From: owner-roc-digest@lists.xmission.com (roc-digest) To: roc-digest@lists.xmission.com Subject: roc-digest V2 #45 Reply-To: roc-digest Sender: owner-roc-digest@lists.xmission.com Errors-To: owner-roc-digest@lists.xmission.com Precedence: bulk roc-digest Wednesday, January 14 1998 Volume 02 : Number 045 ---------------------------------------------------------------------- Date: Mon, 12 Jan 1998 12:04:59 -0600 (CST) From: Subject: Homeless paid to vote in Miami - ---------- Forwarded message ---------- Reuters New Media Sunday January 11 3:27 PM EST Report: Miami Homeless Were Paid to Vote MIAMI (Reuters) - Dozens of poor and homeless people were paid $10 each to cast absentee ballots in a Miami election already tainted by allegations that dead voters participated, the Miami Herald said Sunday. The newspaper said two men recruited the voters at a church parking lot where the homeless often gathered. They were asked to show voter registration and Social Security cards, then driven in white vans and beat-up cars to the Miami-Dade County elections office to cast absentee ballots a day before the mayoral runoff race in November. When the voters returned to the church lot, one of the recruiters paid them, peeling off $10 bills from a large stack, the newspaper said. "I did it to get paid, that's all," the newspaper quoted absentee voter Mary Ludlow as saying. "I had no choice. I was hungry that day," the Herald quoted another voter, Thomas Felder, as saying. "You wanted the money, you were told to vote for -- (candidate number) 212, Suarez." Mayor Xavier Suarez narrowly defeated former Mayor Joe Carollo in a close runoff election in which absentee ballots proved decisive. The newspaper said not all of those who admitted to voting for money said they were told to vote for Suarez. Both the Suarez and Carollo campaigns said they had nothing to do with any vote-buying operation. A man identified by several witnesses as the person who handed out cash to the voters, Jeffrey Hoskins, said he had participated in "two or three" $10-a-vote operations in the past but denied involvement in the alleged operation in November. "It exists. It always exists. You go to Liberty City, Coconut Grove -- everybody knows about the $10," Hoskins told the newspaper, referring to two Miami neighborhoods. Florida law makes it a third-degree felony to pay someone to vote for a candidate. It is a misdemeanor violation for a voter to sell a vote. The Florida Department of Law Enforcement is already investigating allegations of widespread absentee ballot fraud during the mayoral election and has made two arrests on election fraud charges. A volunteer with the Suarez campaign was charged with agreeing to buy phony ballots from an undercover policeman. A 92-year-old man was also arrested after distributing and witnessing dozens of absentee ballots. Several of the votes he delivered contained names of people who did not live inside the city limits, and one was cast in the name of a man who died four years ago. _________________________________________________________________ - - ------------------------------ Date: Mon, 12 Jan 1998 12:09:22 -0600 (CST) From: Subject: Commercial Spies Active in US, South Korea, China, Isreal (fwd) Any wonder that China is big on the US Commercial spy list and big on the Clinton campaign scandal list? - ---------- Forwarded message ---------- Reuters New Media Monday January 12 7:06 AM EST Report: Commercial Spies Active in U.S. LOS ANGELES (Reuters) - Governments of at least 23 countries including Germany, Russia, China, France and Israel have stepped up their economic espionage against U.S.-based companies, the Los Angeles Times, quoting the FBI, reported Monday. The newspaper said a new survey conducted by the American Society for Industrial Security estimated that intellectual property losses from foreign and domestic espionage may have exceeded $300 billion in 1997 alone. More than 1,100 documented incidents of economic espionage and 550 suspected incidents that could not be fully documented were reported last year by major companies in a survey conducted by the society, the Los Angeles Times said. It said it had obtained results of the survey which was scheduled to be released Wednesday. A 1996 Economic Espionage Act makes theft of proprietary economic information in the United States a felony punishable by a $10 million fine and 15-year prison sentence. Urging U.S. firms to notify the FBI if they suspected economic espionage, Larry Torrence, deputy assistant director of national security, told the daily: "The odds are not favorable for any American company when they are targeted for