November 8, 2001

It’s good to be back. This has become an annual event and I’m pleased to be here for the second time. It’s always a good sign when you get invited back. We’re looking forward to the questions primarily, but we are each going to make a fairly brief statement on our respective topics, which all stem from the events of September 11.

When 9/11 came around it was as much a surprise for us as it was for you. In some ways, we were in better shape to handle it than we could have hoped. The point of weakness was our New York bureau. We had only six reporters there. By happenstance, we had, in addition to our six staff reporters, two fashion writers who happened to be in town for fashion week. They immediately found themselves at Ground Zero, reporting on things that they never dreamed of. And we had a sports writer who was passing through town who also pitched in. That morning we chartered a business jet to take 14 other staff members to New York, but unfortunately that plane, along with all of American aviation, was grounded and was unable to get to New York until Thursday.

Others from the paper managed to get into New York by driving and taking trains and so on, and pretty soon we had enough people so that the next morning’s paper, that would be Wednesday’s paper, contained 32 open pages plus partial pages of news of this event. I’ve never been part of a paper that could produce 32 open pages on the same subject in a matter of hours.

In Washington, we were in better shape. We have a large bureau there with about 40 people, nearly all of them reporters, and we’ve been doing some building in that bureau. Among other things, we were in the process of doubling the number of investigative reporters from four to eight, and that proved quite handy in following up all of these difficult-to-get-at leads about what had happened and who these people were and what the FBI was doing and so on.

Overseas, we were in the best shape of all. Simon Li had been rebuilding his staff and had it up to about 28 Times staff people, plus assistants, overseas. Soon it will be 29. Incidentally, we are opening a Seoul, Korea, bureau this month. He also was able to borrow people from other staffs. I haven’t counted up how many people he has over there but we’ve got people in all the principal countries that are involved. He informed me today that he is spending more than $50,000 a month on hotel rooms in Pakistan alone. I’m sure our reporters are living well over there, and I think they’re apparently trying to disprove the outdated belief that war is hell. We also have reporters in the more distant countries, all of whom have come to play in this story, such as Egypt, Israel, China, France, the [former] Soviet Union, and so on.

This story and these events have brought about an abrupt change in both the substance and the tenor of American life. Most of the change has been for the worse, but some of it has been for the better. I would say that in our business of journalism it’s been for the better. Throughout the 1990s, journalism in many quarters was adrift. Newspapers, national television networks, local television stations, and other outlets were drifting into tabloid values and into celebrity journalism. Many publications had whittled away their foreign staffs and their Washington staffs and had even come to disparage the coverage of government as something that readers were no longer interested in.

Not many publications were seriously investing in coverage of government and of overseas news. I feel very fortunate to have landed at one that was going against the tide and to have had the opportunity to continue to take it against the tide. We feel that with these events the interests of the public have at last come to us and we appreciate it. On the first day after the attacks, that Wednesday, we sold 250,000 extra papers and our website was hopping. We had 5.2 million page views on September 12. So, we’ve been busy and we feel that people have been paying attention.

I won’t talk further because the three colleagues I have here are all among the most esteemed members of the Times staff and they all know more than I do about these subjects. So, without further delay, I’m going to turn to Simon Li who, as was mentioned, has been our Foreign Editor and has an extensive editing background in other capacities to talk about the foreign policy of the United States post-September 11.

Thanks, John. Good evening, ladies and gentlemen. This may be your last chance to hear me speak because at $50,000 a month I don’t know how much longer I’ll be here.

I will be rather careful about trying to critique "What now? What has happened? and what will change after September 11?" I’ll certainly talk about what has changed, but the prediction business is very, very dicey. About nine years ago, I had to present the L.A.Times Book Award for Current Interest to a man called Francis Fukuyama, who you may remember wrote a book called The End of History. Well, in the years since, our reporters have been to cover the horrors of Rwanda, the Balkans and, well, you can remember them, too. I’d say that history, far from being over or ended or dead, rose up and bit Mr. Fukuyama’s theory in the you-know-where. So predicting is really a dicey business, and it calls to mind a line from the English playwrite, Alan Bennett. In one of his comedies, the character says "I saw a man peeing in Jermyn Street the other day, and I thought ‘Is that the end of civilization as we know it? or is it just a man peeing in Jermyn Street?’"

