[c]

The Commonwealth

LXXXVII NO. 15

THE WEEKLY PUBLICATION OF THE COMMONWEALTH CLUB OF CALIFORNIA

APRIL 12, 1993

APRIL 15

Bruce Fouke

Professor of Earth Sciences, Vrije University, Amsterdam

A Geologic Perspective of the Caribbean Coral Reefs

Thursday

4:45 p.m., Reception

5:30 p.m., Program Begins

6:30 p.m., Program Adjourns

Club Office

Crystal clear, china-blue waters, fascinating marine life and vegetation, beautiful warm weather. All these describe the earthly paradise known as the Caribbean coral reefs, where divers from all over the world flock to admire its beauty and the surrounding wildlife.

But the colorful coral nurtures more than the earth's fragile marine ecosystem; in these fossilized reefs lies nothing less than the future economic well-being of our society. As natural depositories of significant oil and gas reserves, coral reefs are a vital part of our national energy security. Professor Bruce Fouke has literally a world of experience exploring and researching tropical coral reef ecology and the evolution of carbonate platforms. His training as an exploration geologist includes work for Shell Offshore Oil Incorporated, Pecten International Incorporated, and Amoco Production Company.

Admission—$7 for members, $10 for guests. Call Club office for reservations, (415) 597-6705.

APRIL 16

Gayle Wilson

First Lady, State of California

Prevention: Worth a Pound of Cure

11:45 a.m., Friday

Ralston Room, Sheraton Palace Hotel

One out of every four children in America lives in poverty. One quarter of American mothers receive no prenatal care in the first trimester of pregnancy. Nearly 10 babies in 1000 die before their first birthday. Over 9 million American children have no health insurance.

All over the country, youngsters come to school underfed, underclothed, unvaccinated, and woefully unprepared to learn. Clearly, our kids—and indeed, the very future of our nation—are in grave jeopardy.

Gayle Wilson, California's First Lady and a career volunteer, believes that prevention—not remediation—is the only way to effectively address these problems, and actively promotes programs aimed at ensuring that all of California's children begin their lives healthy and ready to learn.

Mrs. Wilson serves as honorary chairperson for "BabyCal," the California State Perinatal Outreach Campaign, and is active in AIM, which provides low-cost health insurance to mothers and infants. She also promotes ENABL, a teen outreach program which stands for "Education Now, Babies Later," and serves as honorary chair for the California Consortium for the Prevention of Child Abuse.

Tickets—$29 for members, $38 for guests. **Tickets must be purchased in advance.** See advance ticket information, back page.

APRIL 23

UNDERWRITTEN BY CHEVRON CORP.

Jerry Jasinowski

President, National Association of Manufacturers

A Growth Agenda for America

11:45 a.m., Friday

Ballroom, Pan Pacific Hotel

Fast approaching its 100th birthday, the National Manufacturers Association finds itself at a historic turning point. Two years ago Jerry Jasinowski reported to the Club on "Manufacturing on the Move," the Renaissance taking place in the erstwhile rust belt states of Ohio, Illinois, and Pennsylvania. Since then America's manufacturing industry has had to weather a deepening economic recession, heightened labor unrest, and ever-more stringent environmental regulations. While companies have worked hard to cut costs, boost productivity, and improve the quality of the goods they make, worldwide demand continues to slump.

How can the U.S. harness its manufacturing power to give the economy a lift? Can excess defense industry resources be successfully converted to the civilian sector? How will new trade agreements, such as NAFTA, affect U.S. manufacturing?

As president of the National Association of Manufacturers, Jasinowski is the industry's chief spokesperson on issues ranging from health care reform to international trade.

INSIDE:

What's Next for Wall Street..................206-223

Events in the Regions .................................213

The Club's 90th Birthday Celebration ............214-221

COMING EVENTS:

League of Women Voters ....................................222

Admiral Crowe ...................................................Back Page

U.S.-India Relations ...........................................Back Page

THE COMMONWEALTH 205

# What's Next for Wall Street?

## Mary Farrell

Senior Vice President and Investment Strategist, PaineWebber, Inc.

FRIDAY MARCH 26

THE 1990s HAVE already been established as a decade of very significant change for financial markets. Unlike the 1980s, where returns from both stock and bonds were unprecedented, the outlook for much lower interest rates and slower economic growth suggest more normal returns in the 1990s. Also unlike the 1980s, when earnings growth was achieved through financial engineering—mergers, acquisitions, and leveraged buyouts—corporate America will have to work much harder to achieve growth against the backdrop of an aging, maturing population and a consumer squeezed by higher taxes and health care costs.

But slow growth combined with low inflation and low interest rates will provide a

Mary Farrell

stable environment which should be extremely positive for financial markets. Financial assets are the assets of choice in this environment, as common stocks are likely to provide one of the few opportunities for double-digit returns without an undue level of risk. In fact, the last time we experienced such an environment was in the 1950s, a period of prosperity for America and for the stock market.

Has the era of Ozzie and Harriet returned?

## The Commonwealth

(Publication: ISSN 0010-3349)

Published every Monday

Copyright 1992 by The Commonwealth Club of California
595 Market Street, San Francisco, CA 94105

(415) 597-6700

Permission to quote usually granted if written request is submitted; specify parts to be quoted.

Editor: Gail Burna-Wax

Assistant Editor: Naomi Stern

### OPPICERS OF THE CLUB

<table><tr><td>Claude B. Hutchison, Jr.</td><td>President</td></tr><tr><td>Victor J. Revenko</td><td>President Elect</td></tr><tr><td>William German</td><td>Chairman Executive Committee</td></tr><tr><td>Pamela Arbuckle</td><td>Secretary</td></tr><tr><td>Howard T. Hoover</td><td>Treasurer</td></tr><tr><td>Connie Shapiro</td><td>Quarterly Chairwoman</td></tr><tr><td>James D. Rosenthal</td><td>Executive Director</td></tr><tr><td>James L. Coplan</td><td>Director, Member Services</td></tr></table>

### GOVERNORS OF THE CLUB 1993

Jean Auer, Laurence M. Baer, Victoria A. Barbero, Frank G. Chambers, Hon. Ming Chin, A.W. Clausen, William K. Coblenz, Angela Coffee, C. Lee Cox, Richard H. Daniel, Belva Davis, Christine H. Dohrmann, D. Drew Downett, Joseph L. Epstein, Joseph R. Pink, Carol A. Fleming, Anthony Frank, Robert K. Gardner, Ann Getty, Richard Goldman, Rose Guilbault, Bernice Hemphill, Anthony S. Hooker, William M. Hynes, Vickie Jenkins, Seiki Kitadai, L.W. Lane, Anthony U. Martinez, Hon. Robert W. Merrill, Joseph F. Perzelli, Jane Purnell, Steven A. Savia, Bernard H. Schulze, James D. Shuffer, Shelly Silver, John B. Suppin, L. Jay Tenenbaum, Athena Troxel, Judy F. Wilbur, Diane C. Yu.