clandestine action by some country's intelligence service." The society's periodic surveys, which FBI Director Louis Freeh has cited in congressional testimony, provided the federal government with its only estimate of potential damage from economic espionage, the newspaper said. The 1997 survey disclosed that high-tech companies, especially in Silicon Valley in California, were the most frequent targets of foreign spies, followed by manufacturing and service industries. Among the spies' most sought-after information were research and development strategies, manufacturing and marketing plans and customer lists. The FBI as a matter of policy, did not identify governments that sponsored economic espionage, the daily said. But in a recent article in an academic journal, an FBI agent who worked in the field named some of the countries and provided a rare look into commercial spying by foreign intelligence services. France, Germany, Israel, China, Russia and South Korea were named as major offenders in the article by FBI agent Edwin Fraumann which appeared in Public Administration Review published by the American Society for Public Administration, the Times reported. _________________________________________________________________ Reuters Limited - - ------------------------------ Date: Mon, 12 Jan 1998 12:09:38 -0600 (CST) From: Subject: Homeless paid to vote in Miami (fwd) Any one remember the "Vote Scam" book about Janet Reno in Dade County? - ---------- Forwarded message ---------- Reuters New Media Sunday January 11 3:27 PM EST Report: Miami Homeless Were Paid to Vote MIAMI (Reuters) - Dozens of poor and homeless people were paid $10 each to cast absentee ballots in a Miami election already tainted by allegations that dead voters participated, the Miami Herald said Sunday. The newspaper said two men recruited the voters at a church parking lot where the homeless often gathered. They were asked to show voter registration and Social Security cards, then driven in white vans and beat-up cars to the Miami-Dade County elections office to cast absentee ballots a day before the mayoral runoff race in November. When the voters returned to the church lot, one of the recruiters paid them, peeling off $10 bills from a large stack, the newspaper said. "I did it to get paid, that's all," the newspaper quoted absentee voter Mary Ludlow as saying. "I had no choice. I was hungry that day," the Herald quoted another voter, Thomas Felder, as saying. "You wanted the money, you were told to vote for -- (candidate number) 212, Suarez." Mayor Xavier Suarez narrowly defeated former Mayor Joe Carollo in a close runoff election in which absentee ballots proved decisive. The newspaper said not all of those who admitted to voting for money said they were told to vote for Suarez. Both the Suarez and Carollo campaigns said they had nothing to do with any vote-buying operation. A man identified by several witnesses as the person who handed out cash to the voters, Jeffrey Hoskins, said he had participated in "two or three" $10-a-vote operations in the past but denied involvement in the alleged operation in November. "It exists. It always exists. You go to Liberty City, Coconut Grove -- everybody knows about the $10," Hoskins told the newspaper, referring to two Miami neighborhoods. Florida law makes it a third-degree felony to pay someone to vote for a candidate. It is a misdemeanor violation for a voter to sell a vote. The Florida Department of Law Enforcement is already investigating allegations of widespread absentee ballot fraud during the mayoral election and has made two arrests on election fraud charges. A volunteer with the Suarez campaign was charged with agreeing to buy phony ballots from an undercover policeman. A 92-year-old man was also arrested after distributing and witnessing dozens of absentee ballots. Several of the votes he delivered contained names of people who did not live inside the city limits, and one was cast in the name of a man who died four years ago. _________________________________________________________________ - - ------------------------------ Date: Mon, 12 Jan 98 14:24:58 PST From: roc@xpresso.seaslug.org (Bill Vance) Subject: Long Beach Corruption (fwd) On Jan 12, Josh Amos wrote: [-------------------- text of forwarded message follows --------------------] >X-Sender: bart3@popd.ix.netcom.com >Date: Sun, 11 Jan 1998 22:48:22 >To: info@olyarms.com >From: Ned Kelly >Subject: Long Beach Corruption >Cc: hortman38@yahoo.com, boo3@ix.netcom.com > >Long Beach Corruption. By Gene Crocker, Ph.D. >The Voice of a Reformer, 1/11/97 > >John H. Dalton, the Secretary of the United States Navy, will