The Michigan Daily-Saturday, November 17, 1979-Page 3

ANNUAL REPOR T FORECASTS HIGH UNEMPL 0 YMENT

Recession to hit state hard,

'U' economists predict

By MARK PARRENT
Michigan will be harder hit economi-
cally than the rest of the nation in 1980,
University economic forecasters con-
cluded yesterday at the Rackham Am-
phitheater.
After releasing 'their national
forecast Thursday, University
President-designate and Economics
Prof. Harold Shapiro, Economics Dept.
Chairman Saul Hymans, and Research
Associate Joan Crary reported their
annual state forecast yesterday at the

final day of the 27th annual Conference
on the Economic Outlook.
THE FORECAST calls for roughly
similar national and state inflation
rates-approximately 11 per cent as
measured by the Consumer Price Index
of common household goods and ser-
vices. But Michigan's' unemployment
rate for 1980 is expected to rise two per-
centage points to reach a 1980 average
of 10 per cent, a full three points higher
than the national forecasted unem-
ployment rate.
The economists said the 1980

Michigan recession could be described
as being one-half to two-thirds as
severe as the 1974-75 economic
slowdown, when the unemployment
rate averaged 12.4 per cent.
The increasing unemployment rate
can be attributed primarily to a loss in
manufacturing jobs, although the num-
ber of non-manufacturing jobs in the
state is expected to rise slightly, the
economists said. All told, the three
forecasters predict a 1980 net loss of
56,000 jobs in Michigan.
AFTER TH E 1974-75 economic

crisis-the roughest to hit Michigan in
many years-the economy recovered
rather sharply. But the economists said
1981 promises only "lethargic"
recovery, thanks in part to expected
tight money policies of the federal
government.
Such policies are designed to limit the
money supply-and hopefully in-
flation-by keeping interest rates high.
But high interest rates also make
economic expansion difficult.
A major reason for the increased

recessionary effect on Michigan is the
high concentration of the volatile
automobile industry in the state, accor-
ding to the report.
CAR SALES will reach a 1980 level of
9.5 million, down from a 10.7 million
1979 rate and 11.3 million in 1978, accor-
ding to the forecasting team.
Continued oil price increaes will play
a key role in the automobile sales
slump, the economists reported in the
lengthy state forecast.
The state's tax revenue increases are
also forecast to be lower than in recent
years, but Hymans, who presented the
forecast to the conference audience,
said the state "rainy day" contingency
fund should be able to provide as much
as $270 million in relief.

IN THEIR predictions, the
economists assumed that neither the:
ailing Chrysler Corp. nor any other'
major state business enterprise would
experience a demise in 1980.
Also assumed was a delay of Social
Security tax increases and no election
year tax cuts.
The eighth annual state forecast was
compiled using a complex econometric,:
model in much the same manner as the:
widely-respected national forecast.
In recent years, however, the
national forecast has been more ac-
curate than the state predictions. The
three economists say one reason is that
more complete statistics are available
on the national level.

Mass. Sen. Tsongas urges 'U'to divest

By NICK KATSARELAS
US. Sen. Paul Tsongas (D-Mass.)
said yesterday the Regents' position on
South Africa is "unsatisfactory," and
called on the University to lead the way
to ending apartheid through divestment
in firms which do business in South
Africa,

"I'm here to ask the University to
take a leadership role in defying what
the U.S. believes vis-a-vis South
Africa," he said to about 75 people in an
informal discussion at Rackham Am-
phitheater. The University Committee
on Southern Africa sponsored Tsongas'
discussion, which was entitled "The
American Presence in Southern
Africa."
"You (the University) can play a
pivotal role in the midwest, like Har-
vard can in the East," the first term
Congressman explained. "I don't think
anything serious is going todhappen in
this area unless you people go first."
TSONGAS ADVOCATED a "five-
year controlled divestment" plan. He
said those who hold stock in cor-
porations doing business in South
Africa should divest 20 per cent of their
stock per year until the South African
government institutes majority rule.
He acknowledged the possibility that
countries like France and West Ger-
many would probably bu'y up any
available stock, thus negating any ef-

