Winnipeg Free Press

Winnipeg Free Press (Newspaper) - November 23, 1982, Winnipeg, Manitoba Winnipeg free november f i economic doubts increase protectionism Ottawa it was not very Long even As the world was sliding into the present that leading financial authorities were forecasting that the downturn would be unusually painful but the world Economy is the thinking a deep slowdown would squeeze out some of the inflation that had become so strongly rooted in our economic that done the world would soon be1 Back about its Busi How innocent we All bit by As the analysis becomes More much is being Learned about the depth and complexity of the economic and the severe facing the world As it seeks this As Over 100 Trade minis ters gather in Geneva under the auspices of the general agreement on and they will have be fore them a Brilliant overview of the prepared by Gatt in Antici pation of the conference and published month in its widely respected Trade the analysis is Well Worth careful by anyone seeking some under standing of How those Well known ogres economic inflation and Trade have acted to bring the world to its present dismal with some that Story begins essentially in the very year the Trade ministers held their last meeting 1973 and with what the Gatt writ ers describe As the least disputed fact in All the major Industrial the proportion of investment in relation to Gross National product except for housing has declined since that it thereupon offers a proposition that the weakness of investment with near be viewed As the of slow growth and High Unzem restating that the decline in economic growth reflects an inadequate Pace of adjustment to changes in relative sup plies of labor and capital and comparative with the study introduces its concept of the accumulated backlog of adjustments which is Bur Dening National economies and stifling their that backlog is As evidenced by the rising unemployment and the growing demand for Protection and uncertainty the key to the reduced level of the Gatt analysts Sug has been Uncertain first of about the future Avail ability and Price of uncertainties generated by inflation including uncertainty Abri it the future course of prices diminishing certain in the face of protectionist that foreign markets will remain open in the last year or uncertainties related to the perceived deterioration of Bank assets and corporate balance which has raised questions about the future solvency of both nations and individual corporate these uncertainties have affected not Only the level of but Money into areas with Short payoff periods and away from risk Tak of the study goes provides an important part of the explanation for the puzzling decline in the rate of productivity growth in re cent relatively Large contributions to such growth Are in More stable times made by Greenfield new up tothe i Joan Cohen Ottawa editor Nute technology in the production pro even larger contributions Are made by investment in new products and new both these invest ments Are considered too risky in Uncertain As now seems inflation is brought under some of these decade old uncertainties should i though not the Al pervasive uneasiness related to the Energy Situa nor Many of the dangers overhanging the worlds when nations Are properly exploit ing their growth they Are going through a continuous process of structural More efficient industries Are expanding while industries injured by technological change or shifts in or which Are losing their competitive but Gatt research has suggested that for Many years Domestic rigidities Well As invest ment uncertainties have often blocked such political factors some of these occur when considerations of political acceptability go into economic decision making and result in protectionist Trade policies and Industrial in this artificial and confused the labor Market gets the wrong and the Supply and demand for particular skills gets out of excessively High Levels of longer term unemployment other countries feel the of for the writers con import restrictions in the Indus trial countries affect the allocation of investment and future growth prospects the developing with their Trade opportunities they get and can Promise less than optimum mileage from invest ment in these As the world is now learning to its horror they have found themselves unable to service their dead weight debts assumed just to Purchase foreign and unmet interest Obliga Are a Black Cloud suspended Over the ailing and anxious banking sys the Gatt researchers go on to note How it was the Victory of protectionism in the in and its subsequent that produced the dreaded and partial col in the banking system in the great in it is the Prospect of or a series of bankrupt in the banking system that emerges As the top Short term concern of the Gatt it has often been has a cleaner record than Many in the protectionism subsidy but that record is far from unblemished at either the Federal 16vel often offend ing in its Dree regional assistance actions or in the Central through the protectionist a directed at the developing world Andin concert with other Industrial was most notable in the Tex clothing and footwear and in via construction bailout1 action and import it has put Down deep roots in the car Industry As the Gatt study departs from its main theme to report that recent