### ANNUAL DUES

<table><tr><td>Regular</td><td>$98</td></tr><tr><td>65 or older</td><td>$80</td></tr><tr><td>Family (two persons in household)</td><td>$145</td></tr><tr><td>Live and Work over 40 miles</td><td>$80</td></tr><tr><td>from San Francisco</td><td>$80</td></tr><tr><td>Under 30</td><td>$80</td></tr><tr><td>Full-time student</td><td>$45</td></tr><tr><td>Initiation Fee</td><td>$50</td></tr></table>

(No initiation fee for full-time students)

Second class postage paid at San Francisco, Ca. Subscription rate $17 per year included in annual membership dues. POST-MASTER: send address changes to: THE COMMONWEALTH, 595 Market St, San Francisco, CA 94105.

Commonwealth Club Membership is open to interested people worldwide.

# America's changing values suggest a return to the Ozzie and Harriet era.

For the stock market, maybe yes. But with a new administration, new demographics, and new taxes, investment success will require a very different strategy.

At PaineWebber, we expect GDP to grow about 3.2 percent this year and about 2.8 percent in 1994, notwithstanding the Clinton economic plan—with inflation running about 2.7 percent. The benchmark 30-year U.S. government bond, currently yielding about 6.9 percent, is expected to fluctuate around 6.8 percent this year and next. Our estimate for the three-month Treasury Bill is just over 3 percent, both this year and next. We will begin our ninth quarter of economic recovery in April. But we believe this expansion will continue, although at a very slow pace, and unfortunately, at a non-existent pace in some markets.

## The Clinton Program

A word about the new administration and its impact on the economy: The major

force driving this economy has been interest rates—lower interest rates. That will continue to be the driving force. As long as the Federal Reserve decrees that the recovery will continue, remains vigilant on inflation, and keeps rates low, this recovery will continue.

Beyond the problems of a slow recovery, however, we face a secular problem of demographically induced slow growth. There is little any administration can do to change the fact that we are an aging, slow-growing population and will require productivity increases to fuel faster growth. Barring opening our border to unlimited immigration, which is politically unfeasible, or significantly increasing our birth rate, which wouldn't make a difference for another full generation, we will continue to expand slowly.

What can the Clinton program realistically hope to accomplish? We are positive about its ultimate impact on the economy. The Clinton economic plan, as initially proposed, most assuredly is not a deficit reduction program. Expenditures are expected to rise by 2.6 percent in the next fiscal year, and it is unlikely to result in deficit reduction, even with tax increases. If Congress gets more aggressive on reductions, and the stimulus portion of the program is delayed, we could see some progress. Also, the stimulus package, as currently constituted, appears unnecessary, given the ample evidence of growth. Taking money out of the private sector and using it in the public sector has never proven to be the most efficient use of capital.

## Tax Increases

Economic history is rife with examples of tax cuts producing growth—notably the Kennedy and Reagan cuts—and tax increases slowing growth, most recently, the Bush increases. The revenue estimates of the Clinton cuts are based on the assumption that high income taxpayers are brain dead and will simply write larger checks. In fact, as prior changes in tax law more than adequately demonstrate, we can expect their behavior to change and revenues to fall short of projections. Watch for a return of tax shelters, deferred income programs, and other forms of tax savings that have been in remission since the 1986 law lowered tax rates.

In fact some studies of income distribution in the 1980s strongly suggest that the wealthy weren't necessarily getting a bigger share of the income gains, but rather were choosing to recognize a larger portion of income in that lower tax environment. Watch for a reversal of this phenomenon.

But if the Republicans are the party of lower taxes, then Democrats have histori-

continued on page 207

206 THE COMMONWEALTH

COMMONWEALTH CLUB
REGIONAL
EVENTS

CONTRA COSTA COUNTY

MONDAY APRIL 19

A NEW LOOK AT THE DONNER PARTY

JOSEPH A. KING, author, Winter of Entrapment

During the winter of 1846-47 more than 80 men, women, and children were trapped in the snows of the Sierras. These emigrants, who had journeyed from Missouri by wagon train, came to be known as the Donner Party. Thirty-nine of them perished on the trail or in mountain camps during that winter. Some survived by eating the dead. Citing many documents that have previously been ignored, historian and genealogist Joseph King offers a fresh point of view toward the tragedy and raises many provocative questions. Why did women fare better than men? Why did unmarried men tend to die early in the entrapment? What is the meaning of "heroism?" Can cannibalism sometimes be a moral act?

11:45 a.m., Luncheon

Lafayette Park Hotel, 3287 Mt. Diablo Boulevard, Lafayette
$25 for members, $34 for guests. Reservations: 415/597-6705.

MARIN COUNTY

WEDNESDAY APRIL 21

POVERTY, JUSTICE, AND HEALTH CARE

ERICH H. LOEWY, M.D., associate professor, Department of
Humanities and Ethics, University of Illinois at Chicago

President Clinton promises health care reform that will provide
universal access and stem the tide of rapidly rising costs. Many argue
that the only way to achieve these conflicting goals is to finance basic
coverage for all Americans by limiting expenditures on the most costly
and ineffective treatments, in effect rationing health care. Is the nation
willing to make this difficult trade-off?

5:45 p.m., Wine and Cheese Reception • 6:30 p.m., Program Co-sponsored with Dominican College and Marin General Hospital Bioethics Committee

Caleruega Dining Hall, Dominican College, San Rafael
$10 for members, $14 for guests. Reservations: 415/597-6705.

THURSDAY MAY 6

THE FIRST HUNDRED DAYS OF THE
CLINTON ADMINISTRATION

ROLLIN POST, political reporter, NewsCenter 4, KRON-TV

Often the first few months of a new presidency are a honeymoon period where the administration can accomplish a lot in a short period of time. President Clinton has promised to push his economic package through Congress and present a sweeping reform of the health care system during his first 100 days in office. Veteran political commentator Rollin Post will evaluate how well the president is performing so far.

6 p.m., Wine and Cheese Reception • 6:30 p.m., Program Caleruega Dining Hall, Dominican College, San Rafael

PENINSULA

FRIDAY MAY 7

DINNER AT MAC'S MYSTERY THEATER

Join fellow members for an evening of intrigue and indulgence as we dine at the popular Mac's Tea Room in Los Altos. During dinner we will join in on a lighthearted 1930's-style murder mystery entitled *Airship of Fools*. It is 1937, and you are the passengers on board a new luxury airship on its maiden voyage from Paris to New York. Throughout your meal you will meet a host of shadowy characters and get the chance to question them as to their means, motives, and opportunities in an attempt to solve the crime.

6:45 p.m., Seating Begins

7:30 p.m., Dinner and Performance

Mac's Tea Room, 325 Main St., Los Altos
$42 per person (not including drinks).

Reservations: 415/597-6705.

