Trends

Talking Deregulation Will the momentum of deregulation in radio, TV, and telephones let up under the Reagan administration? Many observers worry that it will, because of the appointment of Mark S. Fowler, generally considered a supporter of the established broadcasting industry, as chairman of the Federal Communications Commission. Fowler replaces former chairman Charles D. Ferris, a deregulation activist under whom the FCC stretched the limits of its authority in order to move toward free markets in communications.

Fowler has told reporters he will look to Congress to take the lead on communications policy, concentrating his own efforts on managing the FCC while taking a piecemeal approach to "junking regulations in all areas where they are anachronistic, pointless, and harmful.'' That means many additional regulations on broadcasting could be scrapped—but it also means that major initiatives that would threaten the status quo are unlikely to emerge from the FCC. Nevertheless, Fowler maintains, "I'm for the maximum amount of competition possible."

Whether Fowler really means that will soon be tested by the issue of direct satellite broadcasting—which established broadcasters fear as too much competition. Prior to Fowler's confirmation, however, Commerce Secretary Malcolm Baldridge sent the FCC a ringing endorsement of the new technology, urging swift approval of the application by Comsat to set up such a service. "The commission has been a leader in promoting free market competition and deregulation in telecommunications over the past decade," wrote Baldridge. "The administration supports those goals." And the following week Commerce's National Telecommunications and Information Administration submitted formal comments to the FCC urging OK of the Comsat application.

Competition with the local telephone monopoly suffered a setback in May, however. Xerox Corporation announced that it was scrapping its plan to build an alternative (radio-based) phone network—called Xten—in major cities (see "Dial D for Deregulation," REASON, Apr.). The FCC had allocated frequencies for such systems in January. While maintaining that the concept remains technically feasible, Xerox's statement said that the system's economics no longer appear favorable.

Cable TV, Sex and Privacy It's the old problem of how far to go on television—but with a new twist. To justify their demand for some form of censorship, the opponents of explicit sex on television have always made much of the fact that TV signals go out indiscriminately to all TV set owners.

Now, though, the cries for controls are being heard over cable television's more explicit offerings, even though cable and subscription TV customers voluntarily pay for the service, and if they're offended, they can always cancel. And the customers are buying, to the extent of just under a million subscribers to "adult programming" on cable or over-the-air pay TV. In addition, over two million videocassette recorders are in use in the United States, and as much as 50 percent of videocassette movies now being sold are adult fare.

Still, Utah's legislature passed a law in May establishing strict decency standards for cable television operators. The law was immediately challenged by Home Box Office, the nation's largest pay-TV system, and four Utah stations. A restraining order was slapped on implementation of the law, and Federal District Judge Bruce S. Jenkins is considering whether to issue a permanent injunction against the statute.

Such goings-on are of great interest to the owner of a local cable system in Monroe, Louisiana, which offers softcore pornography to regular subscribers for an extra $2.95 a month. "What better place for a sex show than in the home?" Premium Channel Television owner Jerry Womack asks, noting that 10 percent of his subscribers have added the adult-movie fare to their service. But religious opposition to such freedom of choice is mounting. "If some folks don't get some more self-control," one pastor warned, "it's going to require legislation."

Such sentiments take on a legitimate aura, unfortunately, when a locality grants exclusive franchise rights to one cable system to serve the area. But instead of attacking the monopoly privileges, various groups have demanded city or "public" control over programming in exchange for the exclusive broadcast rights. In Mesquite, Texas, for example, religious leaders introduced a plebiscite to prohibit the franchise winner from showing R-rated movies. It lost by a three-to-two margin. The city council of Forth Worth, Texas, however, has succeeded thus far in banning X-rated movies from the city's cable system. It has also required the operator to make available free lockout boxes so that parents can prevent children from viewing certain channels.

The networks have been griping, too, about "social responsibility" and the lack thereof in alternative television. But the new operators are forging ahead and, in the process, uncovering ever-different problems. SelecTV cable system in Los Angeles, for example, had been prevented from offering adult fare, as its competitor does, by the station from which it leased broadcast time. So it decided to buy that station, the Federal Communications Commission permitting. If it succeeds in acquiring KWHY's license, the aptly named result will be Choice Channel.

America Tops in Buying Power According to World Bank statistics, the United States has slipped to sixth place in per capita gross national product, trailing Kuwait, Switzerland, Denmark, Sweden, and West Germany. These figures have contributed to the prevailing sense that the United States is lagging behind other countries and, therefore, that "something must be done" to regain its position of power and influence—preferably, it seems, by the military and the government.

