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November 22, 1981 - Image 1

Resource type:
The Michigan Daily, 1981-11-22

Disclaimer: Computer generated plain text may have errors. Read more about this.

Forecast numbers don't a

Making economic forecasts is a lot
like making weather predictions:
sometimes you win, sometimes you
And some economics professors joke
about the seemingly arbitrary nature of
economic analysis; if you want to avoid
a roadblock, just assume it away.
OF COURSE, there is a lot more to
economic theory than that. A number
of economists disagree with basic prin-
ciples of the econometric model used by
University researchers for their annual
"U.S. Economic Outlook." But the
model used for these forecasts (the 1982
version was revealed Thursday and
Friday) is not simply a set of complex
equations, arbitrarily thrown together to
reach some kind of conclusion.
The Michigan Quarterly
Econometric Model of the United States"
consists of sets of equations, based on
historical evidence, that try to sum-
marize how people behave in the
market. Developed 29 years ago, it

earned then-University Professor
Lawrence Klein a Nobel Prize for the
impact it had on economic predictions.
And, just as the economy has had its
good years and its bad years, the
predictions coming out of Ann Arbor
have enjoyed striking success as well
as miserable failure. They have been
"very accurate and not so accurate"
over the years, said University
economist Saul Hymans in 1977-a year
in which the forecasted growth in real
Gross National Product was off by
nearly 13 percent.
PART OF THE problem with
economic predictions, said Harold
Shapiro, economist and University
president, is that all forecasts are con-
ditional. "Taking, the extreme exam-
ple, you assume a' major war will not'
break out, or there won't be a great
flood," he said.
This inevitable "assuming away" of
such catastrophes is fine, until one of
them occurs. Take 1974, for example.
The preceding year's prediction of a
19.3 percent growth in GNP met with

an actual growth of minus 18 pe
An oil embargo will do it everytin
The researchers' U.S.
outlook for 1975, meanwhile, wa
tle closer to the mark. Agai
forecast overestimated eco
growth, predicting minus 9.4 pe
the actual growth in GNP was
24.5 percent.
SINCE THOSE two unfor
years, however, the economist,
consistently underestimate(
economy's ability to grow. Al
their GNP growth prediction
the observed growth by 13 per
1977, it was off by only 1.3 per
1980, and by a mere 0.3 percent in
Market reactions to the pred
also cause problems that mayl
"If someone looks at our fore
Washington today and they say,
don't like the implications of tha
then they make a major policy c
there's no question that that
make the forecast wrong," exp
Shapiro, a major contributor

add up
scent. University's annual prediction.
ne. "THAT IMPLIES a degree of impor-
tance that I may aspire to, but is
s a lit- somewhat doubtful," he laughed. Only
n, the if a study'is backed up by similar
nomic results from other sources will its
ercent; results have such an impact, he said.
minus "If macro modelers could actually
predict what would happen to some key
tunate variables, such as the interest 'rate,
s have they could easily get rich," said George
I the Johnson, University economics
though professor and researcher at the In-
missed stitute of Public Policy Studies. "But in
cent in the process of getting rich, they would
cent in alter the economy such that their
1976. predictions were wrong."
ictions Actually, Johnson continued -
lead to pausing briefly for a humorous aside
about thepossibility of being taken to the
cast in woodshed by Shapiro - there is con-
'Hey, I siderable skepticism among economists
t,' and about the ability for forecasts such as
hange, the Michigan model to forecast future
could developments.
plained See ECONOMISTS, Page 5
A.^ 41'-^

