BRITISH TAXES, GLOBAL WARMING, INTEREST RATES, FORECASTS

They'll never learn: Political cultures everywhere have one common characteristic: finding additional ways to pick taxpayers' pockets to finance ostensibly worthy critical services and programs.

The latest example comes from Britain, where a think tank associated with the ruling Labor Party has proposed a scheme to raise that country's top income-tax rate from 40 percent to 50 percent to help fund the Sceptered Isle's fraying socialized medical system. The thought behind the proposal: People will be less resistant to higher levies if they know where their money is going.

These taxophiles also say the higher rate will put Britain more in line with the levels reigning in western European countries such as Italy -- as if imitating destructive behavior were a virtue. The U.K. went from being the sick man of Europe 20 years ago to being the most robust, precisely because under Margaret Thatcher it broke ranks with its socialistic European counterparts, slashing tax rates (from a maximum 98 percent to 40 percent), whipping inflation, eliminating currency control, privatizing government-owned housing, companies and services and lightening the burdens whenever possible on entrepreneurs.

But thanks to creeping taxes and additional business regulations, Britain's growth rate in recent years has sagged to the Continent's levels, prompting Prime Minister Tony Blair, with an eye to next year's election, to promise regulatory relief.

Or take tax-happy France, which is leading the charge against tax-shelter havens such as Luxembourg and Monaco instead of slashing, Reagan-Thatcher-style, its own onerous exactions.

And look at us. George W. Bush was roasted by Democrats, most of the media and even a portion of the business community for putting forth during his campaign mild, across-the-board, phased-in-over-several-years reductions in our income taxes. Criticisms cascaded despite the fact the economy is slowing, the piece of your income going to government is the highest since WWII and Washington is enjoying budget surpluses.

Hot air: A recent multicountry conference on global warming collapsed in recriminations. The confab was supposed to flesh out details on how to carry out the goals of the 1997 Kyoto Protocol. Although Britain and France made headlines because of the cat-and-dog-like spat between their negotiators, the real villains were the United States and Japan. Washington wanted emissions-reduction credits from the absorption of carbon dioxide in our vast forests and farmlands, so-called carbon-sinks.

Good thing this get-together couldn't get its act together. George W. Bush was being polite in one debate when he observed that there is no scientific consensus on what causes global warming -- if indeed the phenomenon is taking place. (Most of the temperature increases of this last century took place before 1940.)

What we don't know about what causes weather changes would fill the Library of Congress. Experts haven't authoritatively figured out what brought on the various ice ages. Many scientists speculate that we are still undergoing the receding of the Great Ice Age. At its peak ice covered 30 percent of the Earth's surface and now covers 10 percent. A major volcano can instantly spew more weather-changing stuff into the atmosphere than all of the Earth's industrial factories have done in 100 years.

Significant weather changes are the norm. Centuries ago, for instance, southern England's climate was so temperate that it was a wine-growing region. This desire to do something about global warming is actually a manifestation of the collapse of socialism -- attempts by self-appointed elites to gain more and more control over our everyday lives in the name of saving us from a supposedly impending environmental catastrophe. -- Steve Forbes, Forbes magazine

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Over the top: Alan Greenspan's unrepentantly harsh series of interest-rate increases represents unreasoning overkill. This fearsomely steep rise in overnight rates for banks has wounded such key areas as the auto industry, softened the underpinnings of the jobs market, threatened consumer confidence and caused a more severe slowdown in overall economic growth than was anticipated or desired.

The Fed may not ever publicly acknowledge that it went too far but, more important, will begin reducing rates in the year ahead. The market may surge sooner than you expect. At that point, perhaps it would not be too much to ask that the Fed return to its proper and more modest mission of maintaining stable, noninflationary growth in the money supply, instead of presumptuously posing as our national nanny and investment expert for which role, it is once again apparent, the Fed's actual credentials have never been even remotely discernible. -- Louis Rukeyser's Wall Street

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We've rechecked our economic forecast for 2001, talking with business folks all over the nation, especially the people who run smaller enterprises, employing fewer than 500 but producing half of all private-sector output.

Our conclusion: Much slower growth but still no recession in 2001. GDP ending next year up about 2.5 percent, with maybe even a negative quarter along the way. Weakest period of '01 will be the early winter months, due to a post-holiday retail letdown and the bite of high fuel expenses.

Interest rates will drift downward in 2001, led by private lenders and followed by a few quarter-point cuts by the Fed starting next spring.

An easing of energy prices, saving businesses and consumers a bundle.

Healthy gains in exports to big trading partners ... Canada, Mexico, Europe and China.

All of this will make up for weaker spending by U.S. consumers.

If conditions sour, look for the Fed to cut rates before spring.

Congress would jump into the act too, embracing broad tax cuts that would have a positive psychological effect on consumer confidence, although no real impact on pocketbooks until cuts took effect in 2002. -- Kiplinger Newsletter excerpts

~Gary Rust is president of Rust Communications.