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About The daily Nebraskan. ([Lincoln, Neb.) 1901-current | View Entire Issue (Sept. 17, 1992)
NEWS DIGEST Britain tries to prop up pound amidst European turmoil LONDON — Britain frantically tried to stabilize the weakening pound Wednesday by hiking interest rates, buying large amounts of the currency and suspending its foreign-ex change links to other European countries. Britain’s actions'intensified a sense that cooperation among the powerful nations of Western Europe is splintering even as they are seeking to forge closer unity. That added to the monetary turmoil gripping Europe and spread economic anxiety elsewhere, including thevLJnited States. Capping one of the most convulsive and frenetic trading days ever, the Treasury an nounced late Wednesday it would suspend the pound from the European exchange rate mecha nism, which sets maximum fluctuation rates for major European currencies. This means Britain no longer is obligated to use interest rate adjustments to keep the pound within limits specified by agreement with its European trading partners. The move allows the pound to reach whatever level is determined by the global currency market. “The new exchange rate will depend on what the market fixes,” British Treasury spokesman Richard Evans said. “The market is so volatile, it’s impossible to say what that might be now.” In New York, the pound continued to plunge. It was quoted at $1.7990 half an hour after the announcement after falling from $1.8695 dur ing the European trading day. Earlier in the day, the Bank of England had announced two sharp increases in its base inter est rate, first from 10 percent to 12 percent. When that failed to lift the pound, the bank raised the rate to 15 percent. Amid the announcements Wednesday evening, the bank said it would rescind the second increase. Interest rates are a key tool countries use to defend the value of their currencies. Higher rates make a currency worth more but they stifle economic expansion by making it more expensive to borrow. When one country raises lalCS, 11 piVMUIW VII VUIVIJ IV VIV HlVWWIJiC. Also on Wednesday, Sweden’s central bank raised a key lending rate to 500 percent in a desperate attempt to protect the value of its currency, the krona. Italy’s central bank, mean while, bought lire to stabilize that currency’s eroding value. The crisis has intensified in the days leading up to a crucial French vote next Sunday on a treaty for European political and monetary unity. A no vote is certain to raise more doubts about Europe’s plan to become one grand market and a single economic superpower, rivaling the United States and Japan. CIA failed to predict 1989 China massacre WASHINGTON — The CIA station chief in China left the coun try two days before Chinese troops massacred pro-democracy demon strators in 1989, after predicting that the military would not move against the protesters, U.S. offi cials say. This, despite the fact that China’s government had declared martial law 12 days earlier and moved tens of thousands of troops to the out skirts of Beijing in preparation for removing the demonstrators from Tiananmen Square. The CIA was well positioned to gauge the authorities’ intentions. The agency had sources among the fledgling pro-democracy move ment led by several dozen students, as well as within China’s intelli gence services with which the CIA had enjoyed a close relationship since the 1970s, U.S. officials said. The agency had for months be fore the June 3 massacre been help ing China’s student activists form their anti-govemment movement, providing typewriters, fax ma chines and other equipment to help them spread their message, said one official who spoke only on the condition of anonymity. U.S. intelligence services had also been cooperating with China around the world on a joint mis sion: to stem Soviet influence. This cooperation survived even the toughest disputes between the two governments in the 1970s and 80s, allowing the National Security Agency to maintain at least two listening posts in northwest China to monitor Soviet communications. In the weeks leading up to the 1989 bloodshed, in which hundreds and possibly thousands were killed, the CIA monitored the growing ten sion closely using its case officers, dozens of diplomats at the U.S. Embassy and an informal network of informers among the students who led the protest. As the protest lost steam, the chief of the CIA station decided the threat of confrontation had been defused, said one official who spoke only on the condition he not be named. “I guess he thought the army would have acted earlier if they were going to at all," said the offi cial. The CIA declined all comment. The station chief, whose name is protected by law, decided to de part for a regularly scheduled