So, what’s changed? Well, I think if we have to try to make a couple of Dave Letterman-type lists of the top ten priorities of American foreign policy post-September 11, we probably couldn’t even read items 10 to 2 because item 1 would be so big on the teleprompter. And if we sort of sidled up and looked at the footnote-size print on items 10 – 2, they’d all probably be somehow related to item 1. Note, since the collapse of the Soviet Union and the end of the Cold War, foreign policy pundits have complained that American foreign policy has lacked a context, a structure, call it what you will, a framework. I think we now have a replacement for that framework, and that’s George Bush’s war, our war, on terrorism. There are a lot of similarities, but chief of them, I think, can be summed up in the old saying about the friends of your enemies are your enemies and vice versa, so what has changed here?

Well, for instance, Pakistan is no longer a shunned military regime under sanctions for playing nuclear chicken with India. Almost overnight, it’s now one of our most valuable allies, pro tem. The sanctions are gone, and in their place we’ve got a promise of $500 million in foreign aid and maybe visions of debt relief. We’re very reliant on President Musharraf and Pakistan now. We wrote a story quite recently about the oppressive nature of Uzbekistan, but for the moment other priorities are more important and our concerns about Uzbekistan’s oppressive nature are being put on the back burner because we may want to use bases there. So, suddenly I think we need the world, we’ve discovered that the world is very much with us. I mean, one moment in the Bush administration we were almost confrontational about the need to go our own way on global warming, land mines, International Criminal Court, and the next moment we’re courting just about every nation for a common cause, talking tough in public saying "You’re either with us or against us," but in private doing deals like crazy. "What do you want, you want debt relief, you want more foreign aid, you want us to back off our support for your enemy, you want us to support this issue for you?" We’re making those deals rapidly and constantly having to maintain them.

I don’t think the Bush administration has changed philosophically about the need to work globally on some of the issues I mentioned, but I suppose it’s certainly possible that down the road pragmatically some of the stands on these issues, like global warming, will become bargaining chips to get allies to stick with us and do what we want. Here we have Pakistan suddenly our most valuable ally, and that leaves India kind of nervous. We were tilting towards India and September 11 happened, and all of a sudden their enemy, Pakistan, is our best friend. So what do they do? They let loose an artillery barrage in Kashmir. Pretty dangerous thing to do, given the tensions on the very day that Colin Powell, Secretary of State, arrived in Islamabad. As if to remind the Bush administration, "Hey, we’re here, too. We can cause trouble, and if you don’t want us to cause trouble you better pay attention to our intentions."

Something similar happened in the Middle East. I think Israel looked at the horrors of September 11 and thought, "Ha, now Americans know the kind of terrors that we’ve been dealing with, the horrors we’ve been dealing with, and this is going to make America put more pressure on Yasser Arafat and the Palestinians to stop the violence." Yasser Arafat seems to have read the situation the same way. He has been showing some small signs of trying to rein in the violent people among the Palestinians, but, in fact, he’s been more receptive to some peace moves. I’m not saying that he’s done great. At a time when Sharon thought that he could really get tough on the Palestinians, in fact, to Sharon’s surprise the Bush administration has been running around courting Israel’s enemies. So much so that Sharon had to invoke Chamberlain in Munich. So there’s a situation in which things haven’t really gone the way you might expect, and people who weren’t No. 1 on our friends list have suddenly become very valuable to us.

Closer to home, just a couple of months ago, President Fox of Mexico had achieved quite a breakthrough. It was the first time that a Mexican administration had won the right to have a say in American immigration policy. I don’t know where that would have ended up politically, probably would have been quite complicated, but that subject’s pretty far on the back burner now, even though President Bush has reassured President Fox. The delays at the border have doubled or tripled, and the businesses that established themselves in Mexico from here are having trouble getting parts and supplies and goods back and forth.

