The Michigan Daily - Tuesday, February 21, 1989 - Page 3 Fed pushes interest rates higher; economists fret WASHINGTON (AP) - Despite objections from President Bush, the Federal Reserve Board has forced in- terest rates higher in an inflation- fighting battle that some economists fear may wind up pushing the coun- try into a new recession. The Fed's credit tightening efforts have been blamed for sending a vari- ety fo interest rates, including mort- g ge rates and banks' prime lending rate higher. Federal Reserve Chairman Alan Greenspan and other Fed officials ar- gue that the central bank has no choice but to move to dampen de- mand in an effort to keep the aging recovery from over-heating. 'However, critics, including the new president, contend that the Fed is overreacting to inflationary fears. Some analysts believe if the central bank does not soon relent, it will topple the country into an economic downturn. Greenspan will get a chance to respond to the critics today when he presents his semi-annual report to Congress on monetary policy. The testimony, before the Senate Banking Committee, will come just one week after the Fed embarked on another round of credit-tightening following a government report that showed inflation at the wholesale level took an unexpectedly sharp jump in January, rising at an annual rate of 12.7 percent. ThetFed responded by pushing short term interest rates higher through a behind-the-scenes process that siphons off available bank re- serves. With the supply of money lower, the cost of that money interest rates increases. Banks on Feb. 10 hiked their prime lending rate, the benchmark rate for many business and consumer loans, to 11 percent, the highest the prime rate has been since the end of 1984. Mortgage rates have been climbing as well, with fixed-rate mortgage now averaging above 10.5 percent. The latest round of credit tighten- ing comes at a sensitive time for the new Bush administration. Higher in- terest rates boost the cost to the government of bailing out insolvent savings and loan associations, a cost already put at $126 billion over the next decade. The higher rates will also under- mine the new president's pledge to lower the budget deficit without rais- ing taxes because higher rates raise the cost of government borrowing to finance the debt. In the last downturn of 1981-82, then-Federal Reserve Chairman Paul Volcker pushed the prime rate up to a high of 21.5 percent and sent th country into its worse recession since the Great Depression as the Fed struggled to contain the country's steepest inflation since the Civil War. ELLEN LEVY/Daily Heavy duty Business Administration senior Rob Londeck lifts at the CCRB. LSA senior Mike Solomon assists him as a spotter. MCC requests more Study faults foreign assistance work study money programs, calls for alterations WASHINGTON (AP) - A gov- ernment report released yesterday calls for a "radical reshaping" of U.S. foreign assistance programs because. current aid concepts are based on a world that no longer exists. "The challenges of today's prob- lefns, and tomorrow's, cannot be met with yesterday's solutions, suitable as they may have been to yesterday's problems," said the report, issued by the head of the Agency for Interna- tional Development, Alan Woods. The 158-page study said the aid program no longer seems able to fulfill its original mandate of helping poor countries achieve the transition from dependency to self-sufficiency. One problem highlighted by the report is that "succeeding Congresses and administrations, prodded by the dominant crises and interest groups of the moment, have piled differing and often conflicting foreign assis- tance objectives on top of each other. A principle conclusion of the re- port calls for altering future assist- ance programs to face new realities and to complement the contributions to development of the U.S. private sector in providing humanitarian aid. This reshaping "must be an im- mediate concern and a major long- term national priority. Nothing less will serve the national interests of the United States," the report said. B-School project becomes reality; brings Mardi Gras flavors to town FY BRADLEY KEYWELL For those who missed the Mardi Pras celebration last week in New Orleans, and those who want to learn what Mardi Gras is about, John Vvanko's French Market Cafe has the 4nswer. The Cafe's "Mardi Gras Cel- bration," running until March 31, ipludes confetti, pinatas, and rag- time jazz. "The idea for the Cafe came from a trip I took to the actual Mardi Gras," said Ivanko, a