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October 26, 1989 - Image 4

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The Michigan Daily, 1989-10-26

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Page 4 Thursday, October 26, 1989 The Michigan Daily

A} beie MIdligan BaivU
Edited and managed by students at The University of Michigan
420 Maynard St.
Vol. C, No. 37 Ann Arbor, MI 48109
Unsigned editorials represent a majority of the Daily's Editorial Board. All other
cartoons, signed articles, and letters do not necessarily represent the opinion
of the Daily.
What's upwth S&Ls



W HY ARE so many savings and
loans going under? The nightly news
answer: because they're financial di-
nosaurs. The right answer: misman-
agement and corruption, with a large
government share in both.
Lincoln Savings started the decade a
a biggish, conservative S&L-paying
6.5 percent to savers, and making its
money with home mortgages. Like
most of its peers, Lincoln drifted into
some speculative markets when Reagan
deregulated S&Ls in 1981. But it
wasn't until Charles Keating bought
the business in 1984, that Lincoln be-
gan to throw its customers' money into
high-risk deals and, predictably, to lose
it. This past April, Lincoln Savings
was seized by the government and
placed in receivership (the bankruptcy
process for S&Ls). Taxpayers will as-
sume Lincoln's debts, which amount to
$2.5 billion.
Change the names, and this much of
the story could fit any S&L; the gov-
ernment will spend more than $10 bil-
lion on bailouts this year. But there's
more to tell. It is becoming apparent
that the disaster at Lincoln could have
been avoided.
In 1986, the San Francisco office of
the Federal Home Loan Bank Board
investigated Lincoln, found $135 mil-
lion in losses, and recommended it be
seized to protect savers. Suddenly,
Washington muckety-mucks stripped
the branch office of its authority. Pres-
sure may have come from Alan
Greenspan, who was a paid consultant
for Lincoln during Keating's first years
- nothing is proven. But it is known
that he had donated over a half-million
dollars each to five influential senators,
Financial aid and theY

including Alan Cranston and the chair
of the Senate banking committee,
Michigan's Donald Riegle. They in
turn used their peddled influence to
keep the investigation closed until this
In the meantime, Lincoln went $1.5
billion further into debt. On the day
before the seizure was announced,
Keating sold an additional $250 million
in worthless shares to investors,
money current laws don't allow them
to recover. No doubt someone had
tipped him off. Riegle, who has given
back Keating's gifts to reestablish his
disinterest, is now campaigning to have
the government pay for Keating's last
Almost all of the obvious angles of
the case are being covered: customers
are suing Keating, the government is
charging him with fraud, the San
Francisco office has filed against its
Washington bosses. The only part
missing is that the bribed senators have
not yet been named in any investiga-
That situation can't last long, since
The New York Times has called for the
Senate Ethics Committee to hire a spe-
:ial counsel to review allegations of in-
fluence peddling in the Senate. That
will take care of the obvious angles.
But the roots of S&L collapse run
deeper. Reagan's deregulation was the
start of the problem; it must end. More
than that, the whole system of hands-
off management of the financial indus-
try is a proven failure; the few rules are
regularly circumvented by bankers with
deep pockets. It is time to bring the
mess under the rule of law.
war on drugs:

By Melvyn Amos
Avis Maria
Paul Lefrak
On Saturday September 23, 1989 a
union trial was conducted by the American
Federation of State, County and Municipal
Employees (AFSCME) International
Union. The trial was an appeal from Judy
Levy who is seeking reinstatement as the
Bargaining Chair of AFSCME Local
1583, the largest University of Michigan
campus union. Levy was elected to that
position in 1987 in an unprecedented land-
The Daily covered this trial in an article
entitled "Ex-Union Bargaining Chair Faces
Appeal," (Daily, 9/25/89.) This article
presented the trial as a fairly technical af-
fair revolving around whether or not Levy
had the right to use a copy of a seniority
list outside of the union office, and
whether she had disobeyed a local execu-
tive board decision.
On the surface this is indeed what the
trial was about. Just below the surface lies
a political context involving a long his-

ort of w
tory of activism and efforts to squelch it.
In fact, the outcome of this trial will have
profound implications for the struggle for
social justice among workers on this cam-
We are writing, as members of AF-
SCME 1583, to provide some of the con-
text that was lacking in your article.
Levy has worked for years in the Mem-
bership Action Committee (MAC) of
AFSCME to forge an alliance of Univer-
sity workers and students capable of wag-
ing an effective fight against racism and
for social justice at the University. Levy
not only makes herself available twenty-
four hours a day to union members, she
spends time actively supporting the strug-
gles of students and of workers not repre-
sented by AFSCME.
On June 15, 1989 Levy was suspended
from office by a ruling from a statewide
AFSCME Council 25 hearing. This was
the third effort to have Levy removed
through a set of bogus charges. The
September 23 trial was an appeal to an In-
ternational hearing. This time the petty
dictators of the local union tried to hide
their political motives, but just barely.
Levy is charged with keeping a copy of a

