There are a number of initiatives in state legislatures which promise to aid the current liability insur­ ance crunch. But a number of policy analysts are beginning to look outside of the United States for ideas on holding down today's hefty insurance costs. They are finding that a number of nations which share America's legal heritage have adopted more rational and cost­ effective approaches for reimbursing injured parties. One of the more dramatic examples is New Zealand. It has totally abolished personal injury lawsuits. All accident victims in that country have access to a national compensation system. It features a maximum lump sum pay­ ment of $8,500 with a current ceiling on lost wages of $350 a week.

Controls on the level and allocation of legal fees are also tools some nations use in controlling liability insurance costs. For example, both Australia and England discourage lawsuits by prohibiting attor­ neys from being paid a piece of the pie from jury awards. Others-­ such as Canada and India--make the losing party in a lawsuit pay the other parties' legal costs. The big difference between the U.S. legal system and most others is the size of our jury awards. And the road to rationality in liability reform is destined to deal with this key issue.

A MIXED BAG AT THE MILLS: Most of the nation's biggest· steel companies are negotiating individual settlements for the first time in nearly 30 years. Indeed, an unprecedented period of financial candor between management and labor in this embattled sector seems to be developing. Outfits that include National, Inland, Bethlehem, LTV and Armco have opened their books to the union. And both management and labor seem to be cooperating in a joint effort to lobby Washington for import controls. Alas, all is not bliss in the land of Big Steel. U.S. Steel, the industry's largest producer, appears on the brink of a thunderous collision with its union when its contract expires on August 1. The bottom line here is that the firm's traditional steelworkers are- incensed by the company's diversification into non-steel enterprises. They feel good plants are being allowed to go down the tubes while the company invests its money elsewhere. The company believes it must further cut its healthy labor costs to compete in the global market­ place. But unions are angry about what they feel has been company breaches of the current agreement. They vow no more concessions. U.S. Steel is building inventory in preparation of a long strike. This could be a case where strong emotions overcome economic logic.

VOTING WITH THE GAS PEDAL: Polls show that while Americans largely support the 55-mph speed limit, they are clearly voting otherwise with the gas pedal. Surveys also show that about 40% of drivers now rou­ tinely exceed the speed limit. Moreover, this number is destined to increase with the coming summer vacation season. Critics argue that the 55-mph limit raises travel times by more than 20% above the old 70-mph limit. Advocates of the existing law counter that it has saved about 4,000 lives each year, since its birth during the 1973-74 oil crisis. Their point is that "if it works, don't fix it." But opponents argue that about 90% of all fatalities occur off the interstates. Many states are simply enforcing the 55-mph near federal-highway-monitoring sensors. Indeed, several states--Arizona, Vermont and Maryland--are in danger of losing their share of the federal government's $3.8 billion in highway funds. Transportation Secretary Elizabeth Dole says they have consistently failed to keep at least 50% of their drivers from exceeding the 55- mph limit. The opposition to the law remains strongest in the Far West. Here it comes across as a needless inconvenience. Trying to legislate a uniform national driving speed in a country with highly diverse driving environments may not be realistic over the long haul. But for now, powerful consensus for change exists.

HOW TO INSPIRE INNOVATION: A successful manager is an innovative manager--one who inspires both productivity and creativity. Here's how to activate your organization's intrapreneur­ ial engine: (1) Challenge old assumptions. What's traditional may not be optimal. Open the search for alternatives. (2) Capture the "flash." Jot down fleeting thoughts or obser­ vations; they may only come once. (3) Dissect the sacred. Even the most firmly established procedure might--just might--be better done another way. Experiment by changing the sequence or by dividing it into smaller steps for closer scrutiny.(4) Reverse your logic. Imagine that the impossible or the impractical were true. This slant may bring surprising insights. (5) Switch strategies. If you keep striking out, change your batting stance. Remember, a near miss doesn't mean you're about to score. (6) Provide a structure. Help creative workers pinpoint their objectives. Set up communication channels and offer regular feedback. Know when--and how--to apply pressure effectively. (7) Defend your team. Give innovators as much leeway as possible, tolerating idiosyncrasies and failures. Protect them from the pointless criticism of unenlightened cohorts.

BUYING MORE, PAYING LESS: The cost of living dropped $4 per $1,000 in February. If this rate continued, the U.S. would witness 4.6% annual deflation. Unthinkable for survivors of the 70s' double-digit inflation. Of course, no one really expects prices to fall that much this year, but the joy ride--on a wave of imported oil--is probably far from over. With a ripple effect through the world's economy, plummeting oil prices are impacting nearly every­ one. Companies in the travel, transportation and shipping industries were first to catch the wave and pass the savings on to their customers. Producers of plastics and other oil­ based products were next. Look for cheaper prices at the pumps to help car sales, too, though they probably won't top January's dazzling figures. Falling oil prices should also stimulate industrial growth, sustaining the recovery and keeping unemployment low. And if mild inflation prompts the Fed to drop interest rates again, inflation could sink further still. The downfall of oil is a windfall for consumers, worth an estimated $40 billion over the coming months. (But we won't spend all of it; many Americans plan to increase their savings and investments.) Consumer confidence is up, too. Cheaper oil may even lead a few oil importing nations to ease trade barriers. Let's face it: Oil is one big domino.

FOREIGN COMPETITORS RIDE THE FAST HORSE: U.S. gifts of "high-tech" know-how to Japan are making us "uncompetitive," says Marvin J. Cetron, founder and president of Forecasting International. In his new book, The Future of American Business, Cetron predicts that a handful of up-and-coming global go-getters will rock U.S. industry. Leading the pack are South Korea, Singapore and Taiwan. Even Japan's aggressive trading may not be sufficient to ward off intensifying Pacific Rim competition. Already Korean companies have laid claim to large shares of U.S. markets for TVs, VCRs, personal computers and imported cars. Seoul's competitive strategies include: (1) lower costs, (2) longer warranties, and (3) better performance. Korea's potential Achilles' heel: political uncertainty…Cetron says U.S. productivity pales next to gains made by workers in the Far East. Excessive trade and federal budget deficits cripple us, he claims, as does the policy of retiring at 65. Cetron feels we should raise the age of entitlement to 73. Job growth lies in both high- and low­ tech service sectors--new-wave fields like information processing and hazardous waste dis­ posal, as well as traditional services such as banking, real estate and travel…Cetron calls himself neither an optimist nor a pessimist but a realist. He warns that foreign competition rides the fast horse…relying on market forces, creative research and relaxing U.S. government intervention to catch up.