The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, Gwen Ifill keyed to President Clinton's visit updates the situation in Kosovo. Margaret Warner finds out why the price of oil is rising. Paul Solman reports on teaching would-be entrepreneurs how to pitch a deal. And Elizabeth Farnsworth talks to the winner of the National Book Award for Non-Fiction. It all follows our summary of the news this Tuesday.

NEWS SUMMARY

JIM LEHRER: President Clinton today urged ethnic Albanians to forgive the Serbs who persecuted them in Kosovo. He spoke to Albanians and to American troops on his first visit to Kosovo since the NATO air campaign ended five months ago. He and his daughter, Chelsea, also toured the headquarters of the U.S. military and joined them for an early Thanksgiving dinner. Mr. Clinton thanked them and the 6,000 other U.S. troops for their service. He said they were proving to Serbs and Albanians that different races and ethnic groups can live and work together. Mr. Clinton's Kosovo stop concluded his ten-day tour of Eastern Europe. He'll return to Washington later this evening. And we'll have more on Kosovo right after this News Summary. The Pentagon released a survey on race issues in the U.S. military today. It showed that three-quarters of minority soldiers say they've experienced racially offensive behavior, often by a superior. More than 44,000 active enlisted personnel and officers responded. The information was gathered in late '96 and early '97. At the Pentagon, Secretary of Defense Cohen commented.

SECRETARY COHEN: There is no place for racism in our society. And there is certainly no place for it within the military. And I believe that we have made greater strides in the military and breaking down the barriers to discrimination than perhaps the rest of our society. But to the extent that any of it exists, to the extent that there are complaints about lack of promotion, actions that involve discrimination, they have to be eliminated.

JIM LEHRER: Racial incidents were more common in the lower ranks. Whites surveyed had a mostly positive view of race relations. First Lady Hillary Clinton said today she will run for the U.S. Senate from New York in the year 2000. She's expected to face Republican Rudolph Giuliani, now mayor of New York City. Mrs. Clinton has been on self-described listening tours of the state. She made today's statement in New York City. It followed much speculation that she was having some second thoughts about the race.

HILLARY CLINTON: In the last months, I have been - at last count -- in 35 counties at last count all over this state. And everywhere I've gone, people talk to me about issues like we discussed today. And that is very exciting to me, because I believe that if we work together, we really can make a difference for the children and families of New York. So the answer is, yes, I intend to run.

JIM LEHRER: In economic news today, new orders for expensive manufactured goods were down for the second month in a row in October. The Commerce Department report said the decline was unexpected, caused by the weakest demand for electronic and electrical equipment in two years. On Wall Street today, the Dow Jones Industrial Average was down 93 points at 10,995. The NASDAQ Index also closed down 49 points at 3342. A United Nations report out today said deaths from AIDS are on the rise. It said about 2.6 million people worldwide will die from the disease this year. That's the most since AIDS began to spread in the late 1970's. 33.6 million people in the world are now carrying HIV, the virus that causes AIDS. And that's it for the News Summary tonight. Now it's on to what now in Kosovo; the rising price of oil; learning how to pitch a deal; and a National Book Award winner.

UPDATE - INSIDE KOSOVO

JIM LEHRER: Gwen Ifill has the Kosovo story.

GWEN IFILL: Arriving in the decimated Yugoslav province today, the President was greeted by the two men now running Kosovo, a United Nations administrator, and the German general in charge of more than 40,000 peacekeeping troops. But it was in a chilly sports hall in an ethnic Albanians town of Farizai after the President had met with local Serb and Albanian leaders that Mr. Clinton directly addressed the ethnic tensions still dividing Kosovo. The President was cheered by the Kosovar Albanians when he criticized Yugoslav President Slobodan Milosevic, architect to the ethnic cleansing campaign.

PRESIDENT CLINTON: Mr. Milosevic wanted to keep control of Kosovo by getting rid of all of you, and we said no. (cheers and applause) Now he has lost his grip on Kosovo, and you have returned. No more days hiding in cellars, no more nights freezing in mountains and forests.

GWEN IFILL: But when translators relayed Mr. Clinton's appeal to Albanians to seek peace by forgiving the Serbs, the cheers died down.

PRESIDENT CLINTON: You can never forget the injustice that was done to you. No one can force you to forgive what was done to you. But you must try. Do not let the children's spirits be broken. Do not let their hearts harden. The future we fought to save for you is the future we see here today, smiling, cheering, happy children. Give them the tomorrow they deserve.

GWEN IFILL: Since NATO bombing ended in June, more than 100 local Serb civilians have been killed in revenge attacks by ethnic Albanians. And as many as 100,000 Serbs have fled the province. While in Kosovo today, the President also visited the massive 755-acre Camp Bondsteel. The installation, home to the largest American encampment built on foreign soil since the Vietnam War, is still under construction -- a more painstaking construction task, rebuilding homes for the civilian population as U.N. peacekeepers struggle to put even the most basic services in place before winter begins in earnest. President Clinton thanked the American military contingent, 6,000 strong now, telling the soldiers they have a special role to play.

PRESIDENT CLINTON: The most important thing you can do besides keeping these people alive and having security, is to teach that to the children and to their parents by the power of your example and your own testimony. The power of our weapons could win the military battle in Kosovo, but the peace can only be won by the human heart: And every day they see you, every day these little kids see you working together, even if they don't speak our language, even if they never met any African Americans or Hispanics before, even if they don't know any Asians before, they can see. They have eyes. They'll get it. When they are secure enough in who they are that they don't have to put anybody else down, hurt anybody else, torch anybody else's church or mosque, just to feel they matter, this is the most important issue in the whole world today. And the power of your example can do more than anything else to help us to win the peace. Thank you. God bless you. And Happy Thanksgiving.

