TIME: Almanac 1993/TIME Almanac 1993.iso/time/caps/82/82four

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                                                                                January 3, 1983 

MACHINE OF THE YEAR

Four Who Also Shaped Events

Paying a High Price for Questionable Gains


If a single idea has dominated the thinking of Menachem Begin,
it is his longstanding dream of restoring Eretz Yisrael, the
biblical land that takes in not only the present-day Jewish
state but also the Israeli-occupied West Bank of the Jordan
River. In the pursuit of that dream, Begin got Israel into the
most controversial war in its history and raised tensions
between the U.S. and Israeli governments to a level
unprecedented in more than a quarter of a century. Yet that did
not diminish the stubborn Prime Minister's resolve. "No one will
set for us the borders of Eretz Yisrael," he shouted in the
Knesset after President Reagan proposed in September that the
West Bank should in the future be linked to Jordan. Using the
biblical names for the occupied territory, as he always does,
Begin thundered: "Judea and Samaria belong to the Jewish people
for all generations."

The Israeli leader, who is a product of Nazi persecution,
Soviet imprisonment as well as the Zionist struggle for an
independent homeland, demonstrated in 1982 that he is both a man
of peace and a man of war. In April, fulfilling one of its
obligations under the Egyptian-Israeli peace treaty, Israel
removed its soldiers and settlers from the Sinai and returned
the last of the territory to Egyptian sovereignty. Scarcely six
weeks later, Begin and his Defense Minister, Ariel Sharon, sent
the Israeli army into southern Lebanon, supposedly with the
limited aim of dealing a fast, deadly blow to Palestine
Liberation Organization guerrillas who were in a position to
shell villages in northern Israel. Had Begin held to his
initial, publicly stated objective of removing the P.L.O. from
a 28- mile zone along the Israeli-Lebanese border, the invasion
would have been hailed at home, and among Israel's remaining
friends, as a great success.

Instead, he carried the war to the Lebanese capital. Israeli
forces moved into the Christian sector of Beirut. They bombed
Muslim- dominated West Beirut for most of the summer, contending
that they were merely trying to flush P.L.O. guerrillas out of
densely populated civilian areas. In what Begin called a "great,
huge blow" to the P.L.O., the Israelis succeeded in driving more
than 11,000 Palestinian fighters out of Lebanon, but a terrible
price:  462 Israeli soldiers had been killed, 2,218 had been
wounded, and Israel remained caught in a military adventure that
was tarnishing the nation's image around the world.

Obsessed as he is with the righteousness of his cause, Begin did
not see it that way. In September, when Israelis learned about
the massacre by Lebanese Christians of an estimated 800
Palestinians in two Beirut refugee camps, they reacted with
anger and astonishment. Political leaders, including President
Yitzhak Navon, demanded a formal investigation of the role that
the Israeli army had played in allowing the Christian militiamen
into the camps. In Tel Aviv, a mass rally of 400,000 Israelis,
an extraordinarily large crowd for so small a country, protested
Begin's refusal to launch an official inquiry. In his defense,
the Prime Minister accused his country's critics abroad of
committing a "blood libel" against Israel, and added, "Goyim
kill goyim, and they come to hang the Jews."

At times, Begin, 69, seemed surprisingly out of touch. Although
he finally gave in to pressure to appoint a commission of
inquiry, he said that he did not learn of the Beirut massacre
until almost 48 hours after the killing had begun. But he
appears to be as tough and stubborn as ever; neither his chronic
poor health nor the death in November of his beloved wife,
Aliza, has led him toward any public thoughts of retirement. Nor
does the Israeli electorate want him to retire. According to the
latest polls, Begin still enjoys the support of 47.8% of his
countrymen. This is down from 54% last August, but far ahead of
the standing of any prospective challenger.


Putting the "Great" Back in Britain

For Prime Minister Margaret Thatcher, the year began
inauspiciously. She had achieved the dubious distinction of
being Britain's least popular national leader on record and her
Conservative government had dropped to a humiliating 29%
approval rating in opinion polls. The newly formed Social
Democratic Party was running strong, and within her own
Conservative Party there was considerable grumbling about her
hard-line economic policies, which had brought high unemployment
and an ever increasing number of bankruptcies.

But Thatcher wraps up her year a stunning winner, her iron-lady
image polished to a high luster abroad, her stature as a
political leader restored at home. It was a year that, thanks
to a war 8,000 miles away, she will mark as a turning point in
her fortunes. As a British businessman puts it:  "In 1982 Prime
Minister Thatcher restored our national pride."  Her rating in
the polls is up to 44$, and many Britons confidently predict
that she would win an election handily if she chose to call one
in 1983.