fect the divestment move might have
wrought. But he emphasized divest-
ment must continue on moral grounds.
"I think the University has a unique
responsibility in maintaining a moral
highground in Soutp Africa," he ex-
plained. Tsongas added that "if I can't
get the University of Michigan to adopt
a morally defensible position of South
Africa, then we got problems."
TSONGAS PRAISED the Carter ad-
ministration for its concern about apar-
theidaand the conditions in South
Africaa.
"Carter is the first president to take a
progressive stance on the apartheid
issue," he said, claiming the Ford ad-
ministration's attitude toward South
Africa was that "it didn't matter."
Tsongas added that former United
States Ambassador Andrew Young was
instrumental in forming the first
progressive policy toward South Africa.
THE FRESHMAN senator said one of
the next moves in ending apartheid in
South Africa is "to appeal all those laws
which support segregationist policies."
Tsongas explained the Sullivan Prin-
ciples don't go far enough in forcing an
end to apartheid. The Regents have
adopted the principles, which call for an-
ti-discriminatory policies toward
blacks in South Africa.

"The Sullivan Principles are refuge
acceptable only to those who don't know
anything about South Africa," he said.
The Massachusetts Democrat also
expressed concern about student
apathy. "I would have anticipated a far
stronger student interest in this issue,"
said Tsongas. "I would just hope and
advocate that students spend their time
and energy on some issue," rather than
remaining apathetic, he explained.
State Rep. Perry Bullard (D-Ann Ar-
bor) spoke briefly after Tsongas'
discussion.He said he iseready to in-
troduce to the state House a package of
seven bills which would prohibit all
Michigan public funds from being in-
vested in corporations doing business in
South Africa.

Join The Daily Editorial Staff!
ars urltlike tey al o
a restaurant llike they all should be

Tso 'gas
.calls for 'U' divestment

ENERGY.
We can't
afford to
waste it.

'U' prof questions
Carter solar policy
By LEE KATTERMAN

I

A University professor yesterday ex-
pressed serious doubts that the solar
portion of President Carter's energy"
program can be successful.
- In a lecture to about 50 nuclear
engineering students and faculty,
Mechanical Engineering Prof. John
Clark said the United States "probably
doesn't have the resources" to reach
the president's goal of 20 per cent, solar
generation by the year 2000.
"Someone ought to rethink that
figure," said Clark.
To reach these goals, Clark said the
U.S. would have to increase its yearly
production of energy from solar sour-
ces at least 25 fold.
"WITHOUT MORE determined
federal and state encouragement, I'm
not optimistic about reching five per
cent of our energy needs with solar
power," said Clark..
He said he believes the U.S. cannot
leave stimulation of solar industries to
narket forces. Solar generation is still
two or three times as expensive as
energy from gas or oil, despite the large
increases in the cost of these fuels over
the past five years, he added.
"We must develop national goals, so
manufacturers know there will be a
market in the future," said Clark.
AT ONE TIME Clark did research in
the nuclear sciences, but while on a 1972

sabbatical in Berlin, he began to study
solar applications when he realized the
immensity of the energy problem in our
country.
Besides being clean, silent and abun-
dant, Clark said, solar energy is also
very dependable. He recently finished a
study to predict exactly how much
energy can be delivered from the sun
over a given time period using energy
levels recorded for the same period in
previous years.
The major shortcoming of solar
energy, according to Clark, is that an
enormous surface area is needed to
collect enough energy for any large
scale uses. But, large solar collectors
are also very expensive, he added.
Tax incentives, accompanied by a
large escalation in fuel prices over the
next 20 years, are required if solar
energy is to be economical, Clark said.
CLARK CALCULATES that for a
typical home hot water heater powered
by the sun to be a good investment, a
homeowner would have to borrow the
money for the system at an eight per
cent annual interest rate and hope that
oil prices go up ten per cent each year
for the next 20 years.
He notes that the successful introduc-
tion of solar technology during the next
decade will also depend on advances in
See PROF, Page 7

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Ann Arbor Film Co-op-The Chess Players, 7, 9 p.m., Angell Aud. A.
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