Harold Shapiro

Ninety-Two Years _ igrn i' gWARMER
Of IF Mostly sunny Sunday with
4 ~Editorial Freedom tI ihna 0
Vol. XCI, No. 64 Copyright 1981, The Michigan Daily Ann Arbor, Michigan-Sunday, November 22, 1981 Ten Cents Ten Pages
SU uts Blue in,'Bonnet Bow
'4 "'Buckeyes upset
Wolverines, 14-9
By DREW SHARP drives on us. Other than that, they
m- ~ Michigan's Rose Bowl aspirations didn't do anything. We shouldn't have
...'\, awere finally laid to rest yesterday at lost. This is one game we should have
Michigan Stadium. won.
Foiled by a .relentless Ohio State AT THE OUTSET, it looked as though
defense the sixth-ranked Wolverines Michigan would live up to its eight-point
,!5.ef ~fell to the Buckeyes, 14-9. The loss det- favorite role. Anthony Carter took Bob
oured Michigan's post-season plans to Atha's opening kickoff and streaked 52
aim* <Houston and the Bluebonnet Bowl yards downfield just steps away from
where it will face UCLA on December breaking for a touchdown. Quarter-
f1. back Steve Smith then drove the
THE WOLVERINES gained more Wolverines down to the Buckeye 25-
yardage than the Bucks, 367 to 257, but yard line when he missed tight end
they could not convert the big play. The Craig Dunaway with a pass, and in-
t n&}ET Ohio State defense stopped Michigan stead found Ohio State rover Doug Hill.
four times inside the Buckeye 15-yard The Bucks' first possession was
line, forcing the Wolverines to settle for stalled in three plays, and they were
three Ali Haji-Sheikh field goals to get forced to punt. Carter took the kick and
on the scoreboard. rambled upfield for 19 yards, giving the
Ohio State quarterback Art Schlic- Wolverines excellent field position at
};, -'ter's six-yard dance into the end zone, the Buckeye 29-yard line.
s3 >t .,one of two TD's for the game, with 2:50 But this was where the Ohio State
- a, remaining, gave the Buckeyes the vic- defense made its first stand, stopping
' ..tory, marking the fourth consecutive Michigan three times inside its four-
year the visiting team has come out on yard line. Haji-Sheik' delivered a 19-
top in this annual showdown. yard chip shot to give the Wolverines an
"In this game, we simply squandered early 3-0 advantage, but the Buckeyes
"°"wt R. a'.k opportunities," said a disappointed Bo defense gained confidence with the
Schembechler afterwards. "This is display.
Dail Pjust like the other games we've lost. We "THE SECOND time they came close
Daly Photo by BRIAN AASCK just haven't been doing a good job of- to scoring, we' told ourselves that they
A HERD OF Ohio State Buckeyes swarm over Wolverine fullback Stan Edwards. Ohio State crushed the Wolverines' Rose Bowl hopes, sending Michigan fensively. We played hard and the were not going into the end zone," said
to the Bluebonnet Bowl in Houston Dec.31 instead. defense played well. They only had two See BUCKEYES, Page 9

Spy incidents
report~ed on
U.S. campuses

While administrators and students at
the University debate the appropriate
response to alleged Taiwanese spying
activities on campus, reports of similar
foreign intelligence activities have sur-
faced on other college campuses across
the country.
At the University of Minnesota in
Minneapolis, Iranian students who op-
pose the Khomeini government claim
that a pro-Khomeini campus group, the
Moslem Student Association, is repor-
ting their political activities back to
Tehran. The Minnesota Daily, the cam-
pus newspaper, has carried two front-
page stories on the alleged spying and
reported that similar incidents have
cropped up at San Diego State Univer-
AT MICHIGAN State University in
East Lansing, Peggy Miller, an advisor
at MSU's International Center, said a
number of partisan signs had been

posted around campus and that articles
in the MSU newspaper, the State News,
had made campus spying "sort of an
issue." A reporter from the State News
had received threatening phone calls
after writing news stories on alleged
spying by Taiwanese agents.
At the University of Kansas in
Lawrence; Chancellor Gene Budig an-
nounced that the university "will not
tolerate any actions, by any individual,
which have the effect of eroding the
academic freedom of another in-
HERE AT THE University, the
foreign spying issue was raised last
summer when a former University
student, Chen Wen-Chen, was found
dead in July while visiting his relatives
'in Taiwan. His death led a number of
Taiwanese students and staff members
to allege that their fellow students were
reporting their supposedly anti-gover-
nment activities back to Tapei and that

