNeil/LEHRER NEWSHOUR SHOW #4245 FRIDAY, JANUARY 10, 1992

MR. LEHRER: Good evening. I'm Jim Lehrer in Washington.

MR. MacNeil: And I'm Robert MacNeil in New York. After tonight's News Summary, our lead story is the economy and the new unemployment figures. We get an administration reaction from the Labor Secretary Lynn Martin, then the views of editors around the country, and political analysis by Gergen & Shields. We close with a report on art that came out of the holocaust.NEWS SUMMARY

MR. MacNeil: President Bush returned to Japan today to a double dose of bad news, political and economic. The economic bad news is a sharp rise in the nation's jobless rate. The Labor Department said it increased .2 percent to 7.1 percent in December. That translates to about 300,000 more jobless Americans, for a total of nearly 9 million, the highest number in eight years. On the political front, the President's approval rating dropped to a new low, according to a New York Times/CBS News Poll. It found more than 2/3 of Americans disapprove of the President's handling of the economy. Mr. Bush said his Asia trip was a success and would provide an eventual economic payoff for Americans. He spoke to reporters at Andrews Air Force Base.

PRES. BUSH: While I'm disappointed that the unemployment numbers went up in December here, our work over the last few days will help open markets for American companies and provide more jobs for our workers. Make no mistake about it, our progress this week will translate into progress on jobs and economic growth in America. The results will be clear and measurable.

REPORTER: Over the short-term, was this trip a political bust for you personally?

PRES. BUSH: Well, I don't think collapsing with the flu helped, but I think I can handle that one, Jim. I feel fine. My health is good. And I don't think it's a bust at all.

MR. MacNeil: Chrysler Lee Iacocca was one of the business leaders that Pres. Bush took to Japan. He returned with tough words for the Japanese. Iacocca spoke to the Detroit Economic Club this afternoon.

LEE IACOCCA, Chairman, Chrysler Corp.: Seeing American government and business arm in arm for the first time ever sent the Japanese a clear message. And I think, I think the Japanese got it, they got it, they didn't like it, they fought it, oh, boy, did they fight it, and they made a start in dealing with it, but only a start. Frankly, from a Detroit perspective, it was a weak start, but it was a start. It's important that we use all the leverage we have because without persistent, outside pressure, the Japanese will not move at all. And why in the hell should they? They're winning. In fact, they're beating our brains in. So we're going to have to move them.

MR. MacNeil: After the speech, Iacocca said executives from the big three U.S. automakers expect to meet again with their Japanese counterparts in February or March. He said the meetings would take place in Washington and Detroit, but other details were still being worked out. Jim.

MR. LEHRER: Federal Reserve Board Chairman Alan Greenspan said today he saw encouraging signs the economy would start growing again, but if it doesn't, the Fed was prepared to make more cuts in interest rates. He said last month's cut in the discount rate had received a good response in the financial markets. He spoke at a Senate hearing on CapitolHill.

ALAN GREENSPAN, Chairman, Federal Reserve Board: We believe that action combined with the effects of previous easing actions should provide considerable impetus toward a sustained revival of economic expansion in 1992, however, we also recognize that the unusual factors retarding the economy may continue to operate in ways that we in the financial markets cannot now anticipate. We will continue to monitor the situation carefully and stand ready to take steps necessary to foster sustainable economic expansion.

MR. LEHRER: Last night, two state governors called for major spending cuts to balance their budgets. California's Republican Governor, Pete Wilson, asked legislators for a 10 percent cut in welfare payments to save nearly $700 million. In Illinois, Republican Governor Jim Edgar also proposed welfare cuts, along with $150 million from the state's elementary, secondary, and higher education programs.

MR. MacNeil: An Irish Republican Army bomb exploded this morning near White Hall, seat of the British government. No one was hurt in the blast, which was close to the Downing Street resident of British Prime Minister John Major. It was the latest in a recent wave of IRA attacks in Britain. We have two reports, beginning with Robin White of Independent Television News.

ROBIN WHITE, ITN: A 30-minute warning was just long enough for police to clear the area around the bomb, but not enough time for them to de-fuse it. One policeman was knocked off his feet, but miraculously there were no injuries. At that stage there was no indication that any more bombs had been planted. The device, five pounds of high explosives, had been left in a brown briefcase between two parked vehicles in a side street a hundred yards from White Hall. Police now want to trace a red G registration Volvo motor car parked there earlier. The explosion smashed dozens of windows and rattled a nearby hotel. For much of the day detectives have been combing the area for fragments of the bomb. The capital has been on high alert, with other scares reported and checked.

PETER ALLEN, ITN: The bomb went off in an area open to the public, but within striking distance of government offices, and only a couple of hundred yards from the site where almost a year ago the IRA launched mortars at Downing Street from the back of a van. John Major wasn't at home this time. He'd left 10 minutes before the explosion for a series of meetings at conservative central office.

JOHN MAJOR, Prime Minister, Britain: I think the terrorists really should have learned now that neither in Belfast nor in London, nor in anywhere else in the United Kingdom will they be able to bomb people out of their normal activities, their homes, their schools, or anything else. If they want to reinforce our determination to make sure we defeat them, this is the way to do it.

MR. MacNeil: Israeli jets attacked a Palestinian guerrilla base in Lebanon today. At least nine people were killed and eight wounded. The base was in the hills just south of Beirut. The Israeli army command claimed it had been used to launch terrorist attacks on Israel. It said the base was destroyed in the raid. That's our summary of the news. Now, unemployment and the economy with Labor Secretary Lynn Martin, regional editors and Gergen & Shields, also art from the holocaust. FOCUS - PINK SLIP

MR. LEHRER: Unemployment, the President's trip, and the economy are the parts of our lead story tonight. Part 1 is an administration view from Washington. It comes from Labor Sec. Lynn Martin. Judy Woodruff talked to her earlierthis evening.

MS. WOODRUFF: Sec. Martin, thank you for being with us. This new unemployment rate up to 7.1 percent. We lost, what, 300,000 jobs in December, almost that money the month before in November. Where are these jobs coming from?

SEC. MARTIN: They're coming from different areas, some hurt worse than others. The construction industry has been heavily hurt. We're losing manufacturing jobs. Some regions, however, are doing worse than others. There are a few. There's some growth in health care, for instance, but overall, what is quite clear is that we are having no job production. In any economy, I should tell you, there's always a change in job, in switches. What we have now though are basically losses, losses that must be made up in other categories. That means new investments. I know it's an election year but I'm the Secretary of Labor. When we just talk about these numbers, part of what bothers me is we don't put them with people. That's people that are out of work, people that can and have a right to expect the administration and the Congress to formulate job investment. They may not know the economics. They may not know if it's monetary or fiscal policy, but they know we have to have a more focused view of what we can do, not speeches, but actually doing something to produce the kind of investment area that means jobs for people.

MS. WOODRUFF: But you're not talking as if this is a situation that's going to turn around anytime soon. When you say jobs are disappearing and they're going to have to be elsewhere, what are you saying exactly?

SEC. MARTIN: I think that what we've seen in this number, in this now over the 7 percent, the 7.1 percent number, is it's quite clear that not only is restructuring going on, in industry after industry that may have some long-term positive effects, that's there's actually in some industries more than restructuring, there's loss. That's why when we hear some good news about exports which are new jobs, that makes some sense, but what I look at as Secretary of Labor is how do we produce more jobs, and there really are only a couple of ways to do it, and we'd better do it.

MS. WOODRUFF: What are they?

SEC. MARTIN: One is monetary policy, and that takes a while, but even today, Alan Greenspan said, you know, it has to take a while to kick in, and I wish we had done it sooner, but that's going to be part of it. The other though is the kind of investment, plus investment, that is going to be very difficult for Congress in an election year to reach agreement on.

MS. WOODRUFF: Before I ask you about the investment, let me ask you about the monetary policy. Did the Fed lower the discount rate over the past year, from what, 6 1/2 percent to 3 1/2 percent, which is a big drop, but still the unemployment rate is going up. How long does it take for that to kick in?

SEC. MARTIN: Well, we should go back even further than a year. And I should tell you we have what's called a lagging indicator. In other words, even if we were in real recovery, did recover, there might still be higher unemployment for a month, for two months. But what we have now is I agree, you know, now in hind sight, and perhaps others who said so in fore sight, should have been more dramatic and bigger. There will be, there will be a kick from this lower rate, not just in refinancing a home, but buying a home. That starts all sorts of other things. We saw a drop in home construction and a loss in jobs in the construction industry that has had a ripple effect. And I think we do have to look at making sure that buying a home becomes even easier for the American people.

MS. WOODRUFF: But you're saying that may take months to take effect?

SEC. MARTIN: Part of me isn't so sure that we should always keep talking about months. There may be some effects, but you'll have to, someone will have to explain to me as a former member of Congress, now the administration, that when there's the state of the union and the Congress is in, I'm not sure the American people will wait to hear from the Congress that it will take them six months to reach agreement. I really think it's time to say and in a month we're going to, we are going to have this package. There may be variations in it, but why not work every day and achieve it?

MS. WOODRUFF: And what is going to be in that package? You just talked about investment, plus investment. What do you mean by that?

SEC. MARTIN: Well, certainly, you welcome some ideas from Congress. But there are certain things that are obvious. It has to be a good place to invest money. There has to be areas that make sense for people to put their money.

