www.vheadline.com Posted: Wednesday, February 26, 2003 By: Patrick J. O'Donoghue

Caracas Metropolitan nurses trade union president, Ana Rosario Contreras says she does not understand why pro-government agitators are targeting nurses, bio-analysts, dentists and workers from 14 hospitals and 85 outpatient units protesting at the Finance Ministry.

“We haven’t been paid for the last three weeks and that’s why we are protesting … we want the Ministry to pass our pay to the Metropolitan Mayor’s Office.”

Contreras complains that fellow nurse Anselmo Torres was hit in the back with a marble from a sling and threatened by government circles … “it’s the first time I have been discriminated against for attending patients.”

money.cnn.com February 26, 2003: 4:52 PM EST By Gordon T. Anderson, CNN/Money Contributing Writer

NEW YORK (CNN/Money) - The threat of war in Iraq, civil unrest in Venezuela, tight inventory controls by oil companies, alleged price gouging by station owners. It's a perfect storm at the pump, and another wave may be about to crest.

The hapless American consumer is enduring the highest retail gasoline prices in nearly two decades. Retail gas prices are up to a national average of $1.66 a gallon, according to the Department of Energy.

Now, politicians across the nation are trying to raise fuel taxes.

In Washington, D.C., as well as in more than half the state capitals, there are proposals to increase the levies governments charge on gasoline, diesel, and other automotive fuels. If the plans become law, they could add more than 25 cents a gallon in state and federal taxes, on top of the 40-to-50 cents a gallon most Americans already pay.

The initiatives range from the quixotic to the inevitable. But the breadth of activity indicates a tax-raising trend. More on rising gas Cars: Best gas mileage Gas gouging alleged 9 ways to beat high gas prices Gas prices state by state

At the federal level, Rep. Don Young (R-Alaska), chairman of the House Transportation and Infrastructure Committee, is spearheading a drive to nearly double the federal gas tax. He wants to phase in a series of annual increases that would raise the feds' take from the current 18.4 cents per gallon to more than 33 cents by 2009.

In state houses, a combination of bloated state spending and recession-ravaged tax bases has legislators in both parties scrambling for new sources of income. For many, the tiny-yet-pervasive gas tax is a tempting target, because it seems painless relative to more visible items like state taxes on income or property. Here is some recent activity:

• In Ohio, Republican governor Bob Taft – who during his re-election campaign mocked his opponent as "Taxin' Tim" Hagen -- has proposed a 6-cent increase.

• In Indiana, where a 3-cent increase went into effect on January 1, legislators are already talking about another hike.

• In fiscally turbulent California, gasoline taxes are on the agenda in Sacramento, as well as within regional authorities in northern and southern parts of the state.

• In Washington state, voters last year rejected a referendum that would have increased gas taxes by 9 cents a gallon. Now, Republican legislators and Democratic governor Gary Locke are trying to push through a 5-cent increase.

• In Maryland, newly elected Republican governor Robert Ehrlich – who ran on a pledge to oppose any broadening of the state sales tax – began publicly considering a gasoline tax increase even before his inauguration.

In all, at least 26 states are pondering increasing fuel taxes, according to the American Automobile Association (AAA). That is in addition to the five states where hikes passed in 2002.

To be sure, most of the proposals are in the planning stages. An actual bill has passed only in Wyoming, and one has been explicitly voted down only in Virginia. Still, expect more attention to be paid to the issue in coming months. What's the money for?

At the federal level, gasoline taxes pay entirely for transportation needs: maintenance and improvements of highways, as well as for mass transit. Most states also devote their fuel-tax revenue to transportation programs. Proponents of increases argue that only money can fix America's crumbling infrastructure, and fuel taxes are a necessary evil.

The U.S. Department of Transportation estimates that by 2009, annual maintenance and "necessary" upgrades of the nation's highway will cost $61.2 billion, with mass transit needs at $12.4 billion. Last year, the federal government spent $31.8 billion and $7.5 billion, respectively, on those items.

"Just based on the DOT projections, we have to come up with revenue sources to almost double the amount of money we spend," said Steve Jensen, a spokesman for the House Transportation Committee. The task is made more difficult by the fact that federal gas-tax revenue is actually declining these days, thanks to more fuel-efficient cars and a recession-related decline in the number of miles people are driving.

"On one hand, nobody wants to raise taxes," says William Beuchner, chief economist at the American Road and Transport Builders Association, a construction industry lobbying group. "But there are a lot of big problems that need to be addressed, so politicians are between a rock and a hard place. If they want to fix things, the money has to come from somewhere." A billion here, a billion there . . .

