The Michigan Daily - Tuesday, March 4, 1986 - Page 3
'U' experts predict stronger U.S. economy
By PHILLIP LEVY
University economists last week predicted an
even stronger U.S. economy through 1987 than
they had previously forseen, basing their new op-
timism on an unexpected drop in world oil prices.
The Research Seminar in Quantitative
Economics (RSQE), a group of University resear-
chers who use models to forecast economic per-
formance, released a report forseeing steady im-
provement in the growth rates of key econimic in-
dicators, such as Gross National Product (GNP),
unemployment, inflation, and auto sales.
THE REPORT revised the council's earlier
prediction last year that economic growth would
prove more moderate. This forecast had been
based on an assumption that oil prices would stay
at around $32 a barrel.
In recent weeks, however, the price of crude oil
has dropped to $16 a barrel, as the Organization
for Petroleum Exporting Countries (OPEC) has
increased production to gain a larger share of the
world oil market.
This unexpected price plunge alone, the RSQE
predicts, will bring in 1986 a 1 percent GNP in-
crease, a .25 percent drop in the unemployment
rate, and a lower inflation rate.
OVERALL then, economic growth will make
even more sizeable gains highlighted by a 4 per-
cent annual growth in the GNP by 1987. RSQE also
forsees increased purchasing power, higher cor-
porate profits, lower interest rates, and
decreasing budget deficits in the United States.
The RSQE figures are the result of an economic
model that developed over a 30-year period, called
the Michigan Quarterly Econometric Model
(MQEM( of the U.S. economy. Since producing
the model, University economists have tried to
improve it and have used it to forecast the
behavior of the U.S. economy.
The MQEM consists of 125-150 equations that
statistically describe different sectors of the
economy, such as consumption, investment, and
government spending. Hymans said that most
models of the economy work on the same basic
principles; they differ only in the number of
equations, which range from 50 to 1000.
HYMAN said the drop in oil prices will improve
the economy through its lowering the prices of oil-
based goods such as gasoliae, home and factory
heating fuels, and plastic goods that are oil-based.
Most of these goods, Hymans said, have
inelastic demands. This means that whentheir
prices drop, consumers will still want about the
same amount as before the price change. This will
result in the consumers having money left over to
spend on other things, which will then stimulate
the economy.
Most economists believe in the existence of a
"natural" rate of unemployment. When the
unemployment rate drops below this level, they
believe accelerating inflation will result. Hyman
said the best estimates he's seen say that the
"natural" rate of unemployment is about 6 per-
cent. If RSQE's forecasts are correct, Hymans
concluded, the unemployment rate is getting to
the point where you have to be careful."
As far as budget deficits go, RSQE assumes that
the Gramm-Rudman-Hollings deficit cutting
targets will be met, and it expects the oil price
change to cushion the impact of budget cuts. Last
week's report predicted that the fiscal 1987 budget
deficit would decrease by $12 billion because of
America's new economic activity. Hymans also
said the oil price drop will help make up for the
depressing effects of budget cuts on the economy.
State charges MSU office with sex discrimination
LANSING, (UPI) - The Michigan stems from unsuccessful efforts to than men performing comparable or ton and all other female extension
Department of Civil Rights has conciliate the complaint of Kathleen identical jobs" and has "condoned agents for the difference between
I charged Michigan State University's Burton, who worked for the service and ratified sexist statements." their wages and benefits and those
Cooperative Extension Service in for 12 years. A publid hearing will be scheduled. paid to men. The damages would be
Wayne County with unlawful sex The civil rights department said the If found guilty, the extension service paid with interest, the department
discrimination. extension service "has consistently may be required to compensate Bur- said.
The Charge announced yesterday paid women extension agents less
Commission advocates drug tests in workplace
Daily Photo by JOHN MUNSON
Rackham Student Government President Dean Baker listens to
discussion of disputed ballots at last night's RSG meeting.
RSG accepts 19 ballots
(Continued from Page 1)
From AP and UPI
WASHINGTON - Drug trafficking
is organized crime's most lucrative
enterprise and constitutes a national
emergency that should be met with
workplace drug testing and
aggressive intervention by the U.S.
military, a presidential panel con-
cluded yesterday.
In a report to President Reagan, the
Commission on Organized Crime said
law enforcement agencies are able to
do little more than hold the line again-
st illicit narcotics traffic generating
an estimated $110 billion a year.