Our Mexico City correspondent tells me he was in a village in Oaxaca today, way down south in Mexico, where people had established a carpet weaving industry and [were] doing quite well with it, and that’s just died. It’s just gone dead. So, it was an illustration of how the consequences of September 11 reached all the way to some small village in Mexico.

I think that one of the things that happened to us on September 11 was that for a while America really discovered its friends again. There was genuine grief and sympathy for America. But already the polls are beginning to show in Europe that our war, our continuing bombing, is making a lot of people uneasy. Democracies in Europe have a lot more flexibility to deal with that kind of widening gap between the leadership and the people, but one of the areas in which we are walking a tight rope is our relations with the Muslim world. Again and again, my correspondents tell me that you would all be shocked at how little sympathy there is for us out there and how angry people are at us. So I know that in some circles it’s not politically correct to say that what America does in the world might have some connection in an indirect way to what happened on September 11, but I think it’s going to be an opportunity for us, and we may decline it, to examine what we’re doing, to try to figure out just for our own safety what it is that we do out there that makes people so mad at us.

Brownstein is one of the best-known people at our paper and one of the most respected political writers in the country. He writes a political column in our paper weekly and he does reporting throughout the year. Last year, the election year, was quite a tour de force by Ron and I’m sure all of you have read many of his articles. He’s also a prominent figure on television. He’s on CNN quite a bit and on the networks. He’s the author of four books and he is the one who has come the farthest to be here. He flew out today and will fly back tomorrow morning to Washington. Ron is going to talk about how September 11 has changed our politics and how perhaps some of our politics won’t change after all.

Thank you, John. It is true. Washington has changed in ways both large and small as a result and, as you can expect, there are some positive things. When is the last time you saw Gary Condit on television? Now that the cable networks are carrying the White House press briefings the reporters are dressing a lot better. I can assure you that the questions are a little more coherent. Those can be a little bit of a zoo. And Democrats and Republicans are talking to each other on Capitol Hill, especially on the issues related to the war, in a way that I really haven’t seen before without any snarls or anything.

On the other hand, the sense of immediacy of this, while not as great as New York, is still quite profound. I know people in Washington who will not take the subway to work in the morning any more because they’re afraid of someone trying to poison it. When you go to the drugstore you can’t find rubber gloves because they’ve been snatched up by all the people who have to run mail rooms around the city. There really is a sense that this is a very tangible and, in some ways, a fundamental change in daily life, you know, not an abstraction.

In broader ways as well, the events of September 11 really have changed the course of events in Washington. It’s changed the nature of Bush’s tenure. In some ways, I think, it has almost inverted his presidency in a whole series of specific ways. Like Bill Clinton in ’92, Bush in 2000 ran focusing mostly on domestic policy, on bringing faith-based charities more heavily into social services and reforming education, and cutting taxes, and now he is quite improbably, for someone with his background, spending most of his time on foreign policy and on military threats. As Simon was saying, even within the foreign policy world the overwhelming critique of him in his first eight months was that he was a unilateralist – sort of going his own way, "my way or the highway" kind of approach to issues like the ABM treaty or global warming. In fact, the Guardian, the left-to-center paper in England, this spring compared Bush to the Taliban for his posture on the Kyoto Treaty and now, of course, here he is leading this great amorphous unwieldy global coalition that requires all sorts of sensitivities to the inclinations of other nations.

Similarly, in a way there was a direct link between the most prominent criticism of him abroad and at home. Politically at home, he faced, up until September 11, criticism from Democrats that he had failed to follow through on his rhetoric of changing the tone in Washington. He pursued a rather unilateralist hardball partisan agenda, particularly on his economic plan and on the tax bill. Democrats were feeling that he basically did not negotiate on any of those issues until he absolutely had to and did not prove as conciliatory and as interested in building a new center as he had suggested during the campaign. But, again, especially on issues relating directly to the war, we saw an extraordinary effort by the two parties to work together in the first weeks after the attack. Really, it’s like nothing that I’ve ever seen in covering Washington since the late 1970s. Bush was not someone who really saw the bully pulpit in the first eight months of his presidency.

