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Show UJ & t Faria Is, flnj-.- r 0-(.- tr ,n -jr - University of utsh fait LkeCity, U112 ULih SALT LAKE CITY, UTAH VOLUME 16, NUMBER 248 THURSDAY, DECEMBER 28, 1972 Forecasters See Business Recovrey In New Year Although Inflation Perils May Reappear Business CHICAGO (ACCN) will boom in 1973 and Americans will achieve new heights of prosperity ' percent representing a real gain and 3.2 percent representing price in- flation. which will be broadly shared. The economy will continue strong However, unemployment will in 1973, he said, because: remain at or near 5 percent and 1 ) The expansion has substantial will reappear momentum; leading indicators of inflationary dangers economic activity are up strongly. during die year. That was the mixed message 2) Capital spending plans by delivered by a trio of eminent business point to a continuation and economic forecasters to an overflow strengthening of plant and equipcrowd of more than 2,000 ment outlays. businessmen at a luncheon here 3) Disposable income is rising December 12. The three economists strongly and consumers appear were: ready and able to buy. Walter D. Fackler, Professor of 4) Fiscal policy remains Business Economics and Director of strongly stimulative. 5) Monetary policy has been Management Programs in The of Graduate University Chicago's generally expansive, sufficiently so School of Business; to fiiel the economy at a good clip of Professor for months. Schweiger, Irving School in and the will Editor, controls Marketing 6) Wage-pric-e The Journal of Business; bear more lightly on the economy. Beryl W. Sprinkel, Senior Vice 7) Major tax increases or President and Economist, Harris revisions are unlikely for 1973, Trust and Savings Bank, and Editor, although by 1974 some major push Barometer of Business. on the tax front will have to be The occasion was the annual made." Business Forecast Luncheon of the 8) Developments on the inGraduate School of Business and ternational front are generally Executive Program Qub. The latter favorable. is an association of graduates of the real While Fackler schools executive program. Sidney Davidson, dean of die Graduate School of Business, introduced the speakers, who gave forecasts of Gross National Product (GNP) for 1973 ranging from a low of $1,255 billion to a high of $1,268 billion. At the luncheon a year ago, on Decembers, 1971, Fackler predicted the current year's GNP would reach $1,153 billion. Today he noted that prevailing estimates of 1972 GNP match his prediction exacdy, and he went on to forecast a 1973 GNP of $1,265 billion. This, he said, would represent a 9.7 percent increase over the current years GNP with 6.5 FJ. Dunfeavy levels. Named to ITTs President Post NEW YORK (UPI)-Fra- ncis J. been has named Dunleavy president of International Telephone & Telegraph, a move which puts him in line to succeed Harold Geneen as chief executive of the worlds largest conglomerate. Dunleavy, 58, has been an executive vice president of the firm. His appointment by directors makes him second in command at ITT. Geneen is expected to retire in 1975 at the age of 65. The post of president had been held by Geneen who still is chairman and chief executive. Many Wall Street observers said Geneen delayed naming a second man in command last spring because of adverse publicity the firm received during the predicted growth for the year averaging 6.5 percent he saw it trailing off to an annual rate of 4.5 to 4.8 percent by die fourth quarter. As the economy approaches fuller employment, as we narrow the gap between actual and potential output, the real increases must drop toward our he longer-ru- n growth potential, said. He said the real increase for 1973 would be achieved without strain" entrants plus an as new labor-forc- e unemployment drop will add about two million more workers to the productive force. Fackler foresaw consumer expenditures rising from 1972s $721 billion to $786 billion in 1973. Housing, he said, would sustain a slight decline from this years high con- troversy over the appointment of Richard Kleindienst as U.S. attorney general. A highlight of his tenure was the mercer in 1970 of HT and Hartford Fire Insurance Co. in a settlement with the Justice Department which required ITT to divest itself of subsidiaries with a value of 41 billion. That settlement has been challenged by many groups and individuals, including consumer advocate Ralph Nader. Corporate profits, we should be aware that some real dangers lie ahead. I am not at all confident that we have learned how to manage prosperity. As we approach full or fuller employment the economy will move once again to an inflationary threshhedd. We simply must find a way to reduce the growth in aggregate demand to a level that is consistent with our real long-ru- n growth potential of approximately 4.3 percent, and at the same time avoid throwing the economy into another recession. This is a very tricky business and the margin for error in monetary policy will get very thin next year. Schweiger forecast a broadly-basecomfortable economic boom that can be easily sustained and that will produce a 1973 GNP of $1,268 billion. That will represent a gain of close to 10 percent for the year, he said, with the real increase about 7 percent and price rises accounting for about 2.8 percent. d, Whereas in 1972 a host of governmental stimuli were employed to accelerate economic recovery, the motive forces in 1973 will be increasingly in the private Business inhe said. sector, vestment in plant, equipment, and inventory, plus consumer expenditures, particularly for durable goods, will contribute more heavily to expansion in 1973. Expansion will be most rapid in the first half of the year, said Schweiger; by the fourth quarter, he predicted, real GNP will be increasing at about a 6 percent rate, with price rises holding at a stable 2.8 percent. In current dollars, he said, GNP should be running at about $1,307 billion annual rate in the fourth quarter. The year ahead will witness reactions to greater employment security, . higher incomes, and a in record another abnormally large increase the labor force, according to Schweiger; he saw unemployment coming down from the current 5.5 percent rate to between 4.8 and 5.0 percent. The gains in personal in real terms, will set a record, he predicted, and the gains