union seniority and address list in her po$-
session. These are lists which any respop-
sible Bargaining Chair should use on a
daily basis to answer questions, investS-g
gate discrimination complaints, and con-
duct grievance hearings. With no concetn
for the membership, the local executive
board intentionally passed an order that
Levy should leave the lists with the local
Under these conditions Levy could not
do her job, and the executive board knew
this. They knew Levy would not comply
with this illegal order that that this would
give them a pretext for a new set ofO
The purge of Levy would be a blow
against workers and students who are
fighting for social justice on this campus.
A decision on the September trial is due
by early November. We ask that students
and workers write letters of support to:
Gerald McEntee, President
AFSCME International AFL-CIO
1625 L Street N.W.
Washington, D.C. 20036
Amos and Lafrak are University workers
and active in AFSCME Local 1583.

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Selective enforcement

FOR THE past six months, students
receiving Pell Grants - federal, need-
based support for education - have
had to sign a pledge that they will not
use the money to buy drugs. Like most
war on drugs proposals, the scheme
sounds fair on a first hearing. Like the
rest of Bush's plans, it does not really
affect the middle and upper classes and
is intended to create fear rather than
actually decrease drug use.
The plan is unenforceable. 30,000
students have signed a pledge
promising not to misuse their federal
support, but, financial aid officers say,
there is no way to find out if they're
keeping their word. Making sure stu-
dents are as economically independent
as they claim is already too much
playing detective, they say.
Since the officers won't spend their
time reading police blotters, the De-
partment of Education, which came up
with the plan, promises to provide
them with computerized files of crimi-
nal records. To their credit, the officers
refuse to take part in such violations of
privacy, no matter how easy Washing-
ton makes it for them.
Privacy isn't the only right being
threatened. Pell Grants are given ac-
cording to need. With the pledge, stu-
dents receiving aid can be punished
twice for the same crime of buying
drugs. In addition to potential criminal
charges, these students face up to five
years in prison and $10,000 in fines as
punishment for breaking their pledge.
At a minimum, they will be thrown out
of school.

As the United Nations has affirmed,
education is a right, not a privilege.
Students who cannot afford the grow-
ing costs of education already face
enough obstacles. By making them
"more responsible" for drug use than
the small number of students whose
parents can afford to pay for school
they are further excluded from higher
The plan is worse than unfair. With
proportionately little federal money
going to preemptive efforts, drug
treatment and education, the Bush war
on drugs is designed to remain a half-
step behind the problem. When the
logic starts with blaming the victims,
the best one can hope for is to create a
climate of fear surrounding drug use in
the name of providing a disincentive.
This is precisely what the pledge plan
aims at.
Bush's call for mandatory drug test-
ing at all institutions that are to receive
federal funding presents a clear threat
to accessible education. Sources in the
Department of Educations have men-
tioned the possibility of backing up the
Pell Grant pledge with a testing pro-
gram, if they can. Aside from the seri-
ous problems with drug testing, like
failing scores caused by aspirin or birth
control pills, instituting the test means
demanding a different standard of be-
havior for students who are trying to
get an education against incredible eco-
nomic odds.
Student activists concerned about
laws like this that don't apply equally
to all have staged protests at Berkeley,
and their efforts are supported here.

what you
To the Editor:
I have a simple request.
Please give your readers an ex-
planation as to why the Daily
is not printed on recycled
newsprint. It is easy for us
readers to conjure up the image
of "hypocrite" when it comes
to the Daily's rhetoric and ac-
tions regarding closing the re-
cycling loop. However, I trust
there are good reasons for the
apparent incongruities, and I
look forward to seeing a full
explanation in print.
-Andy Duncan
October 25
Daily needs
to check
To the Daily:
This letter is in response to
the article entitled "U adds 45
new minority to faculty,"
(Daily 10/2/89.) It states, "Of
the faculty hired, 21 are Black,
15 are Asian-American, and 9
are Hispanic." The number of
Native American faculty hired
is completely omitted. As re-
sponsible reporters, you are ob-
ligated to report the facts -
including the fact that there
were no Native American fac-
ulty hired.
Asreaders we want articles
that contain accurate informa-
tion - the omission of an en-
tire ethnic group is not accu-
rate. It is also insulting to Na-
tive Americans to be omitted
from an article that specifically
concentrates on minorities.
Furthermore the term minority
includes all four ethnic groups:
African-Americans, Asian-
Americans, Latinos, and Native
Americans. It is time for the
Daily to print accurate informa-
tion and become responsible
We trust that the Daily will
correct this problem in the fu-