A new analysis of the relative prosperity of nations, however, shows off the real story behind the figures. According to Robert Summers, Irving B. Kravis, and Alan Heston, professors at the University of Pennsylvania, what has changed is not the relative prosperity among countries but the value of their currency. Since the American dollar is undervalued worldwide relative to its domestic purchasing power, the actual differences in living standards paint quite a different picture.

When measured by what its currency will actually buy domestically, the United States continues to lead the world in prosperity. Swedes, for example, enjoy a living standard only 78 percent that of Americans in terms of the housing, goods, and food the average-salaried person can buy. Switzerland's living standard is only 70 percent that of the United States; Belgium (with a per-capita GNP almost identical to that of the United States) has a living standard 78 percent of that of the United States.

Despite government's continuing inroads on the free-enterprise system, it seems, capitalism still provides the best opportunity for the good life for those who want it.

Making Room for a Space Command Because the Air Force and Navy appear to be resisting the development of space weaponry for defense, serious consideration is being given to establishing a new branch of the armed services—the Space Command. Apparently, the problem is that both services are jealously guarding their turf—existing and planned missions and weapons systems. Any real push to develop, say, space-based lasers, can be viewed as competing for scarce defense resources. Consequently, some Defense Department officials and members of Congress, including Sen. Harrison Schmitt, are considering the creation of a separate service.

What would the Space Command do? Presumably, it would be responsible for in-orbit battle stations designed to intercept ballistic missiles (ICBMs and SLBMs) and for other defense-related satellites: warning systems, satellite interceptors, and perhaps reconnaissance satellites, as well. Recent studies by SRI International and Rockwell International have defined the need for a "manned utility space cruiser"—a 22-foot-long, unarmed, winged vehicle launched by an MX booster or the Space Shuttle. The cruiser would service other spacecraft anywhere from low earth orbit out to geostationary orbits and would glide back to earth like the Shuttle does.

Meantime, the program to develop high-energy laser weapons is making progress. The Air Force is considering a test of its airborne 400 kw laser against a Polaris missile. The objective is for the laser, onboard a KC-135 transport at 35,000 feet, to destroy the missile soon after it clears the ocean surface. And Boeing has proposed a demonstration project in which it would build and orbit a 2.2 megawatt laser weapon for 1985 in-orbit tests against both aircraft and missiles.

According to Aviation Week (May 25), the Soviet Union now possesses an operational ground-based high-energy laser weapon capable of damaging the optical and electronic subsystems of US spacecraft in low-earth orbit and an operational killer-satellite capability (based on 11 successes in 18 tests).

But Officer, I Was Only Doing 55… What do most of us do when ticketed for a speeding violation? We grumble a bit, we plead innocence, and some six percent go to court to contest the charge. If convicted, we pay the fine and unhappily anticipate higher insurance rates and even the loss of a driver's license.

But wait, here comes Robert D. Kizer to the rescue! Kizer, a 32-year-old Texan, has set up four Ticket Clinics so far, in Lubbock, Dallas, Houston, and Amarillo. The lawyers in each Clinic fight moving violation tickets in court for their clients, charging $45 to contest a city ticket and $75 to fight a highway ticket. After the client signs an appearance bond and pays the fee, the lawyers defend them in court by taking the offensive against the reliability of radar and the police officer's memory. Kizer professes an 80 percent success rate in getting his clients off.

To his critics, Kizer replies, "You've got to remember that police officers have legal expertise available to them to prosecute these tickets. We're just providing the same kind of expertise to the poor guy who gets the ticket.'' Kizer views rampant ticket giving as merely a subtler form of taxation. This fact was brought home to him after he campaigned unsuccessfully for mayor of Lubbock against a candidate who advocated that police officers write more tickets not only to encourage safety but to ease the local tax burden. All this, he thought, while Lubbock battled a high street crime rate. The clinics, incidentally, will not defend anyone against drunk-driving charges.

Kizer's first four clinics are so successful that he plans to open 11 more in that many Texas cities this year. He then intends to move into New Mexico and eventually to sell franchises to the concept for $36,500 each. This lawyer also plans, he admits openly, to become "independently wealthy" via the Ticket Clinic route.

