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About The daily Nebraskan. ([Lincoln, Neb.) 1901-current | View Entire Issue (Sept. 26, 1990)
By The Associated Press Edited by Jana Pedersen i,TinTiiiiniiiriiiiiii I ii i—iumwiTu'iii anwiHH iiimi inn '■ riiirr-'ir <rr-:— r mri-JJil LIJ,,t Economists say recession is imminent WASHINGTON - The nation’s economy nearly came to a standstill in the second quarter, edging up a feeble annual rate of 0.4 percent, the government said Tuesday. Many of the nation’s top economists believe a recession is imminent - if not under way already. While White House spokesman Marlin Fitzwalcr said “we don’t be lieve we are in a recession right now,” he acknowledged the latest Commerce Department report on the gross na tional product “is certainly cause for concern. It’s not good news.” The department’s revised report on the GNP — the nation’s total out put of goods and services - was the lowest since a 0.3 percent rate during the last quarter of 1989 and showed the economy weakening even before the Persian Gulf crisis. “The economy was headed to ward a recession before Iraq, and Iraq was just the nail in the coffin,” said Allen Sinai, chief economist for the Boston Co. A recession “seems ines capable,” he said. Surveys following Iraq’s Aug. 2 invasion of Kuwait - and the subse quent oil-price spiral -- showed many top economists forecasting an immi nent recession. The National Association of Busi ness Economists reported Tuesday that more than half of the 71 profes sional forecasters responding to its survey in late August and early Sep tember said a recession already has begun or will begin in the fourth quarter of 1990 or the first quarter of 1991. And half of the top economists surveyed each month by Blue Chip Economic Indicators now believe the economy will enter a recession this year. “In a sharp revision of earlier views, 50 percent of the 50 panel members replying . . . now think the long delayed recession will start this year,” wrote R.J. Eggcrt, the newsletter’s editor. “Of those expecting the recession to begin this year, three believe it actually began in the second quarter, six expect the downturn to begin in the current quarter and 16 have pegged the fourth quarter of this year as the starting date.” Sinai pointed to negative economic data already available for July and August and said, “It looks like the recession started in the third quar ter.” ‘ The economy ground to a halt in the second quarter and is in the proc ess of contracting right now,” added Richard W. Rahn, chief economist for the U.S. Chamber of Commerce. Gas prices could reach up to $2 a gallon NEW YORK - As crude oil approaches $40 per barrel, some analysts say consumers should enjoy $1.35 a gallon gasoline while they can. Gas prices arc likely to go up, perhaps even beyond $2 per gal lon, if a shooting war breaks out in the Persian Gulf, experts said Tues day. And if oil should stay high for a sustained period, the fallout will be widespread, running up the cost of practically everything while slowing economic growth. “This is not good news for the consumer,” said Peter Beutel, an oil analyst with Pegasus Econom etric Group Inc. in Hoboken, N.J. “The problem with energy is it permeates the economy like a ripple in a pond. It’s not just the price of heating oil and the price of gaso line.” Not all analysts believe oil will stay as high as it is. They say that too much war hysteria may have been built into the market, that Iraq’s ability to take out Saudi Arabian oil facilities may be over estimated, and that replacing a bombed oil well is much simpler than replacing a bombed factory. Others, including Beutel, say $40 barrels of oil seem inevitable in the near future. Some estimates have put oil at $60 to $65 a barrel during a war. Oil prices have climbed stead ily since Iraq invaded Kuwait last month. Saddam Hussein’s saber rattling this week put them less than $1 away from the ominous $40 figure. Crude last reached that plateau a decade ago, in the last oil crisis. A price index tied to the GNP waj unchanged at an annual rate of 3S percent in the second quarter. Bu with the surge in oil prices, inflatior as measured in the Consumer Price Index jumped 0.8 percent in Augusi alone. The higher prices will be re flected in the third-quarter GNP re port. The price of oil before the Iraqi invasion was less than S20 a barrel. Il reached a record S38 a barrel at one point on Monday. Since oil is used in producing sc many consumer goods as well as for ; heating and transportation, any price 1 increase not only slashes available : funds needed to feed economic growth but also feeds