GWEN IFILL: For more on Kosovo, we turn to Michael O'Hanlon, a fellow at the Brookings Institution. He is writing a book on the Kosovo war, and recently returned from Kosovo. And Charles Ingrao, Professor of History at Purdue University, he also returned from Kosovo, last Thursday. With the President basically saying today, "we won the war for you. Now you have to win the peace," who is he speaking to, Mr. O'Hanlon?

MICHAEL O'HANLON, Brookings Institution: Well, he's speaking to the ethnic Albanians, the population that he's afraid is too bent on revenge. And this is really the problem he's focused on. The peace in one sense is pretty secure. NATO's there. Serbia's not going to attack. So in broad military term, we're in very good shape, but we know there are these reverse ethnic cleansing activities and crimes being committed, churches being burned down, Serbs being driven out of their homes, relocating sometimes either back in Serbia proper or in different parts of Kosovo where they're more secure. This is obviously regrettable. I'm not sure it's preventable, but it probably makes sense for the President to say something against it.

GWEN IFILL: Mr. Ingrao, is it at all realistic for the President to be saying in this kind of audience essentially forgive and forget?

CHARLES INGRAO, Purdue University: Well, I think it's necessary first of all. And I think it's realistic if you give it a long enough time frame. A lot of these people are nursing terrible wounds right now that are going to take maybe years to heal. We're going to be there for quite some time, looking at what we're doing at Bondsteel. And I think what we have to do at this point is put our confidence in the amount of time that we're going to invest in the region and we have to meet, as the Serbs see it, three basic conditions that we've already promised. The first is to provide security. The second is to get the return of refugees who have fled to Serbia. And thirdly, we have to settle the problem of where is Kosovo going to be five years from now.

GWEN IFILL: But Mr. Ingrao, is the United States through Mr. Clinton advocating a multiethnic ideal for Kosovo which might work in the United States but is not workable there?

CHARLES INGRAO: Well, it is definitely not as workable in Kosovo as in the United States. In fact, even there in Bosnia you had essentially one ethnic group with three religions, people speaking the same language. Here in Kosovo you have two separate societies. That does not mean they can't live together. The experience we see in multiethnic settings throughout Central Europe is that however different people's cultures are, they are essentially apolitical. And they will learn to coexist in a rather easy way in many cases. So long as politics aren't inserted in order to split them off from one another. So I think it is doable.

GWEN IFILL: Mr. O'Hanlon, you returned from Kosovo about three weeks ago. Tell me what it was like there.

MICHAEL O'HANLON: Well, it actually looks better than you might expect in some regards. One hears a lot of talk of poverty of the region. There certainly are a lot of problems with unemployment and obviously homes that haven't been destroyed, but there's an energy in the streets that to an American or a westerner I think is very gratifying, because people are very happy to be back. And they're appreciative of what we did to help them get back. They're obviously are things we need to ask them to try to do in the future, things they can expect us to do better. We're not doing very well at funding a lot of the operations there. A lot of people aren't being paid for their work. We need to get better at supporting them. But generally, it's in some ways, despite all the negative news reports that one sees in places like the "New York Times" yesterday, a fairly positive, happy place. There are a lot of problems. And it's going to be a tough winter, but this is a lot better than war and it's a lot better than life under Milosevic.

GWEN IFILL: Mr. Ingrao, Mr. O'Hanlon just referred to the fact that we're hearing a lot of the bad news, especially a lot of the reverse ethnic cleansing, if you want to call it that --you got back from Kosovo last week. What was your sense?

CHARLES INGRAO: Well, right now you have two totally segregated societies. KFOR forces - it's 40,000 men, but I think they could use a lot more than that. They're separating the two societies. When nightfall comes, it's like a lockdown. The Serbs stay in their communities, the Albanians in theirs. That is probably good and it's probably the only solution we have at this particular point. I think if we look at the amount of time it's going to take, we're doing the right things right now. Let me say one other thing, though. And that is, as we're somewhat impatient about the need to restore Kosovo, to rebuild people lives to, bring about coexistence between these two groups, I think we have to recognize that what has happened in Kosovo, and what happened before that in Bosnia is part of a much longer process that has taken this whole century. Since the Balkan Wars in 1912 and 1913, about 40 million people, civilians, have been either expelled or executed because of their ethnicity. This summer for the first time in this 80-year period, 85-year period, a large number of expellees got a chance to come back to their homes. We have to build on that. Now it's the Serbs' turn to help them to come back to their homes. But if you look in the long-term over this century of ethnic cleansing, this is major step in the right direction.

GWEN IFILL: But if the Albanians, Mr. O'Hanlon, are striking back, are involved in revenge attacks and are visiting the same kind of horror on the people they hate as the people they hate visited on them, how do you move forward?

MICHAEL O'HANLON: Well, first I put it in perspective. This is very troubling. However, the level of violence in Kosovo today is comparable to what we see in many American cities. In other words, this is no longer a society at war. It's still a troubled society, just as many parts of our own are, but it's not a society at war. Trends are in the right direction, partly because the communities are segregating themselves. And they're not living in a situation where there will be revenge attacks quite as easily because the mobs no longer have access to the Serbs. And as the professor just mentioned, this may be in the short term a good thing.

GWEN IFILL: Separate but equal.

MICHAEL O'HANLON: A little bit of that I'm afraid.

GWEN IFILL: Mr. Ingrao, what is it that the international community can do? What is the responsibility right now?