MS. WOODRUFF: Such as --

SEC. MARTIN: Well, the job investments, the capital gains, jobs investments, those kind of combination, and one other thing that has to do more with me.

MS. WOODRUFF: But government spending, are you talking about --

SEC. MARTIN: Government or the Congress during the 1980s has, the debt that we're now carrying is really negatively affecting what we can spend. I will add that the new -- and it is a jobs bill -- that new transportation bill will provide many jobs. That hasn't really kicked in yet. I think we will see some of that. It isn't - - I do happen to like capital expenditures.

MS. WOODRUFF: Because that's money that's being spent to fix the --

SEC. MARTIN: It's money that's there and in the long run you get a double, you get kind of a triple whammy from it, but you can't do it and ignore what debt has done. Debt and the debt we've carried is causing some of this restructuring. And so perhaps the best lesson the Congress can learn is that we're going to have to put this together in one package that will make monetary and fiscal sense.

MS. WOODRUFF: But what else ought to be in that package? You talked --

SEC. MARTIN: Well, I would argue that one of the things not in the package, but in a whole look, is we are going to have to look at a very changed workforce. Judy, we're going to be talking about retraining. We're going to be talking about whole different kinds of schools. It is quite clear, and you can look at just what's happening in industry after industry, that if you are poorer, if you are in an industry that has depended on brawn, not brain, you're hurt even more. It is quite clear if we want to be a high pay economy, and that's what I want for this nation, we're going to have to be a high skill economy and all of us are going to have to face that. That may be longer-term, but in the long and short run it is absolutely necessary.

MS. WOODRUFF: But how much comfort is that to these 1/2 million people who have been laid off work in the last two, two and a half months?

SEC. MARTIN: I used to represent the area in the country that had the highest unemployment in the world and I used to even turn off myself at listening to speeches about what would happen long-term. Part of your job is to make sure that long-term someone is watching. But right now, the comfort you can offer is to say that right now we should be offering retraining so when the economy moves or if there's a chance that this individual person has more than one skill, that may mean a job would be more available. More than that for comfort, you can offer, is the biggest comfort has to be that there will be an agreement for leadership to put this country back to work, and that means with the President's speech, then there has to be the cooperation.

MS. WOODRUFF: You're referring to the state of the union address coming up in a couple of weeks.

SEC. MARTIN: Yes. There has to be that cohesion. Then after that, I hope there's a commitment from Congress to not leave until we get it done, not because I know that everything in the President's speech would be passed, but because, I mean if the American people aren't important enough to the Congress to stay in, that says something about the Congress, I suspect.

MS. WOODRUFF: You talk specifically about job retraining. Is the money being spent right now on job retraining?

SEC. MARTIN: Yes, we're spending more and more on job retraining. Sometimes we come in too late. 20 percent of our kids can't even read their own diplomas in high school. Too often vocational education is non-education and too often we look down upon learning from other nations, I don't care if it's Germany or I don't care if it's Japan, ways to prepare the 50 percent of our young people who aren't going to school so that they can have a really terrific quality of life, so they can make money, so they can have the kind of jobs. We've had management that hasn't responded as well as it should. This isn't the American worker. I am here to tell you the American worker still can be, wants to be, is willing to be the best worker in the world. But his government and, yes, the companies and the unions that have purported to represent him have to be able to give him or her a better chance to be all that that person can be.

MS. WOODRUFF: Well, Sec. Lynn Martin, we thank you for being with us.

SEC. MARTIN: Thank you. FOCUS - EDITORS' VIEWS

MR. MacNeil: Next, some editorial reaction to this latest economic news and other issues. We're joined by four of our regular panel of regional editors plus one. The plus one is Joseph Perkins, a member of the editorial board of the San Diego Union. The others are Cynthia Tucker of the Atlantic Constitution, Clarence Page of the Chicago Tribune, Ed Baumeister of the Trenton, New Jersey Times, and Erwin Knoll of the Progressive Magazine published in Madison, Wisconsin. Ed Baumeister, what's your view of the economy after today's unemployment figures?

MR. BAUMEISTER: Well, in New Jersey, we now have a national average. We're 7.4 percent. We're the second richest state in the union. I think people are beginning to think that there's something wrong and something worse going to happen. There's a sense of impending doom, and it's been provided, wittingly or not, by people like Robert Stemple, who was one of the traveling businessmen with the President in Japan. Just before he went, just before Christmas, he announced that 74,000 people now working for General Motors will not be working for General Motors. He didn't say which ones. He didn't identify which plants. We have a big GM plant just outside Trenton. Twenty-five hundred people work there. And when you go out and talk to them, they talk about dodging the bullet. I mean, they really feel that the world is hostile to them and these forecasts of impending doom are provided by people like the chairman of General Motors.

MR. MacNeil: Joseph Perkins, is there a sense of impending doom in San Diego?

MR. PERKINS: I would say so. Various local industries have been hit by layoffs or eliminations of jobs inthe last year or so. The construction industry has shed about 8,000 jobs. Local banks and other financial institutions have also laid off workers. My own company is undergoing a merger right now that's going to be particularly painful for a lot of workers. And I think that's contributed to a general sense of apprehension throughout the local economy.

MR. MacNeil: Do you share that in Atlanta, Cynthia Tucker?

MS. TUCKER: Yes, indeed. The unemployment figures today show that not only are things not getting any better, they're getting worse. Workers in Atlanta and throughout Georgia are very, very concerned. Atlanta, suburban Atlanta also has one of those GM plants that Ed Baumeister referred to. Workers in the Deweyville plant here are very concerned that that might be one of the plants that is closed. State government here has been hit with the layoffs of nearly 2000 workers throughout banks, throughout the service sector here.

MR. MacNeil: Cynthia, can I interrupt you for a moment? We're having a little trouble hearing you clearly. I'm going to go to somebody else and come back to you in a moment. Clarence Page, is the sense of impending doom a phrase that describes the feelings in Chicago?

MR. PAGE: Chicago and Illinois I think, Robin, while I sympathize with Ed Baumeister in New Jersey, when you hear the national average on the jobless rate is at 7.4, Illinois just topped 9 percent in unemployment, and as you mentioned in your earlier News Summary, Gov. Jim Edgar was calling for $100 million worth of welfare cuts, and cuts in education, something that we had just started spending some money on a few years ago badly needed for higher education, as well as regular secondary and primary education. And the reason for that is because state revenues are down partly because the tax base is down when general revenues are down, it's all a reflection of the economy. These are all numbers but behind the numbers, of course, are attitudes, and numbers kick off attitudes of gloom and doom or a sense of hope. And I think right now the meter's definitely over on the gloom and doom side with people looking for some kind of answers.

MR. MacNeil: Is it, is the meter on that side in Wisconsin, Erwin Knoll?

MR. KNOLL: Yes. I hate to make it unanimous, but I think there is a growing sense among people not only that we're in serious trouble, but also that national leadership, the Bush administration, the Congress, the Democrats running around New Hampshire, looking for their party's nomination, that none of these people are really addressing this problem in any way that shows any promise of delivering. And I think people are grimly disposed toward the leadership and fear that things are going to get a lot worse.

MR. MacNeil: Yeah. Ed Baumeister, today's poll shows that confidence in the President's handling of the economy has gone way down. Two-thirds of the people are negative about it. How much do you think people blame the President for this state of affairs and are now looking to him to put it right?

MR. KNOLL: Oh, I think most of the people I talked to blame him. I know the administration is trying to share this opportunity with Congress, but when you're in trouble you don't call for the criminal justice system, you call for a cop. And it's focused on him very much. There's some irritation among some of the people I talked to today that, you know, we're in serious trouble and he says, wait for the state of the union. Again, it's something else impending. I think it really travels directly to his door, whether he deserves it or not, it goes there.

MR. MacNeil: Yeah. Joseph Perkins, do you agree with that?

MR. PERKINS: Unfortunately I do. You know, the most significant statistic with respect to employment during the first three years of the Bush administration is that the economy has created only 1/2 million new jobs. During the first three years of the Reagan Presidency, during which we also experienced a recession, the economy created something on the order of 3 million new jobs, and I think for many Americans that's the most salient kind of indicator of just how successful President Bush has been in managing the economy.

MR. MacNeil: How do you see that, Clarence Page?

MR. PAGE: Well, I have to ask the question of the quality of the jobs. A lot of people point out that Chicago, for example, has gone from a hog butcher to a hamburger slinger. In other words, we're not, the big heavy production industries that Lynn Martin was referring to earlier, those good paying jobs have been replaced in many cases by minimum wage jobs or close to it. People are having trouble making ends meet even when they work. It is true some new jobs have been created. We need to create more. We've also got to look at how well those jobs are paying and how many people need to be retrained for the jobs of the future.

MR. MacNeil: Cynthia Tucker, Lynn Martin said several times, I actually counted five or six of them, that it was up to the Congress to get together with the administration on this, it was the Congress' responsibility to meet the President's challenge and not drag it out for months. How do you think people are dividing responsibility and the blame for the state of affairs between the President and the Congress?

MS. TUCKER: Well, it does not surprise me at all that a representative of the Bush administration tries to lay the blame squarely at the door of Congress for this mess. But it seems very clear by the polls that American people look to President Bush to provide economic leadership. After all, every President campaigns, every person who's running for the Presidency, campaigns on his or her ability to manage the economy. So the American people lay that solely and squarely at the feed of President Bush, I believe. Now, granted, Congress has a role to play in this. But traditionally, the American people expect that the President will provide the major economic leadership. And I think that the American people still expect that that is the place where it will come from and if President Bush can't provide that, then they'll look for a Democratic contender to do that.

