Balance Sheet

Assets

? Boom Time. While Europe, Asia, and Latin America struggle with an economic meltdown, the U.S. economic expansion sets a peacetime record. What are we doing right? Low inflation, no new taxes, relatively liberal trade and immigration policies, and an entrepreneur-friendly regulatory environment all help. Gridlock in Washington does its share, too.

? Temporary Truce. Free-traders breathe a bit easier as the Clinton administration averts a trade war over steel. The White House refuses to place temporary tariffs or quotas on cheap imports from Russia, Brazil, Korea, and other nations reeling from the economic slump. Stay tuned, though--the steel lobby may get its friends in Congress to pass limits anyway.

? Vintage Smarts. Grab a corkscrew: New research suggests moderate wine consumption is good for the brain. In the journal New Scientist, Italian researchers say a chemical found in wine stimulates an enzyme that helps regenerate brain cells. Savoring a glass or so of wine daily could help stave off diseases like Alzheimer's and Parkinson's.

? Sentence Fragments. Michigan lawmakers gut one of the nation's toughest mandatory sentences for nonviolent drug offenders. The legislature pares back the "650 lifer" law, which previously forced judges to give life sentences to anyone caught with more than 650 grams of heroin or cocaine. Current and future "650" offenders will serve no more than 20 years.

Liabilities

? Takings' Exception. The California Supreme Court says Santa Monica's rent control law doesn't violate the U.S. Constitution's Takings Clause. Even though landlords can't hike the rent of current tenants, the majority noted that the law does allow slightly higher rents on vacant units. Landowners plan an appeal to the U.S. Supreme Court.

? Small Ball. Watch that federal budget surplus slowly disappear, as Bill Clinton tries to deflect attention from scandals by pushing "little" initiatives. Along with tax credits for nursing home care and new splurges on after-school programs for kids and missile defense, Clinton wants to spend as much as $1.5 billion a year buying up vacant property so it can't be developed.

? Limousine Chasers. Plaintiffs' lawyers continue to hit the litigation jackpot. The online publication Lawyers Weekly USA (www.lawyersweekly.com) reports that the top 10 verdicts awarded to individuals in 1998 totaled $2.8 billion, compared with $750 million in 1997. What types of cases win big bucks? Employment claims and medical malpractice each made the list three times.

? Cut Off. For the second straight year, President Clinton asks Congress to make the allowable blood-alcohol level for drivers 0.08 percent. Federalism concerns aside, a January study by researchers at the University of North Carolina shows no evidence that lowering the blood-alcohol level from 0.10 percent has reduced alcohol-related traffic deaths in the Tarheel state. A December study commissioned by the New Jersey Senate reached a similar conclusion.