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Show Noverr.bf-- um'.., -- ATrer WASHINGTON e - than (i.N'P lJ5zj Michael K. Evans 1970 s to about percent today, a substantial accomplishment. Yet this improvement has for the most part been accomplished without the aid of what is usually considered the chief contributor to higher productivity capital spending. The investment ratio has declined from 12.7 percent to 12.1 percent during the past three years, and capital stock is growing at only 2 percent per year, compared to a postwar averge of 4 percent and a peak of almost 6 0 s. percent in the The gains in productivity have come from a renewed effort by both labor and management to work harder and smarter, and from the lifting of the burden of government regulation, particularly in the energy industry. These are commendable results that should not be ignored. However, they have now been pushed about as far as they will go without a boost from higher capital spending. In order to jolt productivity growth back to the 3 percent range, a higher investment ratio is critical. And this cannot be accomplished under the current tax structure and deficit burden. In a different era, when the benefits of the higher growth generated by continued easy money were thought to outweight the 'z Producing Abroad By DAVID ZIZZO materials outside the United States have made domestic production of a growing number of products not worth the trouble, a spokesman for a computer equipment manufacturer says. That's the reason Magnetic Peripherals Inc. laid off 450 workers at its Oklahoma City operation, MPI spokesman Kent Nichols said. Many other industries apparently are following the same pattern. "Where prices are low, volume is high and there is not a great deal of technology involved if you can apply that rule of thumb to other types of products foreign manufacturing will be very attractive," Nichols said. MPI, a worldwide computer equipment manufacturing firm owned by Control Data Corp, Honeywell, Sperry Corp and Bull Systems of France, manufactures disk drive units at its Oklahoma City locations. However, the company an- nounced Oct. 17 it was laying off about 20 percent of its Oklahoma City work force and discontinuing most of its production of flexible or "floppy" disk drives. MPI blamed the move on a "severe price erosion reflecting domestic and foreign competition and the subsequent decline in sales." Nichols said 50 to 60 companies, both foreign and domestic, are building floppy disk drives, but most domestic companies are moving their floppy drive production out of the United States. "The predominant number of domestic competitors in that part of the market also are moving their products offshore because of the tremendous cost savings," Nichols said. It has become "difficult if not impossible" to build floppy disk units domestically at a price competitive with units produced outside, Nichols explained. "They are available everywhere in the world from a number of different companies, all of them being essentially the same product, "he said. "Overseas manufacturing can the cost." be done for MPI, which supplies disk drives to its parent companies that market the units under their own brands, has contracted to have its 5 floppy drive units built in Hong Kong and Taiwan. MPI also has facilities in Minnesota, California and Europe. MPI workers in the United States will continue to manufacture rigid or "hard" disk drives. "Because of the technology involved, it's a much different issue," Nichols said. While floppy disk drive production is a "high-volumvery business, rigid left-hande- use. The Lefthander's Catalog contains 80 products for southpaws which include school supplies, scissors, kitchen utensils, gift and 1 Although the majority of statewide tax proposals deal with property taxts. also affected are growth and rising inflation to llourish in order to accommodate the boom a little longer. It debt rises because of a renewed boom, the Fed will act vigorously to tighten and push interest rates higher. That could result in another see-sapattern ot economic behavior with a second pause and yet a third try at but this is renewed recovery not at all the same thing as saying that the economy will e enjov growth a la the 1960 s. Finally, we still are not confirmed believers of the ultimate strength and stability of the dollar at its current high levels. The trade deficit of $140 billion a year will continue to increase so long as the dollar remains at current income, sales and fuel taxes um? persons, teries, handicapped bingo, industrial development, equality ol the sexes, the environand nument, homeless merous other topics Aside fioiii tax leit'ienJa. questions facing the voters concern abortion, handgun control, nuclear arms freeze, school textbooks, executive and legislative terms of office and salaries, medicaid, hazardous wastes, veterans aid. capital punishment, cable television, constitutional amend sht-lter- s Registered voters across the nation will be aked to consider more than 2ih) such proposals, excluding thoe in Kansas. Massachusetts. Ohio. Tennessee. Vermont and W isc onsin levels, the international debt crises persists, and the Federal budget deficit stays at 5 percent or more of GNP. Eventually it will become clearer that real growth is not going to accelerate throughout the 1980 s: that Congress is bent on passing tax legislation that will harm rather than help savings, investment, and productivity; and that inflationary cost pressures are creeping back into the fabric of industrial society. As that occurs, the demand for dollars will be less intense and foreign investment will diminish accordingly. Consequently the dollar will decline, and the Fed can prop it up only by raising interest rates to a point where they will choke off any remaining growth, leading inevitably to another I . State Savings FSLIC 125 South Main Street. Salt Lake Cirv L'uh Headquarter! Offices in Salt Lake, Ogden, Logan, Clearfield, Centrrville, Murray. Orem and Pavson. 