inflation. The department originally had estimated the economy grew at a 1.2 percent rate from April through June, after advances of 1.7 percent in the first quarter and 2.5 percent in 1989 and 4.5 percent in 1988. But it said Tuesday that more complete data showed weaker net exports an'd lower inventory accumu lation than first thought. The new data showed net exports declining by S9.2 billion rather than $4.5 billion, and inventories totaling $19.8 billion rather than $22.4 bil lion. ‘‘But there really were no areas of strength,” Sinai said. Consumer spending, which repre sents two-thirds of the nation’s eco nomic activity, rose just 0.2 percent, down from 1.1 percent in the first quarter. Business investment fell 4.7 percent after a 5 percent gain from January through March. Saddam addresses America WASHINGTON - Iraqi President Saddam Hussein said in a message to Americans broadcast Tuesday that President Bush was sending Americans to a war more terrible than Vietnam. In a 75-minutc address taped last week, Saddam warned that if Bush were to launch war against Iraq, “it would not be up to him to end it.” Silting at his desk with an Iraqi flag at his side, Saddam said he was addressing his message to the American people to explain the truth behind Iraq’s Aug. 2 invasion and occupation of Kuwait. The rambling address, peppered with references to Allah and his teachings, repeatedly accused Bush and Kuwait’s rulers of plotting to impoverish his country and steal its oil. I “Bush, ladies and gentlemen, is sending your sons to war for no purpose save fatal arrogance,” Saddam said. The U.S. decision to deploy troops in Saudi Arabia and the possible war that could ensue would be a repeat of the Vietnam experience for the United States, except “more violent and causing bigger losses,” Saddam said. He challenged Bush, again, lo an international television debate so that he could tell the world the facts about Iraq’s actions and so that the American leader could learn about his intentions. Iraq desires peace, but one that is based on a broad resolution of all the region’s problems, Saddam said. He repealed his call for a peace conference that would resolve Israel’s 23-year occupation of Arab lands, Syria’s 14-year occupation of Lebanon and Iraq’s claims to Kuwait. Cable News Network began airing portions of the tape at 4 p.m. EDT. U.N. approves air-embargo UNITED NATIONS - The Security Council voted 14-1 on Tuesday to impose an air embargo against Iraq, cutting off flights to and from that nation and occupied Kuwait. Cuba cast the lone dissenting vote. Resolution 670 also calls on all member slates of the United Nations to deny landing rights to airplanes coming from Iraq or Kuwait, which was invaded Aug. 2 by the Iraqis and annexed. Only flights authorized by the Security Council’s sanctions commit tee will be allowed lo go to Iraq and Kuwait, and then only after they have been inspected to confirm they are carrying humanitarian cargo -- food or medical supplies. It also calls on all U.N. member nations to ‘ ‘detain any ships of Iraqi | registry which enter their ports and which are being or have been used I in violation of Resolution 661,” the council’s original trade embargo resolution passed Aug. 6. mamrnmmammmmmmm i m wnmwmmammmmmMmnmmmmmmKmMimmr - Nebraskan Editor Eric Planner Professional Adviser Don Walton 472-1766 473-7301 The Daily Nebraskan(USPS 144-080) is published by the UNL Publications Board, Ne braska Union 34,1400 R St , Lincoln, NE Monday through Friday during the academic year, weekly during summer sessions Readers are encouraged to submit story ideas and comments to the Daily Nebraskan by phoning 472-1763 between 9am and 5 p m Monday through Friday The public also has access to the Publications Board For information, contact Bill Vobejda. 436 9993 Subscription price is $45 for one year Postmaster Send address changes to the Daily Nebraskan, Nebraska Union 34, 1400 R St..Lincoln, NE 68588 0448 Second class postage paid at Lincoln, NE ALL MATERIAL COPYRIGHT 1990 DAILY NEBRASKAN East Germany’s last leader says people fear unification EAST GERMANY - The lasl leader of a sovereign Easl Germany said Tuesday his people arc truly afraid as they prepare to join the competitive, free-thinking and robust society next door. Lothar dc Maizierc, in a wide ranging talk with The Associated Press board, said his nation’s 16 million people will need help to thrive in a new world based on initiative and free enterprise. He said Easl Germans, forced to live in a Communist society for four decades, have grown accustomed to a life in which their futures — and their jobs -- were largely preordained by