Show The Herald Journal Logan Utah Sunday May 3 1981 22 A Trade report: Perhaps reflection a attitude toward the new administration’s economic game plan the West's business people appear to be optimistic based on results of the Prudential Insurance Company’s newest Western Business Forecast wait-and-s- ee survey Comparing their anticipated quarter business activity in second against the first quarter more of the respondents (67 percent) in eight Western states report they expect to make gains The and downturn factions remain evenly divided (16 percent vs 17 percent) (In the last quarter only 59 percent saw an increase coming while a full 25 percent predicted a drop) Idaho-Uta- h business people are less confident about the current quarter compared with the last three months: 63 percent of the respondents expect increased dollar volume 17 percent don’t look for any change 20 percent 1981 two-thir- e A advertisement in a Provo newspaper method of how to giving the details for a mail-ordget out of debt in 24 hours is "stark evidence’’ that Congress has gone too far in liberalizing bankruptcy laws says Senator Jake Garn ( “Millions of responsible consumers end up paying the bill when financial deadbeats find a way to escape from their legitimate obligations" Gam full-pag- er h) said West optimistic than Bankruptcy laws liberal Gam says ds Bankruptcy has a necessary role but it should be a last resort not the easy way out he said The senator referred to the advertisement which appeardin The Herald in Provo The advertisement contained a banner-siz- e headline: “Provo couple gets free of debt in only 24 hours!" The advertisement also read: “Why should any family (or individual) face years and years of scrimping to dig out from what must seem a bottomless pit especially when it may not even be their fault that they fell into it in the first place" The ad described a fictitious Provo Utah couple who “discovered" that by “taking advantage of some brand-nelaws recently passed by the federal government they solved all their problems — and w they did not have to go through bankruptcy” “There is no reason not to take advantage of this d government-permitte’escape’ nor any reason to let pride interfere” the ad continued “(After all you’re not responsible for inflation or high unemployment) All you need is $15 You pay that to the clerk of the court when you file your papers Gam told The Herald Journal the couple described in the ad had suffered a succession of serious financial setbacks which in “real life" would be relatively unique “The ad obviously was designed to encourage large numbers of people in less extreme situations to look for an easy escape from their problems" he said sources estimate that sonal bankruptcy in $2 billion was lost from per1980 Garn said “I believe bankruptcy laws are necessary to protect individuals who suffer unexpected catastrophic financial losses such as through a natural disaster However it was never the intent of Congress to allow people who have lived beyond their means through the availability of easy credit to escape Builders want tax-fre- e savings Tax free treatment of all interest earned on savings deposits earmarked for home loans as see a downtrend By contrast the Forecast panel is less optimistic when making comparisons for the second year-to-ye- ar proposed in a bill by Sen Lloyd Bentsen could reduce interest rates on home mortgages by three or four percentage points members of Congress were told this week Herman J Smith president of percent are predicting an quarter: upturn One year ago 71 percent expected a improvement 62 year-vs-ye- ar Earnings down the year Lower earnings occurred primarily in utility operations and are due to much warmer than normal weather and the fact that the comparable 1980 period benefitted from an sale of natural gas which was not repeated in the current quarter earnings were $14575000 compared with $14950000 for the first quarter of 1980 After payment of preferred dividends earnings for common were $13231000 compared with $14538000 last year Earnings per share for the first quarter were $171 on 7720624 shares outstanding compared with $213 or 6820624 shares outstanding a year ago higher-yieldin- compete with unregulated money market mutual funds which have siphoned off more than $120 billion of potential SAL deposits Without tax incentives for saving Smith predicted that at best mortgage rates would recede no lower than into the 13 percent range in 1981 assuming a gradual decline in interest rates later in the year Initial tax revenue losses to the Treasury under Sen Bentsen's bill would be totally offset by gains generated as a result of the interest exclusion Smith said He added that when fed into NAHB’s Econometric Model the Record reached George S Ecdes chairman and chief executive officer of the bank holding company fold shareholders attending the firm's annual meeting this week that First Security achieved record earnings before securities transactions in 1980 of $409 million compared with $370 million in 1979 Per share earnings were $344 up 99 percent from $313 in 1979 and repreannual compound sent a five-yegrowth rate of 135 percent Earnings for 1980 were achieved in the face of record expense of $331 million compared with $290 million the previous year an increase of $41 million or 14 percent The largest single item of expense was interest amounting to $2121 million an increase of 187 percent Ecdes said UPl ar UCSB underwritten The Utah Council of Small Business (UCSB) announced this week an agreement had been reached between Blue Cross and Blue Shield of Utah and Beneficial Life Insurance Company to underwrite the Council's UCSB Insurance Association group health care program The new association comes as a direct result of the Association’s rapid growth that has seen the small group program increase to more than 7500 individual policyholders representing nearly 2500 small businesses throughout Utah and is effective May 11981 More bonds sold A star is coal-fire- ment underwriters headed by Salomon Brothers of New York Interest rates ranged from 975 to 12 percent born forecast is that the funds The first production models of the DeLorean sports car arrive at the loading docks in Northern Ireland for shipment to the US John DeLorean who owns DeLorean Manufacturing in Logan’ said the first consignment of the new $25000 cars will go on sale the end of May The Logan company plans to have a display model but it will be a while The 400 cars that are on their way to Long Beach Cal and most of what are being built have already been sold said Gordon Hine marketing manager for the Logan company generated by the bill would produce 600000 additional housing of units and 860000 man-yeawork in the first year This in turn would create $721 billion in total economic impact including more than $8 billion in Federal tax revenues $36 billion in employment and business taxes and reduced outlays for rs breadline programs and $2 billion by substituting private sector mortgage funds for tax exempt revenue bond funds For would-b- e difference homebuyers the between today's 15 percent mortgage and the 12 percent loan under the