Administration Scales Back Economic Growth Predictions
The Clinton administration Wednesday sharply scaled back its growth predictions for the U.S. economy through 1994, but regional economists said the president's advisers are still too optimistic for some hard-hit areas of the country.
The administration forecast that the nation's gross domestic product -- the sum of all goods and services produced within U.S. borders -- will grow 2 percent this year and 3 percent next year. That's down from its February prediction of 3.1 percent and 3.3 percent.
In the past two decades, only the recessions of 1980-82 and 1990-91 have produced weaker economic conditions than those that the government now foresees.
"The national economy has gotten off to a very bad start in the third quarter," said Lacy Hunt, chief US. economist for HSBC Holding Group, parent company of Marine Midland Bank.
Hunt predicts another recession by the end of 1994 and blames the tax increases approved last month by Congress. He said California and the New York metropolitan area will bear the brunt of the new tax increases on upper-income Americans.
Nationally, the economy is adding jobs -- 162,000 in July and an estimated 150,000 in August, with the number to be announced Friday-- but growth remains weaker than usual for a post-recession period. The Commerce Department said this week that the economy expanded at an annualized rate of only 1.8 percent in the second quarter.
Bush Aids Hid White House Links To Iran-Contra, Walsh Says
Los Angeles Times
The special prosecutor in the Iran-Contra scandal has accused two aides to then-Vice President George Bush of "acts of concealment" to cover up White House links to secret arms shipments to Central America, sources familiar with the prosecutor's final report said Wednesday.
In his upcoming report, prosecutor Lawrence E. Walsh says Bush aides Donald P. Gregg and Samuel J. Watson knew that the White House was involved in secret weapons shipments to Nicaraguan rebels. But when government spokesmen denied the link, Gregg and Watson remained silent and allowed the attempted deception to go forward, the report says.
Nevertheless, the denials quickly unraveled. And when it was discovered that North had skimmed profits from secret arms sales to Iran to pay for the Contra airlift, the affair turned into a scandal that virtually paralyzed the Reagan administration.
North, whose convictions for several felonies stemming from the scandal were overturned on technical grounds, is preparing to run for the U.S. Senate from Virginia.
The tone of Walsh's judgment on the Bush aides suggests that his report, expected to be released next month, may also include tough criticism of others who played a role in the scandal but were never charged with any criminal wrongdoing: Reagan, Bush, then-Secretary of State George P. Shultz and then-Defense Secretary Caspar W. Weinberger.
Despite Veering Away, Emily Gave Buxton a Good Lick
The Baltimore Sun
Never in her wildest dreams did Bonnie Farkas picture the waters of the Pamlico Sound overflowing their banks, pouring down the streets of Buxton, crossing her lawn and flowing into her green and gold living room.
Although Hurricane Emily skipped and missed many towns along the Outer Banks Tuesday night, she took a vicious sideswipe and hit this little fishing town -- and Farkas' home -- hard.
And Wednesday, as Farkas stood looking at the sight of a house smashed by six fallen pine trees and swept off its foundations by flood waters, she expressed a bewilderment and resignation echoed by many other residents.
Emily left her mark on nearly every building. Some businesses or homes merely had windows blown out. Other water-logged wooden houses sag sadly, their occupants sitting on stoops that lead directly into front yards that became ponds.
Parts of Route 12, the two-lane highway that serves as main street here, still sit under six inches of water. There is no running water to drink, no working telephones, no electricity. Many homes, serviced by still-submerged septic tanks, have no plumbing.