The North Texas Daily (Denton, Tex.), Vol. 66, No. 44, Ed. 1 Friday, November 12, 1982 Page: 2 of 6
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The North Texas Dally
Friday, November 12,1982
U.S. Sen. Lloyd Bentsen plans to introduce legislation
in the Senate next year that would impose stringent elec-
tion fund-raising guidelines on political action committees
that spend more during campaigns than legally allowed.
Bentsen is taking aim particularly at the National Con-
servative Political Action Committee, a group that spent
more than $7 million to defeat liberal representatives and
senators this year.
While political action committees are limited to maxi-
mum contributions of $5,000 in primaries and general
elections, the NCPAC and other groups have discovered
a loophole in federal election laws that allows them to
spend unlimited amounts in a candidate’s behalf or, more
often, to destroy a challenger.
Howard Phillips, a member of the Conservative Cau-
cus. claims that Bentsen's proposal would endanger indi-
viduals’ freedom of speech. H supports his argument by
saying that a candidate has a right to spend as much of
Ins own money as he wishes. However, Bentsen's pro-
posal deals with political action committees, not individ-
ual candidates, although that is where the money ultimately
Indeed, a candidate may legally spend billions if he
wishes. But federal law sets limits on the amounts and
sources of funding for candidates.
The fact remains that so-called independent efforts—
contributions made without the candidate’s cooperation
or consent by political action committees and other groups—
is difficult to gauge during the fervor of a campaign.
The NCPAC is known for spending exorbitant amounts
each year and for pinpointing legislators at whom they
aim their wild spending campaigns. In 1980, the group
spent $4 million to defeat six liberal senators. The NCPAC
used its ruthless tactics again in 1981, when it launched a
campaign against Sen. Paul Sarbanes 20 months before
the election and before any challenger had been named.
A group like the NCPAC does not have the right to
legally spend more money than any other PAC. Existing
loopholes in federal law that permits such groups as the
NCPAC to spend ludicrous amounts against political can-
didates should be closed. If no action is taken, the group,
affiliated with the New Right and the Moral Majority,
will gain dangerous influence and power in the political
Any group interested in the financing and well-being
of a candidate can take advantage of loopholes. Bentsen’s
legislation will prevent further furtive action such as this.
Lamentable as it may be, their actions are presently
legal. And until Congress passes legislation closing the
loopholes, groups such as the NCPAC will continue to
violate the spirit of election laws, prohibiting excessive
interest group campaign spending.
Before unemployment hit
10 percent, manu people
were unduodre oP th-e
direct correlation between
tnat figure and-the size
Recession afflicts workers
Congressmen push legislation to create jobs
By TRENT HADES
America’s burgeoning unemployment
—10.4 percent in October—is growing
worse monthly, and. despite the Reagan
administration's claims to the contrary, only
a soothsayer can say when the nation's rc
cession will end
President Reagan repeatedly has said at
every opportunity that unemployment is the
last aspect of a flagging economy to show
signs of recovery.
World suffers joblessness
Bv LUANN DUNLAP
The global recession has affected virtu-
ally every country in the world Economic
stress and unemployment have been build-
ing steadily and increasing in severity as
major world market countries experience
both inflation and recession.
U.S unemployment reached a post-World
War II high of 10.4 percent lust month,
and unemployment rates in other countries
have equaled or superseded that of the
Canada's jobless rate stands at 12.7 per-
cent. 14.6 percent of Spain's work force is
unemployed and 1 92 million West Germans
are out of work.
Northern Ireland, in addition to the on-
going Catholic Protestant lighting, faces per-
haps the worst economic depression in the
industrialized Western world.
Manufacturing industries in Northern
Ireland, as well as in the rest of the world,
have been hit the hardest. Jobs there have
declined by 40 percent since 1974. and un-
employment is nearing one person in four
of the total 1.5 million population. The re-
cent demise of DeLorcan Motor Co. has
cost 2,600 jobs and more than $150 mil-
lion in government investment in that
When one of the major world markets
enters a recession, it spills over into other
countries. Dr. Carl Ferguson of the econom-
ics faculty said.