(10/12/89)) that under the pro-
posed capital gains tax reduc-
tion, strenuously pushed by the
Bush administration, 80 per-
cent of the benefit of this move
will go to the 1 percent of
Americans earning over
$100,000 a year and fully 60
percent to those few making
over $200,000.
Do tax breaks for the rich
create large enough investment
incentives to justify the tax
revenue loss? In 1987, about
half of new capital came from
tax-free pension funds. Of the
other half, most came from
foreign investors, who do not
pay U.S. income tax, or corpo-
rations, endowments and insti-
tutions unaffected by the rate
change. Only ten percent of
capital investment came from
individual investors, those who
would benefit from this bill.
Furthermore, the best year ever
for new venture capital was
1987, the first year that capital
gains were taxed at the same
rate as other income.
Rather than a tax break for
the rich, perhaps we should be
investing in our human capital:
combating illiteracy, substance
abuse, inadequate health and
child care. Where we most des-
perately need a break is in our
spending on destruction: sup-
porting death squads in El Sal-
vador and guerrillas killing un-
armed peasants in Angola,
destabilizing Nicaragua, prop-
ping up dictatorships in Hon-
duras, Guatemala, and Zaire,
subsidizing the irresponsible
logging of our national forests
and the replacement of family
farms by agribusiness. Maybe
we could all use this kind of a
-Terrance Hanna
October 23
calls it
To the Daily:
I was happy to hear of the
debate concerning my article in
Consider, "Look who's for seg-
regation now!" Unfortunately it
appears as though my words
were not taken as I had intended
them to be. Certainly not the
first time that has happened,
but maybe the last.
What I'm leading up to is
that I have resigned as chair of
"College Republicans" and
"Conservative Coalition", and
thought that now was the ap-
propriate time to make that in-
fnrmation nih1ic_ I have trned

My former fellow College
Republican Officers however,
some of whom were not used
to working with me and thus
were unfamiliar with my ways,
felt that this brashness was
inappropriate behavior for a
C.R. chair. They desire a C.R.
organization which will not
step on anyone's toes. I per-
sonally think this is the wrong
direction for the C.R., but I re-
spect their opinion, and wish
them well. Looking back, I
have no regrets, and many fond
memories. In conclusion, this
fall has seen the retirement of
two well known campus
political figures. Zach Kittrie,
who did his best not to offend
anyone, and Glenn Kotcher,
who did his best to offend
many. Like Zach, I'll be
concentrating on my studies
full time - a rare treat for us
-Glenn Kotcher
October 13
Why fund
To the Daily:
The Michigan Student
Assembly is in debt, but it's
funding spring vacation for
members of the Latin
American Solidarity
Committee. What's wrong
with this picture? In her recent
editorial, "Broaden Student
Horizons" (Daily, 10/24/89)),
Kathryn Savoie implicitly
provides what may well be the
quintessential testimonial to
the irrelevancy of MSA's Peace
and Justice Committee.
While her editorial
purports to defend the
committee's recent excursion
to El Salvador, ninety percent
of it is composed of
information that could be found
by reading a copy of
Newsweek. There is no
striking, new evidence that the
committee uncovered as a
result of sending its delegation
to Central America. The other
ten percent is composed of
assertions about what 'we'
have responsibility for, and
what the role of the University
should be in relation to the
world at large.
I agree that people should
be aware of how their
government spends their tax
dollars. And I agree that the
funds should be responsibly
employed in a manner
consistent with the desires of
the taxpayers. However, in
principle, the same line of
analysis would suggest that

truly a wise investment, the
members are incapable of
producing anything but 'a
reiteration of what was already
known about U.S. policy
toward El Salvador? Savoie 's
editorial exemplifies such
Savoie's only direct
argument, though she states it
in a variety of ways, is that
"we do not come to a
university community to
isolate ourselves from the*
reality of the world." And,
again, I concur. But one must
wonder what sending a small
delegation to El Salvador has
to do with isolating ourselves
from the world, especially
when the project fails to add to
the student body's knowledge
of Salvadoran politics in any
Apparently, the oly#
useful thing that the delegation
brought back is the photograph
printed with Savoie's editorial.
But even if a picture is worth a
thousand words, is it worth
nearly $4,000? Keep MSA
money where it belongs: on
campus, and funding projects
that benefit the entire studet
-Adam DeVore
October 13
U.S. still
bans books
To the Daily:
I applaud the Graduate IEi-
brary's exhibit featuring boojs
that have been banned. An irn
portant point which must be
remembered, however, is that
many of these classics are still
banned today throughout the
United States.
Censorship in public schools
has risen dramatically in the
1980s. Huckleberry Finn is
still banned today in many
high schools, including, irodi-i-
cally, Mark Twain High
School.The Catcher In The
Rye is another example of a
classic currently banned in
school districts nationwide.
Book banning is a tool used
by pressure groups to keep ma-
terial they don't like out of stu-
dents' minds. For instance, in
1984, The Diary of Ane
Frank was banned by a Tei
nessee school district becaue
"it promotes religious toler-
ance." Heaven knows we
wouldn't want that!
All people should recognize
that only be being able to read
all books will they be able to
live as educated individuals and
to make informed decisions. As
the Supreme Court has said
many times, an idea may no*

-Delro Harris
Kevin Ramon
John Feng
Barry Eng
Augustin Irizarry-Rivera
Laurence L. Wu
Joon Kang
Angela Powell

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