Bad News Go 'Way

Allen and Stein

Bad News Go 'Way

Allen and Stein

Bad News Go 'Way
An email conversation about the news of the day.
Sept. 17 1998 3:28 PM

Allen and Stein

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Hey, Herb,

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What's happening all over?
I'll tell you what's happening all over.
Guy sitting home (in the White House) by the television set
Who used to be something of a rover.
That's what's happening all over.

(Frank Loesser, Guys and Dolls)

I am determined not to let you out-musical me.

I almost wish I hadn't pushed you in the direction of happy thoughts. You're so good at that kind of thing (witness, for example your new piece on the Sidewalk Nursery that's posted in Slate today--the salesman in me never rests) that it's a very hard act to follow. In fact, I can't seem to conjure up a single happy thing to talk about. Maybe that's because I just noticed that they're having another clearance sale on the stock market today.

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I agree with you. I don't want to see the video tape of Clinton testifying. But if they show it, I'll watch it--like most everyone else. Wouldn't it be wonderful if the networks saved us from ourselves and decided not to broadcast it? Or at least broadcast only the unsmutty parts. Now that's a happy thought. Not a very realistic one, but a happy one.

What I really want to talk about more is the dicey world economy and whether there are things that the major industrial nations should be doing to improve the odds. I was struck by an article by George Soros in the Wall Street Journala couple of days ago as well as by his testimony to Congress that day. In both he repeated arguments he was already making early in the year at the World Economic Forum in Davos. (I confess to a soft spot for Soros. Sure he made a billion betting against the then overvalued British pound, and sure he has a lot at stake in the shaky Russian economy. But he has used his wealth generously and creatively to try to improve things both in Eastern Europe and in America's inner cities. You can check out the "Slate 60" for his recent donations.)

Soros argues that the global financial system is inherently unstable--but we wouldn't want it to be otherwise. Risk is an unavoidable part of growth and innovation. Still, he acknowledges, those in Congress who worry that IMF bailouts just encourage more risky lending by banks and individuals have a point that needs to be addressed for the future. It would be too dangerous not to give the IMF the money it needs right now to stabilize countries in peril. But it's not too late to reduce the moral hazard for tomorrow's investors. What's needed, he says, is a self-financed insurance mechanism that would rate the risk associated with investments in any given country and charge higher fees to insure investors wanting to put their money in chancy endeavors. Any investors who didn't bother to buy the insurance would eat their losses the next time a crash occurred. While those who paid up ahead of time would be reimbursed from the premium fund at (happy thought) no cost to governments. No doubt there are problems in his plan that I haven't discerned but I wonder if anyone in Congress or the administration is even studying the merits of his proposal?

Bad news, go way

Come back some day

In March or May

I'm dancin' and I can't be bothered now.



(George Gershwin. Dunno if Ira got in on this act or not.)

 

Jodie T. Allen is Slate's Washington, D.C., editor. Herbert Stein, a senior fellow at the American Enterprise Institute, was chairman of the Council of Economic Advisers under Presidents Nixon and Ford. He is a member of the board of contributors at the Wall Street Journal.