Alternative Mail Suppose you want to get a 10-page letter from New York to Los Angeles—today? If you're part of a giant corporation, you may have a company facsimile system, operating over the phone lines. But otherwise you'd have been out of luck—until April. That was when National IMS Corp. began offering its Q-mail facsimile service to all comers. If your message needs to go between any two of the seven major cities where the company's service centers are located, the price is just $1.50 per page for the first 60 pages (and $1/page for each page thereafter). For an additional charge, a Q-mail courier will pick up the letter on your end and another will deliver it; the minimum charge in this case is $30. By the end of the year the company hopes to have 60 to 80 service centers in operation.

The "priority mail" market has grown from nothing to $150 million a year. Besides the government postal service's overnight Express Mail, both Federal Express and Airborne have developed special overnight letter services. Federal's, which went national in June, costs $9.50, while Airborne's is still in the test-marketing stage. Both firms are watching the Q-mail experiment with interest. Nobody has thus far been able to make such a facsimile service pay. But if National IMS can do so, it would be serious competition for the overnight services. Federal estimates that the total market for such services could top $1 billion a year.

Savers' Liberation Survives There are two ways to deal with an untenable situation caused by government regulations. One is to enact further regulations in an attempt to compensate for the distortions introduced by the first ones. That is the course of action that the savings and loan industry had urged on Congress all during the spring, to bail it out from the stiff competition posed by money market funds (see "The New Money Market: Savers' Liberation," by William Donoghue, REASON, June). The S&Ls were in the squeeze because present and prior regulations left them saddled with a portfolio of low-interest loans and restricted ability to compete for savers' money.

The alternative, of course, is to proceed with dispatch to dismantle the offending regulations. That's the course Treasury Secretary Donald Regan urged on the Senate Banking Committee in April, and by mid-May the Wall Street Journal could report that congressional support for regulating the money market funds had all but dried up. "I don't have any head counts or anything, but I'd say the tendency among my colleagues is for deregulation, rather than regulation," stated the chairman, Sen. Jake Garn.

The congressmen were much impressed by an outpouring of support for financial freedom from customers of the nation's 114 money funds. The same wave of opposition to new controls has torpedoed proposed regulations in Arkansas, Georgia, Kansas, North Carolina, Tennessee, Utah, and Washington state.

In his testimony, Secretary Regan suggested that Congress lift restrictions on the types of loans the thrift institutions can make, that the present phase-out of controls on deposit interest rates be speeded up, and that the federal government override state usury ceilings. He also suggested that the administration would consider repealing the McFadden Act (which prohibits interstate banking) and the Glass-Steagall Act (which draws a sharp distinction between the banking and securities industries and forbids either from operating in the other's field).

Reforming Mexican Land Reform Mexican President Jose Lopez Portillo has proposed a new version of land reform that has been attacked for being less than ideologically pure. Since the Mexican revolution ended in 1917, land reform has consisted of the expropriation of idle lands and their conversion into communal farms to be worked by the peasants. The problem, however, has been that the peasants got the use of the land but not title to it. This meant that they had no collateral to borrow money for improvements to the land, and thus farming has remained inadequate for feeding the ever-growing Mexican population.

Portillo's proposal, passed into law last December, allows such communal farms to form "economic units" with privately owned farms. These units will then be able to borrow money from banks for equipment, fertilizers, and other items.

Leftist members of Mexico's ruling Institutional Revolutionary Party have criticized Portillo's plan as a "betrayal of the revolution" because it is not "ideologically pure." But by introducing a measure of private enterprise, the plan may end up giving Mexican peasants their first real chance at escaping rural poverty.

Questionable Allies Can the Soviet Union count on the armies of its northern-tier allies—Czechoslovakia, East Germany, and Poland? That is the question examined in a recent Rand Corporation study, East European Military Establishments: The Warsaw Pact Northern Tier. The conclusion reached by the study's three authors: there are clear limits on what the USSR can expect from its nominal allies.

The Czech army's morale was devastated by the 1968 Soviet invasion; the army has not regained its pre-1968 size, cohesion, or quality. The Polish army was demoralized by having to suppress striking workers in 1970; today this army has regained some of its historical role as guardian of Polish national interests and could not be used against the Polish people. But it would probably take part effectively in a "lightning war" on Western Europe. Only the East German army is thoroughly under Soviet control and therefore considered fully dependable.

Overall, then, the Rand analysts conclude that the three northern-tier armies cannot be used as instruments of domestic repression or to suppress revolts in neighboring Warsaw Pact countries. Their most reliable use would be in a "lightning war" in which, lacking time to consult or prepare, Eastern European leaders would have little opportunity or motivation to opt out. In a war of attrition, though, the morale of East European troops "probably would crumble."

