emerald
vol. 83, No 56
!
Eugene, Oregon 97403
Friday, November 20, 1981
Photo by Bob Batter
Gov. Vic Atiyeh
Atiyeh sees upswing
in sluggish economy
By DONALD COULTER
OMh* ErnaraM
Lane County 's ailing economy may be
bolstered by a high-tech' industry plan
ning to locate in the Eugene area, Oregon
Gov Vic Atiyeh said Thursday night at the
Lane County Convention Center.
Though he would give no details as to
exactly what company would be coming
here, or when it might arrive, Atiyeh
seemed confident that help - in shape of a
national electronics firm - is on the way
Atiyeh's prediction came at a small
press gathering before his speech to
about 150 people attending a two-day
conference entilted "Lane County's
Economy: The '80s and Beyond "
The new industry, Atiyeh said, will
provide jobs for 500-1 000 county res
idents He said the firm is one of three or
four high-tech industries planning to
locate in the state, tabbing Corvallis and
Beaverton as two other possible sites
He said the industries interested in
Oregon want to locate somewhere within
a 40-mile radius of a university and also
near public transportation lines
Unfortunately, these industries proba
bly won't locate here until interest rates —
which hover just above 18 percent cur
rently - start to plunge, Atiyeh said De
spite a drop in the that figure over recent
days, he said "significant further reduc
tions are needed “
"Businesses are no different than the
rest of us If you or I can't afford to buy a
house at these rates, businesses can’t
afford to come here "
In order to attract new industry to the
state, Atiyeh said Oregonians must
change the "no growth” image they have
been projecting for years
“We have to beat down the national
attitude that we (Oregon) don’t want new
business. For years, the no growth' peo
ple in this state have been extremely
successful in keeping industry away,
without realizing they were punishing
someone who needed a job.”
In his speech, Atiyeh emphasized that
economic diversification is essential to
growth in the county, to reduce depen
dance on resource-based industries such
as timber
Economic diversification will plant the
"seeds of a more stable economy." he
said “Timber will always be an important
part of the economy, but economic
diversification will even out the ups and
downs
Atiyeh added that help from the federal
government — in terms of lowering inter
est rates — is badly needed to ease
unemployment in the state He said
Oregon's unemployment rate — 10 6
percent — is nearly two points higher than
the national average
"A moderate recession in Oregon is a
disaster in Oregon,” Atiyeh said "When
the national goverment cools off the
economy (by raising interest rates),
Oregon freezes ”
Due to the cooperation of business,
labor, and state and federal governments,
Atiyeh said he believes interest rates will
decline and the economic downturn will
reverse
"Today is not forever The economy
will improve ”
Student GSLs
to come through
The Federal Reserve staff reversed a
Guaranteed Student Loan "commentary''
on Truth-in-Lending requirements Thurs
day, removing the final obstacle from the
path of many loan checks
The staff reviewed the comments con
tained in an Oct 9 Federal Register and
decided the intent of Congress was to
except GSLs from all Truth-m-Lending
Requirements until August 1, 1982, ac
cording to Griffith Garwood, deputy direc
tor of the consumer and community affairs
division
Garwood says the staff originally disa
greed on what he called an "ambiguous
statute" enacted by Congress Although
the Federal Reserve staff has the authority
to issue "binding interpretations," they
never intended their comments to stop
student loan payments, he says
Banks in many states apparently ignored
the comments and continued handing out
checks, but banks in Oregon and several
other states refused to pay until the conflict
was resolved The "main concern” was in
Oregon, Garwood says
Ed Vignoul, University financial aid dir
ector, says U S National and First Inter
state officials say their banks will be work
ing "super hard" this weekend to get
checks to the University
His office expects a "tremendous influx’"
Monday, and should be ready to hand out
checks by Tuesday, he says
Reaganomics okay, adviser says
By MARIAN GREEN
Of Iff# EriMraM
Reaganomics will work if the American
people give it half a chance, said Frank
Cappiello, investment adviser and com
mentator on the PBS show "Wall Street
Week "
Cappiello's speech, to an audience of
about 165 people, opened the two-day
"Lane County's Economy — The 80 s and
Beyond" conference The conference was
sponsored primarily by the Lane County
Department of Employment and Training
Reaganomics, the president's program
of tax cuts and tighter money policies
designed to reduce inflation and to in
crease long-term investment, is "well
founded in economic doctrine and theory,"
he said
Japan and West Germany operates
under similar policies that offer tax cuts and
savings incentives, and these incentives,
he said, have resulted in higher productivity
and not inflationary problems
"Those incentives will work" in the Unit
ed States too, he said Reagan’s plan is the
"first to encourage all people, not just the
working classes, to work harder "
Americans must recognize that reces
sion is a reality for return to a stable econ
omy, he said. And they must have faith that
the economy will improve
"We are in a recession It will be a fairly
long one There will be pain, but all of this
pain will have some gain," Cappiello said
By this summer, Cappiello predicted, the
recession will bring the prime rate — the
interest rate banks give their best cus
tomers — from 16 percent to 11-12 per
cent, and mortgage rates from 16-17 per
cent to 12-13 percent
"We know that with 12-13 percent
mortgage rates, the housing industry
begins to revive "
While the automobile and housing indu
tries — and lately the consumer industries
— have recognized the recession, the
president s public acknowledgment of the
recession is most notable, Cappiello said
"Most presidents haven’t been able to
pronounce the word
Major Wall Street investors don't fear
Reagan's policies will aggravate inflation
anymore than pre-Reaganomics deficits
already have, he said
Cappiello noted that Wall Street is con
cerned that big banks, congressmen and
businessmen will lose faith and will do just
what the President and the Federal Reserve
Board Chairman don't want them to do —
inject more money into the system,
undermining the policy’s aims
Noting that the media "hasn't been
much help," Cappiello said similar U S
policies failed in 1970 and 1974 — two
recessionary periods — because Wall
Street investors and banks got scared and
put money into the system, undoing the
policies' aims
The media severely criticized in 1963
Pres John F Kennedy's similar policies
that resulted in the "biggest capital spend
ing boom ever.
Photo by Erich Boekelheide
Frank Cappiello
‘ They worked for Kennedy They will
work for Reagan,” Cappiello said
Calling himself a chicken bull,” Cap
piello gave the policy a 60-40 chance of
survival through the recessionary period
“Inflation is our mortal enemy We can
beat it down. We only have six months to
go"