Chen was murdered by the Tapei
government for his dissent in the
United States.
Yet, officials in Ann Arbor, unlike
those at some other universities, have
been reluctant to take action on the
allegations. "The University cannot,
should not, and will not act solely on
anonymous charges," University.
President Harold Shapiro said in an in-
terview last July.
But because the students often fear
for the well being of 'their families in
their native countries, they rarely
agree to testify publicly about the
alleged spying.
"Everybody likes a witness, you see,
that's the problem," according to
Joseph Mestenhauser, the director of
the University of Minnesota Inter-
national Center. The Minneapolis
university has been conducting an
ongoing inquiry with the Ministry of
Foreign Affairs in Taiwan, about the

imprisonment of Minnesota alumnus
Rita Yeh, who was convicted last
January to 14 years in a, Taiwanese
AT CARNEGIE-Mellon University in
Pittsburgh, where Chen was an
assistant statistics professor at the
time of his death, university President
Richard Cyert established a 24-hour
"harassment hotline" to deal with what
he claims is the common problem of
foreign students spying on their coun-
This hotline coupled with a faculty ad
hoc committee on the matter and
Cyert's frequently professed views that
such spying will not be tolerated
"makes everyone (on campus) aware
that there is a control" against in-
telligence operations conducted against
students. Cyert added, "I do think
there is less activity as a result."
See SPIES, Page 3

Promises, promises
IT IS ONCE AGAIN the time of year for campaign
promises, handshakes, and elections. The annual
LSA-Student Government elections will be held
tomorrow and Tuesday and 50 students are vying for
the 15 seats on the council. Four campus political parties
are running slates of candidates and five students are cam-
paigning as independents. LSA-SG election officials will be
staffing polls at the UGLI, the Union, the Fishbowl, and at
most dormitories for most of the day Monday and Tuesday.

December. And merchants along the S. University St.
shopping strip, anxious to be finished with the
Thanksgiving holiday in which turkeys and cranberries are
the only fast-setling items, erected the usual plastic green
and red streetlight decorations more than a week ago. The
first reported sighting of a seasonal TV commercial was
one giving a pitch for mistletoe and Minute Maid orange
juice (it was sadly not the traditional Santa Claus riding the
electric Norelco razor down the snow-covered slopes). San-
ta Claus in fact has already arrived in Ann Arbor and plans
on making several more visits here before the Big Day.
Santa was at Arborland Shopping Center on Washtenaw
Ave. yesterday and will be there again today.. The om-
icinftawill not ann-ar at ri nr;nn all n

musician, charmed the highbrow set when his band was
guest artist with the Nashville Symphony Orchestra in a
benefit performance. Daniels had the crowd standing,
stomping, and clapping wildly when his 60 minutes of down-
home music was over Thursday night. Backed by the 65-
piece symphony orchestra, Daniels and his five-member
band played at the Grand Ole Opry House. The group,
whose sound is a hybrid of many musical styles but cer-
tainly not classical, played all its well-known hits, including
"The Devil Went Down to Georgia," "The South's Gonna
Do It Again," "Long-Haired Country Boy," and "In
America." The unusual pairing attracted a curious mixture
of 3,800 symphony patrons and Charlie Daniels fans, raising
an estimate$ 500on0 for the financially straned symnhonv.

family," explained the new Mrs. Wassel. "And we wanted
our family and friends with us when we tied the knot."
when the couple approached K mart Store Manager Gloria
Varga with the idea, she thought they were kidding.
Assistant Store Manager Bill Throne gave the bride away
and store employees Mike McGuigan and Norma Elston
were the best man and maid of honor. Cafeteria personnel
provided refreshments, the camera section sent a
photographer, home improvements set up tables, and the
appliance section loaned a stereo. Karen Mader, a notary
public and the wife of another store employee, performed
Friday's ceremony. "Some people may think we are
blooming idiots," Mrs. Wassel added, "but we wanted our
wedding to be snecial and different and we got both."

I i



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