With most of the new legislation, "the increases are small -- pennies, in most cases," says Rayola Dougher, Senior Policy Analyst at the American Petroleum Institute. Apparently, the logic is that the size of such plans won't cause much pain.

"It's not the same kind of 'Bam! It hits you' item like an increase in property taxes or the income tax," acknowledges AAA's Justin McNaull. "But for somebody who uses a lot of gas, it's not pocket change, either."

Economist Buechner estimates that for every one-cent increase in fuel taxes, the typical U.S. family will pay an extra $25 per year. So if total federal and state gas taxes go up by a dime, your out-of-pocket expenses rise about $250. Currently, the average family pays about $660 a year in fuel taxes, according to the American Petroleum Institute.

The numbers get huge in the aggregate. Americans drive some 4.3 trillion miles per year, according to the National Transportation Safety Board. An average fuel-efficiency of 20 miles per gallon would amount to some 215 billion gallons of gas is used to cover those miles. Even just five cents more a gallon adds up to a $10.75 billion tax increase.

The biggest worry, however, is not in any individual hike, but in the chance that state taxes will climb steadily and federal gas taxes rise in tandem.

Connecticut, for example, already has one of the nation's highest state taxes on gasoline, at 25 cents per gallon. Legislators there have publicly discussed raising that to 40 cents per gallon by 2007. If the federal effort were also successful, drivers in the Nutmeg State could be paying as much as 73 cents a gallon in taxes by the end of the decade.

Moreover, an increasing number of legislatures are exploring ways to automate the process of increasing gas taxes in the future. Seven states already employ mechanisms that tie the level of gas taxes to some variable -- from the Consumer Price Index to the amount of money in state budget coffers -- which triggers an increase without any new vote in the legislature.  

