Mirror - Vol. 13, No. 07 - October 27, 1988

              The
Fairfield
Volume 13, No. 7MRRORV Our Second Decade Thursday, October 27, 1988 The Image of Fairfield
Senator Weicker Addresses
Committee on Capitalism
r
Lynn Ann Casey
Assistant Editor
On Thursday, October 20,
CODAC, the Committee on De-veloping
American Capitalism,
met for a luncheon at Fairfield
University to hear an address by
Senator Lowell P. Weicker, Jr., a
U.S. Senator from Connecticut.
After welcoming remarks
by Rev. Aloysius P. Kelley, S.J.,
President of Fairfield University,
Walter E. Hoadley, Chairman of
CODAC, gave a report on the
present actions of the committee.
"We take our committee very seri-ously,"
said Hoadley.
He remarked that depite the
fact that the United States is "very
close to full employment, the goal
of all nations," we still have prob-lems
of intense "competition, defi-cits,
and debts." He thinks that
"over the next four years, correc-tion
will be taking place on an
adjustment basis."
Another subject touched
upon by Hoadley was an ethical
one. "In the past year, the subject
of ethics and morals" has come up.
This subject is a major topic under
discussion with the committee at
this time. A recent pamphlet pub-lished
by the committee, entitled
"The Erosion of Moral Values in
Society," shows the concerns of
the committee, and their ac-knowledgement
of the problem of
ethics in capitalism.
Lowell P. Weicker, Jr be-gan
his address to the Committee
by saying that "There is nothing
wrong with our system (of capital-ism);
the fault lies with the people."
He asked all to "stop diassociating"
the people from their government.
Just as he says he has the job of
voting in the Senate, the people
have a responsibility of electing
those to vote in the Senate.
Two of the main topics of
his address were centered on
money: the defense budget and
revenue raising. In respect to de-fense
spending, Senator Weicker
is in favor of a much slower devel-opment
ofthis aspect ofthe budget.
He feels that it is an area in which
the government can cut back spend-ing
in the future. "There are dol-lars
to be saved."
Senator Weicker moved on
to raising revenues: "a subject
nobody wants to talk about." He
said that, at present, the govern-ment
is passing bills for which
there is no funding in the present
budget. He commends the recent
passage of a two and a half billion
dollar drug bill, but comments that
"there is no money for this passed
bill." The situation now is that the
money in the government is stay-ing
the same, while there are more
bills to pay.
His solution to this difficult
subject of taxes is "For every bill
costing over $1 billion, it should
have an accompanying bill raising
the revenues to fund any such bill."
Such a policy would advocate a
"pay as you go basis," and it would
guarantee to the public exactly
where their taxes are going.
The Senator does feel that
the public would agree to such a
policy. "If I were to go out onto the
streets ofBridgeport and ask people
if they wanted their taxes raised,
no hands would go up. But, if I
went out onto the same streets and
asked if they would allow their
taxes to be raised to fight the pres-ent
war on drugs, many hands
would go up."
Senator Lowell P. Weicker, Jr. PR Photo
The Senator concluded that
"Each decade brings new
problems...and we hope that we
can tip toe off the stage of history
without sacrifice." But, the truth
is, according to Senator Weicker,
that "we can't..
The address was followed
by a question and answer session,
in which members ofCODAC were
given the opportunity to hear Sena-tor
Weicker's opinion on many
specific issues, especially those
specifically of which the commit-tee
has the most concern. After
this session, the Committee held a
symposium entitled "The Political
and Economic Outlook in the the
Early Nineties."
Sinai, Ortner, Farrell Speak at Symposium
AnnMarie Puckhaber
News Editor
The 12th Annual Sympo-sium
on American Capitalism
entitled "The Political and Eco-nomic
Outlook into the Early
Nineties" was held on Thursday,
October 20, in the Oak Room.
The symposium included
speakers Dr. Allen Sinai, Execu-tive
Vice President of the Boston
Company; Dr. Robert Ortner, U.S.
Undersecretary for Economic
Affiars; and Mary C. Farrell, Vice
President of Pain Webber Inc.
Sinai opened the sympo-sium
with his talk "Election Year
Economics and Beyond," in which
he discussed the "here and now",
the by-products, and the future of
the economy. According to Sinai,
our present economy is "quite
excellent." The U.S. is experienc-ing
both economic growth and a
rise in family incomes.