decide if the >People's Liberation >Army of Communist China get to take over the former Navy Base and Station >at Long Beach, >California. Why is this considered the "smoking gun" sought by >investigative reporters that links >Communist China with Clinton and his administration? > >The only remaining legal barrier to the PLA's Long Beach take over is the >Environmental Impact >Report ordered by a Long Beach judge. The US Navy is making that report >and it will be positive >for Communist China. The man Clinton put in charge of the US Navy is John >H. Dalton, a >former top executive of Stephens Inc. > >Stephens Inc., a global investment house, has had multimillion dollar deals >with the Riadys' >Lippo Group and Communist China dating back 20 years. In the 70's, >Stephens and the Riadys >formed Stephens Finance Ltd in Hong Kong to finance projects in Communist >China. In 1984, >they bought control of the Hong Kong Chinese Bank. Today, their full >partner in the Hong Kong >Chinese Bank is China Resources, a wholly owned company of the Communist China >government. > >According to Nicholas Effitimiades, a very respected senior intelligence >employee of the US >Defense Intelligence Agency, China Resources is a known front of the >Chinese Communist >Ministry of State Security and always has a Vice President who is in fact a >military officer/agent >assigned to coordinate the efforts of all agents in the company. > >The press has well documented that the owners of Stephens Inc., Jackson and >Wilt Stephens, are >major contributors and loan arrangers for political candidates. The family >and the executives of >the Corporation have donated over $700,000 to the DNC alone. Jackson >Stephens is credited >with bailing out and saving Clinton's campaigns for governor and for >president by arranging >loans at critical stages in those campaigns. However, surprising no one, >Jackson Stephens also >worked for the 96 Dole campaign and donated $100,000. Wilt Stephens was >the major financial >backer of Senator John Glenn's still indebted presidential campaign. > >As events are proving, making major contributions and loans to candidates >are not just matters of >gaining political influence to have one's phone calls answered. Besides >having favorable trade and >tax bills passed, they also get people appointed into key positions in the >United States >government. John Huang was appointed Asst. Commerce Secretary at the >request of Jackson >Stephens and others connected with Stephens Inc. The question is "Who had >John H. Dalton >appointed Secretary of the US Navy and Why"? > >John Huang was a Vice President at the Hong Kong Chinese Bank and brought >over by Stephens >and the Riadys to assist James Riady, Co-President of their Worthen Bank in >Little Rock >Arkansas. He also worked with James Riady and founded the USA branch of >the Lippo Group. >Lippo USA made their first loan to a new immigrant who wanted to establish >a restaurant just >across the street from the Arkansas Capital building. That man, Charlie >Trie, is today a >multimillionaire and has fled this country to Communist China.. > >The irregularities in John Huang's career are well documented; but, the most >obvious connection to Communist China was never followed up by the Fred >Thompson-John >Glenn Senate hearings. (Why was that Senator Glenn?) This was Huang's >"secret" use of the >office in the Stephens Inc. Washington DC branch office. This back room >office was reserved for >the personal use of Jackson Stephens when he was in town. After Huang's >"top secret" and >"classified briefings" in his own US Commerce office Huang would leave that >office where >communications might be monitored and go to Stephens Inc.. Two to three >times a week. Huang >would use there the telephones, the fax and the computer modems to >communicate with Lippo, >and whoever; but, he used the desk reserved for Jackson Stephens. Have >any of you ever used >the desk of the boss? > >Honor, Courage and Commitment are not just words. They are the moral >concepts that most >United States Navy Officers live by. That tough fighting man, the >patriotic Admiral Mike >Boorda Chief of Naval Operations, personified them before he reportedly >"committed suicide"in >his office, May 1996. Those that knew Mike considered the official suicide >explanation laughable. >Mike Boorda was a patriot and lived by his oath of office. The question is >"What does the >Secretary of Navy, John H. Dalton live by? Does he too use the desk >reserved for Jackson >Stephens? > >PS. Dalton, I will be at the Long Beach protest on the 14th of January >standing up for America. > >Resources: Here is partial