Programming on Minnesota Public Radio is supported by triple expresso a highly caffeinated comedy now playing at the music box theater in downtown Minneapolis tickets. 673-0404 Good morning, and welcome to midday on Minnesota Public Radio. I'm Gary eichten. Glad you could join us. You're pretty good that many minnesotans are counting on a tax cut next year tax cut and maybe some extra money for their favorite government programs. After all the state has been Awash in money the last few years and all of the candidates for Governor been talking about returning at least some of that money to taxpayers example Republican candidate Norm call. My name is going to be here in the studio over the noon hour has just released a plan to cut taxes by over a billion dollars. But in the midst of all the give it back talk outgoing Governor Arne Carlson is sounding a word of caution is first hour of. Midday. We're going to hear from Carlson and a widely respected Economist who says Carlson's concern is well-founded as his Services Minnesota Governor comes to an end. Arne Carlson says, he has put state government in Good Financial shape after inheriting a state budget that was in Waffle condition. He says he's imposed fiscal discipline improve the workers compensation system and cut property taxes for business all major concerns of the business owners gathered at the third annual Governor's economic summit summit opened yesterday with opening remarks by Gunnar Carlson and the former senior Economist of the New York Stock Exchange and the conference continues today at RiverCenter in downtown st. Paul Gunner Carlson says the economic ship of state is on a good course, but global economic problems could have a big impact in Minnesota's economy. He warned small business. Owners that they should prepare for a possible recession is coming or any calls and for your help over the past seven and a half years. I know that Minnesota traditionally has had a reputation of being somewhat hostile to business. And more often than not it shows up in our political rhetoric. I remember first coming into the legislature and some 1971 and listening to some members from the Iron Range rail against us Steel. And then U S Steel packed up and left. And 2 years later the same delegation was back asking for subsidies to bring you a steel back because they had lost all those jobs. And that kind of debate still goes on as a state. We still seem to have a part of us that has an ethic that says of people are successful if they make money they should be condemned. We ridicule them we go after them. We have a newspaper in Minneapolis, which is politically correct. It makes absolutely sure that we do not use any false monikers or any kinds of names and in any way shape or form reflect a degree of insensitivity as a regard Sports Etc, but on the other hand were perfectly free. To refer to human beings as fat cats. Wealthy every suburb is usually preceded with the phrase wealthy suburb. Constantly putting one economic group against another. And what that tells me is governor and I think tells all of us here. Is that we do not understand yet how the American and the Minnesota economy work. The reality is the whole purpose and thrush. Of our economy is to try to create jobs and to try to create jobs that allow families to afford a decent lifestyle. That's how we Define if you will our prosperity. When you look for instance at polls today forgetting about how you feel about the Clinton problem. What's interesting is that so many people say don't upset the apple cart because you may be affecting my personal economic well-being. And that is truly what it is all about. We came into office under some very stressful times. It was not an enjoyable year 1991 the deficit actually ultimately reach 2.3 billion dollars in the matter what you do? If you cut spending the provider Community which is vast and powerful and Loud complains. If you raise taxes the rest of the community complains and since those are the only two options suffice it to say that was a lot of complaining. But the one thing that we did that was right was that we did agree to focus on the long-term and that was how do you build the financial system? That looks good in the out years. We pegged off of one. How do you regain a AAA Bond rating? You may recall during the 1980s? State spending exceeded the growth in personal income buy some 15% anybody with an IQ of a potted plant could begin to figure out you're going to go bankrupt. And the system finally developed into the infamous 1989 budget, which I would argue was designed to produce a deficit to allow the legislature to regain its hold it was a political budget. It was not a financial budget and it was not a recession that drove it off the charts. It was bad Paula bad planning and I would argue it was delivered at state auditor. I was in Endless debates with the administration over that budget. And we would told by everyone. That the numbers would bounce. And then a week after the election. The deficit reach well over a billion dollars and then finally escalated into an ultimately became 2.3 billion and actually it was worse than that when you start to contemplate how they had drained literally every single Reserve out of the system. And we we had virtually no bonding capacity. So we were really a very very empty ship and so long-term planning had to come into effect. How often have we heard government be a Democrat or Republican turn around and say we can control the economy know you can't control the economy, but you can certainly plan. Based on the best economic analysis what you are to do you can certainly plan and be responsible for your own strategy. That's what financial planning is all about. And so what we wanted to do was to figure out a strategy to regain the AAA Bond rating which simply meant that you lower the rate of growth of spending and you keep the rate of growth of spending below the growth in personal income. Just by doing that you were short of balanced budgets. But it does mean that you're going to have to control spending. And the truth is matter is as a society. We love spending all you have to do is go to a shopping mall on Saturday afternoon. You'll see America at its favorite hobby it out drawers basketball football and baseball and hockey combined. But the truth are also is we don't like to pay the bill. And the big game is to figure out how your shift the bill from one table to the next door from one economic group to the next that's what it's all about. But by restraining spending that allowed us to better plan how we would look in the out years to was to discipline the legislature to begin to understand that when you spin out of program today, it has cost tomorrow and more often than not those cost increase. So if you spend for one year today, which is their favorite Let's say a 50 million dollar program. It stands to reason in the next budget, which is a two-year budget that's going to be at a minimum a hundred million and then you've got inflationary cost attached to it. So you start to begin to see the rise or back under the old