SILICON VALLEY

WEDNESDAY APRIL 21

THE ROLE OF THE FEMALE
ENTREPRENEUR

ANDREA CUNNINGHAM, founder and president, Cunningham
Communications

KIT MURA-SMITH, co-founder and vice president, Corporate
Marketing and Communications, Trimble Navigation, Ltd.

Meet two of Silicon Valley's most successful women entrepreneurs, and find out what they've learned in building a company from the ground up.

11:45 a.m., Luncheon

The Westin Hotel, 5101 Great America Parkway, Santa Clara
$25 for members, $34 for guests. Reservations: 415/597-6705.

THURSDAY MAY 6

THE FUTURE OF RUSSIA

JAMES A. GARRISON, president, Gorbachev Foundation/USA

The man who organized Mikhail Gorbachev's highly-publicized visit to the Bay Area last year, Jim Garrison heads up the U.S. branch of the year-old Gorbachev Foundation, which was set up by the former Soviet premier to foster democracy in Russia and the other former Soviet republics. Mr. Garrison will discuss the current power struggle in Russia and review the recent summit meeting between Boris Yeltsin and Bill Clinton.

6:30 p.m., No-host Cocktails • 7 p.m., Dinner
8 p.m., Program Begins

Silicon Valley Capital Club

Fairmont Plaza, 50 W. San Fernando, Suite 1700, San Jose
$40 for members, $49 for guests. Reservations: 415/597-6705.

THE COMMONWEALTH 213

90TH BIRTHDAY DINNER

March 18, 1993

The Honorable Henry Kissinger, Former U.S. Secretary of State
Keynote Speaker

## Opening Remarks

Claude Hutchison

1993 President, The Commonwealth Club of California

TONIGHT WE HAVE come together to commemorate the 90th anniversary of one of America's most enduring institutions, The Commonwealth Club of California.

The inspiration that led Edward Adams and his contemporaries to create this organization was long ago validated by the generations of Californians who have been part of the work of The Commonwealth Club and who have seen the Club as a mechanism to ask the tough questions and clarify the issues that have shaped our history—not only in California, but throughout the nation and around the world.

The common thread that has allowed this organization to grow and thrive has been its members. If you trace the history of the Club, you will find that always there were people—officers, presidents, study section chairs, committee members, executive directors—who were out front leading a dedicated membership.

The challenge before us tonight is to take The Commonwealth Club forward into the 21st century and its 100th anniversary, and to protect the vision of the Club's founders, whose simple credo, "Get the Facts," has been our charge, our sustenance, and our inspiration. I look forward to gathering with you all in the year 2003, perhaps in this very room, to re-commit ourselves to the ideals of five men who met at Marchand's restaurant a century before.

We are honored to have with us 16 past presidents of the Club: Our most senior past president, David Bohannon, Club president in 1956 and 1957; next in order of seniority, Charles Travers, 1967; Justice Wakefield Taylor, 1969; John Busterud, 1970; Bruce Mitchell, 1973; Vernon Goodin, 1974; John Bates, 1976; Bradley Garretson, 1978; John Shuman, 1980; Eugene Herson, 1981; Richard Dinkelspiel, 1982; The Honorable Shirley Temple Black, 1984; J. Dennis Bonney, 1985; Richard C. Otter, 1986; Dennis Wu, 1989; and our immediate past president, Justice Robert W. Merrill.

There are two other individuals whom I would like to pay special tribute to. In 1966, a young man from the state of Washington joined The Commonwealth Club staff. Ten years later, Michael Brassington was named the Club's executive director. From 1976 through 1989, Mike led the Club through a period of tremendous growth and excitement. And just over 30 years ago, in late 1962, Jeanne Wong was hired by Stewart Ward, the Club's second executive director. Now working for her fifth executive director, Jeanne remains a major player at the Club. ♦

## Introductory Remarks

1984 President, The Commonwealth Club of California; Former Ambassador of the U.S. to Czechoslovakia and Ghana

HAPPY 90TH ANNIVERSARY to the Commonwealth Club. My happy duty is to introduce Dr. Henry Kissinger—for over two decades my mentor, boss, colleague, and dear friend. Presenting him to this audience has to be the most superfluous act of 1993. Who does not instantly recognize his name? Therefore my words are addressed exclusively to those Martians in our midst. However, you Martians will soon perceive that our speaker, with his booming tone and cogent ideas, is indeed a man for all galaxies.

His first 18 years were spent on one of our continents called Europe, in a tribe called Germans, whence he migrated across the sea to our American tribe and served as a GI for three years. Having won the tribal war, he took refuge within ivory covered walls at Harvard, an institution we call a university, a place where old knowledge is re-circulated, often producing useful mutations of ancient ideas. At Harvard he became graduate, master, and doctor, which qualified him to diagnose the ills of the world. And he acquired profound expertise of our earthly science of geopolitics, a game in which each tribe tries to outmaneuver every other tribe.

Thus armed with judgment and foresight, Dr. Kissinger was sought by six American presidents as a key foreign policy adviser, rapidly ascending to power as head of our national tribal security council. Then he went even higher as secretary of our tribal state department. There he profoundly altered the course of modern earthly history, influencing events in populous places like China and powerful places like the Soviet Union. For this he was awarded the Nobel Peace Prize, the Presidential Medal of Freedom (our American tribe's highest civilian award), and the Medal of Liberty. Today he continues as a counselor of undiminished candor to associations, corporate boards, commissions, international committees, advisory councils, and educational institutions.

Perhaps more instructive to Martians would be to quote directly about Dr. Kissinger from our Zodiac. It reads, "Henry is charming and light-hearted, an earthling whose sonorous voice is widely regarded; authoritative, a master of perception, tireless in travel, a seeker of knowledge and tribal understanding, an explorer in the name of human harmony, and willing to try anything at least once." Earthlings, Martians, and fellow Club members, no introduction could give me higher honor or greater pleasure than to present a long-time friend and colleague, someone held in my most sincere affection—Dr. Henry A. Kissinger. ♦

214 THE COMMONWEALTH

[c]

The Honorable

Henry Kissinger

LADIES AND GENTLEMEN, when I met Shirley, I was stunned because she spoke English. When I was a boy I used to see her movies, and she spoke absolutely fluent German. We worked together in the State Department in Washington for a quite a few years.

At one point she was ambassador to Ghana, and I had a trip planned to Ghana. There was some local politicking going on, and they canceled my trip while I was traveling through Africa. Ambassador Black packed her bags and said, "If you don't take the Secretary, you can't have me," and left. This is not normally done in

the State Department. That cable was sent to me by an associate with a note which said, "There is an ambassador for you."

"No Russian leader
has ever governed
without acquiring
territory."

I want to add one other thing. Shirley also mentioned that I was national security adviser for a while and also Secretary of State. What she didn't say was that for two years I had both positions; I was

s simultaneously national security adviser and secretary of state. I only mention this for students of public administration who might be here, because never before and never since have relations between the State Department and the White House been as harmonious as they were in those years.