will be very widely distributed. The ability of the economy to produce j? 7 percent increase in real GNP will be facilitated, said Schweger, by a shift in demand to industries of high productivity (such as machinery, automobiles, and appliances) which now have growth contributing 5.8 percent and considerable unused capacity. m er income should rise by 9.1 percent to about $685 billion in 1973, he said; consumer spending should rise by about 9.7 percent, reflecting peoples Utah Supreme Court Decisions predicted, before taxes and taxes. In concluding his forecast Fackler sounded a cautionary note. In the midst of all this euphoria, he said, vs. HICHAM) I). MADSEN, et al. Defendants Atty. Gen. Warns Two Arraigned Prison Reform In New York To Cost Money Atty. Gen. Richard G. Kleindienst has declared that Americans should be prepared to pay $12 billion to modernize prison buildings needed to reform criminals. We have long known that if we can interdict die vicious cycle of crime, noncorrection and more crime, we can faring about long-tersavings, not only in the monetary cost of crime and fighting crime, but also in more important savings the salvaging of human lives, he said. In prepared remarks for the National Conference of State Legislative Leaders, Kleindienst put a $12 billion pricetag on revamping the nations prison buildings so meaningful rehabilitation can be undertaken. Kleindienst said the expenditure would not be wasted. m billion. Stale and local outlays will accelerate to a 12.1 percent growth rate, said Sprinkel, while federal expenditures on GNP accounts will rise oily slightly. He forecast that the net export deficit will decline from the current years $4 billion and will be in approximate balance in 1973. Unemployment, said Sprinkel, average 5 percent through 1973 and will be slightly below that level by the end of the year. Will 1973 see another period of very tight money and a credit crunch? Sprinkel discounted such fears. True, he said, a continued advancement will economic stimulate demand for credit, parmarkets. But ticularly in short-tera crunch environment is missing and monetary policy is expected to remain moderately expansive. I expect a moderate rise in short-terrates in the year ahead but little rates. change in long-terSpfinkel predicted that equity prices would continue the present in upward trend on average, response to higher corporate profits, stable long-terrates, and a moderately expansive monetary will m m See details page 8. (UPI)-U- .S. $53 m INTERNATIONAL CLLTIUAL EXCHANGE SCHOOLS, Plaintiff he up by 16 percent 17 percent after BEACH, FLA. price increases 3.3 percent. business, and Consumers, will share in the all government increase, he said. He projected consumer outlays to rise by 8.8 percent to $783 billion, with durables leading the way. Gross private domestic investment will grow 10.1 percent to $196 billion, he said; inventory accumulation will accelerate to about $10 billion, producers' durable equipment outlays will grow to about $88 billion, and housing will taper off slightly to m would go MIAMI million, Schweiger Sprinkel echoed the optimism of the other two forecasters, but in a more restrained fashion. He predicted a 9.1 percent rise in GNP for 1973 to $1,255 billion, with real The increase, he said, could be generated readily by a 3.5 percent or greater growth in private non-farlabor force producitvity, an increase in the employed labor force of more than 2.5 percent, and a modest lengthening of the work week. Schweiger was particularly optimistic in estimating 1973 expenditures for plant and equipment; early dans for such spending were based on an underestimate of the magnitude and duration of the expansion, he said, and sights will be raised, particularly in the latter part of 1973. He precudcted that such expenditures will be about 15 percent greater in 1973 than in 1972, and about 21 percent greater on a fourth-quartcomparison. personal 11.7 predicted. e, Disposable more tolerable rate of inflation. New automobile sales will reach a Police Deaths - Two men NEW YORK (UPI) to a black reputedly belong terrorist group accused of killing several policemen pleaded not guilty December 7, at their arraignment here for the murder of two New York city patrolmen. Anthony Bottom, 21, and Albert J. Washington, 32, were charged with the slaying of officers Joseph Piagentini and Waverly Jones on May 21, 1971 as the two policemen were returning to their car after answering a sick call from a housing who project in Harlem. State Supreme Court Justice John Sandifer accepted their plea and held them without bail pending trial. No trial date was set. The pair were already serving life sentences at the San Quentin prison in California fa the attempted murder policy. of San a Francisco policeman. They were arrested in the California city, Aug. 28, 1971, after an attempt to shoot the policeman through the window of his patrol car failed when a submachine gun pointed at his head failed to go off. Another weapon found on the suspects proved to be a revolver taken from the body of the slain New York officer, police said. Detectives in both cities said the pair were members of the Blade Liberation Army, a group said to be responsible for assaults on police in different parts of the country. Also charged in the slaying are Francisco Tbrres, 23 who is awaiting trial, his brother Gabriel, 24, and Herman Bell, 24, of San Francisco. Bottom and Washington were flown here under tight security by eight New York detectives, after being whisked out of San Quentin. .38-calib- er per capita consumption can come either from more cigarette use by the average smoker or a drop in the percentage of non-smoke- I Like Fackler, he saw the possibility that inappropriate government action could frustrate a the boom. What he termed that package of Washington policies could convert a rosy promise into disaster would include (1) no progress in controlling the budget; (2) a rapid growth in the money suPPty as an interim aid to budget financing; (3) conversely, a sharp decline in monetary growth in an attempt to quickly eliminate inflation; and (4) a tightening of the control program in response to political pressures. ATTORNEY GENERAL OPINIONS CONTROLLED SUBSTANCES ACT HAS NO RETROSPECTIVE EFFECT ON COMMUNICATIONS OBTAINED AND PENALTIES IMPOSED UNDER PRIOR DRUG LAWS. See details page 5. |