CHARLES INGRAO: I think in the short term, we need a restoration of the rule of law. Right now Albanians beating up Serbs, bushing down their homes, when they're apprehended, they're retained; they're held for a couple days and then they're released. There is no court system functioning. There must be deterrence. So the first thing we have to do immediately is establish the rule of law. It goes both way, but I think now it's the Albanians who are doing most of the damage to the Serbs.

GWEN IFILL: Isn't the rule of law in part supposed to be enforced by the U.N. peacekeepers? And the Serb minority, have they been adequately protected by the U.N. peacekeepers?

CHARLES INGRAO: Well, yes, they have been adequately protected when you consider there are 100,000 Serbs on the ground and there is massive effort by KFOR and the IPTF, the International Police Task Force, which is only seventeen hundred or so men now, to protect them. And most of them are receiving adequate protection. But when that breaks down, and individuals do commit crimes, they are not being jailed. They're being released after a couple days without a trial. So there has to be that kind of deterrence. So on the one hand, we're accomplishing a great deal. The number of deaths, as my colleague has pointed out, has really declined. But we can do better. And we're going to have to.

GWEN IFILL: Mr. O'Hanlon, are they on the path now to an eventual democracy? It was an 11-week air war; it ended six months ago. Is democracy the ultimate goal? Or is that still a ways off?

MICHAEL O'HANLON: Democracy has to be the main goal, but, as you know, one of the main political groupings is essentially the military that fought this war and that we called a terrorist organization at some levels of U.S. Government only about two years ago. So to transform that sort of force into a viable, democratic political institution may take some time. I think we can live with the fact it's going to take some time, and we're probably going to be there for five or ten or maybe twenty or thirty years. But that's probably okay. Germany is now at peace. NATO can direct some of its efforts away from Germany and towards the Balkans. I think that's not a major concern. We can be patient.

GWEN IFILL: Mr. Ingrao, Slobodan Milosevic, he's still the de facto - he's certainly the head of Serbia. He denounced the President's visit today as is to be expected, I imagine.

CHARLES INGRAO: Yes.

GWEN IFILL: Does he have any say in any of this, or does he just stand by and yell?

CHARLES INGRAO: Unfortunately he does. The leaders of the Serbian opposition in Kosovo - Bishop Artemia and Trajkovic -- have since the very beginning, and this is unique for Kosovo, since the very beginning, the early 90's, they have been condemning Milosevic, they have been urging coexistence; they have been urging a democratic society with equal rights. They have been marginalized, because since the war, Milosevic has invested a considerable amount of money and also has sent people into places like Mitrovica where there is a sizable Serb population and winning them over to his tack, which is I think very unfortunate. It underlines the problem in Bosnia and Kosovo that until Milosevic is out of power, there really is no lasting solution. But once he's out of power, I think then we have a lot of opportunities in front of us.

GWEN IFILL: Speaking of lasting solutions, Camp Bondsteel is made of concrete, not canvas. It looks like we're going to be there for a while, doesn't it?

MICHAEL O'HANLON: Yes. And the ethnic Albanians want us to stay even when Milosevic is gone. As much as he is the short-term problem and the worst problem, the Albanians don't really want to be part of a Serbia anytime soon, even if Milosevic is out of there. They'd like us to stay indefinitely.

GWEN IFILL: Mr. Ingrao?

CHARLES INGRAO: If I could add one point, during the meeting today between Trajkovic and Artemia with President Clinton, they reiterated the problem of intimidation against Serbs and the continuing flight of Serbs. And one thing he said I think was very instructive. He expressed his own frustration and perhaps anger that the Kosovo leaders, the Kosovar leaders are on the one hand making public speeches that have virtually been dictated or recommending by our people talking about ethnic coexistence, talking about forgiving and forgetting, an end to violence, but when they meet separately away from the cameras they are saying something else. President Clinton expressed a certain amount of frustration that the KLA and the other Kosovar leaders have to really make that commitment. We're probably going to have to play a role in making sure that they live up to what they're saying publicly.

GWEN IFILL: Charles Ingrao, Michael O'Hanlon, thank you very much.

FOCUS - COST OF OIL

JIM LEHRER: As Americans take to the road this Thanksgiving, they'll find gas prices a lot higher than last year, and they could go higher still. Margaret Warner has that story.

MARGARET WARNER: World oil prices surged to their highest level since the end of the Gulf War yesterday after Iraq unexpectedly began cutting off its oil exports. Iraq's move was just the latest shock to the world oil market, which has seen prices more than double over the past year. Crude oil prices closed yesterday at just over $27 a barrel, a nine-year high. Less than a year ago, a barrel of crude was selling at a 12- year low of about $11. Iraq has been allowed to sell a certain amount of oil in exchange for food and medicine under a U.N.-controlled program offering a limited exemption from the sanctions imposed at the time of the Gulf War. In the last six months, for example, Iraq exported about $7 billion worth of oil, or roughly 5 percent of the total sold around the world. But the Iraqi leadership has been agitating to have sanctions lifted altogether. Instead, last Friday, the Security Council simply extended the current oil sales program for just two weeks. Iraq responded by cutting the flow of oil to one of its main export points, and today, Iraq's oil minister said his country will stop all exports of oil.

AMER MOHAMMED RASHID, Oil Minister, Iraq: We have finished pumping and loading all the tankers which we have contracted for, under contracts for the sixth phase by today.

MARGARET WARNER: Even before this latest move, American consumers have been feeling the pinch of higher energy costs. The Labor Department reported last week the prices of gasoline and home heating oil have jumped nearly 31 percent this year.