Given that under present Warsaw Pact plans over half of any initial offensive against the West would be East European troops, these findings raise new doubts about the strength of the Soviet Union.

What about Workfare? There's a widely shared perception in this country that millions of able-bodied people are being supported, at taxpayer expense, by various welfare programs. When black columnist William Raspberry suggested last summer that perhaps welfare payments be linked to a work requirement, he was astounded by the breadth of support for the idea. Under the name of "workfare," the concept has been tested on a small scale for several years and is being proposed as a key component of the administration's welfare reform proposal.

Workfare differs from earlier work-incentive programs—including the one instituted in California when Reagan was governor—in that its focus is not on placing welfare recipients in permanent jobs. The California program proved disappointing in that regard, in part because state and local agency staffs were often hostile to it.

Today's workfare approach is far simpler. The idea is simply that able-bodied recipients of welfare benefits must work off the dollar value of those benefits by helping out in local government agencies—filing, photocopying, raking leaves, etc. The rationale is twofold: that the recipients should contribute something of value in exchange for the benefits and that those unwilling to do so should be dropped from the rolls, thereby saving taxpayers money. In other words, workfare is not job training (though it may have some job-training benefits). It is a means of removing freeloaders from the welfare caseload.

For several years now the US Department of Agriculture has been operating pilot workfare programs for food stamp recipients; 14 communities participated last year. In San Diego, of the 3,422 food stamp applicants found able bodied (out of 45,000 recipient households) last year, only 207 actually worked off their obligation—about six percent. Nationally, about 15 percent of those referred actually show up for work. The others either withdraw from food stamps or are cut off. Last fall San Diego voters endorsed the workfare idea by a 90 percent margin.

The Reagan administration now proposes to expand the idea nationwide, not just for recipients of food stamps but also to able-bodied participants in the Aid to Families with Dependent Children program. The administration estimates that 800,000 adults would be eligible for such a workfare program nationwide. (Also included in the proposed reforms would be a denial of AFDC benefits to the families of those who choose to go on strike and allowing the federal government to tell state agencies about any payments it may be making to welfare applicants. Altogether, the changes are expected to save $1 billion.)

Even liberal San Francisco is turning to workfare. In May the city's board of supervisors adopted a workfare requirement for its city-funded "general assistance" program. City budget analysts expect the program to save $5 to $7 million a year, by encouraging about half of the 5,300 recipients to get off the dole.

Whither Socialized Health Care? As the battle rages over government-provided health care, with one side advocating cutbacks and the other calling for widespread nationalization of health care, it's useful to look at the results of a recent study comparing health care for the elderly in socialized and nonsocialized countries. These results are quite chilling.

According to the authors of the study, every one of 15 countries with socialized medicine gives preferential treatment to younger patients. In one country, the authors discovered, people over 60 years of age are not allowed to use kidney dialysis machines.

This preferential treatment, the two professors from the Center for Health Policy Studies at the University of Dallas contend, shows up in the respective mortality rates of persons above 35; the older the age group, the larger the difference in death rates between socialized and nonsocialized countries. The 15 countries studied include 13 noncommunist European nations plus Japan and Australia; the five countries without socialized medicine used were the United States, Greece, Israel, Spain, and Switzerland.

Coauthor and Center Director John Goodman also examined the political nature of socialized health care. Programs are continued or eliminated on the basis of their popularity, he reports. Once more than 50 percent of health care dollars come from taxation, Goodman warned, a country is well on its way to national health insurance (the average percentage of government health expenditure in countries with socialized medicines is 84 percent; in nonsocialized countries, 54 percent). In the United States, Goodman says, the percentage of government-funded health care has doubled from 22 percent in 1960 to 44 percent today.

The proposed cutbacks recently announced by the Reagan administration will help to slow down this trend. Among the programs being eyed for elimination are Health Systems Agencies and Professional Standards Review Organizations, both rather obvious interventions in the medical care marketplace. The HSA program comprises some 200 local groups with the power to decide on proposals for construction of medical facilities or expansion of existing facilities in their areas to eliminate duplication (or what some might call competition).PSROs are set up to review the health care given to Medicare and Medicaid patients, with the aim of keeping costs within government-defined norms.

