10
Tuesday, January 31, 1995
UNIVERSITY DAILY KANSAN
Income outgains spending
Analysts anticipate economic growth may hurt economy
The Associated Press
WASHINGTON — Americans' income is growing more rapidly than spending, leaving analysts to wonder how soon an anticipated economic slowdown will materialize.
The Commerce Department reported yesterday that personal income rose a healthy 0.8 percent in December to $5.89 trillion, after a rare drop the previous month. Earnings for 1994 were up 6.1 percent, the biggest gain in four years.
Meanwhile, spending climbed 0.3 percent to $4.75 trillion last month. It rose 5.7 percent last year, compared with 5.8 percent increase in 1993, and was the smallest advance since a 3.8 percent rise in 1991.
The figures "tell us what we already know," said economist Paul Getman of Regional Financial Associates, a forecasting service in West Chester, Pa. "This economy has real momentum. It's hot and getting hotter."
But others said they saw signs the rate of growth was slowing and that interest-rate increases soon will begin to have a bigger effect on consumer spending.
There are hints that consumers are becoming more cautious in spending on big-ticket items, said economist David Jones of Aubrey G. Lanson & Co., a government securities dealer in New York City.
"It looks like consumers have tightened up on their purse strings with regard to spending on autos," he said.
Consumer spending represents two-thirds of the nation's economic activity and has propelled the economy's four-year-old recovery.
The government reported last week that the economy surged 4.5
percent in the last three months of 1994 and grew 4 percent for the year, the strongest growth in a decade.
Analysts predict the Federal Reserve, seeking to restrain growth and check inflation, will boost interest rates for the seventh time in a year during a two-day meeting beginning today.
Yesterday's income figures compare favorably to inflation, rising more than twice as rapidly as the 2.7 percent increase in the Consumer Price Index last year.
The Commerce Department also said that disposable income — income after taxes — climbed 0.8 percent in December.
Income fell 0.1 percent in November, only the second time it declined last year. Spending in November rose 0.4 percent, revised down from a 0.6 percent earlier estimate.
The combination of incomes and spending meant that Americans' savings rate — savings as a percentage of disposable income — climbed to 4.8 percent in December,
from 4.3 percent the previous month. The savings rate was the highest since October, when it also was up 4.8 percent.
Boosted by year-end bonuses for auto workers, private wages and salaries increased at a $19.8 billion annual rate in December compared to a $3.3 billion decline in November.
Government wages and salaries rose at a $2 billion rate in December, after gaining $1.2 billion the previous month.
Spending on long-lasting items such as cars and appliances rose 1.1 percent in December to a seasonally adjusted annual rate of $621.1 billion. Spending on nondurable goods, such as food and fuel, was up less than 0.1 percent to $1.421 trillion, and spending on services rose 0.3 percent to $2.703 trillion.
The income and spending figures were not adjusted for inflation. When adjusted, disposable incomes rose 0.7 percent in December, while spending was up 0.2 percent.
Simpson's defense blasts DNA tests
The Associated Press
LOS ANGELES — Inept investigators so polluted blood evidence in O.J. Simpson's murder case that they made DNA testing meaningless, a defense attorney said yesterday, moments after the judge rebuked him and admonished jurors to ignore much of what he said last week because his tactics broke the law.
"The evidence will be shown to be contaminated, compromised and corrupted," Johnnie Cochran Jr. said. "The gathering of evidence was a complete disaster."
Cochran was picking up the pieces of last Wednesday's opening statement, interrupted by a fight about the explosive information he revealed from witnesses previously unknown to the prosecution.
Superior Court Judge Lance Ito sternly warned jurors to disregard six witnesses mentioned last week, including a woman who purportedly saw four men running near the crime scene the night Nicole Brown Simpson and Ronald Goldman were killed.
Ito told jurors the defense had violated the law in withholding evidence and witnesses from the prosecution
and had caused the trial to be delayed two days. He emphasized, however, that the illegalities were not evidence that Simpson was guilty.
The jurors listened intently but took no notes as the judge spoke.
Earlier, and outside the jurors' presence, It reprimanded the entire defense team, ruling they had purposely hidden the identity of several witnesses for the purpose of gaining an unfair tactical advantage.
Ito forbade defense attorneys from calling as witnesses any of the six people mentioned to jurors, as well as eight others named in separate defense reports, until the end of their case.
He refused to grant prosecutors a 30-day delay to study the new evidence, but told Deputy District Attorney Marcia Clark he felt his sanctions against the defense were as harsh a finding as the court can make under these circumstances.
