The Washington Post, New York Times, and Los Angeles Times lead with yesterday's quarter-point Fed increase in the money supply's basic interest rate, the first in more than two years. The nudge was expected, but what was not, all the papers report, was the Fed's concomitant announcement that further rate increases are not necessarily forthcoming, which because it signaled that the central bankers have no serious inflation concerns, spurred strong stock and bond rallies. USA Today fronts the financial news, but goes instead with news that many of the numbers used by the Clinton administration and NATO during the Yugoslav war to describe Kosovo's plight were "greatly exaggerated." Details: Instead of 100,000 ethnic Albanian men feared murdered by Serbs, the real count appears closer to 10,000; the 600,000 Albanian men described by President Clinton in May as lacking shelter, short on food, or buried in mass graves have in fact come through the war healthy; and Kosovo's livestock and crops have also, contrary to official wartime reports, been mostly unaffected. The story quotes a Pentagon spokesman as denying conscious government deception, and a Boston University professor saying that large estimates were used to tap the memory of the Holocaust as a means of justifying U.S./NATO action.
The papers all explain that since the Fed's three rate cuts last fall the U.S. economy has only become more robust while the economic crisis that had gripped most of the rest of the world seems to have abated, and that therefore the Fed viewed those cuts as no longer necessary. The NYT says that one factor in the Fed's thinking is the so-called "new age" paradigm, according to which quantum increases in efficiency and productivity wrought by computers and other technology allow businesses and hence the economy to run at a higher pitch without making inflation particularly likely. Some elaboration would have been nice here. True, it's clear that being able to make more widgets per hour takes away a traditional source of inflation--increased line-worker labor costs. But as businesses become more technology-intensive then why doesn't the explosion in technology salaries make inflation more likely?
The WP and LAT front the flight of two Russian strategic bombers to Iceland, within striking distance of the U.S. (meaning, the papers don't really explain, that they flew to a spot from which their missiles could hit U.S. targets). The bombers were intercepted there by U.S. Air Force fighters and a Navy patrol plane. Two other Russian bombers flew along the Norwegian coast but returned to base before being intercepted by the Norwegian fighters that scrambled in response. The flights were part of Russia's largest comprehensive military exercise since the fall of the Soviet Union and were the first out-of-area Russian bomber flights in a decade. NATO, says the Post, was surprised. Reasons for the flights given by the Post include: a reflection of the Russian military's post-Serbia fears of an expansionist NATO, and an attempt by the military to increase its popular appeal and budget.
The NYT fronts and the LAT runs inside two new studies purporting to show that previous assessments by doctors of the incidence of the heart defect known as mitral valve prolapse, which is associated with a high risk of heart disease and stroke, were far too high. Instead of previous estimates that as many as 15 percent of the population had the condition (the LAT says as many as 35 percent), it's now believed that only about 2 percent do. In effect, millions have been misdiagnosed. Anyone told 10 or 15 years ago that they had the condition should "have the issue readdressed," a doctor tells the LAT.
The NYT reports that Australia passed a law Wednesday that would force Internet providers to remove objectionable material from sites operating in that country and to block access to similar cites located elsewhere.
The Times describes the Cuban-American population in Miami as "bristling with outrage" a day after the U.S. Coast Guard used water pumps and pepper spray on six Cuban refugees on a boat within 150 yards of Miami Beach. The incident was carried live on local television.
A front-page Wall Street Journal feature describes a 4-year-old effort by U.S. military researchers to come up with a weapon suited to safely destroying stockpiles of chemical and biological arms. The problem with current weapons is that they risk spreading the stuff all over the place. The story refers to some of the ideas that didn't make the cut (one no-go: liquid ozone--it looked like it neutralized almost every CB weapon but had a very short shelf life), but when it comes to the ones still in the running, the government stops talking. One guess the Journal makes: "emitters," which are low-frequency vibrators, that via breaking down chemical bonds, can render hazardous chemicals unhazardous.
The WP's "Reliable Source" says that the scene in the South Park movie in which Bill Gates is shot in the head by an irate Windows 98 user has been drawing big cheers. Uh, doesn't anybody remember the concept of shouting "Fire" in the theater? Would this still be OK if it were Bill Clinton getting animatedly offed? Hey, here's an idea, how about a Microsoft screen-saver in which the two South Park "creators" are nailed by their genitals to the floorboards of a burning building but are given chain saws?