George Bernard Shaw once said, "There are two tragedies in life. One tragedy is if you do not fulfill your heart's desire. The second tragedy is when you do fulfill your heart's desire." The United States is now in somewhat that position.

What In Fact Happened

If you compare what American leaders were saying in 1950 and what then happened 40 years later in 1990, you'll find an absolutely extraordinary correspondence. I've been studying diplomatic history for much of my academic life, and I cannot think of any period

in any nation's history where there was such similarity between what a nation set out to do and what in fact happened.

In the beginning of 1989 I attended some discussions in Washington about what might happen in what we all thought would be the two terms of the Bush administration. I said that I thought the biggest event over those eight years would be the gradual disintegration of the East European satellite orbit.

Most of the others in the room thought that this was madly optimistic. Eastern Europe collapsed within eight months, and within two years of that, communism collapsed. In the same year, the Russian Empire that had been put together during the time of Peter the Great—over 300 years ago—disintegrated into its constituent elements.

That is one of the great revolutions in history, but it leaves the United States in a curious position. The Cold War coincided extraordinarily well with certain fundamental American beliefs about foreign policy. There was a two-power world and an ideological conflict which was presented as a conflict between good and evil. It could end either in a stalemate or a victory for one side. We had intellectual preparation for all of this.

Indeed, in looking back on the history of this club, Theodore Roosevelt was president when it was formed. He is a little bit out of fashion now, but he was the most original and creative American president in terms of foreign policy. He took what European statesman had developed over several hundred years of European statecraft, adapted it to American conditions, and wanted to move America into world affairs on the basis of principles such as the balance of power, equilibrium, and a permanent American role. That was extremely innovative in those years.

Our National Interest

He left office just before World War I and was succeeded by Woodrow Wilson, who started the tradition which has dominated American foreign policy ever since. It was quite different from Theodore Roosevelt and totally different from what American statesmen in the late 19th century were saying. It said that America was different from the rest of the world, that America was not concerned with the balance of power, but with the balance of principle. The United States acts in the world not for its own interest, but for the interests of others. We are engaged altruistically for

continued on page 216

THE COMMONWEALTH 215

[c]

The Honorable

Henry Kissinger

What In Fact Happened

Our National Interest

continued on page 216

THE COMMONWEALTH 215

[c]

The Honorable

## Henry Kissinger
Former U.S. Secretary of State

> "No Russian leader
> has ever governed
> without acquiring
> territory."

### What In Fact Happened

### Our National Interest

continued on page 216

THE COMMONWEALTH 215

A Gathering of Presidents

1973 Club President
Bruce Mitchell

1993 Club President
Justice Robert Merrill and
his wife Shirley

1967 Club
President Charles
Travers

Richard Dinkelspiel, 1982 Club
President, with 1969 President Justice
Wakefield Taylor

international law and fighting aggression. All this also had deep
roots in American belief.

I mention it only because the big challenge of our period is
whether we can go back to some of the lessons of Theodore
Roosevelt.

Defending Principle

When you have an ideological conflict as we had between com-
munism and democracy, it is essential to defend principle. But
when you live in a world of several states of more or less equal
strength, with no ideological conflicts of any significance, it is im-
portant to learn a definition of the American national interest. If we
cannot explain to ourselves why we act in this world, we are going
to be in increasing intellectual difficulty.

All the issues that we read about today, from Yugoslavia, to So-
malia, to the Soviet Union, oblige us to ask ourselves: One, what
would we like to see happen? And two, why should America risk
lives or expend treasures for a particular problem? We are not a
foundation, we are a nation. We have limited resources in relation
to all the conceivable problems which exist in the world. In a world
in which Europe, China, Russia, and Japan are going to be major
economic powers and significant players, it is important for America
to find a definition of what our role is in relation to other countries.

I can illustrate this by the current
debate about the Soviet Union and
aid to the Soviet Union.

There is a tendency in the
American debate to divide our-
selves between those who think
foreign policy is a subdivision of
psychiatry, and others who think
that foreign policy is a subdivision

of theology. The psychiatrists think that relations among nations are
like relations among people. The theologians think that when you
confront evil, there are two ways of dealing with it: to defeat it, or to
convert it. Moreover, they have a tendency to believe that every-
body is really a kind of misunderstood American.

Our attitude toward any country, including Russia, is character-

ized by this tendency. President Reagan, who was very strong in
foreign policy, started out calling the Russians the "evil empire,"
and wound up thinking that Gorbachev was a Democrat—all in a
four-year period.

History of Aggression

If a nation has acted in a certain way for 400 years, that reflects
a certain proclivity. In looking at Russian history, I noticed that no
Russian leader has ever governed without acquiring territory. Rus-
sia expanded from the area around Moscow to the shores of the
Pacific, to the center of Europe, to the gates of India, and deep
into the Middle East, in every generation under both czar and
commissar. From this I developed the unworthy thought that
maybe their leaders think that that's the way to act in foreign
policy. I have yet to meet a Russian that accepts the breakup of
the Soviet Empire.

It is important to understand that there are two revolutions going
on in Russia at this moment: an anti-Communist revolution directed
against the stagnation and mismanagement of 70 years, and an anti-
Russian, anti-imperialist revolution directed against 300 years of
Russian expansion.

The anti-Communist revolution extends over the whole territory
of the former Soviet Union. The anti-Russian revolution, for obvious
reasons, does not have many supporters in Russia, and so it is a
mistake to talk as if there are reformers and anti-reformers. You can
be a reformer on the economy and a traditional imperialist on for-
eign policy. That is the fundamental problem that we will face as a
nation.

Anti-Communist Revolution

Let me deal first with the anti-communist revolution.

To go from central planning to a market economy develops un-
believable dislocations. Managers in a centralized economy are
politicians, not entrepreneurs—they know how to operate a politi-
cal system and how to get goals established that they can meet, and
then how to collude with all the other power centers so that their
results do not become apparent if they do not meet goals. The

continued on page 217

216 THE COMMONWEALTH

Ambassador Shirley Temple Black,
1984 Commonwealth Club President,
introduces Henry Kissinger

1978 Club President Bradley
Garretson

Sue Hutchison (seated) and
1993 Club President Claude
Hutchison

workers have no incentive because generally, you can't buy anything. So, all the rules of basic economics have to be relearned. Many vested interests are extraordinarily reluctant to go along with the system, even if they're well-meaning.

In Eastern Germany, the West German government has introduced $90 billion a year, for three years, and unemployment remains close to 30 percent, in the sense that many people are underemployed and in makeshift jobs. Discontent is growing. Russia has 180 million people, and a demoralized civil service. So we should not delude ourselves: there is no level of economic aid that we could even imagine that would make any decisive difference in Russia in terms of economics. It is a mistake to put the future of Russia in terms of American aid.

Secondly, any study of revolution will tell you that what typically happens in revolutions is that all of the people who dislike the existing system get together to overthrow it, and then they begin to divide over how to find a positive direction.

Outsiders are not in a position to shape the outcome of a power struggle like we are seeing today in the former Soviet Union.