Even back in Texas his approach was much more the inside than the outside game. He was much more comfortable working with legislators quietly, establishing a personal relationship with them, trying to advance his agenda by dealing with them on that basis rather than trying to mobilize the public. You saw almost an exaggerated backlash against the Clinton style. The belief in the Clinton White House was that in the modern media age of 24 hour cable and the Internet, an essential, if not the essential, ingredient of presidential power was inserting yourself into the debates going on in the country and, really, barely a tree fell in the forest without the Clinton White House or the President himself expressing an opinion about it. Now, compare that to Bush’s first eight months. We had the shootings, the school shootings, in California. When Columbine happened, Clinton had this very high profile response of bringing in Hollywood and the gun industry and the gun lobbyists and school administrators and they had this big summit. During the school shootings in California, Bush really had no comment; he didn’t want to intrude on the message that the White House was trying to put out. He didn’t respond. The race riots in Cincinnati – again, the White House was very low profile, didn’t really have anything to say. Even when the spy plane came back from China with the crew, Bush very self-consciously stayed away. Low profile.

That was partially a political strategy, in the sense that [the Bush administration] likes to focus on its issues. I often felt that in the first eight months it looked at things that happened in the world almost as an intrusion on the agenda that it wanted to put forward. The day of the school shootings [President Bush] wanted to talk about Medicare, and he talked about Medicare almost as if [the shootings] never happened. What has happened since September 11 though has forced him into a role that he really has never played and which I think he has not been entirely confident about his ability to play and certainly his staff had been uncertain about his ability to play, which is Communicator in Chief. We saw him again tonight playing this role that only the President can play in a time of crisis, of trying to provide meaning, context and reassurance to the country. I think this is a great challenge for him.

You think about what’s going on at once. Almost any of these changes that we’re seeing now would be extraordinary; together they really are virtually unprecedented. We are asking agencies across the government to not only take on new responsibilities, but to operate at a level of precision and thoroughness that we’ve never asked. The Immigration and Naturalization Service, one of the great dysfunctional agencies in Washington, is now under pressure to provide computer systems that will allow them to track all foreigners here on student visas on a regular basis, to keep track of who is entering and leaving the country and whether people have overstayed their visas. We are probably going to be making massive efforts to increase the way in which people in the consular offices around the world, and in the embassies who are in the front line in the visa process, are networked into all of our latest information about who may be potential threats.

Think about what’s going on in the public health world, where we are now stockpiling antibiotics and vaccines in quantities that would have been unimaginable only a few weeks ago. The Postal Service is asking us for $5 billion dollars to institute procedures to sanitize the mail – 600 million odd pieces of mail a day, not all of which have to be treated, but to give you a sense of scale here. The Federal Aviation Administration, and whatever happens to this Airport Security Bill, will have massively increased responsibilities for overseeing the security at airports, including something the airlines have resisted successfully for 13 years: we are likely going to move very quickly toward a system where all baggage that is checked on domestic flights has to be X-rayed, which will require a huge investment in technology.

The borders themselves, the Coast Guard, the Border Patrol you know, there were portions of the northern border with Canada that were so lightly defended or watched that at night they were sealed with the exquisite security precaution of installing a plastic cone in the middle of the border crossing. But we’re now going to triple the number of border patrol agents. The FBI and the Pentagon are wrenchingly shifting their focus toward fighting terrorism and, even at the Justice Department, there is an enormous shift of emphasis from the traditional fare (and at the FBI as well) of patiently accumulating enough information for prosecution toward rapidly disseminating information that can be used for prevention. Very different kind of culture and one that will require a deep change in the culture of these operations.

In all of these ways, the government is taking on new responsibilities and we’re trying to do all of this at once. I have not even mentioned the Nuclear Regulatory Commission trying to rethink the way security is provided at nuclear power plants or the Bureau of Land Management thinking about the way security is provided at dams, and all of the local public health officials and emergency repair officials who are asking for and are likely to receive both money and consultation from the federal government. So all of this is going on.