MR. MacNeil: Erwin Knoll just said, Cynthia, while you were fixing your sound system there that -- I don't know if you heard it -- that as far as he sees it, people don't have much faith in the Democrats either, Democratic contenders either. What do you think?

MS. TUCKER: At this point, I think that's probably true. I don't think any Democratic contender has presented a plan that the American people have particularly noticed. Also, I think it is unfortunate that two of the major Democrats who have been associated in some way with the Presidential campaign have said they are not going to run or are dropping out because of budget problems in their own states. When Mario Cuomo of New York announced that he would not run, he said it was because he could not or had not yet solved New York's budget problems. When Doug Wilder of Virginia announced that he would drop out, he attributed his decision to Virginia's budget problems. Both of them are major Democratic figures so that does not help the plight of the Democrats in trying to prove that they can handle the economy better than the Republicans can.

MR. MacNeil: Erwin Knoll, do you think with this sense of doom and gloom, or however one characterizes it, that the American people are really looking with some hope to the state of the union message and the action the President has promised he will announce that night?

MR. KNOLL: No, I don't think so. Going back to my own time in Washington 20 years ago, it seems to me that people in Washington, in the media and government place much more emphasis on the state of the union address than people out here in the real world do.

MR. MacNeil: But hasn't it taken on a kind of action thrust this time because of the particular circumstances and the turnaround of the administration's view of the economy?

MR. KNOLL: Well, perhaps it ought to take on that kind of thrust, but I think most people as of now, if they think of the state of the union at all, they think of it as just another speech that the President was going to deliver sometime in the latter half of January, and nobody gets very excited about that as a vehicle for fixing anything.

MR. MacNeil: Clarence Page, do you think there's a sense of anticipation about that?

MR. PAGE: Well, as one who sits in the beltway quite a bit these days, Erwin Knoll should be delighted to know things haven't changed much in the 20 years since he left. I think people do put more emphasis on it here than in the rest of the country, however, it is an important address. It sets a tone for the administration. It sets a tone and an agenda for the President's work with Congress. And it certainly provides a dramatic moment or can provide a dramatic moment at this point for the President to tell the nation, show the nation that he recognizes there's a problem and that he's got a grasp on some response to it. However, I agree with Erwin Knoll. I don't think Americans out in Illinois and the Midwest are sitting at home, saying, gee whiz, Gloria, I just can't wait to see what the President has got to say in the state of the union address. It's not something that we look forward to like the Super Bowl.

MR. MacNeil: Ed Baumeister, how has the President's trip to Japan with the automakers and other executives played in your area? The President went out saying the message was jobs. What is the message that's come back, do you think?

MR. BAUMEISTER: The message that's come back is, it may be mixed, but I don't think it's jobs. I think it's clear. These fellows out at the GM plant when they see 19,000 cars, it's a lot of cars, to be granted, but it's not going to save, 19,000 more cars split among the three big American makers isn't going to save the Fisher Guide plant in Ewing, New Jersey. I think they viewed it with a great deal of cynicism, which was sort of fueled by this sense of extremely excited uncertainty. So I don't think it came back as a solid message of consolation.

MR. MacNeil: Joseph Perkins, how do you think -- what do you think the message came back from back from the Japanese trip?

MR. PERKINS: Even the President conceded that he could have gotten a better deal from the Japanese. The point is that that trip was hardly going to produce more American jobs. And I think that that's been reflected in the responses not only of the executives that accompanied the President on the trip, but in the reaction of the American people. I would have liked to have seen the President get together with the Japanese to agree that they would complete the GATT rounds successfully. But that didn't come from thistrip. And I must say that I'm kind of disappointed and I expect that many Americans are disappointed because I don't think that the results of the trips will be more jobs for American workers.

MR. MacNeil: Cynthia Tucker, what message did you get from the trip to Japan?

MS. TUCKER: Unfortunately, I think that the overwhelming aura that sort of surrounded this trip was one of American impotence. I think that certainly the big three automakers came off sounding as whiners. To some extent, President Bush seemed to be going to the Japanese, begging, hat in hand. It seemed to me to reinforce two problems in the American economy. One is of the overcompensated American executive. Even if your company is failing, you still get these incredibly high rates of compensation as exemplified by the three American automakers. The other is that we simply don't seem to be up to the tax of producing quality goods at home. That's not true, but taking three American automakers with him on the trip simply reinforced that impression. And I'm sorry, but that's the one that I think the American people get from this trip. That's the message they get.

MR. MacNeil: Clarence Page, Cynthia mentioned a moment ago Gov. Wilder's withdrawing from the race. What kind of impact is that going to have on the Democratic situation?

MR. PAGE: Well, I see one immediate impact, of course, is this shifts the tone of the campaign to the degree that the other candidates now can feel free, should be encouraged to go out after Gov. Wilder's base constituency, which is mostly black and moderate, not as progressively leaning as Jesse Jackson. However, later this month, Jesse Jackson's Rainbow Coalition has invited the candidates to come and speak here in Washington around January 24th. And I suspect this will be a golden opportunity for them to try to go after Jesse's, the 7 million votes that Jesse Jackson won before. In other words, what has happened is that with Wilder out of the picture, Jesse Jackson has re-emerged, not as a candidate, but as a king maker. And that I think could have quite a bit of an effect on the tone of the debate, could shift it a bit to the left.

MR. MacNeil: Well, gentlemen, and Cynthia, thank you. Jim.

MR. LEHRER: Still to come on the NewsHour tonight, Gergen & Shields and art from the holocaust. FOCUS - GERGEN & SHIELDS

MR. LEHRER: Now, how this week of Japan, economics and politics looks to our regular analysis team of Gergen & Shields. David Gergen, editor at large of U.S. News & World Report, syndicated columnist Mark Shields. First, on the issue of Doug Wilder, do you agree with Clarence Page that this could move the Democrats to the left because of the Jesse Jackson influence?

MR. GERGEN: No. I think it's just the other way around. The important thing that's happened in this race from a perspective of Jesse Jackson and Doug Wilder is that Jesse Jackson did not get into the race and I think that that has allowed the white candidates in the race to issue a broader appeal and appeal far more than they did in 1988 when Jackson was in it, to appeal far more to white suburban voters. I think that's where the motherload of votes is for Democrats is in 1988, to bring those Reagan Democrats back to the Democratic Party. I think they can continue just as Harris Wofford did in Pennsylvania. You as a Democratic candidate can continue to get black votes, but you can broaden your appeal by talking about more than the underclass, by talking about more than the inner-cities. So I think in some ways it's been a blessing to the Democrats so farthat Jesse Jackson has not been in the race, and I do think with Doug Wilder getting out of it, it's going to open the door for a person like Bill Clinton or Bob Kerrey or others to not only appeal to suburban votes but go after the black votes.

MR. LEHRER: Mark, how do you feel about that?

MR. SHIELDS: I think Jesse Jackson's absence from the race is a far more compelling and important dynamic than Doug Wilder's exit from it. Doug Wilder never had, as Clarence pointed out, the same kind of hold on black voters that Jesse Jackson did. Jesse Jackson was the President of black America and he operated at the last two Democratic conventions very much like the shop steward for black America. And Democrats went through this ritual. Walter Mondale did it, less so than did Michael Dukakis, but in both cases, it appeared that they were negotiating almost in an Apomatics-like setting with Jesse Jackson meeting Jesse's non-negotiable demands. I think David's absolutely right, that opening it up to white candidates competing for black votes can only be healthy, can only be healthy for American politics.

MR. LEHRER: Meaning by the time the convention comes around black delegates and the black vote will have already been committed to one of the white candidates --

MR. SHIELDS: Or several.

MR. LEHRER: -- and Jesse Jackson will not be able to be there.

MR. SHIELDS: I think it's interesting. I think that Jesse will emerge as a major figure that the press goes to again. He's the logical person but I don't see him as the de facto king maker.

MR. GERGEN: Absolutely.

MR. LEHRER: All right. Another political question, and we'll work our way back to economics and unemployment, but going back in reverse order that Robin went, in another political question having to do with President Bush, is there any political -- just quickly - - is there any political fallout from President Bush's having collapsed because of the flu?

MR. GERGEN: Well, I think that there's going to be some sympathy for him. I also feel that the press has dramatically overplayed the story. It was a 24-hour flu bug. I don't think so at this point, Jim, that it's going to have much impact on the race, unless we see some additional evidence of him having a health problem. But at this point, I think it's one of the things -- it's sort of like this week's story and it's going to go away very quickly, as long as he remains vigorous. I think he could take some advice from a number of columnists who've written about this in the last few days, and that is perhaps to slow down a bit and appear a little less frenetic.

MR. LEHRER: I was going to ask you about that, Mark. The New York Times detailed in some specificity this morning -- that's a good word -- but the fact that the President, despite being tired, pushed on to job, pushed on to play tennis, hurt his leg so badly, tired him out so badly when he goes to bed he has to put pillows around them, and you wonder what's he trying to prove. Does that question occur to you?

