Balance Sheet

Assets

Mirabile Dictu. That Gramm-Rudman thing is actually working. Congress keeps spending but makes a few tradeoffs. The threat of autocuts may save a billion or so in drought relief. The big savings come on whole programs. First to go: UDAGs, the seemingly immortal porkbarrel grants responsible for many a Hyatt hotel. It was them or the space station, and the space station won.

Underclass Spirit. Jesse Jackson is right. The underclass isn't irredeemable and shouldn't be written off. Millions of poor Americans live dignified lives under horrible conditions. It's Jackson's rhetoric of hope and responsibility—not his class warfare nonsense—that moves his audiences to tears. That response, in and of itself, is reason for hope.

Peer Pressure. The last holdout against the supply-side revolution, West Germany, may have to give in. The economy is stagnant, with growth stuck at 2 percent a year and unemployment unyielding at 8 percent. Supply-siders and government economists meet to talk tax rates. European unification in 1992 promises more pressure. West German trade unions are already jumpy. With no trade or immigration barriers and least-common-denominator product regulation throughout the EEC, the German rage for order will be undone by competition.

King's Gambit. For the moment Hussein's "put up or shut up" challenge to the PLO looks like an asset. Progress in the Middle East comes only through bold strokes by people on the scene—not the U.S. State Department. (Granted, sometimes those bold strokes are wars.) Now Arafat & Co. will either learn to govern, moderating in the process, or flop and put an end to the assumption that they're the real Palestine. At any rate, the West Bank can probably do with fewer bureaucrats.

Liabilities

Make Work. The impulse to find work for government hasn't changed. With nothing but peace and prosperity to run on, Bush gropes for something to buy votes with and settles on child care. Congress busies itself with such threats to the nation as film colorization and dial-a-porn. I think it's time to turn off the air conditioning.

Boxed In. In 1986, there were more than a million interracial marriages in the United States, up from 375,000 in 1970. All this mixing makes it hard for folks to fill out government forms—you know, check the box that matches your race. So the Census Bureau, in an unholy blend of apartheid and Absalom, Absalom!, considers a "coloured" category. (No, they won't call it that.) Better to ban the boxes.

Dole Weevil. Five million people, about 2 percent of the country, live on farms—the lowest number since 1850 (as in: 11 years before the Civil War). They expect a lot from the rest of us. When crops are good, they get price supports. When crops are bad, they get bailouts.

Eco-Hysteria. It's back, bigger and badder than ever. We're not just running out of gas this time. The seas will boil. The sky will burn. AIDS-filled needles will wash up on shore and kill us all. This is not politics, it's not economics, it's fire-and-brimstone, apocalyptic religion.