Tilting at Windmills.

• Author: PETERS, CHARLES

The Misery of Coach * Cell-Phone Dementia * Equal Protection for Republicans Recession Hype * Greenspan's Desertion * Sweet Briar Beats Yale

THE CORPORATE LEADERS WHO ARE always telling the rest of us about the beauty of a market economy often prove unwilling to meet market tests themselves. If their business is in trouble, they'll request a government bailout. If they run a sports franchise, they'll ask the taxpayers to build a stadium. If they can get away with preventing a free market so that they can enjoy the fruits of monopoly power, they will do so, and like Microsoft, keep fighting in the courts for the right to continue doing so.

The latest revelation of how business minds really work is what's known as "the rescission of exercised stock options" If those words puzzle you, they did me too--that is, until they were explained by Floyd Norris of The New York Times. Stock options are offered to corporate managers on the theory that if the managers are successful enough to raise the price of the stock, they should be able to profit from it. But last year, when a lot of stocks didn't rise (m fact, a lot actually fell), many of the managers who had exercised their options by purchasing stock then arranged to cancel the deal retroactively. In other words, they wanted a sure thing. As long as the stock went up, they would keep it and profit. If it went down, they wouldn't lose, even though their fellow shareholders suffered losses. Not only could the other shareholders not cancel their purchases, Norris reports, but even some lower-ranking employees of the privileged managers' companies were not allowed to rescind.

THERE IS ONE LEGITIMATE LEGAL argument to justify government aid to religious--or, as W. prefers-- "faith-based institutions." It is that the Establishment Clause of the First Amendment was not intended to for- bid government help to religion but to forbid government from singling out an individual religion or religion generally for help or harm. Aid to religious charities or religious schools can be justified as part of a program of aid to all charities or all schools, or to categories of schools and charities not defined by religion. The "wall of separation," a phrase used not in the Constitution but in one of Thomas Jefferson's personal letters, does not exist. If it did, how could fire departments put out fires in church buildings? The point is that the fire department does not single out churches for help or harm. It puts out fires in all buildings.

But here comes the catch for churches. If other buildings are taxed, why shouldn't churches be taxed? Otherwise we are singling out churches for a favor we don't give other building owners. Why shouldn't churches pay for the public services they receive just like the rest of us? Thus, while there may be a good case for Bush's programs' constitutionality, the same case can be made for taxing church property, and I suspect faith-based institutions wouldn't like that at all.

TO W.'s CREDIT, HIS TOP PEOPLE are all able. Like everyone else, I've always admired Colin Powell. I have known Dick Cheney for 20 years, and I have immense regard for his competence and reasonableness. After my first encounter with Paul O'Neill a couple of years ago, I wrote an item in this column hailing him as a potential future president. (The reason I was so taken with him was that he was the first corporate executive I've heard boast as much about improving worker safety as he did about improving profits.)

All three men have experience in the federal government--many people don't know that O'Neill worked at the Veteran's Administration and the OMB during the 1970s--so they know the buttons to push to get things done. What worries me, however, is the policies for which they are going to push those buttons. Are they going to give the lobbyists what they want? "Industry groups are lining up to make their case to the new Bush administration that rules they don't like should be killed," reports The Washington Post. A Wall Street Journal headline reads, "Bush Tax Cuts Send Corporate Lobbyists Into A Feeding Frenzy."

O'Neill, in a February press conference, reminded me of one of those country-club Republicans when he said, "Democrats think that everyone should have the same amount of income" I don't know a...