Article: THREE FORECASTS OF HARD TIMES FOR THE UNITED STATES THE APPETIZERS ON TODAY'S MENU CONSIST OF ANONYMOUS OBSERVATIONS FROM THREE GLOOM-AND-DOOM MERCHANTS WHO ARE EXPERTS IN WHAT THEY DO. THEY FORESEE HARD TIMES, DESPITE THE SOARING STOCK MARKET AND THE MISTY PROMISES EMANATING FROM THE POTOMAC ABOUT HOW THE GOVERNMENT IS SERIOUS ABOUT THE DEFICIT, TRADE, COMPETITIVENESS AND ALL THAT STUFF. EXPERT NO. 1, A BOSTON BANKER, PREDICTS THAT PAUL VOLCKER WILL RESIGN AS FEDERAL RESERVE CHIEF IN AUGUST TO RUN A FINANCIAL-SERVICES FIRM. HIS SUCCESSOR WILL BE GERALD CORRIGAN, THE HARD-BITTEN CHIEF OF THE NEW YORK FED, THAT TRAINING-GROUND FOR FEDERAL RESERVE POOH-BAHS. VOLCKER WILL LEAVE AS HIS TWO BIGGEST PROBLEMS THE IMMINENT DEMISE OF A NUMBER OF LARGE BANKS IN TEXAS AND OKLAHOMA, AND THE INSOLUBLE DEBT PROBLEM OF LATIN AMERICAN NATIONS. (IT'S INSOLUBLE IN THE SENSE THAT THE NATIONS SIMPLY CAN'T AFFORD TO PAY BACK WHAT THEY OWE AT CURRENT RATES OF INTEREST.) THIS PROBLEM FINDS A LOT OF US BANKS -- NOT JUST THE BIG ONES, BUT EVEN SOME SMALL-TO-MIDDLING ONES THAT GOT SUCKERED IN -- CARRYING THE CAN FOR ALL THE DAMAGE DONE IN THE PAST DECADE BY INFLATION, CURRENCY SWINGS, DEVALUATIONS AND OIL-PRICE GYRATIONS. EXPERT NO. 2, THE HEAD OF THE OVERSEAS OPERATIONS OF ONE OF OUR LARGEST FINANCIAL FIRMS, MAKES THESE OBSERVATIONS: STOCK MARKET: ''I'M NOT IN THE MARKET AT ALL. I'M IN CURRENCIES. I MADE 40 PERCENT ON CURRENCY LAST YEAR; I DON'T KNOW ANYONE WHO MADE 40 PERCENT IN THE MARKET.'' TRADE: THE BIG PROTECTIONIST BATTLE LOOMING IN CONGRESS IS WINDOW DRESSING. THE FACT IS, MEASURED BY GNP, THE FIFTH-LARGEST ECONOMY IN THE WORLD IS THE COMBINED OFFSHORE ECONOMIES OF US MULTINATIONALS, INCLUDING THE BIG 3 CAR COMPANIES. THE MULTINATIONALS CAN PLAY EITHER SIDE OF THE PROTECTIONIST GAME; THEY WON'T GET HURT NO MATTER WHO WINS. HIGH TECH: THE SO-CALLED INFORMATION AGE IS ALREADY OVER -- AT LEAST THE PORTION THAT WAS TO RESCUE THE US ECONOMY FROM THE DEMISE OF MANUFACTURING IS OVER. HIGH-PRICED SOFTWARE IS HEADING OVERSEAS, WHERE KEYPUNCHERS, PROGRAMMERS, EVEN PHDS, WORK LOTS CHEAPER THAN THEY DO HERE. THOSE NIMBLE-FINGERED ASIANS WHO TOOK OUR JOBS MAKING SHOES, AND THEN SHIRTS, ARE NOW COMFORTABLE WORKING COMPUTERS. MORE AND MORE US BANKS AND FINANCIAL HOUSES ARE SHIPPING THEIR PAPER WORK ABROAD TO HAVE IT DONE CHEAPER, FASTER, AND NONUNION. SERVICE: ''YOU GO INTO A SHOP ANYWHERE ELSE IN THE WORLD, AND INVARIABLY YOU GET BETTER SERVICE THAN YOU DO HERE. SO WHOEVER SAYS THE SO-CALLED 'SERVICE ECONOMY' IS GOING TO SAVE AMERICA'S STANDARD OF LIVING IS KIDDING HIMSELF.'' CROP EXPORTS: THE DAYS (AS RECENTLY AS FIVE YEARS AGO) WHEN AMERICA SHIPPED ONE-THIRD OF OUR CROPS ABROAD ARE OVER. THE GREEN REVOLUTION MEANS PREVIOUS CUSTOMERS FOR OUR CATTLE AND GRAIN ARE NOW OUR COMPETITORS -- PERMANENTLY. LATIN AMERICAN DEBT CRISIS: AFTER ALL THE POSTURING, ALL THE DEBT WILL BE REFINANCED, 40 YEARS AT 4.5 PERCENT, BOOM. EXPERT NO. 3, A HOUSING DEVELOPER WITH A TRACK RECORD IN NEW EN

Article from:

The Boston Globe (Boston, MA)

Article date:

February 12, 1987

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