Balance Sheet
Assets
Trial Period. Congress overrides President Clinton's veto of the securities-litigation reform act. Silicon Valley rejoices. No longer will growth companies whose stock prices drop (and the accounting firms that do their books) fear frivolous lawsuits from parasitic plaintiffs' attorneys. Among other things, the bill establishes a modified "English rule"–if a judge deems an investor lawsuit frivolous, the people bringing suit have to pay the other side's legal fees.
Mass Action. Massachusetts Gov. William Weld and Lt. Gov. Paul Cellucci propose the most dramatic downsizing of any state government in the country. The Weld/Cellucci plan would cut income taxes by 10 percent, end the civil-service tenure system and teacher certification, establish vouchers for government, private, and religious schools, and privatize management of government buildings and of some functions at Boston's Logan International Airport. Will "Taxachusetts" legislators go along?
Pretty Good Outcome. The federal government drops its three-year-old case against computer encryption developer Phil Zimmermann. When someone published Zimmer-mann's "Pretty Good Privacy" program on the Internet, the feds threatened to charge him with illegally exporting "munitions"–a criminal violation carrying a potential five-year prison term. Time for the feds to go further: Give encryption First Amendment protection.
Military Service Inc. U.S. troops in Bosnia work with a new, private partner–Brown & Root Inc. The Houston-based contractor is digging latrines, cooking meals, placing electric lines, and performing other support services. The Washington Post quotes Pentagon sources saying privatization could save taxpayers 20 percent of the $120 billion the military spends annually on health care, base management, accounting, and other logistical tasks.
Liabilities
Investment Tragedies. The typical wage-earning couple who retired in 1982 has received a 16.6 percent real rate of return from Social Security. Today's (and tomorrow's) retirees won't be so lucky. The Tax Foundation estimates that, thanks to declining birth rates and an aging population, everyone born between 1937 and 1990 will get a negative real rate of return on their Social Security "investment." Better start that 401(k).
Wrong Number. And you thought the Americans With Disabilities Act was burdensome. FCC regulations implementing the Hearing Aid Compatibility Act of 1988 (no kidding) will force every company with more than 15 employees to purchase hearing-aid-friendly telephone sets. Investor's Business Daily reports that retrofitting existing phones to meet the regs could cost $45 per telephone unit. And new phones with FCC-mandated volume controls cost as much as 30 percent more than similar phones without the controls.
Steep Task. The federal Board of Tea Experts, which has regulated tea imports for nearly a century, survives the Republican "revolution." The domestic tea lobby convinces Senate Agriculture Appropriations Subcommittee Chairman Thad Cochran (R-Miss.) to strike an appropriations amendment that would have abolished the tea tasters. Taxpayers will keep paying $200,000 a year to employ tasters and, by the way, prop up the price of domestic tea.
Net Losses. New York Supreme Court Justice Stuart Ain refuses to reverse his ruling in the Prodigy libel case. (See "Chilled Prodigy," Aug./Sept.) After Prodigy apologizes to Stratton Oakmont Inc., the investment bank that had first sued the on-line service, Stratton Oakmont drops its suit. No matter. Ain's ruling that Prodigy is a publisher stands. The judge says the law has "not kept pace with the technology" and "there is a real need for some precedent." This precedent may bear bitter fruit soon: Prodigy now faces a libel suit in Florida.