MARGARET WARNER: For more on why prices are up, and what Iraq's latest move could mean, we're joined by Lawrence Goldstein, president of the Petroleum Industry Research Foundation, a non-profit group funded by oil companies that researches the energy market; and Geoffrey Kemp, director of regional strategic programs at the Nixon Center, a foreign policy research group in Washington.

MARGARET WARNER: Mr. Goldstein, explain for us why even before Iraq's latest move we've seen oil and energy prices jump so dramatically this year.

LAWRENCE GOLDSTEIN, Petroleum Industry Research Foundation: There are two factors that have been driving oil price up. The lesser important one is the recovery in Asian economic activity, which has brought about a corresponding increase in demand. But big increase in price is really due to the fact that OPEC for the third time this April agreed to a major cutback in supply. They took about four million barrels a day of oil off the market, so that we're seeing the loss in supply has eroded the very, very aggressive build in stocks that occurred in 1998. That erosion in stocks has led to a very dramatic increase in crude oil prices from a low of about $11 to $12 earlier this year to $27 today, the equivalent of about a 30 to 35 cent a gallon increase at the pump.

MARGARET WARNER: So you're saying essentially that OPEC wanted to create much tighter sup flights and they've had the discipline to succeed in doing that.

LAWRENCE GOLDSTEIN: The discipline evolved back in 1998. They cut supplies twice. But the discipline eroded each time, and in February of this year, the crown prince of Saudi Arabia made an important visit to Iran and was following that meeting, that OPEC agreed to a third round of cuts in April. And the real surprise is not that they agreed to cuts, but the percent compliance has been staggeringly high, very close to 90 percent.

MARGARET WARNER: So, Geoffrey Kemp, why is Iraq doing what they did yesterday -- to put pressure on the Security Council?

GEOFFREY KEMP, The Nixon Center: One of the reasons that Iraq did that, I think, is because they're fearful that a Dutch-British proposal that's being discussed by the Security Council now will in fact be adopted. This proposal will essentially eliminate sanctions, but Iraq will have to have inspectors back...

MARGARET WARNER: Weapons inspectors.

GEOFFREY KEMP: Weapons inspectors will have to come back, and they will have to come back and they will have to certify that Iraq has a clean bill of health on weapons of mass destruction. Saddam would much prefer to see a Russian proposal also at the U.N. go through, which essentially would allow sanctions to be lifted just if the inspectors came back with no real sanction. And I think what you see here is Iraqi concern that ultimately the British, the French, and the Dutch will get their way.

MARGARET WARNER: Now, if Iraq... if this move doesn't work, can Iraq afford to give up... they've been getting at least, what, about $7 billion worth of oil and medicine. It's not everything they want, but every six months or so. Can they afford to do without it?

GEOFFREY KEMP: Of course they can for a certain period of time. Let's be clear about one thing, Margaret. Saddam and his entourage are not going to suffer come what may. They get as much money as they want. They get it from fraud, from the black market, from profiteering. So, in fact, if there is a slow down in supply of food and medicines, actually that will probably help Saddam; similarly, with oil. So they're not going to hurt. The people that are going to hurt are the Iraqi people. And what Saddam is simply hoping is that the plight of the Iraqi people will help him in his fights in the U.N. in New York and in the Arab world where he has a lot of support on humanitarian grounds.

MARGARET WARNER: Mr. Goldstein, if Iraq sticks to its guns here, how soon will American consumers feel this extra pinch, and in what way?

LAWRENCE GOLDSTEIN: We believe that gasoline prices would have been rising in any case, because crude oil prices have gone up more at this moment than the change in street prices at the pump. So that regardless of what Saddam did, gasoline price were going to go up approximately another five cents a gallon. But I want to make it very clear, we don't believe that Saddam is serious. We have learned over time to believe very little that he says, and not to be surprised by almost anything that he tries to do. We believe he's posturing. The extension of the phase six for two weeks has given this moment to step back and try to leverage the market. We don't believe Iraqi oil will stay off the market for any reasonable period of time. And he has a free good on his hand. And this is very important to understand. There will be around seven humanitarian oil sale program agreed by the Security Council. That will set a dollar amount probably in the order of $5.2 billion. So by his withdrawing sales for the next two weeks, in no way costs him any money over the remainder of the six-month program because given any reasonable prices times the volume he could export, he will more than be able to exceed the $5.2 million. His actions yesterday come at no cost to him.

MARGARET WARNER: Could this be a bluff, Geoff Kemp? I noticed that today on the wires there are some reports that maybe Iraq would accept a six-month rollover of the current program. Could he just be bluffing?

GEOFFREY KEMP: Well, he's posturing certainly, and I agree he's not going to be hurt in the short run. Furthermore, let's face it, Iraq is not in a position, given its low level of production, to truly influence the police of oil over time. That's Saudi Arabia's role. And I think the Saudis and the Iranians and other members of OPEC have made it clear that while they wanted oil prices to rise from the $11 low, they certainly don't want them to go through the ceiling again, because they learnt a bitter lesson in the 1970's, that when you do that, the West starts to get ingenious, and we conserve and prices ultimately come down. I think they're quite happy...

MARGARET WARNER: In other words, you kill the goose that keeps laying the golden egg ifyou go too high.

GEOFFREY KEMP: Exactly. And Saudi Arabia has enough locked in spare capacity if the Iraqis for whatever reason did decide the hold the oil back for a long, long period of time, it could be made up from other sources.

MARGARET WARNER: How do you think, Mr. Goldstein, OPEC would respond in Iraq sticks to its guns?