documentation for this article. There is a too >much documentation to >list! > >1. John H. Dalton, Secretary of the Navy Biography, US Navy Home Page >http://www.chinfo.navy.mil/navpalib/people/secnav/secnavbi.html >2. Double Dragons, Riady Stephens friendship led to Indo-Arkie alliance, >The Arkansas Times, >12/13/97, http://www.arktimes.com/white67-sb2.htm >3. The Riadys' Persistent Pursuit of Influence, Washington Post, 6/27/97, >http://search.washingtonpost.com/wp...ngterm/campfin/stories/cf052797.htm >4. Tenacious Tentacles, J Orlin Grabbe, http://www.aci.net/kalliste/lippo.htm >5. Secretary to be questioned about calls by Huang, USA Today, Campaign >finance, 7/16/97 >http://usatoday.com/news/index/finance/ncfin032.htm >6. Huang used office across the street.USA Today, Campaign finance, 7/18/97 >http://usatoday.com/news/index/finance/ncfin035.htm >7. Bob Dole and the Character Issue, Randolph T. Holhut, The Written Word >http://www.mdle..com/WrittenWord/rholhut/holhut29.htm >8. CNO must go, Navy Times, 6/20/96, >hppt://www.sipu.com/letters/Sept96/Boorda.html > > >****************************************************************** > "Find out just what people will submit to, and you have found out the >exact amount of injustice and wrong which will be imposed upon them; and >these will continue until they are resisted with either words or blows, or >both. The limits of tyrants are prescribed by the endurance of those whom >they oppress."......................... Frederick Douglass. >****************************************************************** [------------------------- end of forwarded message ------------------------] - -- - ---------------------------------------------------------------------------- ***** Blessings On Thee, Oh Israel! ***** - ----------------+----------+--------------------------+--------------------- An _EFFECTIVE_ | Insured | All matter is vibration. | Let he who hath no weapon in every | by COLT; | -- Max Plank | weapon sell his hand = Freedom | DIAL | In the beginning was the | garment and buy a on every side! | 1911-A1. | word. -- The Bible | sword.--Jesus Christ - ----------------+----------+--------------------------+--------------------- - - ------------------------------ Date: Mon, 12 Jan 98 14:25:36 PST From: roc@xpresso.seaslug.org (Bill Vance) Subject: 1996 Supplement to The Annotated Constitution--GPO, CRS (fwd) On Jan 12, Rich Zellich wrote: [-------------------- text of forwarded message follows --------------------] Extracted from the NIC's latest Scout Report: 8. 1996 Supplement to The Annotated Constitution--GPO, CRS [ASCII, .pdf, 102p.] http://www.access.gpo.gov/congress/senate/constitution/index.html Adobe Acrobat Reader http://www.adobe.com/prodindex/acrobat/readstep.html The US Congressional Research Service and Government Printing Office recently posted the 1996 Supplement to the 1992 Edition of _The Constitution of the United States of America Analysis and Interpretation: Annotations of Cases Decided by the Supreme Court of the United States_ (discussed in the January 17, 1997 Scout Report). This searchable and browsable supplement adds cases decided to July 1, 1996. Like the 1992 edition, the Supplement contains annotated references to Supreme Court decisions in their constitutional context, and is available in both ASCII text and Adobe Acrobat (.pdf) formats. [JS] [------------------------- end of forwarded message ------------------------] - -- - ---------------------------------------------------------------------------- ***** Blessings On Thee, Oh Israel! ***** - ----------------+----------+--------------------------+--------------------- An _EFFECTIVE_ | Insured | All matter is vibration. | Let he who hath no weapon in every | by COLT; | -- Max Plank | weapon sell his hand = Freedom | DIAL | In the beginning was the | garment and buy a on every side! | 1911-A1. | word. -- The Bible | sword.--Jesus Christ - ----------------+----------+--------------------------+--------------------- - - ------------------------------ Date: Wed, 14 Jan 1998 09:27:42 -0800 From: Liberty or Death Subject: (fwd) BATF & "Unintended Consequences" Forwarded... - ------------------------------------------------------------------ From: colonel@azstarnet.com (Col. Harry S. Bachstein) Subject: BATF -- Books(?), Alcohol, Tobacco & Firearms I just received this from a fellow who got it off the Ohio RKBA list. I would be interested in hearing from anyone with a similar experience. Two producers in the national media are planning 1998 pieces on the phenomenon of this book. This is the kind of info they need. JR ************************************************************************** The