A civil jury found O.J. Simpson liable in the wrongful-death and battery-related charges brought against him by the Goldman and Brown families. The unanimous verdict was less surprising than the whopping $8.5 million in compensatory damages the jury ordered Simpson to pay Goldman's parents. Whereas the cynical view of the criminal trial was that a black jury ignored its instructions by acquitting Simpson in order to sock it to the Los Angeles police, the cynical view of the civil trial is that a white jury ignored its instructions by inflating the compensatory-damage figure in order to sock it to Simpson. Reporters, however, scrupulously pointed out that a civil trial only requires proof by a "preponderance of evidence" rather than proof "beyond a reasonable doubt." But people who have always believed Simpson guilty took the civil verdict as vindication of that belief. The spin on the trial is that O.J. did himself in by contradicting photographic evidence and other witnesses' testimony on the stand. Next comes a short hearing in which the jury will decide the punitive damages. Commentators agree that while Simpson has several good grounds for appeal, none of them is good enough. (2/5)

President Clinton delivered his State of the Union address. Pundits found it long on grand exhortations but short on government action, confirming Clinton's rightward drift. The New York Times' R.W. Apple, speaking for many, pointed out the incongruity of Clinton's call to action at a time when America faces no great threat. (Thesis sound bite from the speech: "The enemy of our time is inaction.") The two topics that caught the most attention were Clinton's pleas for racial reconciliation and a crusade to raise educational standards. The good news: Reviewers deemed it his best State of the Union speech so far. The bad news: It was completely overshadowed by the O.J. Simpson verdict, which came down simultaneously. Television networks forced themselves to cover the speech, but raced to Los Angeles the second it was over. Tom Brokaw accidentally referred to the deliverer of the Republican response, (black) Rep. J.C. Watts of Oklahoma, as "O.J." Commentators wagered that the racial division reflected in the two Simpson verdicts would overwhelm Clinton's noble words to the contrary. (2/5)

Morgan Stanley and Dean Witter announced that they will merge. The combined entity, with more than $20 billion in equity and $270 billion in assets under management, will be the biggest securities firm in history. The idea is to combine the strategic savvy of an elite investment bank (Morgan Stanley) with the huge small-investor clientele of a major brokerage house (Dean Witter). The Wall Street Journal predicts a frenzy of copycat marriages in the securities business. (2/5)

Sarah Ferguson, the Duchess of York, will be paid $1 million to promote Weight Watchers products in America. Brits are outraged at Fergie for debasing her royal title, particularly since she only married into it. Advertisers predict the sponsorship agreement will be a smashing success: Brits scorn Fergie for her adultery, kinky sexual practices, contempt for authority, and general infamy, but Americans love her for precisely the same reasons. The New York Times sees two trends in the deal: the prostitution of the royal family ("The next thing we'll see Queen Elizabeth doing commercials for Depends," says an American ad man) and America's sick fondness for notorious sinners. (2/5)

Serbian President Slobodan Milosevic agreed to recognize opposition victories in last fall's local elections. His attempt to annul them had triggered an uprising that increasingly threatens to force him from power. The pessimistic view, based on Milosevic's history of deceit, is that he's only faking the retreat because he's on the verge of losing control. The optimistic view is that he's serious about it, for the same reason. (2/5)

There were new breaks in the Democratic campaign-finance scandal. The Washington Post reported that a mob-connected stock swindler had been invited to one of the infamous White House coffee klatches. Time magazine reported that the new Democratic National Committee finance chairman had lobbied for regulatory breaks for nursing homes while he was 1) a nursing-home executive and 2) raising big money for the DNC. Newsweek had it that former Chief of Staff Harold Ickes had asked for a $1.5 million donation, part of which was to go to a tax-exempt organization (which, if true, is the Gingrich Heresy). Meanwhile, the Justice Department has subpoenaed records from Clinton, the DNC, and others in its investigation of possible contributions by foreigners, which are generally illegal. (See "The Gist" from Feb. 1) (2/3)

The Clinton administration leaked its new budget proposal. The key items are tax cuts for education and for capital gains on the sale of a home. Republicans congratulated Clinton for moving in their direction but chided him for not going far enough. Chat-show pundits gagged on the talk of bipartisan harmony and tried to egg the two sides into a fight, with little success. (2/3)