## The Role of Economic Aid

I like Gorbachev a lot, as a person, and I have stayed in close touch with him, which I cannot say of all of his predecessors. On the other hand, I said then that it was a mistake to identify the future of Russia with any one leader, in the middle of a revolutionary situation. In those days, I thought Yeltsin was a better bet than Gorbachev. Today, I say that the first duty of a leader is to be able to stay in office. And if he can't stay in office, then no foreigner can help him. And if foreigners try to inject themselves too enthusiastically, then they are likely to produce a backlash and a nationalistic reaction. I repeat: I have high regard for Yeltsin, but I think that staying in office in his problem. Our problem is to get along with Russian governments, if that is at all possible.

The role of economic aid is this: We should, of course, give humanitarian aid to reduce suffering insofar as outsiders can do that. Secondly, there are certain types of non-humanitarian aid that I would favor. But one kind of aid that I do not favor is sending in hordes of American advisers, who descend on a country and at-

tempt to redesign its institutions and become themselves a political issue.

It isn't hard to figure out what an economy like that of Russia needs. They need to get control of their money supply, they need to reduce their deficit, and they know it very well. It's just terribly painful to do, and if you can blame the situation on foreigners, it makes your own life a lot easier as a politician. I was present when a foreign adviser last year told a high-ranking Russian official that by this July, they had to throw 20,000 businesses into bankruptcy. Who would do that in the United States? I'm not questioning the wisdom of the advice, but if it's done, it will not be done because a foreigner advised it. It will done for their own internal reasons.

## Mutually Beneficial Aid

Now I do believe that there is some aid which we should give, partly to save our own consciences.

We could give aid, even considerable aid, for projects that are of clear, immediate, measurable benefit, that are visible to the population, and that might even be of some benefit to us. For example, improving the safety of the Russian nuclear reactor program is in the interest of everybody.

Anybody who has ever studied the Russian program will realize that the Chernobyl explosion, which affected tens of millions of people, occurred in a reactor that is at the middle level of safety in the Russian reactor program. A good half of them are much less safe than Chernobyl. It seems to me that improving the safety of these reactors does not require massive intervention in the decision process, and insofar as foreign aid can do any good—which is by no means self-evident—it would make a contribution that would also benefit all of us.

What we must not do is blackmail ourselves into saying that unless we give a certain amount of aid, a particular Soviet leader will fall. That gets us into an endless process of ever deeper involvement into a political situation which is impossible to manage from the outside.

I believe that over some period of time, which may be extended, and with great suffering, the economic problem will solve itself, or

continued on page 218

THE COMMONWEALTH 217

Henry Kissinger
and Chair of the
Dinner
Committee
Vickie Jenkins

At the Kissinger reception

Members of the
Host-Reception
Committee (L to R):
Charles Purnell,
Teri Follett, Jeff
Dick, and Robert
Anderson

Vice Chair of the
Dinner Committee
Bernice Hemphill
and Dr. Kissinger

"I have yet to meet a Russian who accepts the breakup of the Soviet Empire."

Russia will collapse into total chaos. And since they don't want to collapse into total chaos, they will make progress on the economic issue. The only question is how much time it will take to achieve it.

Just look at the lives of all of these Russian leaders, and ask yourself whether it is possible for them to think of politics the way we do.

When I first came to Russia, pictures of Lenin were hanging in Kremlin offices; now when I visit Russia, I see pictures of Peter the

Great hanging in Kremlin offices. If I were a Pole or a Turk, I would not draw wild comfort from this.

## Anti-Imperialist Revolution

Now let me address the second part of this revolution, the anti-imperialist revolution. The former Soviet Union is today composed of 15 republics; Russia is the largest of those, comprising a little more than half the population and close to two-thirds of the territory. Ukraine is the second largest, with a population of 60 million. Then there are territories of all different sizes and populations, of which the Baltic states are the best known in the U.S.

What most Americans do not know is that the Russian army still occupies the territory of each of these republics. They come and go as they please. The other day the Russian defense minister visited the state of Georgia, and was asked whether he had the permission of the Georgian government. He said, "I don't need permission to visit my troops." This is repeated in every territory. It is almost impossible for them to learn that they are now a different state.

I gave a speech in Moscow to a rather distinguished group last October. I told them that my basic attitude is that their domestic problems were their problems. I said, "We can help; but you have to solve them yourselves. But your foreign policy is in part our problem because the peace of the world depends on it. All I ask of you in foreign policy is that you stay within your borders. Your bor-

ders extend from St. Petersburg to Vladivostok, which is 11 time zones, so you should not feel claustrophobic." I have never given a speech that was such a total disaster. I received something which could be described as applause, but it wasn't extended, and it didn't come from every table in the room.

If a process of re-imperialization were to start, this whole climate of international affairs that now exists would rapidly disintegrate. Nations from Poland to China, from Hungary to Korea, would begin to tremble again. Military alliances would reappear, and we would be back to a version of the Cold War.

So it is very important that we use this period to get across to Russian leaders the idea that if they can live in a helpful and positive relationship with us, then we're willing to help on the humanitarian level. But there has to be a change in their previous conduct, and they cannot re-imperialize.

Now we are reluctant to take this problem on because we do not want another period of tension. But if we are afraid to talk about Russian troops in Estonia now, what will we do in five years, when all these aid programs don't work the way we wanted them to? That is what we must ask ourselves.

## Foreign Policy Challenge

I know I'm coming to the end of my talk, so I would like to point out why this foreign policy environment is such a challenge to us now. We have American troops still in Europe; the North American treaty still exists. It is the only institution that connects us to Europe through formal mechanisms, but it has no mission at this moment, because the Russian army is 1000 miles further back. Therefore, the relationship of Europe to the United States absolutely needs a new definition.

In Asia, it is inevitable that Japan will re-militarize, slowly, systematically—because in the world which I have described, it is impossible for them to define their security identically with us. There are too many different players now. I'm not saying that Japan will be aggressive; I'm just saying that they will be more heavily armed than they are now. In fact, if you analyze Japan's budget, that is exactly what is happening.

continued on page 219

218 THE COMMONWEALTH

[W]

(L to R): Chairwoman of the Host-Reception Committee Jane Purnell, George Hall, George Stewart, and former Club Governor Shirley Stewart

(L to R): 1993 Club President Claude Hutchison, Senator Milton Marks, and Dr. Kissinger at presentation of Senate Resolution of Congratulations to The Commonwealth Club

Carl Rosenfeld, past chairman of the Club's Agriculture Study Section (far right) chats with Club members

You have China growing at the rate of 10 percent a year. I saw the Chinese prime minister last December, and asked him what his country's biggest problem was. He said, "My problem is to keep our growth at 10 percent or below, because otherwise, the economy will overheat." One doesn't meet many leaders around the world who are worried about growing at a rate of 10 percent or more per year. That will make China a huge factor in the future. The relationship of Russia, China, Japan, and, in time, Korea, will be of the greatest importance to the United States.