LAWRENCE GOLDSTEIN: I think you have to realize that OPEC is not a homogeneous entity. There are individuals who clearly would be pressured by the United States to respond if in fact Iraq were to withdraw the 2.3 million barrels a day of exports from the market. Understand we're moving into the peak seasonal demand globally when stocks are already tied, so that Iraq's withdrawal from the market if it were to occur and be sustained from a period would have a substantial impact on price if Saudi Arabia, Venezuela, and Mexico didn't respond. OPEC may be reluctant to increase supplies, but in that environment, I wouldn't be surprised if the U.S. Government weren't already at this moment in consultation with Saudi Arabia, Venezuela and Mexico for some kind of contingency plan.

MARGARET WARNER: How much, Geoff Kemp, do political considerations come into play here in terms of strategic in that region, in terms of what Saudi Arabia might choose to do?

GEOFFREY KEMP: Saudi Arabians think very strategically, particularly after the lessons they learned in the 70's that rights now their great ally is Iran, funnily enough. There is a rapprochement between Iran and Saudi Arabia. They have worked together to keep production down so that prices go up. And they're not going to do anything to disturb that applecart. Their other great ally is the United States. And they can't afford to see us go into a tailspin through high energy prices. Therefore they will I think ultimately cooperate with us.

MARGARET WARNER: Mr. Goldstein, it looks like whatever happens with this Iraq latest move, we're in for these higher energy price for some time. We're not going back to the $10 a barrel oil price?

LAWRENCE GOLDSTEIN: It doesn't appear in any reasonable scenario that prices are going to unwind substantially in the near term, although we do believe you'll see a peak in price over the next 60 to 90 days and slow erosion as we move through 2000.

MARGARET WARNER: All right. Well, thank you very much Lawrence Goldstein and Geoffrey Kemp.

JIM LEHRER: Still to come on the NewsHour tonight, learning how to pitch, and a National Book Award winner.

FOCUS - PITCHING A DEAL

JIM LEHRER: How to succeed in business, 1990's style: Our business correspondent Paul Solman of WGBH-Boston, reports.

SPOKESMAN: Go.

SPOKESMAN: We're poised to become the next Yahoo of the software component industry.

PAUL SOLMAN: A morning session at the Massachusetts Software Council, where two dozen would-be entrepreneurs were trying to launch the next Yahoo or Amazon.Com to become the next superstars of the American economy.

SPOKESMAN: We are in the process of building a nationwide information network to help people make choices about where they go out to eat.

PAUL SOLMAN: In magazines, on shows like ours, software entrepreneurs have been portrayed as today's Rockefellers and Carnegies, driving an era of unprecedented economic growth. But to reach the top, you have to start at the bottom, which is what this session is about.

SPOKESMAN: Hands-free networks will be the first and leading provider of affordable, effortless, and reliable automated network support for small businesses and households.

PAUL SOLMAN: These are entrepreneur wannabes, practicing their sales pitches.

SPOKESMAN: Your company has just acquired one of your competitors. All of their information is stored in Sybase. You guys run Oracle. How do you present a consistent view to your employees, to your end users?

PAUL SOLMAN: The goal is modest, but crucial, a key first hurdle for any entrepreneur: To sell your idea and yourself, raising the money to make your business a reality. In fact, in just three days, these folks would be pitching for real to a conference of investors. At the moment, though, the job was to learn how to hook the audience within the first minute, not an easy task.

SPOKESMAN: It allows really a search engine to have those killer hits that make a real difference. We're still in the seed stage, but we already have an issue patent. And you'll have to help me here. I don't know how to... clue.

BILL WARNER, Entrepreneur: You have to be more specific.

PAUL SOLMAN: The coach here, Bill Warner, is one of the most successful entrepreneurs in America.

BILL WARNER: If you say, you know, "I'm going to build a better automobile than Toyota, Ford, GM, Chrysler, all of them," people are going to say, "okay, well, what? What are you going to do?" You're going to have to say, "look, they get 30 miles per gallon; I get 60, and it never needs to be washed because dirt falls off it." (Laughter) You know?

PAUL SOLMAN: Warner is coaching for free because he likes entrepreneurs and also invests in them. This way he gets a personal preview. He began by telling the group this secret of success: Listen to your mother.

BILL WARNER: She said, "be yourself." She said, "make a good first impression." And she said, "there's somebody out there for you."

PAUL SOLMAN: That somebody is the venture capitalist who will finance you. The first impression is selling yourself fast.

MALAY KUNDU, Invino Corp.: We are basing our business on an instant messaging product based on a system that's been used at MIT for the last 12 years.

PAUL SOLMAN: Malay Kundu wants to sell a similar computer messaging system to schools and organizations. Warner likes the idea, but thinks Kundu's pitch is too impersonal.

BILL WARNER: You got to make a connection with people. The business model comes second. Business models are important, but what's the real connection, I think, is the way to open.

PAUL SOLMAN: To Warner, entrepreneurs should be driven by passion, as he was back in the 70's.

BILL WARNER:I was making videos using, you know, inexpensive equipment for a few years, and I loved making the videos, but the editing was just torture.

PAUL SOLMAN: So in the 1980's, Warner pioneered digital editing.

BILL WARNER: I'd like to show you the system right now.

PAUL SOLMAN: This demo tape launched Warner's own entrepreneurial startup.

BILL WARNER: Much easier, though, to see it as images, as head frames.

PAUL SOLMAN: Avid Technologies is now a multibillion-dollar business in a typical high-tech industrial park in suburban Boston. Avid Software has become the standard for editing movies, TV shows, even stories like this one.

BILL WARNER: So I would start with a reflection shot and go to the inside the door... this shot. With a nonlinear system like Avid, you can stick that in the beginning, but in the old days when I started this, with video, that would have been a problem.