PROponent 3953 Indianola Ave Columbus, OH 43214 (614) 268-0122 Volume 9 November, 1997 Number 11 BOOK CONTROL ... How many years have we been screaming that it ISN'T just about "gun control", it's all about RIGHTS CONTROL! We have more proof. One of the dealers at our gun shows goes by the name of "Winchester Man". You may have seen him or even bought something from him. He has a bunch of gun socks and books for sale among other items. But the particular item of interest was the stack of books "Unintended Consequences" he was selling. At this particular gun show (not one of ours nor in Ohio) several "suits" showed up at his table and indicated that they were unhappy with him selling the book. They identified themselves as ATF. Apparently they told him they couldn't FORCE him to stop selling the novel, but he noted that they strongly seemed to imply that they could make life tough for him if he didn't comply with their wishes. Most PRO members already know that this book is highly critical of some of the BATF mentality we've seen in recent times. So this is what it comes down to. It's not just "gun control" any more, but "book control" as well. This goes right along with "Internet control" and every other recent attack on the Bill of Rights by so-called "federal" law enforcement. But here's the sad part. Sure Winchester Man is pro-gun, but he's not an activist like we are. At this point in time he is still just an ordinary business man trying to make a dollar. And he told this editor that he is not about to buck the wishes of the ATF, illegal or no. He confided that he didn't make that much on the books anyway, so that once he had them all sold, he wasn't getting any more. This is the insidious part of government licensing, isn't it? First, they tell you that "whatever" NEEDS to be "regulated" through licensing, but once in place, this suddenly becomes a long lever through which pressure can be applied to honest businessmen/women. And I'll tell you what kept going through my mind as "Winchester Man" was telling me how the sales of that book "weren't that important". Inside my head it wasn't Winchester Man talking, but some German shopkeeper back in the thirties. He was telling me that he didn't want "trouble" from the Brown Shirts and even though they didn't have the right to choose his customers, only a small fraction of his business was from Jews anyway, so it didn't matter. It is PRO's suggestion to Winchester Man and anyone else trying to avoid "trouble" from the socialist-fascist faction in our government that they dig out a good history book and take a gander at just the photographs...nothing else... of what Germany looked like by the end of WW II. THEN, having done that, come back and tell us exactly how much "trouble" those shopkeepers saved themselves in the end by going along with Nazi policy? The problem here seems to be that while Winchester Man has read the book he is selling, somehow, the history of tyrants contained therein seems to have not made a connection to the present. But there IS a connection. Those who do not remember history are often doomed to repeat it. ************************************************************************* Thanks for any help. JR Read the book UNINTENDED CONSEQUENCES. Reviews are at http://www.amazon.com/exec/obidos/ISBN%3D1888118040 and http://www.nguworld.com/vindex/95/123195vs.htm - ---------------End of Original Message----------------- =================================================================== COL. HARRY S. BACHSTEIN http://members.aol.com/bach11/adventurer.htm - - Monte -------------------------------------------------------------------- "Maybe freedom's just one of those things that you can't inherit." - Peter Bradford, in the film "Amerika" -------------------------------------------------------------------- The Idaho Observer http://www.proliberty.com/observer - - ------------------------------ Date: Wed, 14 Jan 1998 12:35:21 -0600 (CST) From: Subject: Asia money crisis - ---------- Forwarded message ---------- From: tmulkern@mail.ameritel.net (Trent C Mulkern) Date: Wed, 14 Jan 1998 05:56:18 -0500 Wednesday, January 14, 1998 ---LATimes Errors Made in Indonesia Policy, IMF Concedes By ART PINE, Times Staff Writer JAKARTA, Indonesia--The International Monetary Fund has conceded that some of its earlier prescriptions for rescuing the Indonesian economy backfired and inadvertently may have contributed to the collapse of the banking system here, international officials said today. In a confidential report, the fund's senior staff said IMF demands in October that Indonesia raise interest rates as part of