I have opposed sanctions against China. I cannot conceive of a serious policy in Asia which would ignore the 1.5 billion Chinese people, and which does not try to establish some sort of relationship and give us some influence in the countries I've mentioned.

While all of this is going on, some very positive things are happening in the Western hemisphere. It is the only part of the world where genuine democracy is developing and market economics is gaining and government intervention in economies is declining. The relationship of the United States to Mexico, Venezuela, Colombia, and Chile can signal a tremendous change in historical patterns. It is urgent that we ratify the North Atlantic Free Trade Agreement with Mexico and that we expand it as quickly as we can to some of the other countries I have mentioned. That would give us something to bargain with in the face of protectionist elements.

## Fundamental Point

I have briefly sketched some of these things to illustrate a fundamental point. The pattern that made us win at the Cold War is not the pattern that we need in the world to come. On the other hand, the world to come is safer than the Cold War world. In 1948 through 1954, American leaders developed a series of concepts, that with ups and downs, sought to move the world toward its present condition. Now we are in a situation similar to the one of 1948. Can we deal with a world that is not bi-polar, but that has many power centers? Can we understand that our impact on other countries is in the field of foreign policy, and not in social engineering? If we can, we can bring about extraordinary progress and have perhaps even a greater impact on the world than during the previous period. Our challenge is to recognize that every great creation was some idea

before it became a reality.

I have a Chinese friend who alleges there exists the following Chinese proverb—I say “alleges,” because I don’t believe there are as many Chinese proverbs as they would have us believe. The proverb goes like this: When there is turmoil under the heavens, little problems are treated as if they were big problems, and big problems are not dealt with at all. When there is order under the heavens, big problems are reduced to little problems, and little problems do not obsess us. That is our challenge, and having seen what this country has done in world wars and in Cold Wars, I have to believe that if it could win those wars, it surely can win the peace.

## Answers to Written Questions from the Floor:

**Q. What country or political group poses the greatest military threat to the U.S. today?**

A. Fundamentalist Islam represents the greatest threat to the U.S., not primarily in the purely military sense, but in the combined sense of subversion, terrorism, and the areas in which they operate.

**Q. If we should address the nuclear utility problem, then what should be our response to the nuclear weapon problem?**

A. The problem with respect to nuclear weapons is that at a certain level of technology in a country, it becomes almost impossible to prevent that technology from being diverted to military uses. Many people are worried about the former Soviet Union's nuclear weapons being sold to other countries. I don't believe that that is a great danger; the great danger is scientists with great nuclear knowledge being exported or moving into other areas. At some point the United States will have examine whether or not there are nuclear weapons programs in the hands of countries that are so dangerous that we will have to do to them what we did in the Gulf War with

continued on page 220

THE COMMONWEALTH 219

W

Ambassador Black and Dr. Kissinger

The Dinner Committee: Chairwoman Vickie Jenkins with vice chairwoman Bernice Hemphill and Shelly Silver

(Foreground): Dr. Kissinger and Rose Guilbault (Background L to R): Joe Epstein, Judy Epstein, Drew Dowsett, Mona Geller, Daniel Geller

respect to these programs. I'm not picking candidates, and I'm not saying we should do this, but we have to examine this. It is very dangerous to dismantle the strategic defense initiative that was started in the previous administration; we may need it as a safeguard—not so much against the former Soviet Union, but against irresponsible countries who are developing their own technologies.

**Q. If it is naive to assume that other nations are misunderstood democrats, isn't it also naive to assume that capitalism can be transported to other nations, particularly Russia?**

A. The internal development of a country can be only marginally affected by the U.S. Communism collapsed in the former Soviet Union because the Soviet Communist leadership realized that the country was in for endless stagnation unless it changed its economic system. Sooner or later some version of the market will have to come to Russia, or Russia will become a fourth-rate power. But this is not our problem; it is the problem of Russian governments. What needs to be done in Russia is clearly understood. What is not clearly understood is how to create a political framework and how to pay the price for it. It is for these reasons that it will take a while for Western-style capitalism to develop in the former Soviet Union. We should concentrate our intervention on definable problems of demonstrable benefit and get out of the esoteric field of long-range advice.

**Q. What actions should the U.S. consider in support of a free market movement in the former Soviet Union?**

A. I want the U.S. to abandon that kind of attitude; I don't want us to send hundreds of advisers to sit in every ministry. They know what is needed, and if they want to learn more, let them send some graduate students here to study with Milton Friedman. There may be strategic bottlenecks where American help can ease the process, and I would favor extending that sort of help; the other issues I would leave to the World Bank projects. I'm no great friend of these so-called International Monetary Fund projects, in which this big, national plan is developed by foreign economists that these governments are supposed to carry out. It didn't work in Latin America, and it won't work in the former Soviet Union.

**Q. Will Yeltsin make it? If he doesn't, what are the consequences for the U.S.?**

A. Whether he makes it or not is his problem, not ours. There are all kinds of opinions in Russia, and I would not want to even begin to speculate on who would succeed Yeltsin. I am assuming that the pressures on any new leader are more or less the same as the ones on Yeltsin. Of the various figures whom I know, some disagree with Yeltsin on the pace of reform, not on the fact of reform. Others disagree with him because he has the job that they want. Others might want a more managed economy. If I could appoint a foreign leader, I would not have a better candidate than Yeltsin. But if a plethora of foreign leaders appeared with an incumbent president and announced when they got home that they were doing it to strengthen the hand of that president against Congress, that would be counterproductive. I have high regard for Yeltsin. But I do not think his survival is an American problem.

**Q. Looking back on the negotiations in which you participated to end the U.S. intervention in Vietnam, are you satisfied with their outcome? Was the U.S. intervention in Vietnam justified?**

A. What is described as the U.S. intervention in Vietnam occurred in a different administration, by a different party than the one in which I served, but it was justified. Am I satisfied with the outcome? No; I consider it a great tragedy, and it is the part of my governmental experience which haunts me the most. What haunts me most about it is that we did it to ourselves. The kind of debate that was going on in this country at the time, and the recklessness with which it was conducted, made it extremely difficult—indeed, impossible—to find an honorable outcome to a war that was entered into in good faith and from which America had nothing to gain. That administration thought they were protecting the freedom of the peoples of Indochina. It turned out to be a more difficult task than they had counted on, but the extrication was blighted by a kind of self-serving bitterness in this country which I deeply regret.

