Today's Papers

Quotations from Chairman Al

The Los Angeles Times and USA Today lead with Fed Chairman Alan Greenspan’s suggestion in congressional testimony Wednesday that he foresees a cut next week in the fed funds rate, which determines the cost of money throughout the economy. (The New York Times puts Greenspan on its front in column five.) The big story at the Washington Post is that Newt Gingrich has publicly rejected what the Post calls a “plea-bargain-style deal” with the White House to head off formal impeachment proceedings in favor of some quicker but lesser punishment such as censure. The LAT and NYT fronts also report on these developments. The NYT leads with the pledge by Pakistan’s prime minister that he would sign a nuclear test ban treaty within the next year, a story no one else runs on their front page. But there is a chicken-and-egg context–the Times goes on to explain that Pakistan says it will sign only if the U.S. lifts the economic sanctions imposed on Pakistan and India after their surprise nuclear tests last May, but that the U.S. will not do so until Pakistan makes a formal decision to not test its nukes. The story does go on to point out some hopeful developments in the relationship between the two rival A-powers: at meetings in New York yesterday, their prime ministers agreed to resume high-level talks about the region in dispute between them, Kashmir, and also to set-up a communications “hot line.”

Today’s coverage of Greenspan on Fed rates is like all the others you’ve ever read, with this difference: it’s about rates going down, not up. The likely move is said to be in response to what the LAT calls a “drumbeat of pleas” from economists (and, it could be added, from columnists). The papers say that the cut is likely to be a quarter point, down to 5.25 percent. USAT quotes big-shot economist Allen Sinai’s prediction that the upcoming cut is but the first of many. The LAT points out however, that there do not appear to be any similar coordinated cuts forthcoming from the central banks of Europe’s leading economies. By the way, USAT says a survey it took among 49 top economists rates the chances of a U.S. recession next year as one in four.

The Post reports that during closed-door meetings, Gingrich signaled his intent to expand any impeachment inquiry into Whitewater, campaign finance abuse and technology transfers to China. The White House immediately responded, says the Post by accusing congressional Republicans of trying to prolong the Lewinsky matter so as to maximize gains in the November elections. The paper describes the atmosphere around the scandal as “escalating partisan tension.”

The Wall Street Journal has been running a good “first draft of history” series all week on the current global economic crisis. Today’s installment, about U.S. missteps, compares the ineffective U.S. and IMF aid to Thailand to the fatal mistakes of the “best and the brightest” in Vietnam, even going so far as summoning Robert McNamara to explicitly make the comparison.

The NYT front (and an inside story at the WP) reports that yesterday, Hillary Clinton made a rare and particularly vigorous campaign appearance on behalf of New York senatorial candidate Charles Schumer, during which she characterized Schumer’s opponent, Al D’Amato as a “Jesse Helms clone.” The Times says that the appearance leaves little doubt that in the current campaign season, Hillary will fill the role that “in normal times” would have been filled by Bill. The paper also reports that at times, the first lady appeared “dazed and distant,” especially when a reporter standing directly in front of her twice tried to ask her a question.

The WP reports that more than 60 leading intellectuals and artists from around the world have signed a petition defending President Clinton against “inquisitorial harassment by a fanatical prosecutor with unlimited power.” Signatories include Desmond Tutu, Gabriel Garcia Marquez and Emma Thompson.

Today’s coverage reminds one that Alan Greenspan maintains the mystique of his brilliance by a sort of Delphic vocabulary favoring oblique metaphor over definite policy pronouncements. (Or as the Times puts it, “Mr. Greenspan…as usual left himself some wiggle room.”) Yesterday’s testimony was epic Chauncey Gardiner, featuring talk of “rain drops,” “storm clouds,” and “contagion.” As a result, in any newspaper article about his testimony the directly quoted material is almost always meaningless without gobs of explanatory text. For instance, the WSJ quotes Greenspan’s comment that “We have to bring the existing instabilities to a level of stability reasonably shortly. I think we know where we have to go. I do not think we underestimate the severity of the problems with which we are dealing,” and then says that investors widely took this as indicating the quarter-point rate cut. And the Journal says that Greenspan’s statement, “If we give indications to world financial markets that the fiscal structure…is being dismantled, I think there is a price to pay,” should be translated as warning Congress that “eating into the [budget] surplus with either tax cuts or spending increases could rattle investors.”