University Business School graduate. "The New Orleans atmosphere is electric and exciting, and that's what I'm trying to recreate." The one-year anniversary of the French Market Cafe is being cele- brated this week in continuation of last week's national Mardi Gras cele- bration. Last year, Ivanko was assigned to create, develop and refine a business plan in the school's Retail Manage- ment 312 class. His "French Market Cafe" plan received an "A" and prompted his entry into the Ann Ar- bor business community. Taking his concept of a "New Orleans open-air cafe" to downtown restaurant owner David Kaplan, Ivanko persuaded Kaplan to convert his Kaplan's Cafe on Fourth and Liberty into The French Market. "I liked his ambition and drive. And I especially liked the concepts of beignets and cafe au lait," Kaplan said. Beignets and cafe au lait, both staples of the New Orleans restaurant scene, are the essence of his restau- rant plan. Beignets are French square dougnuts, and cafe au lait is a chicory blend of coffee and milk. "I saw an exciting opportunity to turn a 60-page paper into a real-life restaurant. It was a once-in-a-lifetime chance," Ivanko said. His entrepreneurial traits were en- couraged by B-School Professor Claude Martin, instructor of the retail management course. "Not many students are willing to risk the failure of starting their own business ventures," Martin said. "There is great safety in climbing the corporate ladder, yet those who are willing to risk their ideas should be encouraged to do so. John's experi- ence will open new doors, doors not available to corporate types." Kaplan is pleased with Ivanko's success, citing a tripling of sales and a new excitement at the restaurant. "Downtown businesspeople have shown a newfound affection for our New Orleans food and ambiance. It's a new concept in Ann Arbor." The restaurant is a ten minute walk from campus. This distance has frustrated Ivanko, but it has also worked as a motivational factor. He is currently looking to open a new restaurant on South University. THE DAILY CLASSIFIEDS ARE A GREAT WAY TO GET FAST RESULTS CALL 764-0557 BY STEPHEN SCHWEIGER Students must come first. This is the message that the Michigan Col- legiate Coalition is sending to the governor of the state of Michigan. MCC is demanding significant changes in the Michigan Work Study program, which helps financially needy students attend colleges and universities around the state. MCC is asking the governor to increase spending to double the number of students who benefit from the program. Richard Kennedy, the university's vice president of government rela- tions, said that "anything we can do to improve student aid aspects of higher education is a good idea." Paul Thompson, MCC member and law school student said, "There is a definite problem because the num- ber of students who are being helped by the program is low and the aver- age award is only $914 per academic year, which is not enough money." Currently, the Michigan Work Study program helps 6,000 students across the state to pay college tu- ,ition. The Michigan Work Study Program is a need based program which allows students to receive money by working in university jobs. Each work study student is gran- ted a certain sum of money which is determined by the university accord- ing to his orher specific needs. The Michigan Collegiate Coali- tion is comprised of a board of stu- dent delegates representing each of the public universities around the state of Michigan. The MCC works to expand the rights and influence of SHORT OR LONG Hairstyles for Men and Women DASCOLA STYLISTS Liberty off State . . 668-9329 Maple Village .... 761-2733 students around the state. They are working to make students more in- volved in governmental decisions which directly effect them. "Most students who receive this aid are stuck in menial jobs for min- imum wage," said Alaina Lewis, chair of the MCC. Students are allotted a certain amount of money and must maintain university jobs in order to collect this money. After the hours are filled, the student loses the job. Besides the fact that the work study program does not supply enough money, Thompson said, the students are restricted to maintaining jobs only through their respective universities. The MCC is asking the Governor to expand the work study program so that students can work for their communities and the state. "What they (the state) are afraid of is that students might work in abor- tion clinics," said Thompson. "The universities take advantage of the fact that the students can only work