its recovery program apparently conflicted with simultaneous instructions that the government shut down 16 large, insolvent banks. When both policies were put into place at once, at IMF insistence, the move unexpectedly squeezed many healthy banks as well and exacerbated the pressures on the banking system, the document said. That in turn set off a new wave of capital flight. Disclosure of the unintended gaffe, contained in a 17-page report distributed to the IMF's executive board in Washington last week, marked the first formal admission by the 181-country organization that some of its prescriptions here may have backfired and hurt Indonesia. However, officials said the report was not an indictment of IMF prescriptions for other Asian countries caught up in the current turmoil, and they added that the fund was not on the verge of revamping its entire strategy, despite complaints by some critics that it has proven counterproductive. Even as the IMF report was circulated, many Asian currencies and stock markets continued to rebound today. Singapore's main stock index was up 7.4% at midmorning after soaring 7.7% on Tuesday. Malaysia's main stock index gained 6.1% early today, and Indonesian stocks were up 2.3% today after rocketing 9% on Tuesday as Indonesia's currency, the rupiah, strengthened. The confidential report said fund officials had been faced with "conflicting objectives" in dealing with the Indonesian economy--a need to prod the country into protecting its currency while at the same time strengthening its banking system by closing insolvent banks. In a move that IMF strategists believed would bolster confidence in the financial markets, Indonesia closed down 16 insolvent banks, including one that authorities say was owned by one of President Suharto's sons. The idea was to purge the banking system of its worst offenders. However, the report concluded, "these disclosures, far from improving public confidence in the banking system, have instead set off a renewed 'flight to safety'" that has squeezed the banking system even further and may have contributed to the failure of some weak but viable banks as well. The disclosure came as the beleaguered Indonesian government moved swiftly Tuesday to hammer out an emergency economic reform program in hopes of winning formal approval from the IMF on Thursday, when the agency's managing director arrives for talks with Suharto. Although details of the plan are not complete, negotiations between senior Indonesian officials and IMF representatives were proceeding apace without major snags. Insiders said a formal announcement might be made Thursday. The joint effort came after a two-day visit by a team of senior U.S. officials, headed by Deputy Treasury Secretary Lawrence Summers, that underscored American concern about the financial turmoil in Indonesia. The U.S. officials urged Suharto to comply with IMF demands. The 76-year-old president reportedly assured Summers that the Indonesian government will make reforms required in October by the IMF and, in some cases, even exceed them. "It is clear that President Suharto recognizes the need to take strong steps of the kind that have been under discussion with the IMF to breed confidence and to build on the very strong foundations for prosperity that Indonesia enjoys," Summers told reporters before leaving Indonesia on Tuesday. The U.S. mission, accompanied by similar calls for reforms by a bevy of other foreign leaders, was designed to increase confidence in financial markets enough to stem the continued slide in the value of Indonesia's currency, which has been sending stock prices plummeting. U.S. officials had feared that unless the slide could be stopped soon, the turmoil would spread to other financially troubled Asian countries and worsen the economic situation throughout the region, eventually hurting the United States and other industrial economies. The effort paid off after Suharto indicated Monday that he will accede to the IMF demands. Summers went on to Malaysia and Thailand on Tuesday to meet with senior officials there. He is to make other stops in Asia, including China and South Korea. Meanwhile, Goh Chok Tong, Singapore's prime minister, arrived here Tuesday for talks with Suharto to emphasize the U.S. and IMF message. Singapore has close economic ties to Indonesia and has played a key role in Suharto's seeming turnaround. Senior officials here reacted swiftly in the wake of Suharto's new willingness to adhere to IMF policies. Finance Minister Mar'ie Muhammad announced that the government will get its budget into line; Industry and Trade Minister Tungki Ariwibowo spoke of cutting