*continued on page 221*

220 THE COMMONWEALTH

Club members at the reception

Nancy Kissinger and Walter Haas, Jr. at the head table

Carol Fleming, chair of the Club's Section Management Committee, and Dr. Kissinger

Club members at the reception

## Q. What changes can we expect in the leadership of the People's Republic of China?

A. Economically, the People's Republic of China has been a huge success story—and without any significant foreign aid. They had a strategy and they shifted gradually from state-controlled to market economics. They freed the agricultural markets almost immediately and began the production of consumer goods, based on the theory that they had to create incentives for their workforce. Now, 20 years later, in major parts of China, there is a tremendous boom. Politically, they have not moved toward Western-style democracy, partly because China is not only a communist but a Confucian society, and in Confucian society, it is not generally thought that the conflict of ideas produces truth. It is generally believed that truth exists somewhere, and that certain groups are better qualified to define it than others. Therefore, in Singapore, in Taiwan, and in almost every Chinese-type society, you have a kind of authoritarianism, mitigated by the wild independence of individual Chinese, and a family structure which limits what any government can do over an extended period of time. What I believe will happen in China—and what Deng Xiao Ping is trying to do—is that there will be in every province a number of leaders who will carry on the economic reform program. Deng Xiao Ping took a trip through all of the coastal provinces and Southern China last year, and actually appointed the leaders he wishes to succeed him. We won't know how successful that was until Deng disappears from the scene. The People's Congress, which is the equivalent of a parliament, has already brought and will continue to bring about a reshuffling of the top leadership. Last year at this time, if you had asked any interested observer of China, he would have said that the president of China, who was also a high-ranking general, and his brother, who was the number two man in the People's Army, would determine what the army would do in succession struggles. Both have been cashiered, and the army has returned to a more military and less political function. So what will happen in China is continued economic progress and greater constitutionalism in the political field. What one cannot predict in a country of such vast size with such unequal economic development is whether the regionalism will lead to a situation where some of

the regions might actually try to break away.

## Q. If you were U.S. president, how would you handle the current crisis in the former Yugoslavia?

A. I would do about the same thing as Presidents Bush and Clinton have done: I would not put American ground forces into Yugoslavia. What is going on there is a terrible tragedy, and many crimes have been committed, but the situation is beyond the reach of our military forces. If you look back to Vietnam, I do not want to see American forces ever again engaged where one cannot define how they're going to get out, and where one cannot describe success. The Germans had 31 divisions in Yugoslavia, and they could not pacify it in four years of war. I am opposed to American ground forces, and I'm not wildly enthusiastic about American military intervention in Yugoslavia, outrageous and criminal as the activities that are going on there might be.♦

For their help in making
the Club's 90th Birthday Celebration a success

Special thanks to
Paul Felder, P.S. Photographic Services
Mark Stoner of Passport Television and Ray Wood of Wood Works
Public Relations
for producing and contributing the video

Watermark Press

Clos du Bois Wines • Clos Pegase Winery • Forest Glen Vineyards •
Husch Vineyards • Mirassou Vineyard • Robert Pepi Winery •
Silver Ridge Vineyards

and the Management and Staff of the Fairmont Hotel

THE COMMONWEALTH 221

Farrell

A. In the short term, you could have some dislocations. But I would view this as much more of a benefit for the economy rather than something which will help or hurt individual industries.

**Q. What about investments in the Third World and developing countries, particularly Mexico and Latin America?**

A. Mexico is significant because it has what we don't have: a rapidly growing population and a rising level of wealth. This can provide an enormous opportunity to the U.S. A lot of U.S. companies are there already. For example, only 10 percent of the households in Mexico have telephones. There is an enormous potential market out there, since, with a rising level of affluence, a telephone is something you might want to have. As they industrialize, we can provide telecommunications, computers, and transportation.

**Q. Will health care and pharmaceutical stocks survive Clinton-bashing?**

A. Health care stocks have been disproportionately hit, and a lot of it has been very bad public relations. Drugs are 6 percent of the health care dollar. You are not going to save a lot of money if you just go after the drug companies. The other thing we often read is that drug companies spend much more on advertising than they do in research and development. Our drug companies are the strongest players in the world market. They are dominant as creators of major new medicines and drugs, and are major contributors to health care worldwide. How many aspirin and cold tablets are people going to buy without advertising? It is those sales which fund the R&D which creates wonderful new products which save people's lives. So they have gone after the wrong whipping boy, and it has been painful for those people who have owned those stocks. If I owned those stocks, I would not sell—not at these prices. I would cross my fingers and hope that some rationality will come out of the health care plan. But I would be very careful to separate companies into the "haves" and the "have-nots." The "haves" are companies that have drugs in their R&D pipeline that will be coming on stream over the next several years, and that can show unit growth, even if they cannot get price increases. The "have-nots" are going to have a hard time surviving. One of our favorites is Merck, with the largest R&D budget in the world and major new enzyme technology. Be careful of new commitments; wait for the health care plan to be announced.

APRIL 30

Co-sponsored with The League of Women Voters

Becky Cain

President, League of Women Voters

# The League of Women Voters: Fighting for the Physical and Electoral Health of the Nation

11:45 A.M., FRIDAY

Rose Room, Sheraton Palace Hotel

Tickets—$29 for members, $38 for guests. **Tickets must be purchased in advance.**
See Advance Ticket Sale Procedure, back page.

**Q. What is the outlook for the dollar?**

A. We call the dollar "the wild card." The best I can say is that it looks relatively stable.

**Q. Democrats think the deficit is going to decrease; Republicans think it will increase. What is your view?**

A. Based on the plan we see today, it is unlikely that we will see a deficit reduction. But it does look like there is a more aggressive sentiment for cost-cutting in Congress beyond what President Clinton has suggested. If that goes through, we might see some progress. But you do not raise spending to cut a deficit.

**Q. What investments would you recommend as a hedge against inflation?**

A. Inflation is the one potential red flag on the horizon. It is one reason that the long-term bond rates stayed much higher and longer than they should have, even as short-term rates came down significantly. But our best judgment is that inflation is not the problem. Alan Greenspan, when he was a private economist on Wall Street, was one of the most vocal critics of the Federal Reserve for allowing inflation, and he has been adamant in all his testimony that he will not allow this to reinflate even to accommodate the new plan. But we would be much less optimistic if we thought that there was no deficit reduction and we would see an increase in inflation.

**Q. What about the apparent conflict in operational philosophy for today's corporate manager between short-term shareholder return and long-term growth and strategic positioning?**

A. You can't manage for Wall Street if you are trying to keep a corporation going. There was undue emphasis on quarterly earnings when the market would react immediately and negatively to any disappointment in short-term earnings, and companies would start running to produce a good earnings stream. Companies now are more in tune with long-term returns and are making efforts to communicate with Wall Street, so expectations are more realistic. This is going to be a difficult environment. Few companies will have any pricing power, and all will have a more competitive global economy, so managers will have to be long term-oriented just to survive.

**Q. With the market very near an all-time high, how can an investor find good buys? What are your favorites?**

A. It's hard to invest when you're afraid that you have missed all the good bargains. Fortunately, you don't have to buy into the market, you can buy individual companies. That is where opportunity lies. Historically the market goes up 10 percent a year. If you take the 1982-1987 bull market, there were about 1076 trading days, and if you had stock, you compounded at 28 percent a year. If you missed the top 10 performing days in that market, your 28 percent declined to .18

continued on page 223

222 THE COMMONWEALTH

[L]

The
Commonwealth

LXXXVII NO. 15

APRIL 12, 1993

APRIL 15

Bruce Fouke

Thursday

4:45 p.m., Reception

5:30 p.m., Program Begins

6:30 p.m., Program Adjourns

Club Office

APRIL 16

Gayle Wilson

11:45 a.m., Friday

APRIL 23

UNDERWRITTEN BY CHEVRON CORP.