the government. Although most Easl Germans des perately desire the German unifica tion that takes place Oct. 3, de Maizi erc said they realize they will be expected to take control of their indi vidual destinies. “The future in the past meant the future prescribed by the Politburo,” he said. "Now the people sec their future is not a prescribed lime, but a free time. This is something people did not learn, and they arc afraid of that.” He said the government of a united Germany must have a “strong social consciousness” to help East Germans make the transition and avoid becom ing a second-class population. Dc Maizicre, a 50-year-old law yer, will turn over to West Germany the leadership of his nation in just eight days. He was East Germany’s first freely chosen leader and guided it through a rocky, six-month period of tough negotiations on the terms and timing of unification. He said he has made no decision on whether to accept one of the tour new Cabinet posts that wil! be filled by East Germans in the newly ex panded government of West German Chancellor Helmut Kohl. Butdc Maizieresaidhchas viewed his role as prime minister as that of a lawyer representing a very large client, and he would accept a similar role in a united Germany. He defended his people, who crit ics say will be bringing nothing to a united Germany but debts, social problems, a questionable work ethic and a crumbling economy. He said East Germans did not choose their system, which was imposed by the Soviets and remains a legacy of the war started by the Nazis. The nation, de Maiziere said, is part of German history and the cradle of the culture that gave the world Bach, Goethe and Handel. Students protest ban on clothing OMAHA - An Omaha school board board members. since the era of Vietnam war protest committee heard 17 high school stu- Brace, who wore a sign saying ers. dents protest new guidelines banning “Freedom of Expression Big Brother “Restricting what students can wear gang-style clothing and symbols from is Watching” pinned to the back of to stifle gang activity treats only the schools, then decided to stay out of his black leather jacket, said he was symptoms and deprives all students the controversy. suspended Friday for refusing to put of their First Amendment right to The students from Omaha’s Burke the jacket in his locker. expression,” Schatz said. High School Monday protested guide- Brace and other students, some of “The goal is to ensure student lines that ban certain professional whom said they may be suspended safety and to reduce the anxiety and athletic team clothing, hair styles, for leaving school early for the 1 p.m. intimidation factors in schools,” hats or jackets worn in the school meeting, said their right to express Assistant Superintendent Don Bcn building, saggy pants worn below the themselves through clothing shouldn’t ning said. hips, red suspenders, combat bools, be infringed because a minority ol He and Ron Burmood, director of and bandannas. students arc involved in gangs. student personnel services, said dis The committee took no action to They won support from BiU Schatz uia administrators and principals rescind or rewrite the guidelines. of Lincoln, who said he represented developed the guidelines because some “If the gangs all start wearing suits, the American Civil Liberties Union schools have had fights on campuses will you stop wearing them? Burke and hadn’t encountered such an in- arising out of clothing worn by stu High student Jason Brace asked the fringement of freedom of expression dents Mulroney s approval rating plummets TORONTO - Conservative Prime Minister Brian Mulroney heads into the new political season with an awesome array of worries ranging from rebellious Indians and unpopu lar taxes to threats of a breakup of the confederation. Mulroney is in big trouble with voters, scoring 14 percent or less in the polls. But the opposition Liberals have been unable to capitalize on Mulroncy’s growing unpopularity and were drubbed in two recent provin cial elections. Many Canadians feel the country is lcaderlcss and adrift. Mulroncy’s government is the most unpopular since the Gallup organiza tion began taking polls in the country 50 years ago. The polls say the Pro gressive Conservatives arc favored by only 20 percent of the population. At the end of July, Gallup asked Canadians who would make the best prime minister - Mulroney, Chretien or socialist New Democratic Party chief Audrey McLaughlin. Of those questioned, 30 percent chose Chretien, 18 percent McLaugh lin and 14 percent Mulroney. Thirty eight percent rejected all three or said they didn’t know which one they liked.