import barriers. State Secretariat Minister Murdiono said Indonesia and the IMF were on the same track. "In short, we will see how we can quickly revive confidence in the rupiah and carry out the reform and restructuring program," he said. IMF Managing Director Michel Camdessus is to meet Thursday with Suharto. Camdessus has been making a whirlwind tour of financially troubled countries. On Tuesday, he was in Seoul, seeking to increase public support for IMF reforms there and praising the government's efforts as "the beginning of recovery" for South Korea. There was no indication what specifics will be in the Indonesian reform package. But IMF officials have said Jakarta must reduce its budget deficit, shore up its banking system and halt several expensive infrastructure projects that mainly benefit Suharto's family. Officials acknowledge that these steps are likely to be politically painful. For example, an IMF requirement that Indonesia eliminate government subsidies for fuel is expected to quadruple gas prices. Indonesia has been remarkably quiet during the visits by foreign dignitaries this week. On Tuesday, about two dozen students chanted slogans and held up banners outside the Finance Ministry when Summers held talks there. No arrests were made. Analysts here noted that whatever good the economic and financial reform measures may do, they still will not address Indonesia's political uncertainties--not the least of which is who will succeed Suharto if he dies or steps down. The retired army general, who has ruled Indonesia for 32 years, is ill and said to be ready to move aside but has not yet named a successor. On Tuesday, the chairman of Suharto's ruling Golkar party formally named Suharto as its candidate for a seventh term as president but conspicuously did not designate a candidate for vice president--a move that might have eased anxiety on the succession issue. Defense Secretary William S. Cohen expressed confidence today after meeting with Suharto that Indonesia will regain its economic footing and avert a potentially dangerous political upheaval. "The president indicated that he is committed to rebuilding confidence in the economic situation here," Cohen said. Copyright Los Angeles Times ========================================================================== This mailing list is for discussion of Clinton Administration Scandals. If you wish to unsubscribe from this mailing list, send electronic mail to majordomo@majordomo.pobox.com. In the message body put: unsubscribe cas PRIMER ON PANIC By Robert J. Samuelson, Washington Post, January 14, 1998 There is now a dawning recognition that Asia's financial crisis could be far more than a minor mishap for the U.S. and world economies. We are not dealing here only with a handful of countries that overborrowed abroad and are now being compelled to retrench. This is a global version of a domestic banking panic. Foreign investors are withdrawing massive amounts of money, and local investors are dumping their own currencies (such as the Thai baht and the Indonesian rupiah) for dollars. These crises continue to feed on themselves until confidence, a critical but elusive state of mind, is restored. One consequence is that Asia's slump will be worse than originally forecast. In December, for example, the International Monetary Fund assumed that South Korea's economy (gross domestic product) would grow about 2.5 percent in 1998: a big drop from recent growth rates of 6 to 9 percent, but hardly a collapse. This now looks optimistic. Gregory Fager of the Institute of International Finance (a research arm of commercial banks) says that Korea's GDP could drop 3 to 5 percent in 1998. We will probably see downward revisions for other affected countries: Thailand, Malaysia, Indonesia, the Philippines and China. Their deeper slumps will in turn darken the outlook for Japan, which sends nearly half its exports to the rest of Asia. "You're going to have massive bankruptcies in Asia," says economist Desmond Lachman of Salomon Smith Barney. "That has a disproportionate impact on Japan." As Lachman notes, investment spending will drop sharply, and Japan is a heavy exporter of investment goods (factory machinery, construction equipment, communications gear) to Asia. Under Fager's forecast, for example, Korea's investment spending plunges at least 25 percent. The pattern parallels that of a domestic banking panic: first, banks lose deposits; then spending and employment drop. In a textbook panic, something frightens depositors: say, a big bank is found to have so many bad loans that it can't repay all its deposits. Suddenly, confidence evaporates. This