The intent of eliminating HSAs and PSROs is to increase the extent of competition in medical services. This approach is generally credited to Stanford economist Alain Enthoven (see Trends, May 1980). Enthoven has argued that US medical care is so costly because its anticompetitive structure—reinforced by laws and regulations—provides disincentives for cost cutting. Because most people's health insurance is paid by their employer, Enthoven believes, they have no incentive to choose a cheaper plan nor to cut down on unnecessary costs. Hospitals and doctors further have no compunction about charging and administering services involving expensive technology because the bill goes to the insurance company.

To whatever extent the administration's proposals are implemented, at least they represent a step away from the regulation-happy attitude of previous administrations.

Rent Control Ups and Downs While the US Congress continues to debate on whether to impose federal curbs on rent control, two California areas recently modified their rent control ordinances for the better.

The city council of Thousand Oaks voted to phase out its rent controls in a two-step program. Controls were completely eliminated on units vacated on or after May 1; units vacant before May 1, however, have to adhere to new "market value" rates determined by the council until they are again vacated.

The four-to-one vote was a victory, in particular, for one of California's largest apartment owners—Standard Investment—whose managing partner Lawrence Kates had allowed half of its 800 rental units to remain vacant after rent control was imposed, at a loss of some $1.7 million a year. Because Standard Investment owns 20 percent of the units in Thousand Oaks, Kates was heavily criticized for the action. "We didn't create rent control," Kates replied, "and we're not going to let it bankrupt us." Kates argued that the cost of upkeep on the units was not covered by the allowable increase, and since vacant apartments deteriorated at a slower pace, it was more economical to keep the units vacant.

Kates has, incidentally, decided to take the same steps in Santa Monica, where the rent control laws are so stringent that a superior court judge has ordered them rewritten to allow larger rent increases (see Milestones, June). The Santa Monica Rent Control Board, when last heard from, was trying to find some way to force Kates to register his vacant units with the board, as the ordinance requires.

The Los Angeles County Board of Supervisors, in the meantime, has voted to soften rent control laws in the unincorporated areas of the county while retaining them until June 1983. The new measure allows landlords to raise rents up to 10.1 percent annually, or 0.6 percent more than the previous 9.5 percent annual cap. After June 1982, landlords will be able to raise rents to match the 1981 consumer price index. New and vacated apartments are now exempt from controls, as are luxury units. The new ordinance further puts an automatic end to rent controls should the rental vacancy rate go up to five percent.

On the federal front, the Senate passed President Reagan's housing bill, which would cut off federal housing funds for areas with rent control and require public housing tenants to pay a higher proportion of their income for rent. The House Housing and Development Subcommittee has voted against a House version of the plan, however, so its outcome remains unclear. Some 200 cities across the country would be affected by such a plan.

Military Reforms, Not Conscription Increases in military pay and reforms in the structure of benefits would be more effective in solving the armed forces' personnel problem than would the draft. That is the gist of a newly released "Policy Analysis" issued by the Cato Institute in San Francisco, California. The study reviews a great number of the objections to the volunteer army and provides arguments against them.

In the first place, author Roger Nils Folsom writes, even with conscription of two years' forced service, there is still the problem of how to persuade conscripts to stay on after the compulsory period. The study, written with the assistance of Ann Marquiss Folsom, points out that in real terms basic military pay has fallen 20 percent since 1973. Educational benefits, a major selling point in the past, have also dropped.

Folsom notes that the complexity of the structure of pay and benefits makes military service seem less attractive to the potential recruit than it really is. Furthermore, the emphasis on family-oriented benefits instead of on cash discourages the recruitment of "the single unattached individual who might be most receptive to military service—and who might make the best soldier, at least in the junior ranks," Folsom argues.

Folsom goes on to address such arguments as lack of readiness, racial composition, lack of patriotism, and others. He also has a more statistically detailed version available for those interested. (Single copies of the report are available from the Cato Institute.)

Interestingly, a National Center for Education Statistics survey in 1980 asked high school students what they would do if two years of military or civilian service were required by the government after high school. Some 29.4 percent of the respondents said that they would try to avoid either type of compulsory service, while 30 percent were undecided. The remainder divided into 18 percent who would enter the military and 23 percent who would pick civilian service.

Milestones • Nine-Zip Delay. The Office of Management and Budget ordered the US Postal Service to delay implementing the nine-digit zip code until it has determined the cost to users. A postal official then suggested that the OMB had no authority over the USPS and that it would go ahead with the new code. The outcome was unclear at press time.

• Italians Keep Abortion. Some 69 percent of Italian voters rejected a church-backed attempt to ban abortion except in cases of extreme danger to the woman's life but also rejected (89 percent) a proposal to abolish restrictions in the current abortion law. The voters also defeated a measure that would have prohibited private gun ownership.

