RUST COMMENTARY: POLLS THAT OFFER REWPONDENTS SOLID INFORMATION GET INTERESTING RESULTS ON TAX CUTS AND HEALTH POLICY

Clinton-Gore veto tax cut: Rarely have the biases of our colleagues in the media been as clearly on display as in this season's coverage of Congress's $792 billion tax cut. To read the papers you'd think that the Republicans' tax-cut policy had broken apart on the shoals of public indifference, and that the president's imminent veto represented a mercy killing. Meanwhile the Republican leadership is spun as failures. The announcement by Senate majority leader Trent Lott that there will be "no tax cut this year" is variously described as throwing in the towel or turning tail.

Very little of this is true.

Start with the mainstream mantra that "voters don't care about the tax bill." The data show a much more varied picture.

Washington-based Wirthlin Worldwide wondered if some voters were hesitating about tax cuts because they didn't understand them. So before it posed its poll questions, the firm explained the contents of the tax package to voters in simple language, pointing out that it reduced income taxes, capital-gains taxes, estate taxes and the marriage penalty. It found that, having taken in this information, 68 percent of the voters approved of the package, versus 31 percent who disapproved. A full 59 percent too felt the president ought to sign the measure into law. (As an aside, how refreshing to see a pollster actually try to help people understand an issue before collecting its numbers.)

Or take, for example, an intriguing poll by Kaiser-Harvard Health Index, a not-for-profit research group seeking to plumb the depth and nature of interest in health policy. The pollsters presented voters with a roster of news events from July and then asked which they followed, and how closely. It turned out that the only news event that voters followed more closely than the legislative progress of the tax cut was the crash of JFK Jr.'s plane. A full 51 percent of voters said they followed the tax-cut debate "closely" or "very closely." As for a White House proposal to expand Medicare to cover prescription drugs -- an idea routinely presented as widely popular -- it ranked fourth in interest, behind the Tour de France performance of cancer survivor Lance Armstrong.

How voter views on tax cuts changed over the course of the summer was the topic of work by Rassmussen Research. On July 28, soon after the legislation was passed, the Rassmussen analysts found that 43 percent of voters supported the tax cut, 35 percent opposed it, and 22 percent couldn't decide. By Aug. 23, support had solidified: 50 percent backed the cut, 34 percent opposed it, and 16 percent were undecided. What's significant is that the time frame overlaps with the congressional recess, when in fact much of the information about the contents of the bill got conveyed in hometowns to the electorate for the first time. In other words, the more voters got to know about the tax cut, the more they were for it. No wonder the Democrats are muttering so loudly about "dead on arrival."

Indeed, the very best evidence of the tax issue's viability is that even the tax bill's self-proclaimed executioners, Messrs. Clinton and Gore, have felt the need to support some form of tax cut this year. Their proposals are, of course, a mirage. But they provide Democrats a talking point to pretend to voters that they aren't on the wrong side of the tax issue.

Which brings us to Mr. Lott's so-called surrender (New York Times: "Tax Cut Goes to Clinton; GOP Moves On"). Why should Trent Lott, much less any other politician in Washington, believe he could get into a good-faith political negotiation with this lying president? Mr. Lott was around for the White House manipulations that led to the government shutdown debacle in 1995. He may also have pondered the president's desertion of his own bipartisan Medicare commission this spring when Mr. Clinton dumped Medicare allies such as Sen. John Breaux. In this context, Lott's decision to frame the issue as a GOP tax cut versus A Clinton veto actually looks less like a surrender than old-fashioned leadership.

In fact, what the whole veto story really tells you is that all the jockeying we are seeing is really about who will get to claim the high ground on tax cutting come Campaign 2000. Why else would Al Gore in the past week have begun begging Republicans to come back to the table post-veto and "work out a reasonable solution"? The best move here would be for Lott to hold his ground. And once the GOP presidential nominee comes up with a tax-cut plan, Congress can send that up to the White House next year. We look forward to the second big Democratic veto of a tax cut no one wants. -- The Wall Street Journal

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Honey, I shrunk the network: One of the great puzzlers of business, and a question much on the minds of CEOs today, is how to shift capital smoothly out of a declining industry and into a rising one.

Mel Karmazin, head of CBS and author of the $37 billion merger with Viacom, has come up with the best answer yet from anyone in the declining business of network television.

First, let us recall why things are so bad. Last year, for the first time, none of the majors managed to capture even 10 percent of the prime-time audience. Yet they demand higher and higher ad rates for a shrinking viewership, claiming network airtime has only become more valuable as big audiences become harder to find.

Such paradoxes aren't built to last, and the cracks are showing. NBC is the only network that really makes any money. At ABC, Disney is chipping another 60 seconds out of every prime-time hour for another commercial. Ads already soak up 16 minutes and 30 seconds an hour compared to 11 minutes a decade ago. That can only drive the audience away faster.

Nor are big advertisers as gullible as they seem. New research is showing that reach is more important than frequency -- you don't need to pummel people over and over. And often it can be cheaper to combine smaller audiences than aim for big ones. The day is coming when broadband will allow advertisers to zap specific packages of ads at designated viewers.

P&G got a 20 percent click-through with its Scope mouthwash "kiss" sent out over AOL on Valentine's Day, allowing recipients to e-mail a pair of dancing lips to a friend. It may not be time to blow taps for network television, but it would be a bad idea to stop making payments on the life insurance.

What to do? In this column, we have been at pains to ponder the cannibalization dilemma. The large network audience may be a wasting asset, but it's still an asset.

In a stroke of perhaps accidental genius almost two years ago, Mr. Karmazin hit upon a solution when he bought equity stakes in two Web properties, Marketwatch.com and Sportsline, and paid with commercial airtime on CBS instead of cash. The sites were rebranded with the CBS logo, and, thanks to the network's promotional efforts, both have climbed the ranks of the most-visited sites on the Web. CBS's stakes are now worth over $400 million.

In effect, Mr. Karmazin was cashing out of CBS's television audience for a piece of the Web audience of the future.

And he has kept doing it. In April, he doled out $200 million in "branding and promotional time" (as the inevitable CBS press release puts it) for a stakes in Hollywood.com and storerunner.com (an online mall), plus another $42 million for a piece of Office.com (a small-business site).

After this spasm, he rested for a few weeks, then dished up $472 million in promotional consideration for stakes in Medscape.com, Rx.com, Wrenchhead.com ("a site for automotive enthusiasts"), Jobs.com, ThirdAge.com (a baby-boomer site), and switchboard.com, (a directory of names, addresses, phone numbers and maps).

This is a performance that shames many old media companies, which had the same opportunities and waved them off out of nervousness. But that's par for the course. Fortune favors the non-chicken.

The proper way to think of any business is that all assets are liquid if you have enough imagination. Barry Diller tried and failed to exchange shares in his old media empire, which includes the USA Network and other cable stations, for control of the popular Lycos site. Lycos's shareholders balked at giving up their undiluted Web dreams for something with too much of the past stirred in.

Mr. Karmazin found a nifty way around this problem of the, ahem, unique valuations accorded to Web properties, which makes them too expensive to acquire with cash or the shares of old-style industries. Remember that all the money flowing into Internet IPOs the last two years has been flowing right back out into advertising anyway. Mr. Karmazin merely cut the IPO bankers out of their fees, exchanging air time directly for an ownership stake in selected Web sites. -- Business World, Holman W. Jenkins Jr.

~Gary Rust is president of Rust Communications, which owns the Southeast Missourian and other newspapers.