meet ing of station chiefs at CIA head quarters in Langley, Va., said an other official who also spoke only on the condition he not be named. His departure “left the CIA’s secret network of agents and other sources inside China in disarray,” according to a new book about the CIA by autKor Mark Perry. The CIA was far more effective after the massacre than before, ac cording to Perry. The agency was instrumental in an underground network that res cued 15 of the 21 anti-government leaders on China’s most wanted list, he wrote. Two student leaders who were captured and presum ably executed were among the CIA’s most important assets in China, Perry said. Previous reports about the stu dent leaders’ escape from China attributed their success to the help of British and French intelligence officials. Bush answers Democrats with new family leave plan WASHINGTON — On the verge of vetoing a family leave bill for the second time, President Bush on Wednesday belatedly proposed a $500 million tax credit alternative to the Democrats’ compulsory approach. Bush complained it was “very pe culiar and highly political” for the Democrats to wait this late in the election year to renew the fight over whether businesses should be required to give workers unpaid time off to care for a newborn child or sick rela tive. “I think you should be skeptical of any new proposal coming from a presi dent with 48 days left” until the elec tion, said George Stephanopoulos, communications director for Demo cratic nominee Bill Clinton, who strongly supports the Democrats’ bill. “Unfortunately, they and my op ponents believe in a government-dic tated mandate that increases costs and loses jobs,” said Bush, adding, “There’s an awful lot of politics at play here.” The bill passed by Congress would require employers with more than 50 workers to allow employees up to 12 weeks of unpaid leave annually to deal with medical emergencies, in cluding the birth of a child, adoption or a sickness in the family. Bush’s proposal would allow busi nesses with fewer than 500 workers to write off their taxes up to $20 per day for as many as 60 days of leave a year per worker, or a maximum of $1,200 per employee. The White House said Bush would pay for the tax credits by cutting other spending. Rep. Newt Gingrich of Georgia, the GOP whip, said Bush would propose trimming doctors’ and hospitals’ lab fees and other adminis trative costs paid for by the govern ment. Bush said at a meeting with GOP leaders that “There’s some $60 bil lion that (the Office of Management and Budget) knows about where we can allocate to this.” Rep. Patricia Schroeder, D-Colo., Brian Shellito/DN called Bush’s proposal “half-baked” and said if Bush knows where $60 billion can be found, he should spend some of it on Head Start, immuniza tion and nutrition programs for poor 1 children. Analysts say economic growth nonexistent WASHINGTON—Industrial pro duction declined 0.5 percent in Au gust, according to a government re port Wednesday that analysts cited as the latest evidence that the locomo tive once pulling the economy out of recession had lost its steam. The Federal Reserve attributed part of the decline to the effects of Hurri cane Andrew and a strike at a General Motors parts plant. But overall output at the nation’s factories, mines and utilities still fell even when the im pact of those events was excluded. Our economic growth path is now a flat line, at best," said John M. Albertine, head of a Washington eco nomic forecasting firm. “The declines ... were widespread. With no strong sector to hitch a new recovery to, we are likely to have to endure a stagnant economy for at least the rest of the year." Industrial production had risen for four consecutive months through May, leading many analysts to believe it had assumed the role of leading the economy while other sectors were nat. EvclinaTainer of Prime Economic Consulting in Chicago noted that out put then declined 0.4 percent in June, rose just a modest 0.6 percent in July and then fell again last month. “What’s discouraging is the trend in production,” she said. “We’re look ing at... a very low trend line.” In a section of the report on capac ity utilization, the Fed said the operat ing rate of the nation's factories, mines and utilities fell 0.5 of a percentage point to 78.5 percent. U.S. urging Palestinians to negotiate now, official says WASHINGTON — The Bush administra tion is warning Palestinian Arabs to “get their act together” and negotiate terms for self-rule with Israel or risk time running out if the White House changes hands. "We are not saying, 'You’ve got to do this or that,”’ a senior administration official said Wednesday in an interview. "We are saying, 'You’ve got opportunities now that you ought to take advantage of.’” In the current round of peace talks