MR. SHIELDS: I wasn't, I've never been privileged to work for George Bush, and I didn't go to Andover, where cold showers and root canal work were considered, I guess, de rigueur. He is some --

MR. GERGEN: This is a class argument as opposed to a health argument.

MR. SHIELDS: No. I think that's part of it though. I think it's that idle mind at the Douglas workshop, that whole Protestant ethic is very deeply inculcated in George Bush. There's no doubt about it. He is somebody, it was once described by a friend, who frequently confuses motion with accomplishment, if he's doing something constantly, and that the quiet solitudeness hours spent are somehow misspent, that one should be doing something, one should be. That, I don't know how else to explain it, other than that. As far as the flu is concerned, I'd just like to add one thing. I think the Democrats could go for the bait, unless, in fact, it is serious. If it turns out to be a serious ailment, then it certainly will be a central issue of the campaign of 1992. But they'll go for the bait, which is the tempting, almost irresistible bait for Democrats, because Dan Quayle, the Vice President, is in the spotlight again and immediately they'll go after Quayle, with Quayle taunts and teases and jokes and asides. And I think that's a serious political mistake, beyond whether it's the right thing to do, because in 1988, Lloyd Bentsen scored a technical knockout over Dan Quayle. And what we've learned is that American voters when they vote for President vote for President. They don't vote for Vice President. And if they did, Lloyd Bentsen would be Vice President of the United States today. So I think that could be, I think could be a temptation for the Democrats.

MR. LEHRER: David, do you have anything to add to that, why the President persists in what to most normal people seems extravagant in his desire and push to get out there and keep running and keep playing tennis and no matter what the weather is, no matter what his situation is, he's up all night, he's playing all day, what's the deal?

MR. GERGEN: Well, I guess, I hesitate to play amateur psychologist or the scholar of Protestant ethics and those who went to Andover. My sense is it's more physiological. And one reads from a number of experts that if you did lead a very active life as a kid, you tend to continue doing that as an adult. I'm not --

MR. LEHRER: Nothing to be concerned with?

MR. GERGEN: No, No. Here's what I think is bothersome about it. As far as his health, obviously, there's nothing to be concerned about. I think it's a little unsettling to people right now. I think they'd like to see the President a little calmer. I think that's -- if he wants to carry on and do all these sports and everything like that, I don't have a problem with that, but I think people are getting a little bit, wait a minute, the guy's careening around too much, if he'd settle down a little bit, they might have a little more confidence in his leadership. And that's the point I would argue.

MR. LEHRER: Which brings us to the question of the unemployment rate today, the economy, waiting for the state of the union. You heard what the editors said. You heard what Lynn Martin said. What's your reaction to what you've just heard?

MR. GERGEN: Well, I think there's a lot of Bush bashing going on here. It's hard to find a kind word. Let me just say on the other side of the ledger that I'm mostly negative on the trip, but if you think on the positive side of the ledger about this trip, we've been arguing for a long time George Bush ought to be focusing on jobs. He's now focusing on jobs. We've been arguing for a long time he ought to be pushing exports. He's doing that. I think it's healthy also that he's trying to create more of a partnership in business, exactly what the Democrats have been arguing on in the stump here in the last few months. All of that, it seems to me, is good. What went wrong on this trip was he overdid it. You know, he took the pendulum, you know, as he often does, all the way over to the other side, so it turned out to be I think bad politics, bad economic policy, bad diplomacy.

MR. LEHRER: Other than that, it was great.

MR. GERGEN: Right. We have, Jim, what is passing strange to me, an administration that argues passionately against quotas for human beings now embraces quotas for auto parts and I just find that unbelievable.

MR. LEHRER: Mark.

MR. SHIELDS: I think the trip is viewed, has to be viewed as the first major political swing of 1992. By that measure it is a disaster. It is unthinkable that Ronald Reagan would have had such a trip, [a], that he didn't know what it was about, what the purpose was. There was no stated goal. The auto executives, the Secretary of Commerce, and the President's campaign chairman insisted he insisted upon bringing along turned out to be a disaster at several levels. First of all, their salaries became a major focus, especially when compared with those of the Japanese counterparts, whose compassion the prime minister of Japan was offering, they were seeking. Secondly, the President tried to identify with American working people. His company and their company and their presence there deluded that, and, third, it just struck met that they embarrassed the President. Before he could even get back, they called the trip a failure. So they had no spin control. I mean, there was nothing like Ronald Reagan coming out of Reykjavik where the blown opportunity for detente, disarmament for the Japanese. Iacocca spoke to the Detroit Economic Club this afternoon.

LEE IACOCCA, Chairman, Chrysler Corp.: Seeing American government and business arm in arm for the first time ever sent the Japanese a clear message. And I think, I think the Japanese got it, they got it, they didn't like it, they fought it, oh, boy, did they fight it, and they made a start in dealing with it, but only a start. Frankly, from a Detroit perspective, it was a weak start, but it was a start. It's important that we use all the leverage we have because without persistent, outside pressure, the Japanese will not move at all. And why in the hell should they? They're winning. In fact, they're beating our brains in. So we're going to have to move them.

MR. MacNeil: After the speech, Iacocca said executives from the big three U.S. automakers expect to meet again with their Japanese counterparts in February or March. He said the meetings would take place in Washington and Detroit, but other details were still being worked out. Jim.

MR. LEHRER: Federal Reserve Board Chairman Alan Greenspan said today he saw encouraging signs the economy would start growing again, but if it doesn't, the Fed was prepared to make more cuts in interest rates. He said last month's cut in the discount rate had received a good response in the financial markets. He spoke at a Senate hearing on Capitol Hill.

ALAN GREENSPAN, Chairman, Federal Reserve Board: We believe that action combined with the effects of previous easing actions should provide considerable impetus toward a sustained revival of economic expansion in 1992, however, we also recognize that the unusual factors retarding the economy may continue to operate in ways that we in the financial markets cannot now anticipate. We will continue to monitor the situation carefully and stand ready to take steps necessary to foster sustainable economic expansion.

MR. LEHRER: Last night, two state governors called for major spending cuts to balance their budgets. California's Republican Governor, Pete Wilson, asked legislators for a 10 percent cut in welfare payments to save nearly $700 million. In Illinois, Republican Governor Jim Edgar also proposed welfare cuts, along with$150 million from the state's elementary, secondary, and higher education programs.

MR. MacNeil: An Irish Republican Army bomb exploded this morning near White Hall, seat of the British government. No one was hurt in the blast, which was close to the Downing Street resident of British Prime Minister John Major. It was the latest in a recent wave of IRA attacks in Britain. We have two reports, beginning with Robin White of Independent Television News.

ROBIN WHITE, ITN: A 30-minute warning was just long enough for police to clear the area around the bomb, but not enough time for them to de-fuse it. One policeman was knocked off his feet, but miraculously there were no injuries. At that stage there was no indication that any more bombs had been planted. The device, five pounds of high explosives, had been left in a brown briefcase between two parked vehicles in a side street a hundred yards from White Hall. Police now want to trace a red G registration Volvo motor car parked there earlier. The explosion smashed dozens of windows and rattled a nearby hotel. For much of the day detectives have been combing the area for fragments of the bomb. The capital has been on high alert, with other scares reported and checked.

PETER ALLEN, ITN: The bomb went off in an area open to the public, but within striking distance of government offices, and only a couple of hundred yards from the site where almost a year ago the IRA launched mortars at Downing Street from the back of a van. John Major wasn't at home this time. He'd left 10 minutes before the explosion for a series of meetings at conservative central office.

JOHN MAJOR, Prime Minister, Britain: I think the terrorists really should have learned now that neither in Belfast nor in London, nor in anywhere else in the United Kingdom will they be able to bomb people out of their normal activities, their homes, their schools, or anything else. If they want to reinforce our determination to make sure we defeat them, this is the way to do it.

MR. MacNeil: Israeli jets attacked a Palestinian guerrilla base in Lebanon today. At least nine people were killed and eight wounded. The base was in the hills just south of Beirut. The Israeli army command claimed it had been used to launch terrorist attacks on Israel. It said the base was destroyed in the raid. That's our summary of the news. Now, unemployment and the economy with Labor Secretary Lynn Martin, regional editors and Gergen & Shields, also art from the holocaust. FOCUS - PINK SLIP

MR. LEHRER: Unemployment, the President's trip, and the economy are the parts of our lead story tonight. Part 1 is an administration view from Washington. It comes from Labor Sec. Lynn Martin. Judy Woodruff talked to her earlier this evening.

MS. WOODRUFF: Sec. Martin, thank you for being with us. This new unemployment rate up to 7.1 percent. We lost, what, 300,000 jobs in December, almost that money the month before in November. Where are these jobs coming from?

SEC. MARTIN: They're coming from different areas, some hurt worse than others. The construction industry has been heavily hurt. We're losing manufacturing jobs. Some regions, however, are doing worse than others. There are a few. There's some growth in health care, for instance, but overall, what is quite clear is that we are having no job production. In any economy, I should tell you, there's always a change in job, in switches. What we have now though are basically losses, losses that must be made up in other categories. That means new investments. I know it's an election year but I'm the Secretary of Labor. When we just talk about these numbers, part of what bothers me is we don't put them with people. That's people that are out of work, people that can and have a right to expect the administration and the Congress to formulate job investment. They may not know the economics. They may not know if it's monetary or fiscal policy, but they know we have to have a more focused view of what we can do, not speeches, but actually doing something to produce the kind of investment area that means jobs for people.

