Over There

Allen and Stein

Over There

Allen and Stein

Over There
An email conversation about the news of the day.
Sept. 17 1998 10:44 AM

Allen and Stein

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Mornin' Herb,

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Your remarks about the limited purview of economists remind me of my first boss, an international economist, way back when I was a government intern (not of the Monica ilk I hasten to add). We shared an office in the old EOB (back before it got gussied up) and he used to spend a half hour or so on the phone each day mumbling to his broker, "Jerry." I never paid any attention to what he was saying (I was busy calculating--or rather making up--per capita GNP figures for places like Nepal). But one day the thought apparently occurred to him that I might take some of his stock tips seriously. "You realize," he warned me, "that the economist is the guy who can tell you why he's standing in the bread line."

President Clinton has already gotten a taste of the difficulties of dabbling in global economics, though I hope he won't be daunted. Alan Greenspan seemed unusually clear and specific yesterday when he told a House Committee that the world's fat cat countries had no plans for a coordinated interest rate cut, as the president suggested on Monday. And to no one's surprise, Brazil--where, as Jim Surowiecki points out in today's "Moneybox," the IMF's standard prescription of tighter fiscal policy does apply, as it does not in much of Asia--has resisted making needed budget cuts at least until its next election is over.

Some commentators are suggesting that, given his likely reduced influence in domestic policy, Mr. Clinton might turn more of his attention to the international arena. Perhaps not a moment too soon. While the overseas deflationary forces that Mr. Greenspan noted yesterday may ultimately pinch our pocketbooks, the plight of innocents in Kosovo should already be squeezing our consciences. Kosovo is another place where the administration has pursued its policy of talking loudly and carrying a small stick.

True, the Kosovo insurrectionists who started the trouble were warned at the start that they could expect no direct help from the NATO powers, but did we have to let Milosevic get away, once again, with such wholesale slaughter and pillaging? A Washington Post editorial yesterday observed that when thousands of women and children die of starvation and exposure in the coming weeks, "no one will be able to claim ignorance as an excuse for inaction." Meanwhile it looks like the Bosnian elections (for which our own Kate Galbraith is an observer) are replacing the Serb moderates we supported by a bunch of ugly Serb nationalists who are our sworn foes. So much, once again, for our naïve faith that the forms of democracy would lead inevitably to the reality.

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I've been frantically plowing through my newspapers looking for something cheerful to write about today. So far all I've come up with is another ghastly murder by suburban Maryland teenagers, this one of an immigrant dishwasher who hoped to earn enough to bring his family here. Also the revelation by Warren Buffett that he has stashed $9 billion under Berkshire Hathaway's mattress, presumably for the rainy day he sees in the forecast. Have you had any better luck?

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.