PAUL SOLMAN: Solving this problem, though, eventually led to a more fundamental one. As Avid grew, Warner lost his passion.

BILL WARNER: When a company gets bigger, the challenges of running it become different. They start to move away from entrepreneurial solutions to problems. They start to move towards more systematic solutions to problems, to more proven solutions to problems. I'm interested in coming up with solutions to problems that haven't been solved.

REBECCA MOORE: King Tut, Monet in the 20th century, star wars: Did you miss any of these exhibitions that maybe came to your town, or were you hoping to go to any of them?

PAUL SOLMAN: Back at the coaching session, Rebecca Moore's unsolved problem is the overwhelmed museum goer.

REBECCA MOORE: We are the one-stop shopping resource on the internet for museums throughout the world.

PAUL SOLMAN: Moore has a polished pitch, but she didn't mention her credentials. >>

BILL WARNER: What is your background?

REBECCA MOORE: Marketing museums.

PAUL SOLMAN: How long ago?

REBECCA MOORE: Ten years ago.

BILL WARNER: There is value in the audience in knowing that you know an industry. A lot of times people, especially when they say, "I'm going to bring, you know, X, Y, Z to the Internet," it's like all they had was the idea to bring that to the internet. They weren't really involved in it.

PAUL SOLMAN: So a good idea needs a passionate person with credibility, like Liz Cobb, who used to manage complex incentive pay plans for salesmen.

LIZ COBB: There are 17 million sales reps in the U.S. and there's a big hair ball of spread sheets...

PAUL SOLMAN: Cobb was coached by Warner two years ago. He quickly backed her in incentive systems, which makes software to automatically compute the carrot for many salesmen, their bonus. But is money the carrot for entrepreneurs?

BILL WARNER: If you look at real entrepreneurs, they're in it for the success, and the success is measured in the results that it gives to the people that are buying the product, to the people that care about the product.

PAUL SOLMAN: So you weren't looking to make millions? That wasn't your chief objective?

LIZ COBB: It's not my chief objective, no. It's not. It's to solve the business problem and to have been responsible for building it and for having gotten people to see it, accept it and buy it, and use it and see a difference in their lives.

PAUL SOLMAN: But wait a second. If wealth is secondary, why does society make entrepreneurs so rich?

BILL WARNER: I'll tell you, it's part of our culture. It's creating heroes, and you create heroes by making them wealthy. We measure our heroes by how much money they have.

PAUL SOLMAN: More mundanely, though, no matter what the entrepreneur's original carrot was, if her company strikes it rich, so will she. And that can be an incentive for anyone.

BILL WARNER: Let me set this thing. Go.

MERCIA TAPPING, The Tapping institute: For ten years, I used to wake up with a blinding headache. Doctor 19 told me that I was allergic to my house.

PAUL SOLMAN: Mercia Tapping's product is a independent consumer web site for allergy sufferers.

MERCIA TAPPING: Well, we tell the truth about consumer products. We tell you what works and what doesn't work.

BILL WARNER: Wow. That was very strong, and you can see how, you know, this was the ultimate connect with the audience, personal story.

PAUL SOLMAN: So a compelling first minute with a person and idea you could really get behind. But would it sell? Okay, the conference itself, where venture capitalists like Frank Dodge, who runs his own investment firm, and Joan McArdle would size up the entrepreneurs and their software. These are investment gatekeepers whose thumbs up or down may well determine if businesses ever get off the ground. Hundreds of such meetings are held every year in the U.S., a vivid contrast with financing opportunities in other countries, like India, where Kundu's family comes from.

MALAY KUNDU: It's hard enough for people who have had years and years of experience just to get a loan, to be able to start up their own business, let alone someone as young as myself getting enough money to, you know, start up a viable, you know, new idea.

PAUL SOLMAN: Of course, if you're well connected, you're in good shape anywhere.

MALAY KUNDU: If you've got a rich uncle, in any country that's good, you know, but if you don't, then it becomes much more difficult to get a hold of money, and I don't have a rich uncle here, but we've got a business now.

BILL WARNER: America is truly the foremost country in the world for entrepreneurship. One of the things I tell entrepreneurs, is I say, "look. You've got venture capitalists, bankers, lawyers, engineers, accountants. They're all set up to help you start your company, grow your company, build your company, fix your company, everything about your company. It's like we're all here to help.

PAUL SOLMAN: To help, and also profit from, entrepreneur hopefuls who look pretty much like the rest of us, except younger maybe. Anyway, it was time for their pitches.

MALAY KUNDU: Invino Grapevine, just like Zephyr at MIT, is something that when we replicate that model at another university, that becomes the means by which...

PAUL SOLMAN: Kundu continued like this for nine minutes.

MALAY KUNDU: That the messages don't interrupt what you're doing but at the same time I'm showing you exactly what I'm talking about.

PAUL SOLMAN: So, what did the smart money think?

BUSINESSMAN: His speech was too canned.

BUSINESSMAN: And he was too formal and waving his hands around, and obviously he had rehearsed a lot, but it didn't have the same level of sincerity and conviction.

PAUL SOLMAN: In the Q&A after his talk, Kundu seemed more natural, but money loses interest in a hurry.

JOAN McARDLE, Mass. Capital Resource Co.: If real estate is location, location, location, investment is people, people, people. And the smaller the company, the more important it is that the CEO and founder makes a very strong first impression.

PAUL SOLMAN: McArdle means that a startup C.E.O. Has to pitch suppliers, landlords, customers, banks, nearly everyone. Okay, next up would be allergy entrepreneur Mercia Tapping. She was nervous.