The progress of Clinton's Cabinet nominations was a mixed story. Only two nominees, Alexis Herman (Labor) and Anthony Lake (CIA), have been pulled over for closer inspection. The latest word is that Herman will get through (having mollified Senate Majority Leader Trent Lott), while Lake is in more serious trouble. Lake has two problems: 1) his (inadvertent, he says) failure to sell some energy stocks in 1993, when he became national security adviser; and 2) Republican alarm that he might be a dangerous lefty, based on his 1970 resignation from the National Security Council over Nixon's invasion of Cambodia, and on his more recent refusal to confirm that Alger Hiss was a staff Soviet spy. (2/3)

Welfare reform was the hot topic at the National Governors' Association winter meeting. Several Republican governors supported restoration of aid to legal immigrants (which was cut in the new welfare law). Republican congressional leaders reportedly hit the roof over the governors' defection and, under that pressure, they fudged their stand somewhat. But a similar fuss is expected over a cap on Medicaid, which Clinton and Congress are considering. As with welfare, the states will have to pick up part of the bill. Conservative commentators complain that the Republican governors are chickening out on the principle of returning authority to the states now that it's costing them money. Liberals are gloating for the same reason. The popular bet now is that the governors' refusal to let go of the federal teat will doom ratification of the balanced-budget constitutional amendment. (2/3)

The Christian Coalition unveiled the"Samaritan Project," a public/private package of proposals to aid inner-city blacks and Hispanics. The proposals include abstinence education, school vouchers for poor kids, faith-based drug-rehabilitation programs, and a $500 tax credit for anyone who does 10 hours of volunteer work for the poor during the year. Analysts construed the project as a coalition bid for mainstream credibility; the Washington Post portrayed it as a halfhearted repackaging of the coalition's standard fare. Although coalition Director Ralph Reed described the project as a private alternative to government programs, reporters noted that it depends on some $3 billion in government spending and lost revenue. Civil libertarians denounced it as an improper church-state partnership, a sectarian scheme to milk the taxpayer, and a feel-good diversion from the rest of the coalition's agenda. (1/31)

The State Department reported that China's human-rights record worsened in 1996. The Beijing government has stifled every remaining dissident through exile, imprisonment, or intimidation. The report also cites China's transparent intentions to abolish Hong Kong's civil liberties when it assumes control of the territory in July. Questioned about China at his press conference, President Clinton admitted for the first time that his "constructive-engagement" policy hasn't improved China's behavior, but he maintained that it will in the future. Editorialists applauded his candor but dismissed him as timid and naive. (1/31)

The first installment of the"Star Wars Trilogy Special Edition" opened in theaters everywhere. The original Star Wars, sporting touched-up audio and new visual effects, will soon be followed by The Empire Strikes Back and The Return of the Jedi. Critics are bubbling with nostalgia for the film's nostalgia. The fairy-tale version of the Star Wars legacy, promulgated in most of this week's retrospectives/reviews, is that it reacquainted America with the magic of myth, sacred lore, and the romantic quest. The less reverent version is that it launched the era of gaudy action movies and movie-based mass merchandising, and that its carefully scripted revival--complete with licensing deals for tacos, toys, and Christmas ornaments--does it perfect justice. (1/31)

Straws in the wind: The New York Times reports that Santeria, the West Indian religion notorious for animal sacrifice, is gaining American adherents and coming out of the closet. New studies show that 1) one in seven black men can't vote because of a felony conviction; 2) cities in the North and Midwest are more segregated than those in the South; and 3) Hispanics now have a higher poverty rate than blacks. Government figures indicate that cigarette consumption is holding steady and may be rising. Sales of Bruno Magli shoes are up 30 percent this year. Scientist-temps are becoming more common in laboratories, according to the Washington Post. Reports of deformed frogs are spreading across America, Canada, and Japan; USA Today warns that this may be an "early warning sign" of an emerging environmental peril. Medical advocacy groups are pushing a home test for colorectal cancer; it requires patients to collect six fecal samples and mail them to a lab. The Wall Street Journal reports that despite the best efforts of entrepreneurs, the cryonics industry remains lifeless. On the bright side, the Journal reports that Twinkies are making a comeback. And astrologer Jeane Dixon died of a heart attack Jan. 25, exactly as Slate had predicted. (1/31)

Stock-market index funds made Page One news in the New York Times and Wall Street Journal. Mutual-fund investors are increasingly shifting their investments from traditional managed funds--which try to outsmart the whole market at picking stocks--to index funds, which distribute their assets evenly and ride the market's rising average. In recent years, the index strategy has triumphed because 1) stock-picking managers charge more in fees than they've added in above-average performance, and 2) fund managers often keep some money in steadier cash and bonds to protect investors in the event of a market plunge. The news accounts portrayed managed-fund managers as unproductive leeches in comparison with index-fund mangers. (1/29)