3j5HJII1I3 Radl6 Sfaaeh i State in out sm i cly. high standing people, prestige And that's the meaning you 11 Jind in the something respected. new PRESTIGE checking accounts at State Savings But Trestigi checking is more. Tree checking accounts with a package of services High interest earned on the entire account balance State Savings offers three Prestige checking programs that give you free checking and earn high interest on your account. Our Prestige 1(H) account pays you 5'4 interest compounded daily, with no service charge when you maintain a SUM) minimum balance. Prestige Money Market checking pays high money market rates on your entire account balance, and the Prestige Money Market Investment account pays an even higher interest rate. Each account comes with a package of valuable services, all free of charge. Eor a limited time. State Savings is giving away the "Heritage'' series of scenic Ttah posters to anyone opening a Prestige checking account. See us today for complete details on all three Prestige accounts, at any of nine branches in Utah. i (rtdnd-uayumu ! i I LEASING service training two-thir- e, drives require very expensive environments and times as much, sell for about so they are not as sensitive to overseas price competition. Nichols said. The low cost of labor outside the United States is the main reason some products made in America cannot compete, but it isn't the only reason. Nichols said. Components and transportation also are cheaper overseas. Nichols said tariffs, quotas or other trade barriers would be e ineffective in making manufacturing profitable in the United States., especially with products like computer equipment that are bought and sold worldwide. "There is so much worldwide competition for this type of product," he said. There's little left for U.S. manufacturers to do but switch to products that are not subject to global price wars based solely on wages and component costs, that fight already has been lost, Nichols said. "1 don't think there's really a battle anvmore." he said. "clean-room- " 10 Save with the Tandy 1200 HD of the PC XT! the "Mirror-Image- " n Compatible with Virtually All Hardware and Software for the PC XT, including Lotus 1 - 2 - 3 and Symphony n New Tandy 1200 HD ($2999) Features Floppy Disk Drive and Hard Drive b A Tandy 1200 HD, Monitor and Display Adapter is Just $3437, Compared to a Comparably Equipped PC XT for $4920' d A Tandy 1200 HD Color System is Just $3847.95, Compared to a Comparably Equipped PC XT for $5394 labor-intensiv- $120 Only Per Month on Our Commercial Lease Tandy 1200 Monochrome System TANDY... ClearlynService Superior Technology iSupport TANDY CHRISTMAS COMPUTER CAMP GIFT CERTIFICATES! 5 someone a head start in computing! Camps for ages and adults will be held 1 at Radio Shack Computer Centers. Computers and instructors during December provided at each of the five daily sessions. Give novelty items. All of the products nave been tested for quality and durability by I. HI Since 1975, LHI has provided information on products, research and achievements of lefthanders through the publication of Lefthander Magazine. A free LEFTHANDER'S Catalog is available by writing to LEFTHANDER Catalog, P.O. Box 8249, Topeka, KS 66608. IT ments and conventions, state lot and motor Means Free Checking at means Jo most above-averag- Lefties Catalog Available Lefthanders International, publisher of Lefthander Magazine, announces the release of Lefthander's Catalog featuring an entire line of mail-orde- r products d designed specifically for posals leading the way, voters in 44 states and the District ot Columbia will act on a host of special constitutional amendments, initiatives and reteremitims on Election Day. says Commerce Clearing House - mid-196- High Tech Makers OKLAHOMA CITY (UPI) -Cheap labor, transportation and However, this is anothei critical difference between now and the 1960 s, or for that matter even the late 1970 s. The Fed and this statement holds just as true whether Volcker stays or goes will not stand idly by and permit the combination of above-averag-e is x After that, however, no clear pattern emerges. Sometimes the economy cannot shake off the negative effects of the pause and heads back into recession; other times, notably in 1962 and 1967, the catharsis proves effective and the economy regains its strength for several more years. With inflation well under control, some optimists foresee continued expansion for the remainder of the 1980 s as well. However, we do not expect this to happen because of the more restrictive role monetary policy is likely to play in late 1985 and during 1986. The initial phase of the recovery in 1983 was greated almost immediately with higher interest rates; and while they subsided later in the year, rates rose significantly during the first half of 1984 when real growth remained at 8 percent, the dollar momentarily "veakened, and the ugly spectre of higher inflat;on reappeared. Just as the Fed is now easing in order to stave off a recession, it will tighten once the economy gets back on its feet in order to ward off any signs of higher inflation. And it will not wait until the inflation has been already been recorded on the books. Everyone would like to see the economy emulate the economic sans performance of the 1960 s the Vietnam War, of course. However, it still seems the key factors that worked in the direction of stable or lower inflation and kept the recovery alive 20 years ago are likely to be missing when they are needed later next year. The first item on the list is productivity. The underlying rate of productivity has increased from ''2 percent during the late With varied statewide tax pro- costs ol higher inflation, the Fed might have by permitted total debt to grow appreciably faster now. Page Voters Queried on Tax Proposals Lull (L'PIi Ever' business cycle expansion in the postwar period has been interrupted by a marked slowdown in the second year of recovery, just as is occurring full-scal- - Tah I and the business world Uture is Unoredicfable m THF HKKAI.I). Pr..vn. 4. 1984 What is happening on stock markets O (Lib IBl&dd rosT-Boo- r 1, 12-1- 26-3- ur 4Q95 Plus applicable usesales lax. 'Based on manufacturer's pricing as ol June, 1984. IBM is a registered trademark ot International Business Machines Corp. Our Local Computer Center Serves You Better Orem, Grand Central Plaza, 384 East A DIVISION OF TANDY CORPORATION & 1300 South PRICES 226-865- APPLY AT RADIO SHACK COMPUTER CENTERS AND PARTICIPATING STORES 1 AND DEALERS |