MERCIA TAPPING: It's like being a teenager going to your first mixed dance and saying, "I hope someone picks me."

MERCIA TAPPING: We're about unbiased information and research about allergy- related consumer products. When I went through this, I thought, "wouldn't it be great if there was actually a catalog that told the truth about these products instead of everything is the best thing since sliced bread and a miracle cure?"

JOAN McARDLE: I think she has a terrific personality and I think she sells the story well, but it's still a story; it's not a business quite yet.

PAUL SOLMAN: It's funny. You know, she was just walking by, and you said, Frank, "hey, get her away from here before I start talking." Is that because you thought she might be unusually sensitive?

FRANK DODGE, Frank Dodge Associates: Exactly. That's a good point. She does not have that veneer of the seasoned entrepreneur, and she's a very sensitive individual. I think that's why she's doing this.

PAUL SOLMAN: How did Tapping think it went?

MERCIA TAPPING: Well, the truth is, you don't quite know. I mean, the fantasy is that, you know, 20 people would rush out of their seats and say "tomorrow we must talk!" Or they'd get out their check books, or "I'll send my lawyer to negotiate." And the truth is, it doesn't happen like that. So now we wait.

PAUL SOLMAN: Uncertainty: It seems to be the one sure thing about entrepreneurship. And even Bill Warner is in its grip.

BILL WARNER: Wildfire.

SPOKESPERSON: Here I am.

PAUL SOLMAN: For the past seven years, Warner's entrepreneurial baby has been an electronic phone system called Wildfire.

BILL WARNER: Call.

SPOKESPERSON: Call whom?

BILL WARNER: Paul Bassett.

SPOKESPERSON: At work?

BILL WARNER: Yes.

SPOKESPERSON: Dialing.

PAUL SOLMAN: Wildfire has spent millions in investment capital. Yet the jury is still out. In a few years, it could be your voice mail system or out of business entirely.

SPOKESPERSON: What's it say?

PAUL SOLMAN: Meanwhile, back at the conference, it's time for one last pitch.

REBECCA MOORE: King Tut, Star Wars...

PAUL SOLMAN: Rebecca Moore of Museumshop.Com had taken Warner's advice: Same first few words, but quickly she added herself.

REBECCA MOORE: I started my career at the Smithsonian Institution about 13 years ago, and I was struck by two things: One, that museums had to compete with all other types of attractions and media to get attention...

MICHAEL FITZGERALD, Commonwealth Capital Ventures: I think the museum shop is probably right up at the top of the list.

PAUL SOLMAN: Is that right?

MICHAEL FITZGERALD: Yeah. I thought that was very good.

PAUL SOLMAN: Did you like the open or the beginning of the presentation?

MICHAEL FITZGERALD: Oh, I thought it was fantastic. I thought she was one of the best speakers so far. I got all the basics that I needed.

DAVID SOLOMONT, CommonAngels: There's a classic example of a young, capable entrepreneur who's really taking advantage of the internet opportunity and picked the market niche and seems to be going after it very nicely.

PAUL SOLMAN: A victory at last, or was it? Well, we checked in four months later to see how our would-be entrepreneurs had fared. Malay Kundu? The conference netted him a handful of meetings but no deals. Meanwhile, you can see his messaging system on his web site, even become one of the people testing it. Mercia Tapping? She never got a nibble, which prompted her to go back to the drawing board. She officially launched her web site at the end of August, and is looking for a seasoned Internet CEO to run the company. And finally, Rebecca Moore. She was approached at the conference and she has her deal, now being finalized-- which made us take more seriously her answer to what had been our last question. What are entrepreneurs really like?

REBECCA MOORE: I think we're all crazy. I mean, if we knew how difficult it would be, nobody would go into it.

PAUL SOLMAN: So bottom line, it seems, all that you entrepreneurs out there need is a good idea, a taste for uncertainty, credentials, passion, poise, a stomach for rejection, a touch of madness, and, if you're still interested, a great one-minute open.

BILL WARNER: Go.

SERIES

JIM LEHRER: Finally tonight, another in our series of conversations with winners of this year's National Book Awards, announced last week. Once again to Elizabeth Farnsworth in San Francisco.

ELIZABETH FARNSWORTH: The winner in the non-fiction category this year was

John Dower, for his book "Embracing Defeat: Japan in the Wake of World War II." Drawing on a vast range of Japanese sources, Dower tells the story of the intense interplay of victor and vanquished during the U.S. military occupation of Japan from 1945 to 1952. John Dower is Professor of History at MIT. He has written many other books about Japan, including "War Without Mercy: Race and Power in the Pacific War." Congratulations and thank you for being with us.

JOHN DOWER, National Book Award, Nonfiction: Thank you. It's a pleasure.

ELIZABETH FARNSWORTH: I'm interested in the word "embracing" in your title. It's not a word that you usually use with the word "defeat." Why did you choose it?

JOHN DOWER: Well, it has a certain ambiguity that captured a lot of things that I was after. From the Japanese side, the Japanese were really coming out of war and defeat into a new period, into a new life. And what they embraced was the end of suffering and violence on their own part; 66 cities had been destroyed, about three million people had been killed. And there was a sense of embracing the opportunity to start over, but also embracing the moment when the killing and the destruction ended. I once spoke to a Japanese person and talked about this experience of obliteration after the war, and they said, you know, the first thing we were liberated from was death; that there was a sense that the killing would now come to an end. The other side of it was that at tend of the war, the Americans and Japanese entered into a remarkable period of... here are these bitter enemies that come together with remarkable amity very quickly. And there was a sense that together they could seize this opportunity to create a better society, more peaceful, more democratic. So they embraced each other in a way, and they embraced the opportunity, and it spun off in many, many interesting directions.