at the State Department, steady progress between Is rael and Syria stands in sharp contrast to slow paced discussions between Israel and Palestin ians over self-rule arrangements for the West Bank and Gaza. The Palestinians are demanding a freeze on construction of new homes for Jews in the territories and East Jerusalem. They also are seeking a commitment from Israel to withdraw from those areas. A top Israeli official assured the Palestin ians on Wednesday that Israel means to give them real authority to run their lives and does not intend to annex the West Bank and Gaza. “The question is whether the other side will ■ ■ .1 see that this is a real opportunity that may never return,” said Deputy Foreign Minister Yossi Beilin. President Bush could get a big boost if the peace talks produced an Arab-Israeli agree ment. The best prospect seemed to be Palestin ian acceptance of some version of Israeli Prime Minister Yitzhak Rabin’s proposal for elec tions next spring for a Palestinian administra tive agency. It would give them control of their day-to-day activities on the West Bank and in Gaza. The senior U,S. official, who spoke only on condition of anonymity, said the Palestinians “still have a tendency to raise issues that are more symbolic than real.” He said Israel and Syria had broken through “some psychological barriers" and exchanged written proposals for an agreement to end their 45-year-old conflict. “I don’t think we are on the brink of an imminent breakthrough” between Israel and Syria, he said, “but there are serious negotia tions under way.” NelSra&kan Editor Chris Hopfsnspsrgsr Night News Editors Kathy Stelnauer 472-1766 Mike Lewis Managing Editor Kris Karnopp Kim Spurlock Assoc News Editors Adeana Lett In Kars Morrison Assoc News Editor/ Wendy Navratll Art Director Scott Maurer Writing Coach General Manager Dan Shattll Editorial Page Editor Dionne Searcey Production Manager Katherine Pollcky Wire Editor Alan Phelps Advertising Manager Todd Sears Copy Desk Editor Kara Wells Sales Manager Jay Cruse Sports Editor John Adklsson Classified Ad Manager Karen Jackson Arts & Entertainment Publications Board Chairman Tom Massey Editor Shannon Uehllng 488-8761 Diversions Editor Mark Baldridge ' Professional Adviser Don Walton Photo Chief William Lauer 473-7301 FAX NUMBER 472-1761 The Daily Nebraskan!USPS 144-080) is published by the UNL Publications Board. Ne braska Union 34. 1400 R St., Lincoln, NE, Monday through Friday during the academic year, weekly during summer sessions. Readers are encouraged to submit story ideas and comments to the Daily Nebraskan by phoning 472-1763 between 9 a m. and 5 p m Monday through Friday. The public also has access to the Publications Board For information, contact Tom Massey. 488-6781 „ Subscription price is $50 for one year. ..:>, ■ Postmaster Send address changes to the Daily Nebraskan, Nebraska Union 34, 1400 R St .Lincoln, NE 68588-0448 Second-class postage paid at Lincoln, NE ALL MATERIAL COPYRIGHT 1992 DAILY NEBRASKAN Family spirit bolsters storm-torn Kauai LIHUE, Hawaii — Her legs were cut from glass shards that went flying when Hurricane Iniki tore the roof off her family’s house. Her possessions sat stacked on the garage floor. But Uluwehi Huddy was smiling. “We’ll be fine,’’ the 22-year-old hospital worker said. “As long as we stick together, we’ll be fine.” 1 From the “I’ll be back” signs tacked on roofless businesses, to drivers cour teously waving each other through broken traffic lights, many of the es timated 5,500 residents seemed to be taking pride in one resource they-had left: community ties. “We call it 'ohana,”’ said David Cherrier, who was looking for grocer ies Tuesday at a Salvation Army Cen ter. Roughly translated, ohana (pro nounced oh-HAH-nah) means “fam ily feeling.” “This is one big extended family," he said. Not everyone on the hurricane shredded Hawaiian island of Kauai is bearing up under the pressure of life without electricity or even a home, of not knowing when they can bathe. Reports have emerged of fights in gasoline lines, of homes being looted, of thefts of a generator and a medical supplies shipment. Some residents along the north coast of Kauai, a circular island 30 miles across, were upset over a lack of information about recovery work. “People feel isolated, uninformed and angry,” said Myles Ludwig. “There is a great community spirit out there, but people feel that government has ignored them.” Despite the problems, Kauai Mayor JoAnn Yukimura said great progress is being made considering the hurri cane hit just last Friday. The White House said Tuesday that the federal government would cover the state’s costs for hurricane relief. President Bush was to sign a waiver for the state Wednesday, Gov. John Waihee said. The storm caused an estimated $1 billion in damage, he said.