THE solution is to bolster police in-
i
I
1
What's happening
around Ann Arbor
terception of narcotics with anti-drug
programs aimed at reducing the
demand for illicit substances, the
report said.
It added that the U.S. drug problem
has become a threat to national
security and justifies drastic
measures such as drug testing in the
workplace.
"No attempt to eliminate organized
crime from this country can possibly
be complete without a concerted
nationwide campaign to reduce the
demand for narcotics in the United
States," the commission's chairman,
2nd U.S. Circuit Court of Appeals
Judge Irving Kaufman, said in a
statement. "The gaps that now exist
between strategists who seek to
reduce supply and planners who want
to reduce demand must be closed."
CALLING drug trafficking and
abuse "the most serious organized
crime problems in America today,"
the report says the president should
direct all federal agencies to for-
mulate "immediately clear policy
statements, with implementing
guidelines, including suitable drug
testing programs."
The study says government contrac-
ts should not be awarded to com-
panies that fail to implement drug
testing programs. There are some 2.7
million civilian federal employees
and 1.7 million in the military.
In addition, the federal government
does business with some 15,000 com-
panies employing 23 million workers.
AT A NEWS briefing, the com-
mission's deputy director, Rodney
Smith, stopped short of saying that all
working Americans should undergo
drug testing, but added, "We are
saying to every employer in the nation
that 'you should consider the
suitability of drug testing.' "
Smith acknowledged that the tests
are not 100 percent accurate and that
there was conceren among com-
mission members about employees
unfairly losing their jobs as a result.
But he said drug testing technology
can be improved and that losing a job
unfairly "is one small issue in a much
larger issue.
The study says the U.S. military
should adopt a broader view of what
constitutes a threat to national
security and that the Defense Depar-
tment should consider expanding
Navy assistance to Coast Guard in-
terdiction operations.
THE REPORT pointed to the
testimony of a recently slain infor-
mer, pilot Adler Barriman Seal, who
reported that Nicaragua, with the ap-
parent blessing of the Sandinistas
government, is being used as a tran-
sshipment point for cocaine between
Colombia and the United States.
The study also says the United
States should pursue through
diplomatic channels an agreement so
U.S. Customs agents can pursue
suspected airborne drug traffickers
into airspace over Mexico.
Only the part accepting ballots that
were signed but did not contain ID
numbers were passed, allowing one
ballot to become valid but
disqualifying the other nine.
Six ballots were originally disputed
because the names of the voters did
not appear on Rackham School
registration sheets. After a cross-
check, five of the voters were found to
have been late registrants and their
votes were validated. One voter who
was not a registered student, was
disqualified.
Eight people who voted for their
division representatives also voted in
other divisions, whereas the ballot
stated that students could vote for
representatives only in. their
divisions. RSG decided to accept the
votes for candidates in the proper
divisions.
FIVE of ten other ballots on which
voters just omitted their division
numbers were also accepted.
With the addition of the disputed
votes, RSG released an official vote
count. In the presidential race, in-
cumbent Dean Baker received 147
votes, and challenger Peggy Kuhn
received 76. Lee had 153 votes in the
vice-presidential race compared to
challenger Bart Edes' 73.
The defeated candidates, who are
ideologically more conservative than
the current RSG members, will con-
tinue their involvement with RSG.
Edes took the position of Rackham
student representative to the Task
Force on Graduate Student Financial
Aid and said that Kuhn is probably in-
terested in taking a spot on one of
RSG's standing committees. Eric
Norenberg, an Institute of Public
Policy student like Kuhn and Edes,
also voiced interest in serving on
some of the RSG committees.
Resolving future ballot disputes
may prove difficult for RSG. Bylaws
define the election procedure and to
change them would require a referen-
dum voted on by all Rackham studen-
ts. RSG does not favor holding
another election, given low voter par-
ticipation in last month's election.
Lee said a possible solution might be
to change the format of the actual
ballots, but no RSG members have
submitted formal proposals to change
the ballots or the bylaws.
k
n.
S
Campus Cinema
The Incas (1980), ARCH, 7:30 p.m.,
Angell Aud. A.
An archaelogists' view of the
,Peruvian Incas' culture, this
documentary seeks to solve the
mysteries of this prehistoric culture.
Streetwise (1985), MTF, 8 p.m.,
Michigan Theater.
A probing documentary that
revolves around street life and big-
city youth.
Performances
Concert of the Month - Michigan
Union Arts Programs, 8 p.m., Pen-
dleton Room, Michigan Union, (764-
6498).