MS. WOODRUFF: But you're not talking as if this is a situation that's going to turn around anytime soon. When you say jobs are disappearing and they're going to have to be elsewhere, what are you saying exactly?

SEC. MARTIN: I think that what we've seen in this number, in this now over the 7 percent, the 7.1 percent number, is it's quite clear that not only is restructuring going on, in industry after industry that may have some long-term positive effects, that's there's actually in some industries more than restructuring, there's loss. That's why when we hear some good news about exports which are new jobs, that makes some sense, but what I look at as Secretary of Labor is how do we produce more jobs, and there really are only a couple of ways to do it, and we'd better do it.

MS. WOODRUFF: What are they?

SEC. MARTIN: One is monetary policy, and that takes a while, but even today, Alan Greenspan said, you know, it has to take a while to kick in, and I wish we had done it sooner, but that's going to be part of it. The other though is the kind of investment, plus investment, that is going to be very difficult for Congress in an election year to reach agreement on.

MS. WOODRUFF: Before I ask you about the investment, let me ask you about the monetary policy. Did the Fed lower the discount rate over the past year, from what, 6 1/2 percent to 3 1/2 percent, which is a big drop, but still the unemployment rate is going up. How long does it take for that to kick in?

SEC. MARTIN: Well, we should go back even further than a year. And I should tell you we have what's called a lagging indicator. In other words, even if we were in real recovery, did recover, there might still be higher unemployment for a month, for two months. But what we have now is I agree, you know, now in hind sight, and perhaps others who said so in fore sight, should have been more dramatic and bigger. There will be, there will be a kick from this lower rate, not just in refinancing a home, but buying a home. That starts all sorts of other things. We saw a drop in home construction and a loss in jobs in the construction industry that has had a ripple effect. And I think we do have to look at making sure that buying a home becomes even easier for the American people.

MS. WOODRUFF: But you're saying that may take months to take effect?

SEC. MARTIN: Part of me isn't so sure that we should always keep talking about months. There may be some effects, but you'll have to, someone will have to explain to me as a former member of Congress, now the administration, that when there's the state of the union and the Congress is in, I'm not sure the American people will wait to hear from the Congress that it will take them six months to reach agreement. I really think it's time to say and in a month we're going to, we are going to have this package. There may be variations in it, but why not work every day and achieve it?

MS. WOODRUFF: And what is going to be in that package? You just talked about investment, plus investment. What do you mean by that?

SEC. MARTIN: Well, certainly, you welcome some ideas from Congress. But there are certain things that are obvious. It has to be a good place to invest money. There has to be areas that make sense for people to put their money.

MS. WOODRUFF: Such as --

SEC. MARTIN: Well, the job investments, the capital gains, jobs investments, those kind of combination, and one other thing that has to do more with me.

MS. WOODRUFF: But government spending, are you talking about --

SEC. MARTIN: Government or the Congress during the 1980s has, the debt that we're now carrying is really negatively affecting what we can spend. I will add that the new -- and it is a jobs bill -- that new transportation bill will provide many jobs. That hasn't really kicked in yet. I think we will see some of that. It isn't - - I do happen to like capital expenditures.

MS. WOODRUFF: Because that's money that's being spent to fix the --

SEC. MARTIN: It's money that's there and in the long run you get a double, you get kind of a triple whammy from it, but you can't do it and ignore what debt has done. Debt and the debt we've carried is causing some of this restructuring. And so perhaps the best lesson the Congress can learn is that we're going to have to put this together in one package that will make monetary and fiscal sense.

MS. WOODRUFF: But what else ought to be in that package? You talked --

SEC. MARTIN: Well, I would argue that one of the things not in the package, but in a whole look, is we are going to have to look at a very changed workforce. Judy, we're going to be talking about retraining. We're going to be talking about whole different kinds of schools. It is quite clear, and you can look at just what's happening in industry after industry, that if you are poorer, if you are in an industry that has depended on brawn, not brain, you're hurt even more. It is quite clear if we want to be a high pay economy, and that's what I want for this nation, we're going to have to be a high skill economy and all of us are going to have to face that. That may be longer-term, but in the long and short run it is absolutely necessary.

MS. WOODRUFF: But how much comfort is that to these 1/2 million people who have been laid off work in the last two, two and a half months?

SEC. MARTIN: I used to represent the area in the country that had the highest unemployment in the world and I used to even turn off myself at listening to speeches about what would happen long-term. Part of your job is to make sure that long-term someone is watching. But right now, the comfort you can offer is to say that right now we should be offering retraining so when the economy moves or if there's a chance that this individual person has more than one skill, that may mean a job would be more available. More than that for comfort, you can offer, is the biggest comfort has to be that there will be an agreement for leadership to put this country back to work, and that means with the President's speech, then there has to be the cooperation.

MS. WOODRUFF: You're referring to the state of the union address coming up in a couple of weeks.

SEC. MARTIN: Yes. There has to be that cohesion. Then after that, I hope there's a commitment from Congress to not leave until we get it done, not because I know that everything in the President's speech would be passed, but because, I mean if the American people aren't important enough to the Congress to stay in, that says something about the Congress, I suspect.

MS. WOODRUFF: You talk specifically about job retraining. Is the money being spent right now onjob retraining?

SEC. MARTIN: Yes, we're spending more and more on job retraining. Sometimes we come in too late. 20 percent of our kids can't even read their own diplomas in high school. Too often vocational education is non-education and too often we look down upon learning from other nations, I don't care if it's Germany or I don't care if it's Japan, ways to prepare the 50 percent of our young people who aren't going to school so that they can have a really terrific quality of life, so they can make money, so they can have the kind of jobs. We've had management that hasn't responded as well as it should. This isn't the American worker. I am here to tell you the American worker still can be, wants to be, is willing to be the best worker in the world. But his government and, yes, the companies and the unions that have purported to represent him have to be able to give him or her a better chance to be all that that person can be.

MS. WOODRUFF: Well, Sec. Lynn Martin, we thank you for being with us.

SEC. MARTIN: Thank you. FOCUS - EDITORS' VIEWS

MR. MacNeil: Next, some editorial reaction to this latest economic news and other issues. We're joined by four of our regular panel of regional editors plus one. The plus one is Joseph Perkins, a member of the editorial board of the San Diego Union. The others are Cynthia Tucker of the Atlantic Constitution, Clarence Page of the Chicago Tribune, Ed Baumeister of the Trenton, New Jersey Times, and Erwin Knoll of the Progressive Magazine published in Madison, Wisconsin. Ed Baumeister, what's your view of the economy after today's unemployment figures?

MR. BAUMEISTER: Well, in New Jersey, we now have a national average. We're 7.4 percent. We're the second richest state in the union. I think people are beginning to think that there's something wrong and something worse going to happen. There's a sense of impending doom, and it's been provided, wittingly or not, by people like Robert Stemple, who was one of the traveling businessmen with the President in Japan. Just before he went, just before Christmas, he announced that 74,000 people now working for General Motors will not be working for General Motors. He didn't say which ones. He didn't identify which plants. We have a big GM plant just outside Trenton. Twenty-five hundred people work there. And when you go out and talk to them, they talk about dodging the bullet. I mean, they really feel that the world is hostile to them and these forecasts of impending doom are provided by people like the chairman of General Motors.

MR. MacNeil: Joseph Perkins, is there a sense of impending doom in San Diego?

MR. PERKINS: I would say so. Various local industries have been hit by layoffs or eliminations of jobs in the last year or so. The construction industry has shed about 8,000 jobs. Local banks and other financial institutions have also laid off workers. My own company is undergoing a merger right now that's going to be particularly painful for a lot of workers. And I think that's contributed to a general sense of apprehension throughout the local economy.

MR. MacNeil: Do you share that in Atlanta, Cynthia Tucker?

MS. TUCKER: Yes, indeed. The unemployment figures today show that not only are things not getting any better, they're getting worse. Workers in Atlanta and throughout Georgia are very, very concerned. Atlanta, suburban Atlanta also has one of those GM plants that Ed Baumeister referred to. Workers in the Deweyville plant here are very concerned that that might be one of the plants that is closed. State government here has been hit with the layoffs of nearly 2000 workers throughout banks, throughout the service sector here.

MR. MacNeil: Cynthia, can I interrupt you for a moment? We're having a little trouble hearing you clearly. I'm going to go to somebody else and come back to you in a moment. Clarence Page, is the sense of impending doom a phrase that describes the feelings in Chicago?

MR. PAGE: Chicago and Illinois I think, Robin, while I sympathize with Ed Baumeister in New Jersey, when you hear the national average on the jobless rate is at 7.4, Illinois just topped 9 percent in unemployment, and as you mentioned in your earlier News Summary, Gov. Jim Edgar was calling for $100 million worth of welfare cuts, and cuts in education, something that we had just started spending some money on a few years ago badly needed for higher education, as well as regular secondary and primary education. And the reason for that is because state revenues are down partly because the tax base is down when general revenues are down, it's all a reflection of the economy. These are all numbers but behind the numbers, of course, are attitudes, and numbers kick off attitudes of gloom and doom or a sense of hope. And I think right now the meter's definitely over on the gloom and doom side with people looking for some kind of answers.

MR. MacNeil: Is it, is the meter on that side in Wisconsin, Erwin Knoll?