Now, not surprisingly, with all of this moving down the center lane in the political highway, the traditional agenda, the agenda we had been arguing about on September 10, has really been pushed back. The Patients’ Bill of Rights, education reform, school construction, prescription drugs, all of these things are on hold until at least next year, and when they come back they’re going to come back in a very different climate for one big reason. We are spending a lot of money to harden all of these targets and to increase our level of vigilance in all of these different ways. You know, we recently, as recently as when President Bush took office, were looking at surpluses as far as the eye can see. Now the combination of the tax cut from last spring, the cost of the terrorists’ attack and the slowdown of the economy means that we will be running deficits in all likelihood in the next two years. Not [what] we’ve been arguing about over the last few years, about whether we should spend money that is generated by the Social Security tax for other purposes — which has become the modern definition of the deficit — but like a real old-fashioned deficit where we’re going to spend more than we take in income tax and payroll tax and we’ll be increasing the national debt. You know, we all got sick of hearing Al Gore say "lock box, lock box, lock box." By the end of the campaign probably most Americans wanted to stuff him in a lock box. But the fact is that up until September 10 both parties had agreed that we should not be spending Social Security money for other purposes. Now we’re on track to do that at least through 2006.

In all of these ways September 11 has changed life in Washington, big and small, from the rubber gloves to the public presidency to the growth of government in all of these security-related areas. What it hasn’t done, though, is end the underlying division between the parties on the role of the federal government in American life. The further away you get in concentric circles from the direct response of the attack, the more you see that. You’re going to see that in the fight over the stimulus bill, about how to stimulate the economy, with the House Republicans and the White House wanting to focus on tax cuts, Democrats want to focus on pump priming spending, now reassembled under the mantle of security. We see it on the Airport Security Bill itself, where the Republicans want to continue this as a private function, by and large, and the Democrats want to make the airport baggage screeners public employees. Interestingly, you are going to see in the next few years, I believe, inevitably, given the cost of the response to terrorism, increasing questions from Democrats about whether we can still afford the full tax cut that we approved. It now looks like a very distant period of peace and prosperity last spring. The future elements of the tax cut that haven’t been phased in yet, not rescinding anything that people have already received, but whether we can afford to go through all of these next steps.

I don’t think the underlying divide in American politics has changed. You know, this last election, when you look at all of the dimensions of it, the 2000 election, was probably the closest thing to a tie that America has experienced since 1880. We had the second-narrowest division in the Electoral College ever. Only in 1876, you remember, the Hayes-Tilden race in 1876, which was won by one vote and was the last time, interestingly, we had as lengthy a dispute after the election about who really won. To resolve that election, the Congress ended up appointing a 15-member commission with five members from the House, five members from Senate, five members from the Supreme Court. All five members of the Supreme Court, on every issue in 1876 under dispute, voted with the party that had appointed them. So, the more things change, the more things stay the same perhaps. By the way, Florida was one of the states in dispute in that election. I’ve often wondered who the Katherine Harris of 1876 was.

I think you’ve all probably seen the map of the red and the blue counties post-election. It was one of the most dramatic physical visual representations I’ve ever seen of American politics. It shows you that we really are two countries at this point, politically divided more along cultural than economic lines. Church attendance was a better predictor of the vote in 2000 than income. Gun ownership was a better predictor of the vote than stock ownership, whether you owned stock or didn’t own stock didn’t really matter how you voted. Sixty percent of people who owned guns voted for Bush and 60 percent of people who didn’t own guns voted for Gore. Stark differences of place, rural versus urban America. I like to say that George Bush won every county in America with a cow in it — except in Vermont where you have those leftie cows that work for Ben and Jerry’s. But except for that it was an extraordinarily stark division, and what was striking is that in these little elections we had this week in New Jersey and Virginia, September 11 changed everything and nothing. I mean it overshadowed and obliterated the elections with very little public attention to them and yet the extent to which voters did turn out and did vote, what was clear was they voted on the same issues that mattered to them before September 11, primarily education, the economy and, in New Jersey, guns and abortion, and they divided along very similar lines that we have seen in the last few years, which says to me that what we’re looking for in 2002, I think, is a continued narrow division of the Congress and a sort of continuation of this fundamental tie in American politics.

