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THE HERALD OUTLQOK Sailing February the HERALD OUTLOOK is published each Saturday by the HALTON HILLS HERALD Home Newspaper of Hills A Division of Canadian Newspapers Company Limited at Street Georgetown Ontario 8778822 8772201 PUBLISHER David A Beattie EDITOR Brian MacLeod AD MANAGER Dan Taylor Second Class Mail Registered Number STAFF WRITERS Ben Alan SPORTS EDITOR Colin Gibson ACCOUNTING Jennie Inga Shier CI ADVERTISING Joan ADVERTISING SALES Jeanmne Valois Craig Teeter SUcie Roberts PRODUCTION DEPARTMENT Dave Hastings Supt Annie Wilson Marie Keep the economy right up the middle SNAFU by Bruce Diane Matey Your Business Since the devastating deflation of the 1930s policymakers have been searching for the golden mean between inflation and Mean is the mid point bet ween two Inflation is soaring prices defla tumbling ones These polar op posites have spaw some cunous offspring in recent years stagflation disinflation Stagflation is the theoretically unlikely pairing of rising prices and slow economic growth It prevailed in the mid 1970s and some say it is back again Disinfla tion is a word economists coined during the recession because they were afraid to say deflation Lately it has come to mean a slowdown in inflation For example the inflation rate has fallen from 8 per cent in 1981 to 1 per cent currently Economists call this process disinflation With such a modest inflation rate some might say we have achieved the golden mean Not Crow governor of the Bank of Canada or Alan Greenspan chair man of the S Federal Reserve Board Both these men believe inflation is still a real and present danger Thats why interest rates have stayed so stubbornly high You see inflation wreaks havoc on the bond market Inflation erodes the savings of people who lock their money up at a fixed rate of interest for a long time In the 1970s for example long term bon dholders ended up with a loss after subtracting inflation Say you were buy a 20year Government of Canada bond that pays interest of 10 per cent a year With inflation at around five per cent your real or inflation adjusted return will be five per cent not bad by historical stan Historically investors have been satisfied with real returns of three to four per cent Now suppose inflation zooms up to per cent You will still get your per cent interest but the purchasing power of your mone will have fallen You will have lost after subtracting inflation Deflation is worse Frank Feather a Canadian futurist describes it well in the following passage from Canada Tomorrow Deflation is as big a threat to Canada as is inflation It gains momentum when desperate business conditions force owners to dump products on the market at whatever prices Even a mild recession in North America could force many economic players to do this with real estate stocks and bonds As prices edge downward debt that has been previously taken on becomes harder to service lit becomes harder to make the in terest payments Just like Third World borrowers homeowners may lose jobs or be forced to take pay cuts This will undermine their ability to service their big mor tgages forcing many to give up their homes perhaps at prices below what they paid for them or below the value of the mortgages on the property Berrys World A- INTERNATIONAL ASSOCIATION OF FORMER SECRET POLICE ANNUAL CONVEHTIOhf Qia- I Inc Orson Welles right US congress will see fireworks Kevin Bell United States lawmakers return ed to Washington this week to begin a new session of Congress that guarantees more than its usual share of political fireworks The second session of the Congress will likely be more pro ductive than the first session which was dominated by political scandals involving Defence Secretary nominee John Tower and Speaker Jim Wright Much of the work that should have been done is still waiting for the lawmakers attention Inside and outside the day today business on Capitol Hill the political wars will be waged under the spectre of this years Congres sional elections In their own minds the political image of each candidate will be as important as the accomplishments of 1990 The fireworks began early with a clash between Congress and Presi dent George Bush over his veto of legislation that would have allowed Chinese students to remain in the United States for an extended period Election politics were clearly playing a big role Most con gressmen even those who have been loyal Bush supporters were thinking of how the voters back home would react if he or she refused to back legislation ting students from the government responsible for the Tiananmen Square massacre IMAGE Image must also be on the mind of Speaker Tom the Democrats point man in the House who returned from his winter vacation about 15 pounds lighter He plans to lose another pounds to become a leaner meaner opponent of the Republicans But its likely that the most im portant images will be reflected off the abortion issue With the tide turning strongly in favor of the prochoice forces some hardline abortion ad vocates have softened their stand The Republicans are clearly ner vous over polls showing that many voters approve of their conser vative economic platform but op pose their attempt to restrict abor tion rights As thousands of antiabortion protesters descended on the city Jan to mark the anniversary of the Supreme Court ruling that legalized abortion Republican tional chairman Lee chose his words carefully The Republican platform commits the party to a constitutional amend ment that would overturn the Supreme Court ruling but told the protesters that there is room in the party for varying points of view Atwater has a tough job to fuzz the partys image on abortion after the president refused last year to allow federal money to be spent on abortions for poor women who are victims of rape or incest But presidential spokesperson Marlm Fitzwater is going along with the new strategy He termed Bushs position a personal choice of conscience and reiterated the new party position that Republicans have room for pro- choice candidates Bush however is sticking to his hardline stand At a recent press conference he became angry when he was asked about a report that the Bush family has split cleanly down malefemale lines on abortion with the women taking a pro choice stand That report is pure unadulterated long pause malarkey he said It was obvious some stronger words came to mind Most politicians may be concen trating on this years Congres sional elections but that hasnt stopped speculation about possible contenders for the 1992 tial race As in the election the early consensus again seems to he that New York Gov Cuomo has the best shot at getting the Democrat nomination will be back Stewart MacLeod There are several compelling reasons why Prime Minister Brian Mulroney to the surprise of so many of his cabinet colleagues ac cepted the resignation of his sports minister Jean Charest In fact given Mr Charests earlier statements in Auckland N Z that he had no intention of quitting we can safely assume the resignation idea came from the prime minister And a good idea it was even if the yearold mimster was one of the cabinets brighter lights ob viously destined for an upward political future Its remarkable how many of his political col leagues in introducing him to au diences referred to Mr Charest as a future prime minister He still could be Mr not only left the door open for the disappointed ministers return to cabinet he strongly hinted he ex pected Mr Charest to come through it I accepted his resignation knowing that is a very honorable man said the prime minister and he will no doubt comeback No doubt at all But first he must serve a suitable stretch in the backbench reform school where he can share experiences with Ber nard Valcourt who is serving his backbench term for being con victed of driving a motorcycle under the influence of alcohol He too will no doubt be back in cabinet What the prime minister has clearly learned and lets face it hes had a fair amount of ex perience is that fighting attacks about alleged scandals is not only nonproductive but decidedly unpleasant FAST ACTION The opposition was smelling blood the moment it was revealed that Mr tried to phone a Quebec judge to explain or whatever details of a letter he had written earlier He was asked to do this by one of the lawyers in the case which involved a dispute over the selection of coaches for the Commonwealth Games now underway in New Zealand Mr Charest said there was no thought of trying to influence a judge it was just a matter of try ing to be helpful Mr Charest being a lawyer as well as a sixyear veteran of Parliament should have been fully aware of the dangers surrounding phone calls to judges But there are indications that he sometimes acts rather impulsively such as impos ing a lifetime ban on sprinter Ben Johnson before an inquiry was even established Perhaps a few months out of cabinet will give him time for reflection It will also give the prime minister a break from the daily torture of allegations ministerial improprieties Anyway a phone call like this calls for a ministers resignation Regardless of intent there shouldnt even be the slightest perception of influence peddling