MR. KNOLL: Yes. I hate to make it unanimous, but I think there is a growing sense among people not only that we're in serious trouble, but also that national leadership, the Bush administration, the Congress, the Democrats running around New Hampshire, looking for their party's nomination, that none of these people are really addressing this problem in any way that shows any promise of delivering. And I think people are grimly disposed toward the leadership and fear that things are going to get a lot worse.

MR. MacNeil: Yeah. Ed Baumeister, today's poll shows that confidence in the President's handling of the economy has gone way down. Two-thirds of the people are negative about it. How much do you think people blame the President for this state of affairs and are now looking to him to put it right?

MR. KNOLL: Oh, I think most of the people I talked to blame him. I know the administration is trying to share this opportunity with Congress, but when you're in trouble you don't call for the criminal justice system, you call for a cop. And it's focused on him very much. There's some irritation among some of the people I talked to today that, you know, we're in serious trouble and he says, wait for the state of the union. Again, it's something else impending. I think it really travels directly to his door, whether he deserves it or not, it goes there.

MR. MacNeil: Yeah. Joseph Perkins, do you agree with that?

MR. PERKINS: Unfortunately I do. You know, the most significant statistic with respect to employment during the first three years of the Bush administration is that the economy has created only 1/2 million new jobs. During the first three years of the Reagan Presidency, during which we also experienced a recession, the economy created something on the order of 3 million new jobs, and I think for many Americans that's the most salient kind of indicator of just how successful President Bush has been in managing the economy.

MR. MacNeil: How do you see that, Clarence Page?

MR. PAGE: Well, I have to ask the question of the quality of the jobs. A lot of people point out that Chicago, for example, has gone from a hog butcher to a hamburger slinger. In other words, we're not, the big heavy production industries that Lynn Martin was referring to earlier, those good paying jobs have been replaced in many cases by minimum wage jobs or close to it. People are having trouble making ends meet even when they work. It is true some new jobs have been created. We need to create more. We've also got to look at how well those jobs are paying and how many people need to be retrained for the jobs of the future.

MR. MacNeil: Cynthia Tucker, Lynn Martin said several times, I actually counted five or six of them, that it was up to the Congress to get together with the administration on this, it was the Congress' responsibility to meet the President's challenge and not drag it out for months. How do you think people are dividing responsibility and the blame for the state of affairs between the President and the Congress?

MS. TUCKER: Well, it does not surprise me at all that a representative of the Bush administration tries to lay the blame squarely at the door of Congress for this mess. But it seems very clear by the polls that American people look to President Bush to provide economic leadership. After all, every President campaigns, every person who's running for the Presidency, campaigns on his or her ability to manage the economy. So the American people lay that solely and squarely at the feed of President Bush, I believe. Now, granted, Congress has a role to play in this. But traditionally, the American people expect that the President will provide the major economic leadership. And I think that the American people still expect that that is the place where it will come from and if President Bush can't provide that, then they'll look for a Democratic contender to do that.

MR. MacNeil: Erwin Knoll just said, Cynthia, while you were fixing your sound system there that -- I don't know if you heard it -- that as far as he sees it, people don't have much faith in the Democrats either, Democratic contenders either. What do you think?

MS. TUCKER: At this point, I think that's probably true. I don't think any Democratic contender has presented a plan that the American people have particularly noticed. Also, I think it is unfortunate that two of the major Democrats who have been associated in some way with the Presidential campaign have said they are not going to run or are dropping out because of budget problems in their own states. When Mario Cuomo of New York announced that he would not run, he said it was because he could not or had not yet solved New York's budget problems. When Doug Wilder of Virginia announced that he would drop out, he attributed his decision to Virginia's budget problems. Both of them are major Democratic figures so that does not help the plight of the Democrats in trying to prove that they can handle the economy better than the Republicans can.

MR. MacNeil: Erwin Knoll, do you think with this sense of doom and gloom, or however one characterizes it, that the American people are really looking with some hope to the state of the union message and the action the President has promised he will announce that night?

MR. KNOLL: No, I don't think so. Going back to my own time in Washington 20 years ago, it seems to me that people in Washington, in the media and government place much more emphasis on the state of the union address than people out here in the real world do.

MR. MacNeil: But hasn't it taken on a kind of action thrust this time because of the particular circumstances and the turnaround of the administration's view of the economy?

MR. KNOLL: Well, perhaps it ought to take on that kind of thrust, but I think most people as of now, if they think of the state of the union at all, they think of it as just another speech that the President was going to deliver sometime in the latter half of January, and nobody gets very excited about that as a vehicle for fixing anything.

MR. MacNeil: Clarence Page, do you think there's a sense of anticipation about that?

MR. PAGE: Well, as one who sits in the beltway quite a bit these days, Erwin Knoll should be delighted to know things haven't changed much in the 20 years since he left. I think people do put more emphasis on it here than in the rest of the country, however, it is an important address. It sets a tone for the administration. It sets a tone and an agenda for the President's work with Congress. And it certainly provides a dramatic moment or can provide a dramatic moment at this point for the President to tell the nation, show the nation that he recognizes there's a problem and that he's got a grasp on some response to it. However, I agree with Erwin Knoll. I don't think Americans out in Illinois and the Midwest are sitting at home, saying, gee whiz, Gloria, I just can't wait to see what the President has got to say in the state of the union address. It's not something that we look forward to like the Super Bowl.

MR. MacNeil: Ed Baumeister, how has the President's trip to Japan with the automakers and other executives played in your area? The President went out saying the message was jobs. What is the message that's come back, do you think?

MR. BAUMEISTER: The message that's come back is, it may be mixed, but I don't think it's jobs. I think it's clear. These fellows out at the GM plant when they see 19,000 cars, it's a lot of cars, to be granted, but it's not going to save, 19,000 more cars split among the three big American makers isn't going to save the Fisher Guide plant in Ewing, New Jersey. I think they viewed it with a great deal of cynicism, which was sort of fueled by this sense of extremely excited uncertainty. So I don't think it came back as a solid message of consolation.

MR. MacNeil: Joseph Perkins, how do you think -- what do you think the message came back from back from the Japanese trip?

MR. PERKINS: Even the President conceded that he could have gotten a better deal from the Japanese. The point is that that trip was hardly going to produce more American jobs. And I think that that's been reflected in the responses not only of the executives that accompanied the President on the trip, but in the reaction of the American people. I would have liked to have seen the President get together with the Japanese to agree that they would complete the GATT rounds successfully. But that didn't come from this trip. And I must say that I'm kind of disappointed and I expect that many Americans are disappointed because I don't think that the results of the trips will be more jobs for American workers.

MR. MacNeil: Cynthia Tucker, what message did you get from the trip to Japan?

MS. TUCKER: Unfortunately, I think that the overwhelming aura that sort of surrounded this trip was one of American impotence. I think that certainly the big three automakers came off sounding as whiners. To some extent, President Bush seemed to be going to the Japanese, begging, hat in hand. It seemed to me to reinforce two problems in the American economy. One is of the overcompensated American executive. Even if your company is failing, you still get these incredibly high rates of compensation as exemplified by the three American automakers. The other is that we simply don't seem to be up to the tax of producing quality goods at home. That's not true, but taking three American automakers with him on the trip simply reinforced that impression. And I'm sorry, but that's the one that I think the American people get from this trip. That's the message they get.

MR. MacNeil: Clarence Page, Cynthia mentioned a moment ago Gov. Wilder's withdrawing from the race. What kind of impact is that going to have on the Democratic situation?

MR. PAGE: Well, I see one immediate impact, of course, is this shifts the tone of the campaign to the degree that the other candidates now can feel free, should be encouraged to go out after Gov. Wilder's base constituency, which is mostly black and moderate, not as progressively leaning as Jesse Jackson. However, later this month, Jesse Jackson's Rainbow Coalition has invited the candidates to come and speak here in Washington around January 24th. And I suspect this will be a golden opportunity for them to try to go after Jesse's, the 7 million votes that Jesse Jackson won before. In other words, what has happened is that with Wilder out of the picture, Jesse Jackson has re-emerged, not as a candidate, but as a king maker. And that I think could have quite a bit of an effect on the tone of the debate, could shift it a bit to the left.

MR. MacNeil: Well, gentlemen, and Cynthia, thank you. Jim.

MR. LEHRER: Still to come on the NewsHour tonight, Gergen & Shields and art from the holocaust. FOCUS - GERGEN & SHIELDS

MR. LEHRER: Now, how this week of Japan, economics and politics looks to our regular analysis team of Gergen & Shields. David Gergen, editor at large of U.S. News & World Report, syndicated columnist Mark Shields. First, on the issue of Doug Wilder, do you agree with Clarence Page that this could move the Democrats to the left because of the Jesse Jackson influence?

MR. GERGEN: No. I think it's just the other way around. The important thing that's happened in this race from a perspective of Jesse Jackson and Doug Wilder is that Jesse Jackson did not get into the race and I think that that has allowed the white candidates in the race to issue a broader appeal and appeal far more than they did in 1988 when Jackson was in it, to appeal far more to white suburban voters. I think that's where the motherload of votes is for Democrats is in 1988, to bring those Reagan Democrats back to the Democratic Party. I think they can continue just as Harris Wofford did in Pennsylvania. You as a Democratic candidate can continue to get black votes, but you can broaden your appeal by talking about more than the underclass, by talking about more than the inner-cities. So I think in some ways it's been a blessing to the Democrats so far that Jesse Jackson has not been in the race, and I do think with Doug Wilder getting out of it, it's going to open the door for a person like Bill Clinton or Bob Kerrey or others to not only appeal to suburban votes but go after the black votes.