The events of September 11 and the response have given Bush an enormous boost and it may well carry through all the way to 2004 if he handles this well. But what I think last Tuesday told us was that popularity of a president in war time, the fact that he is at these extraordinary poll ratings, is largely because he has transcended partisanship. He has become a symbol of national unity. One Democratic strategist said to me recently "He is not wrapped in the flag. He is the flag at this point." I think you saw that tonight. I don’t know whether you saw his speech, but the last third of it — the first two-thirds I thought it was pretty flat — but the last third of it, when he started evoking the spirit of the nation was quite stirring. That is a large reason why he is experiencing this extraordinary approval rating, because he’s expressing the aspirations and the beliefs of the country. But what I think we saw on Tuesday was very difficult to translate into partisan advantage for other candidates, a popularity built to a large extent on transcending politics. So I think that despite September 11, we are in for a continued very tight division and a very competitive environment in which the dominant story politically of the last 12 years remains true—there is no stable majority at this point for either party. We are a country without a majority party, and that is a force that requires both parties to constantly adjust and also really to conciliate and to compromise in order to get anything done.

So, with that I will close and turn it back to my colleagues.

Jim Flanigan is Senior Economics Editor and columnist with the paper. One of the joys of my job is overseeing the columnists. They tend to be very modest people with small egos and they all want to write on Sunday, they all want certain days, and if you let them have their way they would all be writing on the same day, which is a measure of Jim’s stature at the paper that his column is scheduled on Sunday plus whenever else he feels like it. Jim, as was mentioned earlier, has had two tours of duty at the Los Angeles Times and two at Forbes magazine, and he will discuss the outlook for business and the economy in light of terrorism and war.

The best way if you’re thinking about the economy or even the stock market [is to ask] what is different since September 11, truly different, and what is not different? And one global economic fact that is very different is that Russia has reentered the world economy. Of course, Russia was in the world economy before September 11 but, by golly, didn’t Vladimir Putin come out strong. First thing he did, I think, was assure Europe that Russia would provide energy. No need to worry about an energy boycott, we’ll be here for you. Then he had the overture to Bush and the meeting, and I believe he’s going to Texas next week. The Russians are really very thrilled with the fact that they’re anticipating development aid and business. The political leader of the Khabarovsk region was here in Los Angeles recently and, when asked about petroleum, he said, "Yes, China, Japan and Korea want us to provide energy and we want to provide energy." Actually, I don’t speak Russian so I’m imitating a translator. But the thought was, "Sure, invest in the pipelines and we’ll give China and Japan and Korea all the oil and gas they want. We have loads of it in Siberia." A whole new attitude about regions we now have correspondents in — Uzbekistan, Kazakhstan. It was something obscure and possibly not even profitable before September 11, and now all of a sudden Chevron-Texaco, as it’s now called, is noted for having a good position in the oil of the Caspian Sea. So Russia’s emergence is a new fact….

I understand that the Los Angeles garment industry is having a revival. We have a garment industry here, and it does a lot of finishing, but most of the goods are made in Asia or they’re made in Honduras or in Mexico. Well, I think the Western Hemisphere goods are still made, but some of the work is coming back here, because there’s a question: "Can I get it? How quickly can I get it? How assuredly can I get it in these times?" Well, we’re at war.

There will be more warehousing. Warehousing is an industry here, but right now, frankly, nothing like this is moving. If you go down to the port you don’t see the same level of activity that you saw before September 11 or last year, because we were already going into a recession before the terrorist attack and that accelerated things. It is very slow now, but it will pick up again. Why will it pick up? It will pick up because globalization isn’t inexorable. Globalization means the tying in and the coming into the world economy of the great economies of China, of Southeast Asia, of Indonesia. Now we add Pakistan and India and, again, Central Asia, the old Silk Road territory, and Latin America — Brazil, Argentina. Argentina’s having trouble now. Everybody’s having trouble because the world economy has slowed down. I hear economists talking about deflation, but I am told that it’s not so much deflation as Latin America and Asia, lowering their prices because the Americans aren’t buying. And, indeed, we aren’t buying a whole lot.