University doctoral piano student
Sharon Kleinhuizen will perform
works by Beethoven and Scarlatti.
Bars and Clubs
Bird of Paradise (662-8310) - Bill
Heid Trio, beebop and blues.
The Blind Pig (996-8555) - Circle
Confusion, techno-pop dance sounds.
The Earle (994-0211) - Larry
Manderville, solo piano.
Mr. Flood's Party (995-2132)-
Willy DeYoung Blues Band.
Mountain Jack's (665-1133) -
Billy Alberts, easy listening.
The Nectarine Ballroom(994-5436)
- High Energy Dance Music, DJ
Roger LeLievre.
Rick's American Cafe (996-2747)
- Al Hill and the Headlights.
U-Club(763-2236) - Reggae Dance
Party, DJ Tom Simonian.
Speakers
C. Patrick Babcock - "In-
stitutional Care of the Mentally
Ill,"Friends of Mental Health, 7:30
p.m., basement meeting room,
Public Library.
Paul L. Heller - "Sediment
Response to Tectonic Rotation in the
Pacific Northwest," Geology, 4
p.m., 4001 C.C. Little.
Michael Cullinane - "Analysis of
the Philippines Election,"
Ecumenical Campus Center/Inter-
national Center, noon, 603 E.
Madison.
History of Jazz Lecture Series -
Eclipse Jazz, 7:30 p.m., Welker
Room, Union.
Ronald Bishop, Nancy Bishop -
"Teaching Medical Students in Nor-
thern China," Science Research
Club, 7:30 p.m., Chrysler
Auditorium.
Williiam Burkel - "Endothelial
Cell Linings in Vascular
Prostheses," Science Research
Club, 7:30 p.m., Chrysler
Auditorium.
Robert Ross - "Sino-Vietnamese
Relations: The View From Hanoi
and Beijing," Chinese Studies, noon,
Commons Room, Lane Hall.
Nancy Cantor - "Questions An-
swered and Unanswered by
Biological Accounts of Personality,"
Psychobiology, 12:30 p.m., 4054
KHRI
Alfred Storey - "Speaking
Skills," CRLT, 3:30 p.m., 109 E.
Madison.
Eric Topol - "Heart
Catherization, Angioplasty and
TPA." Cardiac Rehabilitation, 7
p.m., D229, level B-1, new Hospital
Steven Goldstein - "Artificial
Joints," 3:45 p.m., 1017 Dow Bldg.
Meetings
Action Against AIDS - 7 p.m.,
main floor, League.
Science Research Club - 7:30
p.m., Chrysler Auditorium.
Aikido Club - 5 p.m., Wrestling
Room, IMSB.
Furthermore
Introduction to Tell-A-Graph -
Computing Center course, 7 p.m.,
1013 NUBS.
Women's Tennis - Calvin College,
4 p.m., Track & Tennins Bldg.
Team Building for Managers and
Supervisors - HRD Workshop, 1
p.m., HRD.
Supervision, Part IV, the
Discipline Process - HRD
workshop, 8:30 a.m., HRD.
Weekly Praise and Message -
Christians in Action, 8:30 p.m..,
Union.
-Boticelli Game Players - Noon,
Rm 1, League.
Glamour's Competitive Edge '86
Seminar-6:30 p.m., Jacobson's.
MCAT STUDENTS -
Don't waif until the
Fall EXAM to
EXCEL on the MCAT
Huron parking plan
defeated by council
EXnEL
Test Preparation
1100 S. University
996-1500
L' 'I
(Continued from Page 1)
convince me," said Epton. "We need
to know if we will get what we were
presented."
Developers have promised 400 jobs
at the center, but Epton said most of
those jobs will be in retail and food
service. Those jobs do not pay well
enough to allow workers to live in Ann
Arbor, he said.
Another potential problem coun-
cilmembers considered is traffic flow.
When the center was originally
scheduled for construction, there
were two other projects in that area
being built - One North Main and a
parking structure at Ann and Ashley.
The city council brought up the
question whether Ann Arbor needs a
convention center at all.
"Ann Arbor is a nice place to live,
but we are not competitive with other
cities," Epton said. "I don't believe
that people are foaming at their
mouths to attend a convention in Ann
Arbor."
"People have not convinced me that
center will work," he said.
But some council- member
disagree.
James Blow (R-Second Ward) sai
"I think the plaza as a whole w:
provide 400 new jobs, over $1 milli
in takes and bring more peoplet
town."
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