"A spread theory is involved in the mat-
ter of recession. Any drop in productivity
in Western Europe. Canada, the United
States or Japan signals a spread of reces-
sion and unemployment from one country
to another. "
Today's economic problems do not com-
pare in severity with those of the Great De-
pression of the 1930s, J-erguson said. Then,
unemployment in the United States stood
between 25 and 30 percent, he said, and
worker output dropped 30 to 40 percent.
"Today, we see big drops lin productivity
and demand! in the steel, auto and hous-
ing industries In the ’30s. everything
dropped—except cigarette consumption. It
Several factors account for today’s less
severe world economic landscape.
"During the Great Depression, you hud
more one-earner families, and you had no
government help—no unemployment ben-
efits." he said. "Also between 1932 and
now. average workers and families have
been and are a lot richer and have bigger
savings cushions, which provide greater abil-
ity to survive joblessness."
During the Depression era. the world also
saw a drop in disposable, personal income—
income after taxes. Ferguson said. “Now,
the drop (in this area) is hardly anything.
And this has been true through all post
World War II recessions."
I he auto, steel and housing industries
in foreign countries are suffering along with
those in the United States. Germany and
England have experienced declines in auto
and steel. Japan's growth has slowed.
Ferguson said, but it is not considered to
he in a recession.
Any recession has a strong effect on
heavy industry, he said. "There are always
bigger drops in investment and consumer
durables, such as housing." he said.
Wage costs in the steel and automobile
industries, relative to productivity, are more
out of line in comparison with Japan and
Germany, Ferguson said "Basically, what
this means is that wages are too high. There
are some workers who have priced them-
selves out of the market.”
The substantial drops in heavy industry
also account for the fact that the number
of full-time employees in all countries is
declining. The demand for service, howev-
er, is on the rise. Thus, the demand for
part-time workers has risen.
"A weird situation in business cycles ex-
ists today that we’ve not had before," he
said. "The big difference is that we went
into this recession and wanted to reduce
the rate of inflation at the same time. Re-
ducing the inflation rate is contrary to the
things that must be done to bring about
recovery." Ferguson said.
One example of this is to fight recession
by running government deficits or increas-
ing them. If this policy is implemented dur-
ing an existing recession, the problems will
The Democrats historically have favored
running deficits as anti-inflationary meas-
ures. Ferguson said They also have pushed
for tax increases, which in theory, are anti
inflationary’ policies. However, he said, it
doesn't help recovery.
"We ll get a worldwide recovery—one
has started already One indication is that
output (of goods) has gone up two quar-
ters recently, and that almost always means
the economy is on the way back up. "
Anti recession policy should not be
implemented now. he said. "We need to
let the recovery come naturally."
And as the world wades its way through
a muddled economy, governments should
continue aiding the unemployed. Ferguson
said. "What's needed is a combined recov-
ery without inflation. I don't think that’s
likely to happen, but it would be best."
"IT’S NOT JUST wishful thinking.”
Dr. Kenneth Gray of the economics faculty
said. "Historically, unemployment does pick
up last. I don't have any explanation, just
During October, unemployment increased
in all categories except black workers, which
remained at 20.2 percent. Unemployment
among white teen-agers increased slightly
to 24 percent, although among black teen-
agers unemployment slipped from 48.7 per
cent to 46.7 percent.
The highest unemployment ever recorded
was 24.9 percent, during the nadir of the
Gray said economists universally accept
three main types of unemployment: friction-
al, cyclical and structural.
Frictional unemployment is always pres-
ent. Gray said, and Is the type of unem-
ployment that occurs when workers are be-
tween jobs. When a worker quits his job
and decides to move elsewhere, the transit
time between his old job and his new job
creates frictional unemployment. Another
example is the graduate w ho decides to take
a few months off traveling or loafing after
This type of unemployment occurs when
industries shut dow n or the economy needs
bolstering. High inflation and interest rates
contribute to business failures, which
correspondingly increases unemployment.
The third type of unemployment is
structural.—the most serious, Gray said.
"Right now structural unemployment is
probably about 6 or 7 percent, although
several years ago it was about 4 percent."
