The Michigan Daily
Vol. XCII, No. 12-S Ann Arbor, Michigan-Thursday, May 20, 1982 Ten Cents Sixteen Pages
orporate
p-ofits plunge
in recession
WASHINGTON (AP)- Crushed by
the recession, U.S. companies' profits
took their second-biggest plunge ever
during the first three months of this
year, new government figures in-
dicated yesterday.
Before-tax profits dropped 20.2 per-
cent and after-tax profits 17.5 percent
from the fourth quarter, hitting annual
rates of $169.8 billion and $118.8 billion
respectively, the Commerce Depar-
tment reported.
THE DOLLAR amounts of the
declines-$43 billion and $25.2 billion-
were bigger than any except during the
second quarter of 1980 in that year's
short but very steep recession. And the
percentage drops were surpassed only
in the second quarter of 1980 and in the
final quarter of 1953, Commerce of-
ficials said.
Commerce Secretary Malcolm
Baldrige conceded in a prepared
statement that "the recession has had a
strong effect on corporate earnings."
Before-tax profits, for example, were
down 27.6 percent from the third quar-
ter-when most economists say the
recession began-and 33.9 percent from
the first quarter of last year, he said.
BUT BALDRIGE also said tax relief
pushed by the Reagan administration
"is softening the decline in after-tax
earnings."
"The tax act of 1981 reduced cor-
porate tax liabilities to the federal
government at an annual rate of $8
billion in the first quarter, representing
about 16 percent of the total corporate
tax bill," he said.
And he said, "The dramatic drop in
inflation is laying the groundwork for a
sustainable business expansion which
should be accompanied by a strong
rebound in corporate profits."
ON THE other hand, he said inflation
improvement has not always helped
businesses, acknowledging that "the
cost-price squeeze on corporations in-
tensified in the first quarter as in-
creases in costs of production outstrip-
ped the rise in prices."
Descending
The interplay of shadow adds a new dimension to an otherwise mundane fire
escape.
State declares prison emergency
By LOU FINTOR again and another 90 days are subtrac- release and cited the results of a study ter normal release)," Goddard said.
Acting on a request from state ted from minimum prison sentences. of arrests made during and after the Richard McKeon, an executive
corrections officials, Gov. William THE STATE'S prison system must 1981 invocation of the Emergency assistant to state Correction Director
Milliken declared a "state of emergen- now drop its inmate count by more than Powers Act. Perry Johnson, said that current prison
cy" in Michigan prisons yesterday that 800 prisoners to reach 95 percent capac- According to Goddard, only two- capacity figures do not even reflect bed
will help ease overcrowding by ity - or 12,588 inmates. This 800 figure tenths of one percent of all arrests for space that cannot be used due to
releasing 900 inmates in several coun- does not include any additional serious felonies were committed by in- mechanical or structural problems.
ties - including Washtenaw - across prisoners the system may take in mates who were released by the act. "In actuality, we've been over-
thestate. during the 90 days. At present, the "STATISTICS tell us that those crowded for more than 30 days,"
"We wil begin to intitiate the im- prison system's population is 13,426 or people who were arrested for those McKeon said, adding that some
mediate release of prisoners," said 175 over the temporary emergency crimes would.have committed the same facilities currently lack adequate
corrections department spokesperson capacity of 13,251. crime three months later anyway (af- See, GOV., Page 2
s..ai '-uAru sT 5 nsis us.ing AnnnrrUlug fn '.uuaru, t%^ actua
Cal Goddard. "It's basically just doing
the paperwork at this point," he added.
MILLIKEN'S executive order,
authorized by the state's controversial
1980 Emergency Powers Act, will slash
90 days from the sentences of all state
prisoners serving sentences of flexible
lenth - such as 10 to 20-year terms.
Inmates serving life and flat sentences
are excluded.
This is the second time the act has
been invoked. The act first was used
May 20, 1981 - almost one year to date
- on the eve of the state's explosive
prison riots in Jackson, Iona, and
Marquette, which were triggered by
overcrowding.
The act forces Department of Correc-
tions facilities to drop their capacity to
95 percent within 90 days after its
declaration. If capacities aren't
lowered, the act automatically triggers
According to Gxoddard, the actual
release of prisoners is expected to take
place "one week from now after the
paperwork process is taken care of"
and officials expect to release "about
900" inmates over the next three mon-
ths.
Goddard stressed that the inmates
will be released "anywhere from two to
90 days earlier than they normally
would be paroled." Most will not be
coming from large state institutions,
but "primarily they will come from the
halfway house," he added.
GODDARD SAID that this will, in
turn, create more bed space in halfway
houses to accommodate prisoners frm
the larger institutions who are awaiting
placement in such community rein-
tegration programs.
Goddard said he does not expect a
sharp increase in crime rates due to the
Area officials gear up
for early inmate release
By LOU FINTOR
State corrections officials in
Washtenaw County, who are preparing
to review inmates for early parole on
the heels of Gov. William Milliken's
emergency prison overcrowding order
issued yesterday, expect the order to
effect primarily "halfway house" in-
mates.
"It's going to be quite a task, getting
everybody out," said Jack Frost, area
manager of parole, probation, and
community resident programs of the
Michigan Department of Corrections in
Washtenaw County.
STATE OFFICIALS already have
predicted the order mainly will affect
halfway houses, community residence
programs which help prisoners make a
transition into the community.
The corrections department main-
tains two "halfway house" facilities in
Ann Arbor and reserves approximately
18 beds at a Romulus Salvation Army
mission, bringing the total of halfway
See AREA, Page 2