MR. LEHRER: Mark, how do you feel about that?

MR. SHIELDS: I think Jesse Jackson's absence from the race is a far more compelling and important dynamic than Doug Wilder's exit from it. Doug Wilder never had, as Clarence pointed out, the same kind of hold on black voters that Jesse Jackson did. Jesse Jackson was the President of black America and he operated at the last two Democratic conventions very much like the shop steward for black America. And Democrats went through this ritual. Walter Mondale did it, less so than did Michael Dukakis, but in both cases, it appeared that they werenegotiating almost in an Apomatics-like setting with Jesse Jackson meeting Jesse's non-negotiable demands. I think David's absolutely right, that opening it up to white candidates competing for black votes can only be healthy, can only be healthy for American politics.

MR. LEHRER: Meaning by the time the convention comes around black delegates and the black vote will have already been committed to one of the white candidates --

MR. SHIELDS: Or several.

MR. LEHRER: -- and Jesse Jackson will not be able to be there.

MR. SHIELDS: I think it's interesting. I think that Jesse will emerge as a major figure that the press goes to again. He's the logical person but I don't see him as the de facto king maker.

MR. GERGEN: Absolutely.

MR. LEHRER: All right. Another political question, and we'll work our way back to economics and unemployment, but going back in reverse order that Robin went, in another political question having to do with President Bush, is there any political -- just quickly - - is there any political fallout from President Bush's having collapsed because of the flu?

MR. GERGEN: Well, I think that there's going to be some sympathy for him. I also feel that the press has dramatically overplayed the story. It was a 24-hour flu bug. I don't think so at this point, Jim, that it's going to have much impact on the race, unless we see some additional evidence of him having a health problem. But at this point, I think it's one of the things -- it's sort of like this week's story and it's going to go away very quickly, as long as he remains vigorous. I think he could take some advice from a number of columnists who've written about this in the last few days, and that is perhaps to slow down a bit and appear a little less frenetic.

MR. LEHRER: I was going to ask you about that, Mark. The New York Times detailed in some specificity this morning -- that's a good word -- but the fact that the President, despite being tired, pushed on to job, pushed on to play tennis, hurt his leg so badly, tired him out so badly when he goes to bed he has to put pillows around them, and you wonder what's he trying to prove. Does that question occur to you?

MR. SHIELDS: I wasn't, I've never been privileged to work for George Bush, and I didn't go to Andover, where cold showers and root canal work were considered, I guess, de rigueur. He is some --

MR. GERGEN: This is a class argument as opposed to a health argument.

MR. SHIELDS: No. I think that's part of it though. I think it's that idle mind at the Douglas workshop, that whole Protestant ethic is very deeply inculcated in George Bush. There's no doubt about it. He is somebody, it was once described by a friend, who frequently confuses motion with accomplishment, if he's doing something constantly, and that the quiet solitudeness hours spent are somehow misspent, that one should be doing something, one should be. That, I don't know how else to explain it, other than that. As far as the flu is concerned, I'd just like to add one thing. I think the Democrats could go for the bait, unless, in fact, it is serious. If it turns out to be a serious ailment, then it certainly will be a central issue of the campaign of 1992. But they'll go for the bait, which is the tempting, almost irresistible bait for Democrats, because Dan Quayle, the Vice President, is in the spotlight again and immediately they'll go after Quayle, with Quayle taunts and teases and jokes and asides. And I think that's a serious political mistake, beyond whether it's the right thing to do, because in 1988, Lloyd Bentsen scored a technical knockout over Dan Quayle. And what we've learned is that American voters when they vote for President vote for President. They don't vote for Vice President. And if they did, Lloyd Bentsen would be Vice President of the United States today. So I think that could be, I think could be a temptation for the Democrats.

MR. LEHRER: David, do you have anything to add to that, why the President persists in what to most normal people seems extravagant in his desire and push to get out there and keep running and keep playing tennis and no matter what the weather is, no matter what his situation is, he's up all night, he's playing all day, what's the deal?

MR. GERGEN: Well, I guess, I hesitate to play amateur psychologist or the scholar of Protestant ethics and those who went to Andover. My sense is it's more physiological. And one reads from a number of experts that if you did lead a very active life as a kid, you tend to continue doing that as an adult. I'm not --

MR. LEHRER: Nothing to be concerned with?

MR. GERGEN: No, No. Here's what I think is bothersome about it. As far as his health, obviously, there's nothing to be concerned about. I think it's a little unsettling to people right now. I think they'd like to see the President a little calmer. I think that's -- if he wants to carry on and do all these sports and everything like that, I don't have a problem with that, but I think people are getting a little bit, wait a minute, the guy's careening around too much, if he'd settle down a little bit, they might have a little more confidence in his leadership. And that's the point I would argue.

MR. LEHRER: Which brings us to the question of the unemployment rate today, the economy, waiting for the state of the union. You heard what the editors said. You heard what Lynn Martin said. What's your reaction to what you've just heard?

MR. GERGEN: Well, I think there's a lot of Bush bashing going on here. It's hard to find a kind word. Let me just say on the other side of the ledger that I'm mostly negative on the trip, but if you think on the positive side of the ledger about this trip, we've been arguing for a long time George Bush ought to be focusing on jobs. He's now focusing on jobs. We've been arguing for a long time he ought to be pushing exports. He's doing that. I think it's healthy also that he's trying to create more of a partnership in business, exactly what the Democrats have been arguing on in the stump here in the last few months. All of that, it seems to me, is good. What went wrong on this trip was he overdid it. You know, he took the pendulum, you know, as he often does, all the way over to the other side, so it turned out to be I think bad politics, bad economic policy, bad diplomacy.

MR. LEHRER: Other than that, it was great.

MR. GERGEN: Right. We have, Jim, what is passing strange to me, an administration that argues passionately against quotas for human beings now embraces quotas for auto parts and I just find that unbelievable.

MR. LEHRER: Mark.

MR. SHIELDS: I think the trip is viewed, has to be viewed as the first major political swing of 1992. By that measure it is a disaster. It is unthinkable that Ronald Reagan would have had such a trip, [a], that he didn't know what it was about, what the purpose was. There was no stated goal. The auto executives, the Secretary of Commerce, and the President's campaign chairman insisted he insisted upon bringing along turned out to be a disaster at several levels. First of all, their salaries became a major focus, especially when compared with those of the Japanese counterparts, whose compassion the prime minister of Japan was offering, they were seeking. Secondly, the President tried to identify with American working people. His company and their company and their presence there deluded that, and, third, it just struck met that they embarrassed the President. Before he could even get back, they called the trip a failure. So they had no spin control. I mean, there was nothing like Ronald Reagan coming out of Reykjavik where the blown opportunity for detente, disarmament and world disarmament was blown by the time they got back, the Reagan apparatus had been able to somehow turn that into a victory. And it just struck me that his Bush trip, the change of emphasis, timing and thrust were all a direct consequence of the victory of Harris Wofford in Pennsylvania and it turned into a jobs, jobs, jobs. I mean, it wasn't that when it started out and it became that, so it was a campaign trip. As a campaign trip, it was a negative.

MR. GERGEN: My sense of it is, Mark, is that Bush has lost his bearings ever since the Pennsylvania defeat for Dick Thornburgh, and Harris Wofford. Somehow they've lost their compass and I think more than anything else now, they need to somehow seize control of their own administration and figure out what they're really about and where they're going. You know, they replaced John Sununu. And Sam Skinner is a first rate fellow who's come in there. But Skinner didn't go on this trip. The Secretary of State didn't go on this trip. Here we're dealing with a most important bilateral partner and he didn't go on the trip. And it seems like who is in charge and what is this administration trying to accomplish. I think they've got to get ahold of themselves and figure that out. It's not just a political question. It has an awful lot to do with people who are losing their jobs in this country.

MR. LEHRER: All right. On that upbeat note, we'll leave it. Gentlemen, thank you very much. FOCUS - HOLOCAUST MEMORIES

MR. MacNeil: Finally tonight, memories of the holocaust and a concentration camp in Czechoslovakia called Terezin, known to the Nazis as Terezinstat. It served as a transit camp for more than 130,000 Jewish prisoners, among them several artists. Much of their work survived the war and has been assembled in an exhibit now touring the United States. Charlayne Hunter-Gault saw it when it was in New York.

MS. HUNTER-GAULT: Terezin is an 18th century garrison town outside Prague, Czechoslovakia. During World War II, it served as a transit camp for thousands of Jews destined for the gas chambers of Auschwitz and Treblinka. In a bizarre twist, the Nazis tried to convince the world it was a paradise ghetto, a place with a rich cultural life, where Jewish prisoners were well treated. This Nazi propaganda film was part of the deception.

FILM SPOKESMAN: [NAZI PROPAGANDA FILM] [Speaking through Interpreter] On the old fortress grounds people happily while away some of the leisure hours in the sunshine.