on campus," Lewis said. The MCC also made another pro- posal in order to put the students and people in greater contact with the state. The state, they feel, must no longer be a partner only to the uni- versities but to the academic com- munity at large. To accomplish this, MCC suggests that a "higher educa- tion task force" be created by the legislature and governor which would represent the interests of students, the universities, and the citizens of Michigan. With the creation of such a task force, students would have a greater voice in decision making, and greater access to policy. Afghan prime minister resigns KABUL, Afghanistan (AP) - Prime Minister Mohammed Hassan Shard resigned yesterday, broadening the power of President Najib. Meanwhile, in Pakistan, Afghan scholars and Moslem guerrillas, who have vowed to topple Najib's gov- ernment, took on the task of nomi- nating an interim Afghan govern- ment when their top leaders could not agree on the issue. Shard, 63, had remained in Na- jib's 28-person Cabinet after a weekend shakeup in which the president replaced seven of 10 non- Communist Party ministers with members of his People's Democratic Party. Shard was not a member of the party, but had been selected as prime minister by Najib last May to por- tray his government as enjoying broader support. A source, who spoke on condi- tion of anonymity, said Shard met with Najib and agreed the president should head the Cabinet during the state of emergency that Najib de- clared Saturday. The state of emergency suspends or limits freedom of expression, pri- vacy, and public assembly. Najib said it was needed because of "conspiracies" and "armed interven- tion from outside." Also over the weekend, Najib created a new military council that appeared to take over as the most powerful body in his government. The 20-member Supreme Military Council for the Defense of the Homeland met yesterday to discuss the government's battle against the guerrillas. Foreign Minister Abdul Wakil said Sunday the council will coordi- nate economic and military activi- ties. He said it will not replace the Cabinet, but did not elaborate. The council consists of the most powerful Cabinet members, the Communist Party Politburo and Central Committee, and military leaders. The seven guerrilla groups based in Pakistan became bogged down over the weekend in their attempts to, form an interim government for their takeover. Leaders have been divided along fundamentalist and moderate lines over power sharing. Sources in Pakistan who spoke on condition of anonymity said yes- terday the leaders dropped their nom- ination of hard-liner Ahmad Shah for prime minister and appointed a commission of 70 field commanders, Moslem clergy and scholars to nominate a head of government and cabinet. THE LIST What's happening in Ann Arbor today Speakers "Chinese Intellectuals in Crisis, Again? No, Not Again!" - Prof. Yi Tsi Feuerwerker, Lane Hall Com- mons, 12 noon. "The Spanish Revolution: Work- ers Battle Facism" - B118 MLB, 7 pm. Revolutionary History Series. "Perspective on Puerto Rico"- Yvette Perfecto, International Center, 12 noon. "Brownian Motion, Martingales, and Laws of the Iterated Loga- rithm for Harmonic Functions"__ Prof. Rodrigo Banuelos, 3201 An- gell Hall, 4:10 pm. Coffee hour, 3:30 pm in 3212 Angell Hall. 'Meetings German Club Meeting/Film - 2212 MLB, 6:15 pm. Film: "Hei- mat". U of M Asian Student Coalition - 2439 Mason Hall, 6:30 pm. "Students for the Exploration and development of Space" General Meeting - B131 MLB, 7 pm. New members welcome. Iranian Student Cultural Club - Rm. C MiAcrh;iv2,iI Lan 710n Union Ballroom, 5:30 pm. Open to all! Furthermore Peer Writing Tutors - 611 Church Street Computing Center, 7-11 pm. Tutors are ECB trained. "Cry Freedom" - Stockwell Hall Blue Lounge, 7 pm. Facilitators from Baker-Mandela Center. "War Generation Beirut" - MLB 3, 7 pm. Free. By PSC. Pre-Interviews - Monroe Auto Equip. Co., 1200 EECS, 6:30-8:30 pm. On-Campus Recruiting Program Information Session - Angell Hall Aud. B, 5:10-6:30 pm. Northwalk - Sun-Thur, 9 pm- 1 am. Call 763-WALK or stop by 3224 Bursley. Safewalk - Sun-Thur, 8 pm-1:30 am; Fri-Sat, 8-11:30 pm. Call 936- 1000 or stop by 102 UGLi. Performances "In the Traffic of a Targeted City" - At the Performance Network, curtain time 8 pm. Tickets $10 in AA ALL YOU CAN EAT ALL YOU CAN EAT PIZZA SPAGHETTI "'TNT NT EDT Tuesday & ''IINLr Wednesday Sunday $3.75a$4.50 I" 6-9 5-9 CORNER OF STATE AND HILL 994-4040 Enhance your presentation! 9 Listings s Overhead Transparencies * Menus 1't V ut ~. I'