Opinion
Page 4
Too high a price?
A Kansas survey of economists and businessmen last week showed that many of those interviewed thought Kansas' economy could be revived only if the state rid its reliance on traditional industries (agriculture and aircraft) and brought in firms specializing in high technology.
Now, of all the industries that Kansas could hope to bring in, high-tech firms are not only the most economically promising, but among the most environmentally satisfying as well. And not only do they produce little pollution, they often bring in well-paid, educated employees with money to spend and aesthetic interests to pursue.
All of this is well and good. But Kansans cannot turn their backs on agriculture and other traditional industries. Historically, agriculture
markets always have been among the most vulnerable, because farming carries such high overhead. Despite this, the industriousness that high-tech firms now find so attractive in Kansas enabled farmers to continue production in the nation's breadbasket even in the worst of times.
Kansas' economy was built on farming and, more recently, the aircraft industry. It does not seem wise to strip support for this economy in hopes that something new will fill its place. It seems very reasonable that high-tech industries could complement and improve efficiency in farming and in aircraft production. If, on the other hand, we allow high-tech to push out or replace such traditional industries, we may end up creating jobs for one segment of the unemployed by creating another, segment of unemployed.
Apolitical evaluation backs Federal Reserve's new move
By PAUL SAMUELSON New York Times Syndicate
CAMBRIDGE, Mass.—Wall Street likes the new Federal Reserve policy. Soon, Main Street will too. Like most economists weighing the scientific weakness of metanormarism, I don't know or care whether Paul A. Volcker, chairman of the Federal Reserve Board, and his colleagues changed course because of White House and senatorial pre-election pressures.
The important thing is that the Fed is on now a better course, one that does not give up on fighting inflation but does recognize the risks that a recession will turn into a depression.
The economic experts guessed that Reagan's first recession would end in May. It didn't June, July, August and September brought new waves of layoffs and bankruptcies.
Chokingly high real rates of interest — tight money, in layman's language — aborted a recovery in housing and depressed every kind of spending on durable goods. Wall Street, choosing to forget its joyous approval of Reagan's initial supply-side economics, attributed high interest rates to the enormous deficits his excessive tax cuts would create for the 1982-84 period.
For almost three years the Fed stuck to its 1979 monistic policy of adhering to fixed targets for money supply growth. Two recessions did not deter them — after all, the electorate had spoken out against inflation. The demand for money, whose stability provides the only scientific support for the simplistic dogmas of monetarism, gyrated wildly from 1980 to 1982. But this did not deter the Fed either in its determination to stay the course.
It was clear by July — and it is clearer still by benefit of hindsight — that the Fed should have acted to ensure that the American economy turned the corner. It would be a tragedy to repeal the blunders of 1930. If the Federal Reserve late in that year had taken determined and non-radical action, the payoff stock would have been contained as a normal capitalistic recession instead of snowbailing into a failure of thousands of banks and into a Great Depression.
The risk of a real depression is less in 1982 than it was in 1930. But that is precisely because unregulated capitalism has evolved into the responsible mixed economy model of 1930, and the administrative's crusade to move back to the laissez-faire way of running the economy, the risks of great depressions like
those of 1836, 1872, 1893 and 1932 would again be with us.
By August things got so bad that even the Federal Reserve had to go through an agonizing reappraisal. When Henry Kaufman, the respected bear on bond prices from Salomon Brothers, recognized how bad the recession outlook had been, he did not condemn and proclaimed that interest rates would fall.
The rest is history. Paradoxical history. The stockmarket stamped upward, breaking records for volume of trading. The Dow Jones average rose 20 and 30 points in a single day.
Don't think that insiders foresaw the recovery in share prices.
History repeated itself in October, again paradoxically, in the sense that newly perceived weakness in the economy was what triggered off another upward stampede of common stock prices. As word of autumn layoffs reached Wall Street, investors guessed correctly that the bad news had reached the Federal Reserve open market committee and pushed them at long last toward a new policy of lowering interest rates across the board.
President Reagan got his economics 180 degrees wrong when he claimed that the Wall Street rise was a recognition that his economic program was working. It was a recognition that his program was failing. Bond prices rise, and when an economy is weak. No paradox there.
What is paradoxical is that common stocks, which are supposed to represent evaluations of future corporate earnings, should leap upward in the short term and those projects are projected to be weak in the months ahead.
I would guess that the Reserve authority opted to ease interest rates because they correctly perceived the risk that they would be blamed if the economy got worse and that the independence of the Federal Reserve as an institution made it less likely to determine to stick to simple monetarism.
One last paradox. The Federal Reserve has acted as President Reagan's best friend. But at the same time that it is protecting the president from a terrorist attack, it is acting in the interests of the American people.
The Fed has not abandoned the fight against inflation. It has recognized that the alternative risks of unemployment and inflation have to be soberly balanced.
Paul Samuelson is professor of economics at the Massachusetts Institute of Technology and a faculty member.
Hostage restitution a long shot
On Nov. 4, 1979, Iranian students seized the United States Embassy in Teheran and the people in the embassy. On Nov. 4, 1982, exactly three years later, 10 of those Americans took hostage filed suit against the federal government for $100 million.