The problems in the econ-omy
were oudined by Sinai as being
the rise in inflation, high interest
rates, high deficit, and a lack of
competitiveness versus the rest of
the world.
Sinai said the country is
now in a "full employment zone,"
where the unemployment rate is
below 5 1/2%. The "gap," or dif-ference
between potential output
and actual, explained Sinai, is
potentially zero. He said this pres-ent
state is due to the declining
dollar, which caused a revival in
exports.
Sinai predicted continual
economic growth throughout the
year 1989 but, also predicted a
recession in the year 1990. "Defi-cits
are a terrible problem and do
catch up with every society," said
Dr. Allen Sinai, Dr. Robert Ortner, Mary C. Farrell PR Photos
Connecticut Senator Questioned
on Contemporary Issues
Lynn Ann Casey
Assistant Editor
AnnMarie Puckhaber
News Editor
Senator Lowell P.
Weicker, Jr. answered questions
following his address to the Com-mittee
on Developing American
Capitalism on Thursday, October
20.
Question: There is a wide-spread
ofdeceit among politicians.
How would your behavior differ
from the current President if you
were in his position? Answer: "I
assume integrity, not law break-ing."
Many people assume politi-cians
are doing something wrong,
but "you can be very proud of
those who serve in government." I
think the "United States is head
and shoulders above any other
country."
Question: What are your
views on the debt-tax? Answer: I
do not think that this value-added
tax is being seriously considered at
Continued on page 3
Sinai. He said the budget deficit
must be eliminated inorder to take
pressure off the federal reserve.
Other predictions made
by Sinai for the future include
higher inflation and slower growth,
a weak dollar, and loss of purchas-ing
power overseas. v
Dr. Robert Ortner contin-ued
the symposium with his ad-dress
"Central Issues in the Eco-nomic
Outlook." He said the goal
of the Reagan administration was
"to get the economy rising again,"
and he believes it has been since
1982.
The "human side," as
Ortner called it, of the economy is
that 18 million jobs have been
created by the Reagan administra-tion
and, as a result, standards of
living have improved.
Despite these improve-ments,
however, Ortner said that
everyone agrees that "we must
reduce the budget and trade defi-cit."
The problem is that no one
knows how to go about it.
Ortner believes that it is
"important to have more invest-ment
at this point in the economy if
we want to keep it going." The
conflict that arises, according to
Ortner, is that people feel the grow-ing
economy is "built on a moun-tain
of debt." The debt amounts to
40% oftheGNP. However, Ortner
feels this is "not a disaster." He
said we have to "work harder on
the deficit but we don't have to
panic."
The first step, according
to Ortner, is to get spending under
control. He said that "taxes are not
an efficient way to reduce the defi-cit"
but that they only slow down
the economy. He concluded his
address by stressing the need for
"more capital spending."
Mary C. Farrell com-pleted
the symposium with her talk
"Investment Strategies with a
Global Perspective." Farrell be-gan
by discussing the Stock Mar-ket
crash of 1987. She said that on
October 20,1987, the day after the
crash, "we found out that our sys-tem
could sustain the economy.
"The Stock Market i
crashed because it was over-val-ued,"
said Farrell. However, she
believes the U.S. has now returned
to "rational investing." In the last
12 months, according to Farrell,
trading was very narrow but is now
entering into a "healthy market."
According to Farrell,
"acid allocation is what saved you
in the Stock Market crash." She
explained that this is what deter-mines
which asset is more attrac-tive
and, therefore, influences
which stocks are bought.
Farrell described the
economy as still being "extremely
vulnerable" but said that she does
not see another crash in the future.
She said, however, that "it's futile
to think we can stop a crash."
In her conclusion, Farrell
explained two investment themes.
The first is what she called "neo-mercantalism."
Farrell explained
that this is a shift in the U.S. export
policy to export products to newly
industrialized nations. She believes
that if we supply these countries
with what they need for industri-alization,
we will be successful.
The second investment
theme discussed by Farrell is to
restructure the service sector. She
said the 2/3 of the GNP is service
related and that there is a labor
shortage. However, Farrell said
there are "substitutions for labor
that we don't know are there."