www.npr.org Morning Edition: February 25, 2003

Carter Urges More Diplomacy on Iraq

BOB EDWARDS, host: When former President Jimmy Carter was awarded the Nobel Peace Prize in December, he concluded his acceptance speech with these words. Former President JIMMY CARTER: Ladies and gentlemen, war may sometimes be a necessary evil, but no matter how necessary, it is always evil, never a good. We will not learn how to live together in peace by killing each other's children. EDWARDS: Carter has been a tireless advocate for peace through his non-profit Carter Center. His advocacy has, at times, made him a critic of the Bush administration's policies toward Iraq and North Korea. In his new book, "The Nobel Peace Prize Lecture," Carter outlines how peace should be the foundation of any country's foreign relations. This view still leaves room for war, he says, especially in the case of Iraq. Mr. CARTER: The American people have two basic commitments that are pretty universal. One is that we want Iraq to eliminate all weapons of mass destruction, and secondly, we'd like to do this peacefully. My hope is, and my prayer is, that we can accomplish both those goals. The bottom line is that Iraq must comply with United Nations resolutions to eradicate all weapons of mass destruction, and I think that if Iraq refuses to comply, then the war would be inevitable. EDWARDS: You were critical in the past of the Bush administration's reluctance to take the case against Iraq to the United Nations. Do you support a second UN resolution backing military action against Iraq? Mr. CARTER: Yes, I do. As I expressed in this book, I think that this is a very good move to strengthen the United Nations and not to weaken it, and to strengthen our ties with our natural allies and others around the world who want to see this issue resolved, but resolved peacefully, if possible, through the United Nations. EDWARDS: What about the breakdown in ties with France and Germany and the United States? Is this a temporary breach or a real cause for concern? Mr. CARTER: I really believe it's a temporary breach, just based on this one argument, and I don't have much doubt that the leaders of France and Germany are now representing, fairly accurately, a majority of people throughout Europe. EDWARDS: As president, you tried not to take sides in the Middle East as a means of brokering a peace agreement. What do you make of the Bush administration's approach? Mr. CARTER: I think that the present stalemate in the Mideast, and the lack of vigor in the United States government in seeking a resolution is one of the major causes of dissention, not only in the Middle East and the Persian Gulf, but throughout the world. It has driven a dividing line between us and Muslims throughout the world and others who think that the United States is the only avenue to peace. This is the first time since Israel became a nation, and certainly since the 1967 War, when the American government has not tried to take a balanced role and tried to negotiate forcefully to bring about peace. We're not doing that now. EDWARDS: What should the US be doing to help resolve the Middle East problem? Mr. CARTER: I would like to see our government continue to work with the so-called other members of the quartet--that is Russia, Great Britain and the United Nations--evolve a proposal on the Mideast based on United Nations Resolution 242; that is a withdrawal of Israel from the occupied territories and a peaceful relationship without terrorist acts in the Mideast and pursue this aggressively at the negotiating table, as I did when I was in the White House, as other presidents all the way through President Clinton have done vigorously, including George Bush, Sr., and make an effort to bring the two parties to a table with a hope of peace and justice for both sides. EDWARDS: And in North Korea? You helped ease tensions between the US and North Korea in 1994 by negotiating for peace. What should the US do now? Mr. CARTER: Well, I would like to see us find some avenue to have direct talks with North Korea. What we have at this moment is a deadlock, and what I've advocated is that through some mechanism--either sponsored by China or Russia or some other means--that we find an excuse to save face, but also to negotiate directly with the North Koreans. My hope is, and my belief is, is this is what the North Koreans want and that there can be a resolution of this issue peacefully. EDWARDS: You promote pace and democracy abroad through the Carter Center. Do you worry there's too much pushing and not enough diplomacy in current US foreign policy? Mr. CARTER: Well, I think the diplomatic effort in this present standoff, concerning both North Korea and Iraq, has not been adequate. The public opinion polls that I have seen, almost throughout the world, show that America has not yet prevailed in convincing other countries or other peoples that our policies are correct. I know that Secretary of State Colin Powell is now in the Far East, in China, on the way to South Korea to try to convince the other nations that our policy in not negotiating with North Korean is a proper one. So far, he's not been successful. EDWARDS: With so much attention on Iraq and North Korea, is another part of the world being neglected? Mr. CARTER: Well, the Carter Center's involved every day in Venezuela, and we've helped in four different elections in Venezuela in the last five years. Venezuela and Bolivia are trouble spots. We've already mentioned a part that I think is being neglected between Israel and the Palestinians. Africa is always much more greatly in need. So, yes, the rest of the world is often neglected, and I think that a lot of the world was neglected when I was in office as well. EDWARDS: As you travel abroad, have you noticed a significant rise in anti-American sentiment? Mr. CARTER: I think the anti-American sentiment now is at the highest point that I have ever witnessed in my life. The Carter Center now has programs in 65 different countries in the world--35 of them are in Africa--and there's a great expression of anti-American feeling, and this is exhibited not only to diplomats, but also to business leaders and others who come back home and make their reports. Yes, I think the anti-American sentiment is very high right now. EDWARDS: Why? Mr. CARTER: I think it's primarily because we've abandoned any real effort to bring peace to the Mideast, and the fact that we have persisted in moving, at least rhetorically, against Iraq with the insinuation that we would do it unilaterally. EDWARDS: Or is just a product of being the last remaining superpower? Mr. CARTER: Well, as a matter of fact, as I tried to explain in my Nobel address, this is the first time in world history that there has been one unquestioned superpower, economically, military, politically and even, I would say, socially and culturally in many ways. And this has aroused from opposition, some jealousy, some animosity toward America just because of our extreme success. EDWARDS: Thank you, Mr. President. Mr. CARTER: It's been a pleasure to talk to you. EDWARDS: Former President Jimmy Carter's new book is "The Nobel Peace Prize Lecture." An extended version of the interview is at npr.org. The time is 29 minutes past the hour. Copyright ©2003 National Public Radio®. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to National Public Radio. This transcript may not be reproduced in whole or in part without prior written permission. For further information, please contact NPR's Permissions Coordinator at (202) 513-2000. This transcript was created by a contractor for NPR, and NPR has not verified its accuracy. For all NPR programs, the broadcast audio should be considered the authoritative version. To purchase an audiotape of this piece, please order online or call 1-877-NPR-TEXT.

www.vheadline.com Posted: Wednesday, February 26, 2003 By: Patrick J. O'Donoghue

4 Venezuelan baseball players have been telling US news reporters about the ordeal during the winter league and after.

Speaking at the Minnesota Twins clubhouse in Fort Myers (Florida), Luis Rivas, Johan Santana, Juan Rincon y Gabriel Torres refrained from making any political statements but did complain about the winter league being suspended because of the national stoppage.

• The biggest effect the stoppage had on the players themselves was the lack of gasoline and the queues.

Santana highlights personal insecurity, especially in Caracas, even though he did spend some time in his native Tovar village (Merida).

Lew Ford, who played for the Aragua Tigers,  says things got ugly after the national stoppage started and it was a pity that the league was cancelled … “it would have relieved a bit of tension that was in the air … people love baseball.”