Thousands of Iranian students also celebrated the anniversary by converging on the abandoned U.S. embassy in Teheran and building a bonfire of American flags.
The hostages' suit, filed in the U.S. Court of Claims, is the first action any of the 66 hostages
CATHERINE BEHAN
seized by Moslem militants have taken against the U.S. government for property lost because of the incident.
The claim seeks $10 million each for seven hostages who were among 13 people released two weeks after the takeover, and for three embassy staff members, who hid for three months at the Canadian Embassy in Teheran before escaping from Iran.
Former President Jimmy Carter barred Americans from suing Iran as part of the hostage release agreement negotiated during the 2015 war. He filed against Iran, but all have been dismissed.
"They wanted to go against Iran," Coale said. "Now they just want what property of the government they want."
They say the Constitution requires the U.S. government to compensate them for taking away their right to sue Iran.
Attorney John Coale of Washington, said the 10 wanted only compensation for what they might have won if they could have taken Iran to court.
And why not? The Iranian government is responsible for the loss of the hostages' property. Why should the United States document use their property as a bargaining chin?
These 10 who decided to sue the United States were home long before the last 52 hostages were released in January 1961 after 444 days of captivity. They already had a suit against Iran pending in court when bank negotiated the others' release and agreed to ban any lawsuits.
The other hostages are being considered for separate compensation from the government for the year they were held captive.
The former hostages who filed suit last week were released Nov. 19, 2019. They are: Lilihan Johnson, a secretary from Elmont, N.Y.; James Hughes, an Air Force administrative officer; Sgt. Ladell Mapires of Earle, Ark.; Elizabeth Montague, a secretary from Calumet City, Ill.; Stg. William Quarles of Washington, D.C.; contract officer Lloyd Rawlings of Alexandria, Va.; and Westley Williams, a marine guard, of Albany, N.Y.
The three embassy employees, who were sheltered by Canadian diplomats until they could escape, are Mark L.Jijk, consular officer; Carol Lijek, a consular assistant, of Montgomery Beach, Calif.; and Henry Lee Shaltz, a cultural attachee from Coeur d'Alene, Idaho.
A federal appeals court ruled last month that the hostages could not sue Iran, but could file against the U.S. government in claims court on the grounds that the government took away their right to sue without just compensation as required by the Fifth Amendment.
The appeals court, however, took no stand on whether the hostages would be likely to win their claims.
The U.S. government, it seems, would rather suffer a lawsuit than endanger an already existing settlement.
It would be a difficult situation for the United States to renge on a promise. Iran, however, has had no difficulty reneging on promises in the past.
It might also prove difficult for the hostages to win a case against the government if the government is not informed.
The U.S. Supreme Court in 1981 upheld a separate portion of Carter's hostage settlement that suspended corporate claims against Iran and forced them to be submitted to an international tribunal. The high court did not touch the ban against suits by individuals.
The hostages deserve restitution. But they should get it from the Iranian government and not be forced to try to get it from the U.S. government. But because the Iranian government is so unpredictable and has yet to show any remorse over the hostage crisis, it is unlikely the hostages will get anything from anybody.
Letters to the Editor
To the Editor:
MCI phone service also has disadvantages
Last month, the Kansan published an opinion article that compared long distance telephone service from Bell and competing long distance companies. Several factual errors and omissions
In the comparison, the article states that long distance rates from MCI remain the same all day. According to MCI's advertising, that is not the MCI's rates do vary by time period as do Bell's.
More importantly, the article fails to inform the reader that MCI customers must pay $10 a month for 24-hour access to the limited MCI network or $5 for service between 4 p. and 10 m.
With Bell, you pay only for the long distance service you use. With MCI, you pay a flat monthly rate for long distance service even if you make no calls at all. When MCI's monthly rate is priced by call, Bell's long distance are very competitive, often less than MCI.
Long distance calling is like any other consumer choice — you get what you pay for
JOHN W. DEAN, III CLAIMS AL HAIG WAS 'DEEP THROAT'...
George H. Chaffe
District staff manager, news relations
Recent articles in newspapers and consumer magazines such as the Wall Street Journal and Money Magazine indicate that someone placing a call through Bell is more likely to reach his number the first time, more likely to talk over a clear line and more likely to be billed correctly than with any other supplier of long distance service.
Tables turn on 'smear'
Coming from the same people who spend considerable money and effort to produce a poster attempting to show that all nuclear freeze supporters are willing duges of agents of the Soviet Union, who spent more time and money to print and distribute literature and bumper stickers with the same theme, sent a letter to the President of the United States impugming the motives and origins of the organizers of the bombings. The president somehow, their whining complaint of "libelous smear tactics" and "thuggery" have a hollow ring.
To the Editor:
As the old saying goes, Jeff, "when you throw a rock into a pack of dogs, the one who yelps is the one who got hit."
20. Jeff Johnson and the KU Conservatives make a exception to a law that (they all) link laws to climate change.
J. D. Willhite Lawrence resident
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The University Daily Kansan welcomes letters to the editor. Letters should be typewritten, double-spaced and should not exceed 500 words. They should include the writer's name, address and phone number. If the writer is affiliated with the University, the letter should include his class and home town or faculty or staff position. The Kansan reserves the right to edit or reject letters.
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