anal Ysis has finally proved that efforts to protect Home industries against imports can impair a country capacity to the protected Able to show higher can offer higher wage rates and returns on in drawing workers and capital away from other industries and forcing up the general level of wages and industries Selling abroad find it harder to their profits resources throughout the Economy Are being used at a lower level of efficient and a country income is re the relationship has been Stab the study in analysis of the actual experience of a number of in the analysis appears to have established the Al important fact that a country even unilateral removes its Tariff barriers will find itself More competitive International and a Richer the study concludes by observing that it is in the backlog of adjust ments on the world and in the corresponding weakness in the inter National financial that the worlds problems continue to grow units proposed solutions Are easy enough to As the Trade ministers meeting will readily recon difficult in the extreme to either plan for or pointing to the finding that Trade liberalization will actually Benefit Domestic the Gatt study Calls on the worlds nations to rein Force the positive investment strength ing effects of declining inflation and interest rates by Clearing the Way for structural adjustment to proceed with out further this Means ending letting noncompetitive industries go the Way of the Dodo and letting Trade follow the course of least the 1980s will Tell if we Are up to a world bound up in Trade barriers is heading for economic report Reagan charts a risky course by Bogdan Kipling special to the free press Washington president Ronald Reagan keeps urging americans to stay the course on economic the he is already pulling out of the recession and Prosperity is around the although it will take a Little sweat and a few tears before we get by staying the Reagan seems to mean that americans should keep fighting if they succeed in1 wrestling it to the ground for the other problems will take care of them echoing his masters trea sury Secretary Donald Regan declared in mid november that a economic recovery has already Regan could not quote any statistics to support his but the Lack of positive proof of an economic upturn can always be hidden by statistics showing that the rate of decline has slowed Down and that precisely what Regan such juggling of statistics is common to All politicians and Regan should not be taken too but his the president of the United should be held to a higher Standard of when he Calls upon the people to stay the somebody had better make sure the titanic int headed for president reagans steady course so far has taken the United states and with it the rest of the industrialized Western to the Brink of depress staying with it poses More risks than opportunities to save the at that the consensus among Washington politicians and including most of these Nior ones in the Reagan adm Nistra Rudolph an economist at the american Enterprise agrees with Reagan up to a it is important to prevent inflation from rising if inflation were to cause an other Penner there is no Assurance our economic system could withstand it during this dec but even a conservative Man in a conservative research organi doubts reagans Wisdom in reaching for accelerated tax cuts to help the Lack of fiscal stimulus is not one of our Penner says Lack of demand which boils Down to the question of what happens at if Christ Mas sales Are As poor As they were in the last couple of Penner i will have to revise my assess one of the Bright spots in the econ omy now is supposed to be from the depth of the housing contractors appear to have acquired some degree of starts projected for the first three months of next year should run at an annual rate of according to the National association of Home but such a level of still depress Onville in the eyes of the builders and construction labor in an average says Robert staff economist for the Home builders the Industry should be putting up million housing in 1981 Only Homes were Sheehan making the improve ment to million expected this year seem so Good by but the housing improvement is clearly relative and the billion tax Cut would like to see could abort recovery in this vital the tax Cut would add to the budget deficit and that in turn would tend to boost Bank interest and mortgage says the Home builders the Auto Industry is still in deep with no evidence that customers Are about to flock to the As Long As the Auto Indus try is even White House economists steel the rubber Glass manufacturers and paint mixers will be the rate of under utilization of american factories is the Federal Reserve Board reported in mid november that Only per cent of Industrial capacity was in use in the lowest since the Central Bank began to gather such statistics in another key indicator of a country economic has been holding up or even increasing As Only the Best Industrial plants and workers Are still pm but production the Over All output of industries has taken a nosedive in the summer of 1981 and the Angle of the plunge is levelling off Only be cause production fell by just per cent in the third Quarter of this say Washington the Rea Gan administration is claiming an eco nomic such ring hollow in of the 11 million jobless they want