Simpson is on trial for the June 12 murders of his ex-wife and her friend.
Prosecutors devoted half their opening remarks last week to a "trail of blood" from the bodies to Simpson's Bronco to socks at the foot of his bed; they said sophisticated DNA analysis linked Simpson and both victims to many of the samples.
But Cochran called the tests "garbage in, garbage out" because of batched collection methods by careless, poorly trained employees.
"We expect in the course of our evidence in this case to show that from their own studies, the LAPD's laboratory is a cesspool of contamination," he said.
examination gloves lay atop Goldman's chest, apparently dropped there by a police technician, Cochran said.
He showed jurors a blowup photo that showed the feet of a woman standing near Goldman's slashed body. The woman's high-heeled pumps were not covered with the protective boots normally worn by crime scene workers, and she was standing on a blood-stained sheet beside the body. A pair of bloodied
"We think the evidence will show this scene was tracked, traipsed up, and the gathering of evidence was a complete disaster," he said.
He added, "If the evidence was contaminated at the scene or mishandled by the LAPD, it doesn't matter what was done afterward."
Goldman's mother and sister were asked to avert their eyes when his body was shown. Members of the Simpson and Brown families also looked away, and the judge ordered the photograph kept off television. The courtroom was silent as the picture was shown.
Cochran used charts, video displays and a tape of testimony from last July's preliminary hearing to illustrate the direction his case would take.
The attack on prosecution evidence will also include the saga of the Bronco and how carelessly it was handled, Cochran said. Coffee was spilled on its hood at some point, he noted, and it was burglarized while at a police tow yard.
Governors talk welfare reform
The Associated Press
WASHINGTON — Kansas Gov. Bill Graves said yesterday that he favored proposals to loosen the federal strings on welfare but not if it hits states with heavy new costs and hurts the truly needy.
Many Republican governors are advocating an approach in which the federal government would take money now spent on existing programs such as Aid to Families with Dependent Children and convert it into grants for each state. There also would be a national emergency fund for states hit hard by economic downturns.
Graves is attending his first National Governors Association meeting. The governors heard yesterday from President Bill Clinton at a White House session. Welfare reform was the main topic on the agenda.
"We want to be in a position to continue that (help) and not find ourselves in dire financial straits because of some expedient political decision," Graves said.
"With local control and more accountability at the local level, we think we can do a better job." Graves said. "Everyone's trying to find that fiscally responsible way to deliver government services."
Clinton said he favored granting states more flexibility on welfare but added there was a national interest in protecting poor children.
"We do have a national interest in the welfare of these children and in changing the welfare system so that it promotes responsibility and lifts people up, without punishing children who were not the cause of the problems that they face in life," he said.
Graves said the president has adopted a conciliatory tone on welfare reform and is clearly looking for allies among the GOP governors.
"He's looking to build some bridges with Republicans, who are going to dominate this debate," Graves said.
Republicans are already at work on proposed welfare reform legislation, part of the House GOP's "Contract With America" agenda.
Accused subway killer defends himself in trial
The Associated Press
MINEOLA, N.Y. — A Wall Street securities trader testified yesterday he was scared out of his wits when he charged and tackled the gunman who killed six people and wounded 19 on a commuter train.
Kevin Blum also identified the attacker as defendant Colin Ferguson.
Ferguson, 37, an unemployed Jamaican immigrant who is acting as his own attorney, maintains that someone else carried out the December 1993 massacre aboard a Long Island Rail Road train.
Blum, 43, a senior vice president at Lehman Brothers, said he was standing in a doorway of a rail car when he heard a popping sound like a firecracker.
Blu said he crouched over, then looked back over his shoulder and saw the gunman standing military
fashion, holding a gun with two hands and shooting into a seat.
He said he raised his briefcase as a shield and charged.
Under questioning by prosecutor George Peck, Blum said he was "completely scared out of my wits. I thought I was going to die. I thought this wasn't fair to my wife and children. It doesn't happen that way."
Ferguson was expected to cross-examine Blum later.
Blum and two other men were hailed as heroes for tackling the gunman and ending the spree.
Police discovered the Black gunman was carrying notes blaming white people and other Blacks for conspiring to sabotage his life and that the suburban railroad was his venue for revenge.
Ferguson, who wears a bulletproof vest in court out of fear of retribution, is not a lawyer. But last month he chose to act as his own attorney after a prosecution psychiatrist deemed him fit to stand trial.
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