Twins general manager, Terry Ryan says the team is worried about players and their families during the recess, especially because of increasing instability in Latin American countries.

news.ft.com By Lauren Foster and Julie Earle Published: February 26 2003 20:21 | Last Updated: February 26 2003 20:21

These are unsettling times. US investor optimism fell to the lowest level in at least seven years this month and consumer confidence dropped to a nine-year low, both on fears of war with Iraq.

Last month, nervous equity fund investors withdrew $1bn more than they invested - the first January outflow for equity funds in more than a decade.

Adding fear to already jittery war nerves, Iraq released new information on its weapons of mass destruction, including a biological bomb. The disclosure further divided the United Nations Security Council over whether to back a US-led war against Iraq, which Washington is expected to be preparing for mid- to late-March.

Many investors are wondering if they should head for the exits. Vanguard, the second largest mutual fund firm, says it has had a significantly higher number of calls in recent weeks from investors worried about war and the economy.

So what could happen in the markets if war breaks out?

If the conventional wisdom holds true, war is good for stocks and the economy. Historically, stocks tend to fall in the run-up to war as investors reduce their holdings and allocate funds to "safer" or less-risky investments, such as Treasury bonds or gold. When the bombs start to fall, the saying goes, stocks rally. The adage is: "Buy on the sound of gunfire."

While many people believe this scenario will play out if the second Bush/Saddam showdown takes place, sceptics caution that Iraq is not the only reason behind the recent market malaise and once the war factor is out of the way, investors will once again have to confront the bleak underlying US and global economy.

In the three days following Iraq's invasion of Kuwait the Dow Jones Industrial Average dropped 6.31 per cent.

As the US began gearing up for Operation Desert Storm, stocks started climbing. Within four weeks of the campaign, the Dow gained 17 per cent.

"Once the war starts, it is not unreasonable to expect that investors could start betting on a favourable outcome. After all, the US is hardly the underdog. A quick decisive victory would create at least a temporary big rally," says Alexander Paris, chief economist at Barrington Research Associates, a brokerage and research firm.

But there are caveats: the success of the initial operations, the length of the war and whether the US is in Iraq as part of broad-based coalition that has the support of the international community or not.

"It is clearly different this time around," says Joseph Keating, chief investment officer of AmSouth Funds, referring to the Gulf war, which started in January 1991. "The last time, the US was pushing Iraqi forces out of Kuwait whereas now the effort is to bring about a regime change - this is a different ball game."

Providing there is a quick, successful turn of events, there should be a broad rally in the equity markets. "There is a lot of money sitting on the sidelines. There is a buyer strike out there right now," says Mr Keating. "Investors are waiting to get in."

Phil Dow, market strategist at RBC Dain Rauscher, cautions that investors should not expect "bluebirds and rainbows" once the war fears are taken out of the market. There is still North Korea, he says.

While stocks have been hammered, the debt market has remained strong. Frazzled investors have poured money into bond funds, which have had record inflows. But there is concern now that the bond market may fall apart because bond prices have gone up sharply, and their yields are falling.

US Treasuries, a traditional haven, would likely face a sell-off after the start of the war.

Gold funds have also seen strong inflows as the metal is often viewed as a hedge against war and other potential crises. But once the war is under way, the gold price is expected to fall.

The price of gold soared amid the panic buying just after the start of the Gulf war but fell when it was clear the war was going in the US's favour.

As for the oil price, that, too, should drop. In the last Iraq conflict, oil soared after Iraq's invasion of Kuwait but fell sharply once the war began.

In today's prices, the cost of a barrel of oil jumped from $23 in July 1990 to an average of $47 in October 1990. By February 1991, with the war under way, it was down to $25.

Mr Paris believes that if the war is concluded successfully - and Venezuela's production is back on track - the price of oil could be around $20 by the end of the year. "There is a war premium in oil prices," he says. "Take out the war and you take out the premium."

If Saddam Hussein uses a "scorched earth policy" and sets fire to the oil fields, the price of crude would soar. Some analysts are discounting a worse scenario: that the Iraqi leader could use dirty bombs to destroy the oil fields.

And what if the US goes into Iraq with only Britain and Spain on its side? Or Mr Hussein uses weapons of mass destruction? Or the conflict drags on?

"If the war goes badly, the West fractures and the Middle East explodes, obviously it will create more uncertainty and further disrupt economic activity and world trade," says Barton Biggs, global strategist at Morgan Stanley, in a research note.

"The price of oil will soar, delivering a lethal blow to the world economy. The result will be a worldwide recession and new lows in the stock markets. Cash, government bonds and gold will be the safe havens in a dark and dangerous world."