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About Oregon daily emerald. (Eugene, Or.) 1920-2012 | View Entire Issue (Feb. 12, 1981)
Prime rate acts as inflation weather vane By JEFF BAKER Of the Emerald Loan rates charged by banks, busin esses and the federal government may not be of prime interest to consumers, but they determine credit levels across the country. The prime interest rate — the rate banks charge their best commercial customers — is used as an economic indicator by both financiers and market analysts. “It's a sensitive reflection of where interest rates are overall,” says Charles Smith, financial loan officer for Citizens Bank of Oregon. “Other interest rates are adjusted to the prime.” The rate banks charge for other loans are generally less than the prime — from 10 to 17 percent for personal and mortgage loans to 19.5 percent for the prime. University economics Prof. Barry Siegal says banks often charge local businesses lower rates to keep them alive. “Banks can't afford to keep lending at a lower rate since they borrow their money at a cost,” Siegel adds. Siegel says the prime is a “reflection of anticipation of inflation, which is why we see it increasing." The real interest rate “without inflationary prospects” would be about 3 percent, Siegel predicts. State usury laws previously limited the rates banks could charge for most non-commercial loans to 15 percent, Smith says This "arbitrary restriction" was lifted last summer when "most favored lender" loans were instituted. These allow banks and savings-and loans to charge roughly the same rates finance companies do, Smith says. This allows the market to set the interest rate, as Siegel emphasizes it should. The importance of the prime as an economic indicator lies in the way it measures the cost of credit. The con sumer price index — the most closely watched and widely quoted economic statistic — measures the cost of goods and services. The two are connected, says Smith, characterizing the prime as a “coin cident" indicator — one that goes along with economic trends rather than predicting or following them. One consequence of a high prime rate is that it makes holding inventories more costly, says state labor economist Margaret Simeral. “This increases production costs and makes for a slower economic recovery,” Simeral says. Mortgage rates are more important to Lane County’s housing-dominated economy than the prime rate, Simeral says. She calls the prime a “short-term corporate rate" that is generally higher than prevailing mortgage rates. Bill would give police wiretapping leeway By GREG WASSON Ol the Emerald SALEM — Fear of electronic recording already has found expression in Oregon law through a statute prohibiting recorded face-to-face conver sations unless all participants know the tape is being made. But a new proposal would create an exception for police officers. A small allowance already is made for police when the crime involves drugs. House Bill 2432, if passed, would expand that allowance to permit police to Sports weekly: Reject Jones’ dome donation Sports Illustrated suggests in its latest issue that the Universi ty tell lumberman Aaron Jones to keep the $250,000 he's pledged to the University athle tic department to help build a new basketball pavilion. Jones, through his attorney Lewis Hoffman, has been reported as saying he will not donate $250,000 toward the basketball facility if the Univer sity doesn’t dismantle its Environmental Law Clinic. The clinic has received cri ticism from Jones — and more recently the Evergreen Forest Products, Inc. — for its invol vement in an Idaho suit restrict ing logging in Idamo. Sports Illustrated, in its Feb. 9 "Scorecard” column, avplaud ed the University’s stance that "it has no intention of closing the clinic.” But the column sug gests the University take one more step in the matter to dis courage boosters from wielding undue influence over a univer sity — or its athletic department. "It ought to go even further and directly repudiate Jones’ ultimatum — and his now-taint ed gift," says the column. "No school needs a gym that badly.” legislative issues secretly record conversations in all criminal and motor-vehicle offenses. A police lobbyist believes the change is needed. “If police officers are not per mitted to utilize the most so phisticated techniques to ap prehend those who are violating the law,” says Jack Kane, lob byist for the Oregon Council of Police Associations, "we won't be able to compete with them.” Kane's feeling is echoed by a representative from the attorney general’s office, who says