Structural unemployment occurs when the
people and the jobs don't match. Jobs may
exist, but workers trained to perform them
do not. "The pegs are square, and they
must be shaved to make them lit in the
round holes," he said.
One of the methods of shaving pegs is
job training programs, which teach workers
particular skills they need for particular kinds
new jobs by the end of 1983.
WITH FRICTIONAL unemployment,
"the pegs fit in the holes, they’re just being
moved around." Gray said.
Cyclical unemployment occurs for defi-
nite periods of time—months or years—
when not enough jobs exist for the number
of workers. "In this case." he said, "there
arc not enough holes for the pegs."
THE SO-CALLED "natural" unem
ployment is the sum of frictional and struc-
tural unemployment. Gray said.
Reagan's tax cuts helped cause the pres-
ent high unemployment by greatly decreas-
ing the amount of revenue the government
could collect. Thus the government cannot
maintain the number of jobs it has created,
causing programs to be cut and workers
laid off. Also, last year's tax cut failed to
stimulate the economy as Reagan had hoped.
Democrats in the U.S. House of Repre-
sentatives this week indicated that tax in-
creases were likely next year. Democratic
House leaders said that during next month's
lame-duck session they would push lor jobs
and housing legislation that would be li
nanccd by money saved hy cutting alloca
tions funding the Reagan administration s
proposed military buildup.
This week, the White House said Reagan
may reconsider his opposition to large scale-
job programs, hut said the president teas
still adamantly opposed to "make-work,
dead-end" public service employment
The House's job hill would cost an ee
timated SI billion, and the housing legisla
lion would cost between S3 and S4 billion
The hills would create an estimated 400.(XX)
IRONICALLY. PLENTY of work out-
side the private sector needs to be done.
Transportation Department officials estimate
that the nation's highways and bridges will
require SI61 billion worth of work during
Transportation Secretary Drew Lewis has
been supporting a 5-cent-a-gallon gasoline
tax for fiscal year 1983-84. The tax would
generate S5.5 billion in revenue annually,
and create some 320,000 jobs.
If a unemployed worker can be put to
work—no matter how menial the task
production is increased, bringing the cost
per unit of the product down. Gray said.
Enough government work exists to em-
ploy a considerable fraction of the unem
ployed. The old argument that jobs in the
public sector are not as advantageous to
the country and the economy as jobs in the
private sector is not necessarily valid. Gray
A balance must exist between the private
and public sectors. Gray said. Some jobs
the public sector cannot or will not perform,
he said, such as operating and maintaining
LIBRARIES SERVE the public good
and there is a need for them, hut they arc
not profitable organizations. They must be
funded by some sort of taxes, he said. An
other example of jobs that the public sec-
tor cannot perform Is operating and
"The purpose of a lighthouse is to scare
ships away. How can you possibly charge-
ships for that?"
The coal industry has not been able to
export coal at the rate it could because port
facilities arc in desperate need of expansion,
he said. Unless there Is a balance between
the two. the economy could not function
The public sector often is criticized for
not being as effective as the private sec-
tor—a view to which Reagan subscribes—
due to the absence of competition. "How
ever, the same argument holds true in the
private sector when there is a monopoly."
The North Texas Daily
Wt iiibt" 'a the
North Texas State University
Printed by the North Texas State University Printing Otfice
Southwestern Journalism Congress
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ALL-AMERICAN 75 TIMES
CAROL RUST, editor
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Laurie Griffin, news editor
Jerry Hill, news editor
Ana Barrera, news assistant
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Luann Dunlap, editorials editor
Trent Eades, editorials editor
Debbie Cordell staff writer
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Jacque Johnson, entertainments editor
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Rod Evans, spods editor
Charley Wilson spods editor
Karen Carr artist
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Jill Brannon, photographer
Ed McVey, cartoonist
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The North Texas Daily (Denton, Tex.), Vol. 66, No. 44, Ed. 1 Friday, November 12, 1982, newspaper, November 12, 1982; Denton, Texas. (texashistory.unt.edu/ark:/67531/metapth722982/m1/2/: accessed February 17, 2019), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting UNT Libraries Special Collections.