not statistics showing them that times Are not really that mass unemployment More than bankruptcies Are driving the politicians in search of a solution to this recession that looks More like a de pression to the the administration is flirting with a five per cent gasoline tax to get Money for a Highway rehabilitation plan that would double As a Job there is talk of finding economic salvation in Speede Dup but the great As Reagan is wants to stay the course whatever that bikers Battle helmet Law with statistics As the nip government contemplates bringing Manitoba in line with the other nine provinces which have compulsory helmet the Bat felines Are being unlike the previous four when tory and nip administrations succumbed to arguments from the anti helmet the current attempt to have More solid support from the despite that apparent in the opponents in tend to continue their attempts to con Vince elected officials that Mere compulsion will not solve the these opponents do not necessarily fit the stereotype with leather jackets Jand clanging chains and do not merely talk about the need for Freedom of the new Breed is equipped with documents and quotations from indicating that Little will achieved unless there is adequate instead of marching on the legislative spokesmen have been More requesting meetings with government officials and ing to make their views known to interested this writer was regarded As one of those individuals after a which presented arguments of those in favor of such appeared in the within 21 members of Abate bikers aimed education were in Contact with her to present their under the dome Arlene Billinkoff a main spokesman was John who has been Riding a motorcycle since he was runs a custom paint and body shop and teaches motorcycle safety with the Manitoba safety which has expressed support for compulsory helmets because it May save a few that May but he does not believe the change will really improve the proponents of such legislation have not presented solid facts to Back up their Prest Howe he intended to Back up his argument with ranging from a review and analysis of government claims about the effect of motorcycle helmet Laws by the american motorcyclist association to an affidavit from a professional Engineer specializing in motor vehicle safety to the supreme court of British his evidence included 1976 statistics Canada figures showing that without compulsory had the second lowest rate of fatalities per registration there were also numbers demonstrating that while the death rate decreased in Ontario for the first two years following the introduction of they then Rose that was proof of the fallacy that helmets would prevent loss of he he asked How Many deaths from head injuries would have been pre vented by they May even be a problem in some Prest believed that in states and provinces where helmets Are riders tend to buy smaller which offer Little while those who voluntarily use tend to the most protective even he Many helmets do not provide much according to tests conducted in Ana Prest a major qty of helmets failed to meet safety requirements and a yellow plastic construction hard hat appeared to be the even a helmet constructed of two salad bowls glued together with a styrofoam liner was More effective in the Impact absorption test than most commercial who does have a said his Simpson Model which is regarded As one of better ones on the contains a warning inside which states this article is sold with out warranty expressed or no warranty or representation is made to this products ability to protect the user from any injury or the or assumes that if that is the Prest wondered Why pressure was being applied for a protective measure which would do very Little Good and might even cause the University of Manitoba will be doing heat retention tests to discover whether a helmet restricts there has been investigation into potential neck injuries and cutting Down of peripheral vision be cause of the he i others have studied these he and have acted at present the Law is being contested in British Columbia and Prest believes it May be the first of Many such challenges in in the United compulsory helmet legis lation existed in 47 states because they could not receive government funding without 30 states have repealed the Law for adults since that requirement was according to figures from the american motorcyclist Asso the fatality rate has Only in creased that proves compulsion does not prevent insisted More important is along with stringent licensing and even compulsory education May be a prob Lem because of the he at the Manitoba safety Council conducts an 21hour which attended last year by about 150 he believes that since most a rather Small percentage of the registered cyclists in the a better alternative might be upgraded if press arguments Are so Why is the helmet Law still in Force in nine provinces and 22 states because governments Are too stubborn to admit they were he Why were they not doing something about alcohol and smoking if you compare those there will be a substantial Prest and other opponents of compulsion Hope to convince the Manitoba government that helmets Are a false sense of Security they have listened in the i Hope they listen those on the other Side also Hope the government will listen but to a Dif Ferent doonesbury ;