that without the change, it will remain virtually impossible to arrest the "kingpins” of organ ized crime. But at least two members of the House Judiciary Committee have expressed concern that the bill will allow police to run roughshod over suspects. One member, Rep. Joyce Cohen, D Portland, is dismayed because the bill does not require ap proval before an individual police officer is wired for sound. “The bill should allow for the OK of a judge or superior — someone who knows who’s taping whom, and when," she says. "I’m concerned that this bill would allow any police of ficer to go on a fishing trip until they find somebody who will incriminate himself." Rep. Dick Springer, D-Port land, voices another possible problem: The amendment, he says, does not require officers to have probable cause of a crime before wiring up. Black leader decries racism It’s time for blacks every where to organize themselves — militarily if necessary — against the rising tide of racism in America, said Donald Brown, president of the Black Student Union. Speaking to 20 people in the EMU Tuesday night, Brown cit ed the murders of more than a dozen black children in Atlanta and the hearts of blacks getting cut out in Buffalo, N.Y., as ex amples of racist violence in America. Brown said many blacks are ‘‘willing to work it (race prob lems) all out” peacefully but aren’t going to practice non violence while they’re gunned down by racists. He said he ad heres to the Black Panther philosophy of arming oneself against violence. A revolution in America is in evitable, Brown said. ‘‘Miami was just a preview of what’s to come.” White liberals might not fit into a black revolution because they aren’t willing to die for the black cause and will "change sides when the going gets rough," Brown said. Many people — including Dollar Rent-A-Car Systems Weekend Special! No need to stay at home when you don't have a car. With these special low rates you can afford to enjoy the weekend! We feature Fords and other fine cars. *14M per day weekends Free mileage in Oregon Savings is the key! 211 W. 6th, Eugene 485-8980 some blacks — believe black Americans aren’t discriminated against as much as a few decades ago, but discrimination is more subtle and sophisticated than in the past, he said. Eugene isn’t free of racial prejudice either, Brown said He said landlords in the city have refused to rent to him, and he has frequently been pulled over by policemen for just "acting black” — bobbing his head to the music of his car radio. Only one black attended Brown’s talk. Brown said the lack of blacks at the speech was a “definite problem” and that he would rather be talking to a black crowd. Apathy is the reason most blacks didn’t come, Brown ex plained. Most of the 175 blacks attending the University are athletes who only care about receiving professional sports contracts after school, he said. However, Brown said many blacks were probably afraid to attend the meeting because the CIA and FBI keep close tabs on black activities. "We're probably being moni tored right now ’ he said. Brown s address was spon sored by the Muslim Student Union, Black Student Union and other campus groups as part of the “Week of the Oppressed.” MOVING SOON? MOVE IT YOURSELF & SAVE 50% Dependable Cars, Trucks & Trailers Low Rates LOCAL & ONE WAY TRUCKS CARS ROUND TRIP ONLY g| Reservations Now Guarantee “sr Da,“' *■ Equipment TRUCK & AUTO COMPANY 345-2353 10% Discount with copy of this ad J "To me, that opens up a sit uation where the officer can just be wired without necessari ly knowing that something is going on,” he says. "People may be breaking the law and there may be evidence inside a house that they are doing that, but the police still have to obtain a search war rant.” Springer also questions whether secret recording with out judicial approval may violate constitutional limits on searches and seizures. The committee will schedule further hearings on the bill University of California, Santa Cruz BACKPACKING SPRING QUARTER 15 UNITS Southwest Canyons ecology • ethnobotany ancient cultures Rocky Mountains ecology • botany wildlife studies Financial Assistance Grants available Deadline to apply: February 20, 1981 Phone (408) 429-2822 or Write: SPRING FIELD STUDIES Cardiff House University of California, Santa Cruz Santa Cruz, Ca 95064 Tonignt COLLECTORS NO COVER • Rock n Roll Fri & Sat DOUBLE FEATURE ATTACK & THE FUN NO COVER in the Lounge AND THE NEW LON GUITARSKY GROUP, Latin Fusion Dancing in King Cole Room Sunday's Country Night FULL HOUSE NO COVER • Country Rock In the Eugene Quality Inn 222 E Broadway