Jerry
Jasinowski

A Growth Agenda for
America

11:45 a.m., Friday

Ballroom, Pan Pacific Hotel

INSIDE:

What's Next for Wall Street....................................206-223

Events in the Regions ............................................213

The Club's 90th Birthday Celebration ....................214-221

COMING EVENTS:

THE COMMONWEALTH 205

## Mary Farrell

FRIDAY MARCH 26

Mary Farrell

## The Commonwealth

(Publication: ISSN 0010-3349)

Published every Monday

(415) 597-6700

Permission to quote usually granted if written request is submitted; specify para to be quoted.

Editor: Gail Burns-Wax

Assistant Editor: Naomi Stern

### OFFICERS OF THE CLUB

<table><tr><td>Claude B. Hutchinson, Jr.</td><td>President</td></tr><tr><td>Victor J. Revenko</td><td>President Elect</td></tr><tr><td>William German</td><td>Chairman Executive Committee</td></tr><tr><td>Pamela Arbuckle</td><td>Secretary</td></tr><tr><td>Howard T. Hoover</td><td>Treasurer</td></tr><tr><td>Connie Shapiro</td><td>Quarterly Chainwoman</td></tr><tr><td>James D. Rosenthal</td><td>Executive Director</td></tr><tr><td>James L. Coplan</td><td>Director, Member Services</td></tr></table>

Jean Auer, Laurence M. Baer, Victoria A. Barbero, Frank G. Chambers, Hon. Ming Chin, A.W. Clausen, William K. Coblentz, Angela Coffee, C. Lee Cox, Richard H. Daniel, Belva Davis, Christine H. Dohrmann, D. Drew Downett, Joseph I. Epstein, Joseph R. Pink, Carol A. Fleming, Anthony Frank, Robert K. Gardner, Ann Getty, Richard Goldman, Rose Guilbault, Bernice Hemphill, Anthony S. Hooker, William M. Hynes, Vickie Jenkins, Seiki Kitadai, L.W. Lane, Anthony U. Marunez, Hon. Robert W. Merrill, Joseph F. Perrelli, Jane Purnell, Steven A. Savia, Bernard H. Schulte, James D. Shiffer, Shelly Silver, John B. Suippin, L. Jay Tenenbaum, Athena Troxel, Judy F. Wilbur, Diane C. Yu

### ANNUAL DUES

<table><tr><td>Regular</td><td>$98</td></tr><tr><td>65 or older</td><td>$80</td></tr><tr><td>Family (two persons in household)</td><td>$145</td></tr><tr><td>Live and Work over 40 miles from San Francisco</td><td>$80</td></tr><tr><td>Under 40</td><td>$80</td></tr><tr><td>Pull-time student</td><td>$45</td></tr><tr><td>Initiation Fee<br>(No initiation fee for full-time students)</td><td>$50</td></tr></table>

## America's changing values suggest a return to the Ozzie and Harriet era.

### The Clinton Program

### Tax Increases

continued on page 207

206 THE COMMONWEALTH

The Honorable

## Henry Kissinger

I want to add one other thing. Shirley also mentioned that I was national security adviser for a while and also Secretary of State. What she didn't say was that for two years I had both positions; I was simultaneously

### What In Fact Happened

### Our National Interest

continued on page 216

THE COMMONWEALTH 215

[Lc]

A Gathering of Presidents

Defending Principle

History of Aggression

Anti-Communist Revolution

continued on page 217

216 THE COMMONWEALTH

L[C]

## The Role of Economic Aid

## Mutually Beneficial Aid

continued on page 218

THE COMMONWEALTH 217

[L]

At the Kissinger reception

## Foreign Policy Challenge

continued on page 219

218 THE COMMONWEALTH

LC

## Fundamental Point

before it became a reality.

continued on page 220

THE COMMONWEALTH 219

[C]

*continued on page 221*

220 THE COMMONWEALTH

LC

Club members at the reception

Club members at the reception

THE COMMONWEALTH 221

Farrell

APRIL 30

Becky Cain

11:45 A.M., FRIDAY

Tickets—$29 for members, $38 for guests. Tickets must be purchased in advance. See Advance Ticket Sale Procedure, back page.

A. Inflation is the one potential red flag on the horizon. It is one reason that the long-term bond rates stayed much higher and longer than they should have, even as short-term rates came down significantly. But our best judgment is that inflation is not the problem. Alan Greenspan, when he was a private economist on Wall Street, was one of the most vocal critics of the Federal Reserve for allowing inflation, and he has been adamant in all his testimony that he will not allow this to reflate even to accommodate the new plan. But we would be much less optimistic if we thought that there was no deficit reduction and we would see an increase in inflation.

A. It's hard to invest when you're afraid that you have missed all the good bargains. Fortunately, you don't have to buy into the market, you can buy individual companies. That is where opportunity lies. Historically the market goes up 10 percent a year. If you take the 1982-1987 bull market, there were about 1076 trading days, and if you had stock, you compounded at 28 percent a year. If you missed the top 10 performing days in that market, your 28 percent declined to 18

continued on page 223

222 THE COMMONWEALTH

CONTRA COSTA COUNTY

PENINSULA

MONDAY APRIL 19

During the winter of 1846-47 more than 80 men, women, and children were trapped in the snows of the Sierras. These emigrants, who had journeyed from Missouriby wagon train, came to be known as the Donner Party. Thirty-nine of them perished on the trail or in mountain camps during that winter. Some survived by eating the dead. Citing many documents that have previously been ignored, historian and genealogist Joseph King offers a fresh point of view toward the tragedy and raises many provocative questions. Why did women fare better than men? Why did unmarried men tend to die early in the entrapment? What is the meaning of "heroism?" Can cannibalism sometimes be a moral act?

11:45 a.m., Luncheon

MARIN COUNTY

WEDNESDAY APRIL 21

THURSDAY MAY 6

FRIDAY MAY 7

6:45 p.m., Seating Begins

Reservations: 415/597-6705.

SILICON VALLEY

WEDNESDAY APRIL 21

11:45 a.m., Luncheon

THURSDAY MAY 6

THE FUTURE OF RUSSIA

Silicon Valley Capital Club

THE COMMONWEALTH 213

[L]

90TH BIRTHDAY DINNER

March 18, 1993

## Opening Remarks

Claude Hutchison

### 1993 President, The Commonwealth Club of California

## Introductory Remarks

### The Honorable Shirley Temple Black

#### 1984 President, The Commonwealth Club of California; Former Ambassador of the U.S. to Czechoslovakia and Ghana

214 THE COMMONWEALTH