OPINION

The Michigan Daily
bhe Mt Otigant DOatl
Vol. XCV, No. 41-S
' 95 Years of Editorial Freedom
Managed and Edited by Students at
The University of Michigan
Editorials represent a majority opinion of the
Daily Editorial Board
The strife is over
T HE ART FAIR is over.
For four days, Ann Arbor faced an onsalught of
humanity hungry for clay pots, doo-dads, knick-knacks, and
incredible bargains on stuff local merchants couldn't sell
last year. Some even came for the art.
Of course, the Art Fair also has a positive side. It in-
terrupts the summer doldrums for the merchants, many of
whom suffer when students pact up in May. There is cer-
tainly a fair amount of good art to be found, which helps
maintain Ann Arbor's reputation as a glimmer of hope in a
cultural wasteland.
But, oh, the noise. And the mess. And the crowds. And
the traffic. And the crying babies.
It really starts on Tuesday, when the artists begin
building their booths. Then, early Wednesday morning, the
invasion begins. People from all over come in to sweat
through another Art Fair. They trudge through the streets
all day, and end up with a painting or two, a shirt they
bought for 60 percent off, and an impressive sunburn.
On Thursday, it gets worse. Bargain-hunters scour State
Street for incredible buys, and everyone under the age of
10 gets dragged around all over the place. If they're lucky,
they have an ice cream cone to show for their efforts.
By Friday, the merchants are going crazy from waiting
on obnoxious customers all day. Friday is also the day a lot
of students come up to meet each other or visit their frien-
ds. Outside Charley's, the entire street is covered with
trash and broken glass. A mob of drunken, fun-crazy
youths roam the area. But they pay for it the next morning,
when that six-pack of Heineken comes back to haunt
them.
By Saturday, everyone who has been here for all four
days is numb. Nothing can penetrate the shield - the sun,
the people, the sales, and the art just don't matter
anymore. Still, this is the best time to find some really
good deals, since it's the last day of the fair. And then the
reverie from'the night before begins again - after all, the
Art Fair only comes once a year.
Sunday morning, an eerie calm settles on the city. The
only reminders of the fair are the scum-stained sidewalks
and the mounds of litter dotting the streets. It's safe to go
outside again. Until next year, anyway.
The Michigan Daily encourages input from
our readers. Letters should be typed, triple
spaced, and sent to the Daily Opinion Page, 420
Maynard, Ann Arbor, Michigan 48109.

Tuesday, July 30, 1985

Page 5

Recharging the U.S. economy
By n cRemarkably, inflation did not re-ignite. The reasons
ByFranz Schurmann were that interest rates went down but did not plunge. An
oil glut led to low but stable oil prices. And wage hikes in
While the President is recuperating, the second most the advanced countries remained moderate. Foreign
powerful man in the U.S. - Federal Reserve Board money continued to flow into the U.S. Cautious U.S.
chairman Paul Volcker - has made moves that will af- diplomacy helped keep the world economy on even keel.
feet the lives of millions of people throughout the world. FROM JULY 1982 till July 1985, Volcker managed to act
With the support of his colleagues on the Board, he has on- successfully both as custodian of the world economy and
ce again changed the basic game-plan of the world as chief U.S. player. The U.S. economy recovered,
economy's chief player. followed by East Asian, then Europe, and by now the first
Since the U.S. is the core of the world economy, it alone signs of Latin American recovery. But increasingly,
must double as both robust player and custodian of the foreign recovery has meant producing on a vast scale for
global economic game. The act solely in its own interests, the American market. Floods of cheap foreign goods en-
as other players do, risks letting the game fall apart. tered the U.S., seriously depressing American industry. It
BUT A STRIDENT chorus of voices has been deman- seemed as if U.S. consumers would keep the world
ding that the U.S. do just that. They point to spreading economy afloat by stuffing themselves with every con-
pockets of weakness in the U.S. economy - depression in ceivable kind of import.
manufacturing and agriculture, layoffs in silicon valleys, The world now faces over-production for increasingly
sluggishness in housing, actual and near-miss bank saturated markets. Volcker knows that the most common
failures. And now Volcker has given in to the demands. explanation for the Great Depression was over-production
On the surface, all the Fed has done is to allow the which consumption could no longer handle. His current
money supply to rise. That means lower interest rates move is designed to stimulate under-production in the
and more money for business investment and consume, U.S. But it will also have the effect of curbing global over-
spending. That move will also allow the value of the dollai production, much of which was aimed at what is, after all,
to fall further, stimulate U.S. exports and curb foreigr a finite American consumer market.
imports. In short, it benefits the American economy at the IN JULY, 1982, cynics believed Volcker was doing
expense of others. Reagan a favor by restimulating the American economy
Not lone after Vocker first assumed office, he made a in time for the 1984 election campaign. But this time there
fundamental switch in the U.s. monetary game-pan. In is no election, only the rising demand for protectionism
October, 1979, the Fed decided to use the money supply tstnomestio, ov the S m dorroadttonise
figures,'not interest rates, as the basic determinant of its thecoes.from all over the U.S. Vocker had to heed
decisions. The dollar money supply nowadays encom- Another factor that probably influenced Volcker was a
passes the entire world. Interest rates, however, remain perception of declining presidential leadership. Even
an American Affair. Volcker's move meant a new Fed before the president's illness, it was apparent that White
policy which, in effect, assumed responsibility for the House leadership had been eroded by too many
world economy as well as the American. resignations. Now Stockman's resignation means the
THE NEW policy was forced on the Fed by a new surge departure of the White House inner circle's toughest
in global inflation caused by an unexpected spurt in oil fighter against big government spending. Clearly,
prices due to the Iranian revolution. As a result, interest priority has to be given to the health of the world's core
rates went up, as did the dollar. Though money flowed into economy.
the U.S., the money supply contracted. The ogre of in- Voeonomy. dmrd safiacilwzadbeas
tha~i hch ha~dthreautnedhe old conoy n n- Volcker has been admired assa financial wizard because
flation, which had threatened the world economy since the of his ability to stimulate the economy and beat inflation a
early 197t0s, was beaten. at the same time. It allowed the U.S. to continue bth as
But there was a terrible cost to the American economy: robust player and responsible 'ustodian of the world
the Reagan recession of 1981-82, considered the worst sin- economy. This time it is going to be harder. If he can
ce the Great Depression of the 1930s. By the summer of repeat the feat, then he will go down in U.S. history as the
1982, the American economy was in such bad shape that greatest man of the 1980's.
remedial action was called for. In July, Vocker made a
switch and let the money supply rise. Immediately, the Schurmann teaches history and sociology at the
stock market responded by going on its longest bull run in University of California, Berkeley. He wrote this for
history. Pacific News Service.
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