It was on April 2 that Argentine troops invade the Falkland
Islands, a remote and irrelevant British colony 400 miles off
the Argentine coast. The House of Commons reverberated with
cries of "Resign!" Thatcher boldly dispatched a task force,
which grew to more than 100 vessels, to the windswept South
Atlantic. It was a 19th century show of force against "a tinpot
dictator," as the British haughtily described Argentine
President Leopoldo Fortunato Galtieri.

Few, least of all the 8,000 troops who sailed to the sound of
brass bands and cheering, anticipated the bloody battles that
lay ahead. But all attempts at a diplomatic settlement failed,
and war it was. It was an impressive late 20th century display
of fighting for a principle--that a nation must defend its
sovereign territory.

Catastrophe was always only a Exocet missile away, but Thatcher
never wavered. "Failure?" she once asked derisively. "The
possibilities do not exist."  Seventy-four days later, the white
flags of surrender were fluttering over the Falklands and
victory belonged to Her Majesty's forces. Never mind that 255
British lives had been lost (750 to 1,000 for Argentina) or that
six British navy ships and a merchant vessel had been destroyed.
The triumph upheld both pride and principle, and with it came
the so-called "Falklands factor" that lifted British spirits as
well as Mrs. Thatcher's standing in public opinion surveys. For
the first time in the Thatcher years, a major poll found more
Britons optimistic than pessimistic about their country's
immediate future.

As the Falklands factor wanes, Thatcher remains her
self-assured self. Unemployment is 13.2% the industrial base
continues to shrivel and growth may not exceed 1.5% in 1983;
still she boasts that her policies have brought the inflation
rate down to 6.3%, the lowest in ten years. She continues to
promise that she will "put the 'Great' back in Britain."
Thatcher has taken on the powerful trade unions and thus far has
not come a cropper. At the same time, she has staunchly resisted
industry's pleas to soften her austere monetarism. She has also
been luck. The Labor Party opposition is a shambles, split by
left-right fratricide, and the Social Democratic Party's
momentum has faded as fractious Britain united behind its
resolute leader in the Falklands war.

A Thatcher associate, suggesting that the next election could
turn on the contrast in leadership, observes:  "This Prime
Minister leads from the front, with her chin out."  The man on
the street puts it plainly:  "She's gutsy."  Even many of her
numerous enemies acknowledge that the lady is a leader, even as
they despair over where she is leading them.

Meanwhile, Thatcher, 57, looks ahead with a confidence she could
not command twelve months ago. At the Tories' annual convention
in Brighton this year, the slogan was THE RESOLUTE APPROACH, and
no one doubts that in any election campaign Thatcher will
trumpet her readiness to battle any comers, whether they be
crusty trade union chiefs, Argentine generals or hectoring
Commons members. And, as ever, she plans to prevail. When a
close friend recently asked her, "Who will come after you?"  she
replied insouciantly, "After me-- there's me!"  No thinks she
is joking.


Bringing Inflation Under Control

No figure loomed larger over the world economy in 1982 than that
of the 6-ft. 7-in. cigar-smoking chairman of the U.S. Federal
Reserve Board, Paul A. Volcker. It was he who fought
unflinchingly to bring down the U.S. consumer price spiral, but
in the process he helped drive interest rates and unemployment
up throughout the industrialized societies. In the U.S., his
policies surprised skeptics by limiting the rise in the nation's
consumer price index to roughly 5% in 1982, but his policies
also helped push unemployment stunningly into double digits. By
year's end joblessness was closing in on 11% of the nation's
labor force, or 12 million individuals, a level that would have
seemed almost unthinkable last January.

Although the Reagan Administration has been vocally committed
to bringing inflation under control, waging this fight has
fallen pretty much to Volcker, a 1979 appointee of Jimmy
Carter's. Often erroneously characterized as a "tight money"
policy, Volckernomics amounted to an ongoing effort by the Fed
to slow the rate of growth of the nation's money supply, thereby
choking off inflation at its monetary source.

As the economic slump that began in 1981 deepened during 1982,
Volcker had to perform a delicate balancing act. The problem
became how to ease up on the money supply, which the Federal
Reserve had targeted to grow at a rate of about 2 1/2% to 5 1/2%
during 1982, without frightening investors into thinking that
the central bank was repeating an old mistake and reinflating
the economy in response to political pressure.