MS. HUNTER-GAULT: The Nazis hadn't planned to use Terezin as propaganda. The deception evolved because many of Terezin's prisoners came from Prague, a center of Jewish cultural and intellectual life. Artists, musicians, and scholars, they worked assigned jobs by day, but in the evening many secretly put their talents to work singing, lecturing, sketching, playing musical instruments. When the Nazis found out, they allowed the activities to continue and then encouraged them as part of the hoax. Fred Terna spent a year and a half at Terezin. His father, brother, and grandmother passed through on their way to the death camps.

FRED TERNA: The Germans wanted to have a certain culture activity in that bizarre and macabre situation, where they wanted to show how good they were. They were lying. We knew. They knew that we knew. Everybody was eventually going to be killed.

MS. HUNTER-GAULT: To perpetuate the hoax, they had Jewish artists draw these romanticized sketches of the camp's cultural activities. A collection of Terezin art was recently exhibited at the Drawing Center in New York City. The show revealed that while the artists appeared to be doing the Nazis' bidding, they were secretly defying them. Alongside the propaganda hung these sketches, hidden and found after the war, which showed the awful truth.

FRED TERNA: People lived jammed together, a terrible number of people, at times more than 50,000, in an area where 6,000 were before.

MS. HUNTER-GAULT: When there was no room left, the Nazis made room by packing prisoners into freight cars and shipping them East for extermination. Marianca May spent three and a half years at Terezin. Her father died there. Most of her relatives passed through there on their final journeys East.

MARIANCA MAY: When in fall of 1944 nearly all my friends left on the transport, I had no one. I was either crying or screaming or just tearing my hair out singly and said, why not me, why couldn't I go with them, I don't know what's going to happen here, where is it going to.

MS. HUNTER-GAULT: Terezin's creative talents lived every day with that horrible uncertainty. Yet, they continued to practice their art. The exhibit included sketches of several of these artists. Terna and May have special memories of two of them. May will never forget Raphael Schecter, a prominent conductor and pianist.

MARIANCA MAY: Raphael Schecter was a petit, smaller man, who was an absolute small genius. You know, he may have been small in stature, but his humanity, his feeling for music and for people was so tremendous that you forgot everything in his presence. You forgot you were hungry. You forgot you were tired. You forgot who you were. We got more hope from him than I got from any rabbi I ever listened to there.

MS. HUNTER-GAULT: The music is Verdi's Requiem, conducted by Arturo Tuscaniny, with full orchestra and chorus, the memory, Raphael Schecter conducting the same requiem, accompanied by two rickety old pianos. May was a member of the chorus.

MS. HUNTER-GAULT: How often did you practice?

MARIANCA MAY: Twice or three times a week. We lived for these rehearsals. The music was the one light spot at the end of the tunnel, something to get up for, something to be alive for tomorrow.

MS. HUNTER-GAULT: To the Nazis, the chorus was simply grist for their propaganda mill. To the chorus members, it was a form of spiritual resistance. Forced to live under inhuman conditions, Terezin's prisoners saw music, art and poetry as an expression of their humanity and a means of defying their captors.

FRED TERNA: Poetry was read. Lectures were put together and attended so that we kept that part autonomous that the Germans couldn't touch, namely our minds.

MS. HUNTER-GAULT: Schecter chose Verdi's Requiem because the lyrics spoke of the Judgment Day. For him, that meant the day the Nazis would have to answer for their crime. How great the trembling shall be when the judge shall come, by whose sentence all shall be bound. And when you sang those words --

MARIANCA MAY: We were living for that moment. If anybody would have come and said, stop singing the Requiem or we'll shoot you, we would have continued singing and would have all been shot.

MS. HUNTER-GAULT: Three times the Nazis shipped nearly the entire chorus off to Auschwitz and three times Schecter start over, training new singers.

FRED TERNA: That is a place where they made maps, charts, graphs under the guidance of Hitler, who's shown over here.

MS. HUNTER-GAULT: Fred Terna owes a special debt to a graphic artist and cartoonist named Fritz Tausick, better known as Frita. Frita also refused to give in. By day he churned out schedules, charts, and posters for the Nazi camp commanders. By night, he drew sketches of the torment they heaved upon their prisoners. Terna was a young, aspiring artist at the time.

FRED TERNA: I sort of worked up my courage and showed him some of my drawings and he looked at them and said, horrible, horrible, inexcusable news, getting smaller and smaller. And he hands them back to me and said, Fred, they're good drawings but if they find them on you, you're dead.

MS. HUNTER-GAULT: Terna didn't discover till years later that Frita was secretly making his own drawings.

FRED TERNA: This drawing shows the place where old and mostly mental cases were kept, a huge, large number of people just couldn't manage emotionally. It was a very, very strange place, howling and screaming.

MS. HUNTER-GAULT: Frita made these drawings in hopes that the outside world would see them and learn the truth about what happened at Terezin. A half century later, as eye witnesses to the torture and suffering die off, these sketches keep the memory fresh. They also show these Nazi propaganda drawings were what they really were. This coffee house scene, for example.

FRED TERNA: It shows what Germans would like to see, sweet scene, spacious. They have a coffee house with food on the table, a large orchestra, and everybody enjoying himself.

MS. HUNTER-GAULT: Contrast that view with this sketch by Frita of the real coffee house.

FRED TERNA: You have to have a ticket to go to the coffee house. You look at the emaciated, old people. There's nothing being served and there's no communication between these people.

MS. HUNTER-GAULT: This Frita sketch exposes an elaborate hoax the Nazis perpetrated on the International Red Cross. In anticipation of a Red Cross visit, the Nazis made the prisoners build recreation areas and clean up whole sections of the town.

MARIANCA MAY: The first thing they did, mass transports left in May and June so there wouldn't be any visibility, they wouldn't be visible how overcrowded we were. It looked more or less naturally inhabited. There was buildings there painted, only the fronts of buildings were painted.

MS. HUNTER-GAULT: After the Red Cross visit, the Nazis took advantage of the beautification effort to make this propaganda film called "The Furor Gives a City to the Jews."

NAZI PROPAGANDA FILM ANNOUNCER: When the work day is over and evening begins the laborers leave the factories and return to the city. Use of free time is left to the individual. Often, workers flock to the soccer game. Theresienstadt's major sports event. Evening lectures on scientific and artistic topics are regularly attended.

FRED TERNA: Why would make that film? As an alibi, propaganda for the world outside, who knows, but that film is absolute, total fakery. No scene described exactly what happened and even when they chose well kept people, they take the people who have been brought to Terezin in comparatively recent times.

MARIANCA MAY: As soon as the commission was gone, as soon as the whole farce was over and new transports began and all these wonderful little children who were treated too well and given new clothes and swings, all these little children then into the gas chambers.

MS. HUNTER-GAULT: In this sketch of empty baby carriages, Frita recalls all the children who were killed. In this sketch, he juxtaposes the propaganda with the reality. At great personal risk, Frita arranged to have several of these drawings smuggled out of Terezin.

FRED TERNA: A group of them were smuggled out, wound up at the Red Cross in Switzerland. They in turn when they heard about German propaganda, how good the situation was for Jews in Central Europe showed that drawing, now how come this? It didn't take long before they found out who had made it and he and another group of artists were taken to a Gestapo prison, horribly tortured. Frita died actually on his way to Auschwitz. He did not -- he arrived in Auschwitz, he was practically dead.

MS. HUNTER-GAULT: In this sketch of a lone prisoner being dragged to the small fortress, Frita foretold his own death. He died November 8, 1944. Frita was 38 years old.

FRED TERNA: I'm trying to give some of the feeling that I remember from Auschwitz, also some of it from Terezin, Terezinstat.

MS. HUNTER-GAULT: Fred Terna was also sent to Auschwitz, and then a sub-camp of Dachau. He was liberated April 27, 1945. Today, he is 67 years old, a professional artist, husband, and a father of a four-year-old son. For years, he couldn't talk about the horror of Terezin.

FRED TERNA: But now I feel the obligation on me and it is up to us and for all survivors still around to tell what it was like, talk to as many people as possible, so that those who perished should be remembered and not just a footnote in somebody's textbook.

MARIANCA MAY: This meant a lot to me because the artist is one of the most important people of Terezin, Raphael Schecter, conductor and musical genius.

MS. HUNTER-GAULT: Marianca also feels compelled to tell the story. She was liberated from Terezin on May 8, 1945. Today, she is a widow with two grown daughters. She says not a day goes by that she doesn't remember Raphael Schecter, the man who gave her hope. Schecter died at Auschwitz on April 17, 1944. He was 39 years old.

MARIANCA MAY: He said, when the war is over, we will do all this music, especially the Requiem, once a year, no matter where in the world we'll live. This is just a temporary thing. Forget about Terezin. This is not going to last.

MR. MacNeil: The Terezin art exhibit will be on display next at the University Art Museum in Berkeley, California, beginning January 26th. RECAP

MR. LEHRER: Again, the major stories of this Friday, the nation's unemployment rate increased .2 percent in December to 7.1 percent, the number of people out of work was at its highest level in eight years, and President Bush said his Asia trip was a success. He said it would eventually provide an economic payoff for Americans. But Chrysler Chairman Lee Iacocca called the trade talks with Japan "a weak start." Good night, Robin.

MR. LEHRER: Good night, Jim. That's the NewsHour for tonight. We'll be back on Monday with an exclusive interview from Moscow with a Russian hardliner who some say could be next in line for Boris Yeltsin's job. I'm Robert MacNeil. Good night.