Balance Sheet

Assets

Dominos Deliver. The East isn't Red, and maybe it's not even pink. Free minds and free markets prove a tad more popular, at least in Central Europe, than anyone expected. Hungary's "radical" Alliance of Free Democrats zaps the Socialists (né Communists) in referendum voting. Poland's prime minister reads Hayek and Friedman. "We want to have a prosperous market. We want our people to live well," says Walter Komarek, Czechoslovakia's likely opposition leader. "We want them to live as they wish."

Say Bye-Bye. Parents, taxpayers, and day-care providers escape (for now) the regulatory embrace of the Act for Better Child Care. A squabbling Congress goes home without passing it. Meanwhile, local politicos continue to wreak havoc on child care. One casualty: Linda Beasley, featured in last June's REASON. When the zoning czars granted her a mere three-month OK, she quit the business.

Take That. Pow! The Supreme Court trashes New York City's SRO-preservation law with a flicker of the VDT. The justices let stand a state court ruling that emphatically declared the confiscatory law a taking under the Fifth Amendment. (See "SRO-Time," Trends, Oct. 1989.) Property-rights advocates flagged the case as a test of the Court's 1987 takings decisions; success should cow a few greedy city councils.

Wild Theme. The most interesting thing about Douglas Wilder's win in Virginia isn't that the abortion issue proved useful to the Democrat—it's how he packaged it. Lots of Thomas Jefferson, individual liberty, limited government; little feminist rhetoric. Classical-liberal ideals and symbols tap deep sympathies, so deep you can even win with them.

Liabilities

November Surprise. Ortega and pals decide it's now or never. First, the broken ceasefire. Then, a rebel push in El Salvador. The timing is good: Everybody is watching Eastern Europe and declaring the Cold War over. Central America is a downer. And if the push works, Nicaragua may not need those pesky elections.

Stock Response. Program trading doesn't cause stock market crashes any more than crashes cause California earthquakes. But it involves math, computers, and (even worse) newfangled notions. Better regulate it out of existence, say critics. Small investors whine, but they've never had it better. They regularly beat the experts, and, after all, they can always buy mutual funds.

Smoking Gun. Cigarettes are gross. But worse than breathing those noxious fumes is listening to the yammering of the antismoking lobby. Their latest target: Philip Morris ads promoting the Bill of Rights. The Bill of Rights. It must be their guilty consciences. They know the First Amendment protects cigarette makers, and they just can't stand it.

Evil Intuition. Leading indicators—lousy Christmas sales, a trade-deficit drop driven by falling imports, and a hunch—say we're in for a recession in 1990. Yuck. And the new regulatory chic won't exactly prolong prosperity. Oh well, all the other doomsayers were wrong. Maybe I am, too.