By midsummer, business failures had escalated alarmingly, the
stock market had slumped to its lowest level in more than two
years and fears of international financial collapse were
spreading. Against this backdrop, Volcker hinted that he was
prepared to act more flexibly, to permit monetary growth
"somewhat above" the announced targets. Several quick cuts by
the Fed in its discount rate to member banks drove home the
point. As the money supply expanded and interest rates fell.
Wall Street bought Volcker's act. Beginning in August, the Dow
Jones industrial average stages a 288-point rally that peaked
in early November, and the bond market boomed with it.

Toward year's end, with the money supply growing at a
super-heated annual rate of more than 16%, critics argued that
Volcker should slow the pace. When a Congressman tried to pin
him down on what course he would take in 1983, the Fed chief
made it clear he was no dogmatist: "You're saying, 'For God's
sake, give us a simple rule that you can follow!'  And I'm
afraid I'm suspicious of any rule that is that simple."

It is not even certain that Volcker will be chairman of the Fed
beyond next August, when his term expires. Should Reagan choose
to reappoint him. Volcker would be faced with a big decision.
The chairman of the world's richest central bank makes only
$60,663 a years; he could doubtless command at least $500,000
if he left. It is almost ironic, but the banker who moves
billions could use the money. A man of limited personal means,
he lives in spartan $394-a- month bachelor digs in Washington
during the week. On weekends he shuttles to New York City, where
his arthritic wife Barbara lives with their son James, 24, a
victim of cerebral palsy. She supplements the family budget by
working as a bookkeeper. Despite the personal sacrifice, many
hope that President Reagan will ask Volcker to stay on the job
another four years, and that the 55-year- old Fed chairman will
accept.


Making the Everyday Seem Unique

He is 3-ft. 6-in. tall and 3 million light-years from home. His
face looks like a cross between Carl Sandburg and a Galapagos
turtle. He snacks on Reese's Pieces, and after a hard day he
enjoys relaxing in front of the TV with a few cans of Coors. He
walks like Charlie Chaplin in slow motion and, when excited,
breathes like an asthmatic piglet. He wants nothing more in this
world than a faithful pal, unless it is to return to his
out-of-this-world home. Cynics will insist he is made of
aluminum, steel, fiber glass, polyurethane and foam rubber, but
this is a small matter. The larger truth is that E.T. emerged
from a sweet communal dream:  of fellowship, loyalty, ordinary
heroism, unfettered fun. He is every child's secret best friend,
every adult's reverie of the innocence that was, once upon our
time.

He is also a magical money machines. As the unbilled star of
Steven Spielberg's E.T. The Extra-Terrestrial, the little
botanist from outer space has beguiled $310 million worth of
U.S. movie-goers since June, easily outpacing the previous front
runner, Star Wars. With December openings in foreign capitals,
he is starting to duplicate that triumph around the globe. A
novelization of Melissa Mathison's script has sold more than 3
million copies, an illustrated storybook another million.
Heartlight, Neil Diamond's musical homage to E.T., has sold more
than a million albums since September. And, even in this
recession-blitzed Christmas season, E.T. dolls were whisked off
department-store shelves as fast as they could be flown in from
Taiwan and Korea.

Virtually every blockbuster movie is a powerful fable of
resilience. The audience finds vicarious strength watching
Scarlett rebuilt Tara, or Maria von Trapp spirit her brood out
of Hitler's Austria, or Don Corleone take his cold-dish revenge.
E.T. gives its viewers more, from less. Here is a fairy tale set
in the most mundane of contemporary realities:  a typical
California suburb. The creature appears to his friend Eliott in
a pizza-strewn backyard:  he lives in a child's closet. As E.T.
built his "phone home" device from old toys and household
castaways, so Spielberg fashioned a dream world from the
Formica-and-vinyl tatters of the American dream.

It is important to remember that E.T. is also a movie, crafted
as expertly as if it had come off the NASA assembly line. Every
character has his own quirky resonance; each scene is energized
by grace notes that reward all those subsequent viewings. But
Spielberg had proved his directorial skill before--with Jaws,
Close Encounters of the Third Kind, Raiders of the Lost
Ark--while tapping the moviegoer's sense of fear and excitement.
This time, though, he touched something more than a nerve
ending. With E.T. he proved that the everyday could be unique,
and that the science fiction of movie technology could show us
all the way home. Inside this runty extraterrestrial was the
idealized heart of America, pulsing bright with humor and
humanity.