Different Angles on the News Jude Wanniski March 28, 2000

RUSSIA: The major media, led by the NYTimes, have been plain awful in covering the politics of Russia. The NYT insists Vladimir Putin squeaked to victory in Sunday's voting, defeating his nearest rival in a field of ten, the "Communist" candidate Gennady Zyuganov, by only 21 percentage points!!! -- The headline in the NYT: "Putin Garners Only Slender Majority as Russian Voters Show Independence." The rest of the U.S. media dutifully fell into line, sniffing at Putin's KGB credentials as evidence there soon would be a crackdown. You had to get the Financial Times to realize what a solid victory it was for Putin. The darling of our Political Establishment, Grigori Yavlinsky, a "liberal reformer" who is nothing more than a bag of wind, got 6% of the vote, which the WSJournal did not mention in its editorial complimenting him for "performing decently." In its news columns, the NYTimes now cites Chechnya as an example of "Russian aggression." The WSJ this morning headlines: "Foreign Investors Are Divided on Outlook for Reform Under Putin," although it is forced to note that the RTS stock index climbed 40% in the last month as Putin laid out his supply-side economic plans, with a TOP income-tax rate of 20% and a philosophy geared toward entrepreneurial capitalism. If there had been a runoff between Putin and Zyuganov, Putin would have gotten two-thirds of the vote, and even that wouldn't have told the full story of his victory. The Communist Party is a positive force in Russia's national political economy and will support Putin's programs to clean out the corruption that piled up when Moscow took the "shock therapy" advice of the NYTimes and WSJournal. We only await Putin's pick for Finance Minister to assess the breadth and depth of reforms that could make Russia the fastest-growing economy in the world in the decade ahead.

CHINA/TAIWAN: After all the pre-election noise and silly war talk, the China and Taiwan stock markets are ahead of where they were March 10, the last trading day before the sharp decline in Taiwan's stock market. The Taiwan index, at 9429 on the 10th, closed at 9856 last night. Shanghai's "B" index closed at 41.8 last night, up from 37.1 on the 10th. Shenzhen "B," at 83.4 on the 10th, is now at 95.1. Hong Kong's Hang Seng now is at a record 18301, from 17831 on March 10th. As far as we can see, there is nothing but blue sky ahead for these markets. The World Trade Organization (WTO) is practically in the bag with little chance Congress will stand in the way of a permanent Most Favored Nation vote. There are projections now floating around that China will pass the United States in the number of Internet connections by the end of the decade. If Congress votes down Permanent Normal Trading Relations, China still gets into the WTO with European backing, and the EC goes to the front of the line in its commercial relations with China. Israel is already peddling sophisticated AWACS radar to Beijing, although nobody seems to care but Pat Buchanan.

INTERNET TAX: As the WSJournal reports this morning, House Minority Leader Richard Gephardt has a package designed to persuade the New Economy campaign contributors that Democrats are friendly folks. It is mostly fluff, but the heart of it is a commitment to extend the tax moratorium to the year 2003. The reason, of course, is that House members run every two years and want to be able to shake down Silicon Valley in the 2002 elections. George W. Bush publicly backs a five-year extension and Al Gore has nothing to lose by going along with Bush, as long as the AFL-CIO can count on Gephardt. But will either pledge to veto an Internet tax in their first term, i.e., if Congress delivers one in 2003?