Bentsen approach would save almost $150 on monthly payments for a $60000 mortgage That would 30-yea- r price more than 4 million families back into the market for a median-price- d home Smith also voiced support for the legislation introduced by Sen e Robert Dole to create a housing savings account for firsttime homebuyers Citing survey findings that only 18 percent of all homebuyers in There are people who keep promises they make to themselves during college that some day they'll write a book H Craig Petersen assistant dean of research in the Utah State University economics department for a long time has felt that textbooks on business and government were just too wordy and “ex- tremely dull” Petersen's “Business and Government" is warm off the Harper and Row presses in New York They had to push up the publication date so he could use the book for his spring quarter senior students he said ge It seems many similar textbooks are written by professors to impress other professors Petersen said “I wanted to write a book so when students read it they would say ’I understood what he’s saying and I didn’t fall asleep' " Petersen said his $18 text is basically a survey of regulation and business that tries to be fair It leans more toward presenting the economics of business and government rather than the legalities He believes that many of today’s students don’t get the chance to rub against the threads of the basic economy because of government His personal view of government is it has expanded its role much too far into business and has only recently been forced to wonder if what it has implemented is really worth the cost 1979 were first-tim-e purchasers compared to 36 percent of the total in 1977 Smith said tax-cutargeted to saving and housing were needed to remedy the affordability problem for the record number of first-tim- e buyers expected to descend upon the housing market during the ts 1980s Demographic projections indicate that during the 1980s 41 million Americans will reach the prime home buying age of 30 compared to 31 million in the prior decade The rate of new Petersen is a Logan native and has been teaching at USU since 1973 He has faith that Reagan’s proposals will work out: if not now in the end His reasoning is that new policy is trying to encourage people save again and is pushing for wiser government spending There will always be conflict between business and government he said Business recognizes government is necessary but nowadays they’re saying there is just too much regulation But business can’t blame everything on government Petersen said There is a low degree of economic literacy in the country he said Most people including business people can't back up their complaints with facts he said' j ' ' ' household formation will be 25 percent higher than in the 1970s Yet because of mortgage rates housing production has so far this decade lagged far behind the rate set in the previous 10 years Housing starts totaled 129 million in 1980 and are expected to improve only slightly in 1981 to 132 million units Smith said that the unsubsidized FHA mortgage insurance programs represent a necessary op- home-buyetion for moderate-incom- e particularly when in- terest rates are high and credit becomes less available To clear up any confusion the Administration may have about the role and future of these programs Smith said that since its inception in 1934 FHA has fulfilled its role as the lender of last resort Excerpts “Reagan’s election is a potential revolution in government" he said “Many of his economic policies are yet untested and have been accepted on a matter of faith" ! tax-fre- rs Professor keeps promise to not be dull 478-pa- Intermountain Power Project officials say they have completed a deal to provide $300 million to additional funding to help construct the huge d power plant near Lyndal The chairman of the Intermountain Power Agency Reece Nielsen said the funds will complete the second of a series of bond sales to finance the planned 3000megawatt unit Nielsen said the latest set of bonds were purchased by a team of invest- National er m off-syste- m Consolidated 123000-memb- Association of Home Builders recommended the (NAHB) Bentsen tax free savings proposal to the Senate Subcommittee on Housing and Urban Affairs as “a strong positive step toward the solution of the present housing crisis" The Bentsen bill Smith said would restore a long-tersource of mortgage funds which have recently been seriously eroded by banking deregulation and a shift from passbook savings to g money market certificates It would also he added allow savings and loans to SALT LAKE CITY — Mountain Fuel Supply Company this week reported that earnings for the first quarter of 1981 were down compared with earnings for the same period last - Gam said he was brought up on the idea that if a person borrowed money it was paid back — no matter how difficult it might be The basic issue involves honesty and personal integrity and the nation’s laws should be structured to encourage people to honor their obligations if at all possible he said Garn said Congress went “too far” in amending the bankruptcy laws And millions of small businesses millions of borrowers and persons ing credit who must pay additional charge to make-u- p short fall caused by bankruptcies and millions of persons who will seek credit in the future will be denied because of tightened lending policies and higher interest rates Garn rejected the notion that Congressional review of the bankruptcy laws which began Monday pits the consumer against some nameless corporate entity In fact the question is about the balance between those consumers who pay their debts and those who do not he said It is not the nameless corporate entity that picks up the tab for bankruptcies but the consumers who pay their debts Garn said "In today’s world the involvement of government in business activities is as much a reality as are the forces of supply and demand There is little that the businessperson does that is not affected by actions or policies of some level of government The scissors of supply and demand are still crucial factors in market outcomes but to suppose they operate unaffected by social control is to be very naive “The average person is concerned about the interference of government in his or her life There is a feeling that our lives are somehow less ours than they use to be that the freedom of choice and action Jiat we fancy we have always had is being usurped by faceless bureaucrats responding to books An jargonized regulations written in organization such as the federal government with over two million civilian employees and a $600 billion budget must be a threat to the “little guy" trying to eke out a living by working long hours driving a battered Ford and buying margarine instead of butter The sheer size of government conjures the impression of an unyielding amorphous force devouring everything in its path “The typical course in introductory or intermediate microeconomic theory serves to cloak the real world The student is continually exposed to the wonders of the market as governed by the twin deities supply and demand ' |