ELIZABETH FARNSWORTH: Professor Dower, was a key goal to tell the story from the Japanese point of view? I'm really struck by how many different sorts of Japanese points of view you give us in this book.

JOHN DOWER: One of the things I was drying to do here was to recapture Japanese voices and to, in a way, destroy the image that there were one kind of Japanese, there is one kind of Japanese response. In fact, it's a very heterogeneous society, and so I was trying to understand how the defeat and the beginning over affected many, many different kind of people. Usually we historians deal with the policy makers and the elites. And I was trying to capture the voices of ordinary men, ordinary women, returned soldiers, even children, to a variety of Japanese sources and to move into popular culture, as well as elite culture. And so it does come through, I hope, with the multiplicity, which is quite surprising and quite engaging if you're not prepared to encounter that.

ELIZABETH FARNSWORTH: Tell us a little bit about how you worked. You took about ten years to do this, right? How did you get all these voices? I mean, you've got everybody from prostitutes to the highest government officials in here.

JOHN DOWER: Well, I got the voices from, as you might imagine, a terrific variety of sources. The Japanese have published a great deal about this period themselves, and as scholar I have been looking at aspects of society that previous historians perhaps sometimes overlooked, like films-- films, popular songs. One of the ways of getting out what people were thinking is what they were writing in letters to the editor. They were pouring out their feelings in letters to the editor during the occupation, which lasted from 1945 to 1952. They sent over a half million letters and postcards to the American occupation authorities. And we can get at those. People wrote poems expressing their feeling, and many of these have been assembled or you can get at them. There was a huge burst of publishing, and one of the things I got into was top ten best-seller lists. I tried to see what ordinary people were reading. And we now have access to diaries. There's just a multitude of sources coming from all sorts of different directions. And another thing that the Japanese published with great diligence was little dictionaries every year of new words and new expressions in the Japanese language. And it's kind of a little cultural social history, wonderful to look into.

ELIZABETH FARNSWORTH: You write that much of what we think of in this country as culturally or historically Japanese actually could be a result or is a result of this interplay between conquered and conqueror. For example, Japanese bureaucratic capitalism, which some people call the Japanese model, tell us about how the occupation and General McArthur - what he did during that period -- helped create this bureaucratic capitalism.

JOHN DOWER: That's a wonderful question and a big problem. I'm leery of the explanations that look to deep, cultural values to explain Japanese behavior. I think we can understand them more in terms of historical experience and the experience that was really decisive was the experience of war, defeat and occupation. Now, it was liberating because the Americans went in and cracked open a very repressive system and pushed new laws in, but the Japanese played a terrific role and often took the initiative in promoting some of those reforms and new laws. And what really mattered was the way the Japanese adopted them, responded to them or adapted them. So there is this terrific sense of the Japanese really taking part in democratization. The other side of it is more negative, and this is that when we think of Japan in the 20th century, we think of a period of militaristic rule from the early 1930's to 1945, which is true-- a repressive militaristic rule. But they were also under military government from 1945 to 1952, because they were not a sovereign nation. They were an occupied nation and the occupation was dominated by General McArthur and his staff. And that was a military government that could not be criticized, that had to approve every law and that chose to operate in Japan through the Japanese bureaucracy. And what happened from 1945 to 1952, one of the anomalies is that the Japanese bureaucracy got stronger under the Americans than it had been even during the bar years. So what we get, what I call in the book "Hybrid Japanese- American Legacies" that explain much of what we today look at as peculiar Japanese models or ways of doing things.

ELIZABETH FARNSWORTH: You also write very interestingly about the refusal of some Japanese to take responsibility for crimes committed by some Japanese during the war. Briefly, explain how the occupation may have played a role in that.

JOHN DOWER: That's one of the great problems. The overwhelming feeling of the Japanese when they came out of the war was of victimization, that we have suffered so greatly, and once again they look at the three million Japanese who have died in the war in their ruined cities and the hardship they faced after the war. This sense of victimization makes them look at their own suffering rather than the suffering they cause to others. They don't see themselves so much as victimizers as victims themselves. Then this became compounded because the Americans controlled the occupation. The greatest number of victims of the Japanese were the Chinese, the Indonesians, the Korean people; they were Asian peoples. They really were invisible during the occupation, and the Americans simply so overwhelmed the scene that the Japanese didn't get a good look at what they had done to others. In the war crimes trials that the Americans pursued, they're very flawed trials and they've left a problematic legacy to the present day, because what happened was they exonerated the emperor without ever investigating him to really see what his responsibility was. And they didn't even let him take moral responsibility for the war by abdicating, which was proposed by the emperor's own entourage. The Americans vetoed it. This they said, "we need this man." So they left him out of the war crimes trials. They focused on a small number of leaders almost arbitrarily chosen, showcase trials. And then by the time the trials ended in 1948, the Cold War was... had erupted. The Americans didn't want any more trials. We began to rehabilitate some of these old people. And so the question of responsibility became blurred.

ELIZABETH FARNSWORTH: All right. I'm going to have to interrupt. That's all the time we have now. But thank you very much and congratulations again.

JOHN DOWER: Thank you.

RECAP

JIM LEHRER: Again, the major stories of this Tuesday. President Clinton visited Kosovo. He urged ethnic Albanians to forgive the Serbs who persecuted them. And back in this country, a Pentagon survey showed that three-quarters of minority soldiers say they've experienced racially offensive behavior, often by a superior. We'll see you online and again here tomorrow evening. I'm Jim Lehrer. Thank you, and good night.