happened in the Great Depression. Depositors in all banks feared for their funds. They rushed to withdraw. If everyone tries to withdraw, the economy collapses. Banks call loans. Companies go bankrupt. Good loans go bad. Something similar is now happening globally. Think of Asia's economies as a series of banks. In the 1990s, they received huge inflows of foreign funds. A lot (but not all) of these funds actually were loans from foreign banks to local banks and companies. At year-end 1996, such foreign bank loans totaled $100 billion to South Korea, $70 billion to Thailand and $56 billion to Indonesia. When received, these funds (mostly dollars) were converted into local currencies and fueled a spending boom. But now the foreign funds are fleeing, because local borrowers used the money for bad investments: unneeded office buildings or factories. There's a vicious circle. Lending and spending drop. Local currencies plunge as they're sold for dollars. Imports become more expensive and decline; the world economy suffers. After the Depression, most industrialized countries learned to cope with domestic banking crises. There are three defenses: (a) provide deposit insurance, so that depositors won't panic in the first place; (b) close banks with bad loans to maintain confidence in the banking system; and (c) have a lender of "last resort" - - -- the central bank, which is the Federal Reserve in the United States -- make temporary loans to banks if there is a panic. But these mechanisms don't exist globally. There is no worldwide central bank to provide temporary loans or shut bad banks. A lot of the daily story of the Asian crisis is an effort to mimic these defenses. The IMF has organized huge credits ($57 billion for Korea, $43 billion for Indonesia, $17 billion for Thailand) to replace some of the lost foreign capital. South Korea is negotiating with private banks to substitute long-term bonds for short-term loans: another effort to stop the loss of foreign capital. "Reforms" sought by the IMF -- closer supervision of local banks, more disclosure of financial information -- aim to restore confidence among overseas investors. Stemming the outflow of funds would limit the damage to these economies. No one knows whether the effort will succeed. By their nature, panics are unpredictable. One problem leads to another. Recently, a major investment bank in Hong Kong failed because it couldn't collect on loans made in Indonesia. Then the Hong Kong stock market dropped sharply. There are connections. One country's currency depreciation may lead to another's. China has already suffered a loss of competitiveness compared with its Asian neighbors that have devalued. (A lower currency makes a country's exports cheaper on world markets, even as it makes its imports more expensive.) Will China devalue? Will foreign capital flee other developing countries (Brazil, Mexico, India)? The optimism about the limited impact of all this could still be vindicated. It presumed that the forward momentum of the U.S. and European economies would overcome Asia's adverse side effects. These would operate mainly through two channels: lower exports to Asia and lower profits of multinational companies in Asia (say, Coca-Cola sales in Thailand). By themselves, these effects would probably be small. For example, American exports to Asia are only about 4 percent of U.S. GDP; Europe's dependence on Asia is even less. But what if squeezed exports cause companies to cut investment? Or suppose disappointing profits depress stock prices, and then pessimistic investors curb their spending? What we're witnessing is a dramatic redistribution of global capital and its aftermath. In theory, Asia's loss is America's gain, as investors switch into dollars. Higher interest rates and inflation in Asia ought to be offset by lower interest rates and inflation in the United States. But the Federal Reserve hasn't yet cut rates because it remains worried about inflation with unemployment at only 4.7 percent. Should it reduce rates? Probably. Still, there are risks either way. What economists blandly call "policy challenges" abound from Seoul to Tokyo to Washington. Confidence depends on how well they're handled. ______________________________________________ subscribe @ ========================================================================== This mailing list is for discussion of Clinton Administration Scandals. If you wish to unsubscribe from this mailing list, send electronic mail to majordomo@majordomo.pobox.com. In the message body put: unsubscribe cas - - ------------------------------ End of roc-digest V2 #45 ************************