The Michigan Daily - Thursday, January 30, 1992 - Page 7

Economy slows to
a virtual standstill
WASHINGTON (AP) - The economy virtually
stood still in the fourth quarter, a government report
showed yesterday. Public and private economists
agreed any meaningful recovery is months away.
The Commerce Department said yesterday the mi-
nuscule growth - at an annual rate of 0.3 percent - in
the gross domestic product (GDP) was due mainly to a
spurt in exports and a modest revival in the housing
sector. And some experts contend those gains will
prove short-lived.
Most other components of the GDP showed little
or no strength, including consumer spending, which ac-
counts for two-thirds of the nation's economic activity
and is essential for any sustained growth.
For the year, the GDP sank 0.7 percent, the first an-
nual decline since a 2.2 percent drop in 1982, the final,
year of the previous recession. The GDP is the nation's
total domestic output of goods and services.
"Basically, it says the economy is stalled," Sung
Won Sohn, an economist with the Norwest Corp. in
Minneapolis.
Acting Commerce Secretary Rockwell Schnabel
called the sluggishness "clear and convincing evi-
dence" of the need for quick congressional enactment
of the economic growth package President Bush out-
lined Tuesday night in his State of the Union message.
Still, Federal Reserve Chairman Alan Greenspan
told Congress yesterday the central bank is beginning
to see "some very subtle signs that the erosion in the
economy is beginning to stabilize."
He also suggested "this economy can move out of
this extreme lethargy with monetary policy alone"
and without the huge tax cuts that Bush and many con-
gressmen are proposing.
Even with the growth package and the impact of
lower interest rates, a sustained recovery will not be-
gin before spring, cautioned Commerce chief economist
Antonio Villamil at a news conference.

Mideast talks
end positively
MOSCOW (AP) --The multinational Middle East
conference ended on an upbeat note yesterday with
Arab, Israeli and Western delegates set to hold a series
of meetings around the world this spring and explore
the nuts and bolts of peace in the region.
Although marred by a Palestinian boycott and the
absence of Syria and Lebanon, the meeting added a sense
of substance and continuity to the fragile U.S.-brokered
peace process.
It drew an impressive cross-section of the Arab
world, the United States and Russia, the Europeans,
China, Japan, Turkey and Canada, and gave Middle
Easterners what Israel's foreign minister, David Levy,
called "a taste of the fruits of the coining peace."
Rather than talking abstractions, delegates spoke of
water-sharing, the environment, and the need to cut
crippling defense spending.
After the talks ended, Israeli delegation heads
praised the Arabs' business-like approach and the care
they took to avoid political point-scoring.
The Israelis, who have long craved acceptance by
their Arab neighbors, claimed a diplomatic victory
simply in getting the Arabs to sit with them.
Yesterday's session, which followed an opening day
of speeches, involved small working groups negotiat-
ing behind closed doors, and it apparently produced
some tangible results.
Delegates said they agreed to meet again between
the end of April and mid-May, after the Jewish
Passover and Muslim Ramadan holy days.
They said the program approved by a steering com-
mittee calls for a meeting on refugees in Canada; on
economic cooperation in Belgium May 11-12; and on
arms control in Washington. Turkey or Austria will
likely host a forum on water. Japan is willing to host
the meeting on environmental protection.
Israel suggested creating a separate working group
on health, and Levy said it will be decided upon within
a few weeks.

Joint Chiefs of Staff Chair Gen. Colin Powell points to a graphic during a news conference at the Pentagon
yesterday to discuss the Defense Department's 1993 budget.
Shipyard jobs threatened by defense cuts

GROTON, Conn. (AP) - The
peace dividend suddenly looks
more like a pink slip to 21,000
workers at the Electric Boat
shipyard who owed their jobs to
the Cold War defense buildup.
With President Bush's call to
slash $50 billion in defense spend-
ing, including $17.5 billion for the
Seawolf submarine program, they
and thousands more at key defense
plants around the country

wondered

yesterday whether

there's a place for them in a peace
economy.
- In Southern California, the
Northrop Corp., learned the presi-
dent wants to cut construction of
the B-2 Stealth Bomber from 75 to
20 planes to save $14.5 billion over
the next five years, threatening at
least 1,500 jobs.
- In Colorado, Bush's

ballistic missile program meant
4,100 Rocky Flats nuclear weapons
plant workers would lose their
jobs within three years.
- In Washington state, Seattle-
based Boeing Corp. is a major sub-
contractor for the B-2 Bomber. The
proposed cutbacks would mean the
loss of as many as 2,000 jobs this
year alone.

proposed scrapping of W-88

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