• Homosexual Immigrant Wins. A Washington federal appeals court ruled in May that homosexual Horst Nemetz could not be denied citizenship because of his sexual preference. An earlier court had noted that Nemetz had presumably violated Virginia's sodomy laws and therefore lacked the "good moral character" required for naturalization. But at least nine states have decriminalized sodomy between consenting adults, the appeals court panel noted, and citizenship cannot be denied because of "an accident of geography "

• Religious Unemployment. The US Supreme Court held unanimously that church-run educational institutions need not pay unemployment taxes for their employees. The ruling overturned the Department of Labor's interpretation of a 1976 federal law exempting employees of church-run schools from the unemployment compensation program. The court decided that Congress had meant to include also those employees not working directly in a church building.

• Indiana Endorses Liberty. Indiana became the ninth state to endorse the Liberty Amendment in April, joining Wyoming, Texas, Nevada, Louisiana, Georgia, South Carolina, Mississippi, and Arizona. The amendment would, among other things, repeal the 16th Amendment and prohibit taxes on "personal incomes, estates, and/or gifts."

• Antileft Church Group. A group of Protestants and Catholics have formed the Institute on Religion and Democracy to fight what they consider to be a left-wing bias in the current religious leadership—particularly its involvement with the National Council of Churches and the World Council of Churches. "The choice between bread and freedom is a false choice," the institute's brochure declares in response to the liberal religious leadership's argument that political freedom must sometimes be sacrificed to further economic justice.

• Keynes Discredited in China. A special commentator announced in the March issue of Hong Chi, the Chinese Communist Party's theoretical magazine, that Keynesian economics is "not applicable to China." Marxist economics was not mentioned as an alternative modus vivendi; neither was free-market economist Milton Friedman's recent trip to China discussed.

• Rental Potential. A professor of urban planning at Rutgers University's Center for Urban Policy Research says that as many as nine million rental units could open up if localities lifted zoning restrictions on rental units made available in single-family homes. Prof. James Hughes notes that half of all homes presently average one or less persons for each two rooms and that about 300,000 units are already being created annually inside single-family residences.

• Conrail Sale Support. The American Farm Bureau Federation, the nation's largest farm organization, and the National Industrial Traffic League, the largest association of shippers and receivers, separately released statements supporting the proposed sale of Consolidated Rail Corporation (Conrail) to the private sector.

• Government-Owned Bank Rejected. Voters in Minot, North Dakota, emphatically rejected a proposal to set up America's first city-owned bank, by 4,940 to 1,018. Minot State College political science professor Karl Kalvelage proposed the idea, with a deposit base of city and county government accounts to establish the bank and with tax-exempt profits. He was successfully beaten through the efforts of the Task Force for Free Enterprise.

• Warranted Searches. Police officers must have a search warrant to enter a third party's home even when they believe a fugitive may be hiding there, the US Supreme Court ruled seven to two. Even when armed with an arrest warrant, therefore, police officers may not automatically search the homes of that individual's friends and acquaintances.

• Balanced Budget Boosted. The Senate Judiciary Committee voted to approve a proposed constitutional amendment requiring a balanced federal budget, except in times of war or a three-fifths majority vote in both houses of Congress for deficit spending. If Congress votes to pass the amendment, it will take effect two years after being ratified by 38 of the 50 states. Thirty states have voted so far to call for a constitutional convention to consider a balanced budget; the congressional action would preempt such a convention.

• Industrial Homework. The Department of Labor recently announced that it would repeal the 40-year-old restrictions for certain industries on hiring employees to perform work at home. Severe criticism immediately erupted from unions, business groups(!), and government officials, and now the Labor Department says it will consider "selective easing" rather than total elimination of the ban.

• Ron Paul Lauded. The National Taxpayers Union named Rep. Ron Paul (R-Tex.) the "Taxpayers' Best Friend" in Congress for his frugal performance in 1980. The award was based on NTU's 1980 Congressional Spending Study, in which Paul scored 94 points on a scale of 100.

• Mail Clergy Squashed. New York State's highest court (the Court of Appeals) ruled that the Town of Hardenburgh's 200 mail-order ministers could not get religious tax exemptions for their property unless it was held exclusively for church use (the Town of Hardenburgh has a population of 236). The ruling upheld the state legislature's attempt to control a growing taxpayer revolt in Ulster County. The town will be taking the case to the US Supreme Court.