We know the economy is slow. We’re all going to buy small goods this Christmas. I bet that Wal-Mart has a better Christmas than Neiman Marcus. Wal-Mart, in fact, reported higher sales today. This will pass. We know it will pass. We know also that even technology, which you may have been investing in, was written off, and the Internet age was supposed to be over, but it isn’t. In fact, usage of the Internet is expanding rapidly among business even today, and the brighter businesses, like General Electric, are counting on doing business over a broadband Internet connection to an even greater degree in the next five years.

So where are we in all of this? Some things haven’t changed, they’ve just slowed down, and other things are waiting. They’re waiting for what? They’re waiting for the stimulation, they’re waiting for the signal, they’re waiting for something to return, for the end of the recession, for the end of the downturn. There’s a lot of stimulus pumped into the economy. Somebody said yesterday that in the world — through the actions of central banks in Europe and in Asia, Japan and in the United States, of course, the lowering of the interest rates — $250 billion has been pumped one way or another into the economies of the world. Why do banks do that? They do it so that no businesses go to the wall just because times have slowed. So that the interest rates are low, so that nobody actually runs out of cash and has to give up the business and lay off people just because there’s not enough money around or conditions are tight. But all of this money around is not providing that spark. We’re not getting an upturn.

When will we get an upturn? What will be the signal? A lot of learned economists are saying, "Well, judging by this factor and that factor we’ll get it in the middle of 2002." I’m not sure how they know, and the stock market, in fact, is pretty strong. But one guy that I listen to, or at least who e-mails me, sent me something very interesting. He took a real study of World War II and, as we know, once we got into World War II we really mobilized a war economy at that time. The government went to Henry Ford and said, "You are going to build tanks and jeeps." The great General Motors plant and Boeing’s plants were turning out war materiel and it sparked the economy. But when did the confidence take off? Well, according to a fascinating chart, confidence and the stock market began to take off on April 28, 1942. It was shortly after Doolittle made a raid over Tokyo, but that wasn’t what sparked the confidence in the stock market. It was Benito Mussolini, the dictator of Italy, saying, "You know, this war isn’t going so well." You can chart it. Wall Street took off the day after Mussolini said, "Hey, look around. This is not really going so well. I don’t care what you say," and Wall Street said, "He’s right. Boy, this is going to go well."

According to the chart this fellow put up, and I suppose he was just tracking the Dow Jones of that time, the market did keep on going on a steady rise through the war, through much of the war, and then it had a pause in 1943 when there was the invasion of Sicily, and then it really took hold. There was a conference in Tehran, Iran, in 1943, with Churchill, Roosevelt and Stalin. They all got together and somehow out of that conference came confidence not only that the war would end — everybody knew that the war would end, and they pretty much knew how it would end or which side would win — but what came out of that is that there would be a post-war world, not of bitterness, anger and retribution, as there had been after World War I, after our own Civil War, but a world of building, a world of new progress, of new directions and new planning. That kind of confidence sent the stock market, anyway, on a very long-term spiral upward.

Now, nothing that dramatic is likely to happen today because, frankly, we can’t look for that kind of dramatic signal. We’re not in that total war. Clearly, we’re not. But what would it be? I would think it would be some sign that, hey, this thing is going O.K. This war against terrorism, as President Bush says, always, "We will not tire, we will not flag." We know that, but some sign from Afghanistan that this is going to go O.K. — it may not be the capture of bin Laden or whatever. It will be all right. We got it under control. It’s going to be all right and it’s going to make progress and we can see our way clear. That, I hope, will come soon. We all hope it comes soon. I’m looking forward to taking your questions.

Thank you very much.