budgetary system. They left the 50 million dollars alone and pretended that the next year will be 50 million again. So you always had this enormous flux and stress within the financial system itself. We then had to make a fundamental decision which was what is your Prime mission and we decided that the Prime mission was to create an environment that was conducive to Quality job growth. Many people said you're taking an enormous political risk, cuz you'll never sell it to the public. The reality is the public is well ahead of its of its political system on this issue. We asked Estate Planning Department to go around the state on a program called milestones and meat. with each and every Community around the state and every region and start to plan out. With them what their goals and objectives were and you know what their answer back was create quality job opportunities in our region. They wanted to have an environment that would allow them to be able to at least afford to their children the opportunity to make a decision to live there and raise their families there as opposed to moving to the metropolitan area for Economic Opportunity. And the result has been rather interesting for the first time in my memory and conceivably for the first time in our history. What is traditionally called non-metropolitan Minnesota is slightly stronger in the job performance. Then is the metropolitan area. So there's a vibrancy across the state as a whole and as a matter of fact with the unemployment figures reaching an all-time low. I think we're down to 2.1% now. Every single company is complaining about a shortage. Of available Talent now that may not be a pleasant problem for you is employers but from a governmental perspective. It's an absolute Delight. Now in order to be able to achieve a goal of employment opportunity and means you got to pay some prices. I means one you got to start to redo some of the tax and Regulatory burdens not just cumbersome 222 business but much more importantly compelled business to make the ultimate decision, which is do they stay or do they go or do they expand elsewhere and it was really the third scenario that was hurting Minnesota. It wasn't that we had a lot of companies packing up their bags and leaving, Minnesota. What it was was when they were expanding they would cross out Minnesota and go elsewhere and think of some of the major cut the biggest I thought was 3 m and 3 m made the decision to go to Austin Texas. That should have sounded an alarm all over, Minnesota. That was a devastating blow to us because in terms of research development the spinning out a new technology was not going to take place here. It was going to take place in, Texas. And then Northwest Airlines had made a decision that under no circumstances would the refurbishing of its airplanes take place in Minnesota. It would take place elsewhere and at that time it look much like it would be the state of Indiana but it was expansion. That was a problem and they were too large pieces that were hurting his very badly one was the commercial industrial and probably the worst what is workers compensation in for 3 years. It was a bloody battle to get the coalition's together, and we finally got them together. And passed ultimately what became a 40% reduction in workers compensation giving back to Minnesota employers about 120 million dollars each and every year. Now that's an enormous change and prayerfully we can continue in the direction of reducing workers comp cost CI. We have fully funded reductions for CI from I think it was 5.04 down to three point five. So that reduction will be in excess of 30% It's a 30% reduction that we have fully funded. So when you listen to political candidates talking about tax cut we have funded that cut for the next four years. And the total amount of cuts that we have funded and paid for. Are over three billion dollars the biggest tax cutting program in the history of the state? And therefore it's no accident that we have the sharpest job growth in our job growth exceeds the national average buy some 60% So obviously it's a strong. It's a vibrant economy other factors that contribute because we have to hit the cost drivers or Healthcare welfare. And ultimately my favorite subject education reform. The reason we had to go after the cost drivers was to control our growth and you and the private sector had exactly the same problem on Healthcare. You'd never know it from the Dynamics of today's debate. But everybody private-sector public sector were complaining about the ever-increasing cost of healthcare and it was no longer affordable. And so some way a system had to be designed to contain the growth and cost. We had already a fairly large and extensive network of managed care. And so we were able to ultimately it was a bloody political battle to avoid a a single-payer system but still protect competition and prayerfully protect Quality Inn choice, but also do it under the confines of managed care which allowed us to be able to have a what what I would regard as a superb Healthcare System. That was at that time 17% below the national average income. And then coupling that with welfare reform not getting caught up into the endless political slogans. Of 2 years and you're out but rather beginning to focus on the single parent. And what is it that we could do to assist the single parent to get back into the workplace? And the reasoning behind it was the well-being of the children. We didn't want children to be raised in an environment. Where was no focus on work think about how you define yourself as a human being somebody ask you. Who are you invariably you come back? And you say I am a small business man, or I am a professor or I am a janitor, whatever it is. You always mention your vocation. Imagine what it's like to be an 8 year old kid in school and say well I don't have a father on my mothers on welfare. That's is not exactly boost your self-esteem answer the family investment program. We put more money. into the hands of the single mother we gave her children and herself access to healthcare 52,000 children. Move it into Managed Care. And at the same time in our first experiment over half the participants were employed within 18 months. And that's what you want you want to assist people to help themselves in order to better the life particularly for the children education reform. I Will Not wax on other than to say that you as leaders and small-business fully know the value of competition and how competition drives quality what we wanted to do and ultimately succeeded wish to create a sense of competition between the public and the private system throughout the United States and throughout a large part of our history in the 20th century. We have seen wealthy people. We have seen those who have power and position send their children to the finest private schools in America while at the same time deny access to the very same schools to those of low income. As a child was given the opportunity to go to one of those good private schools. I wanted to make sure that before I passed on that I gave the same opportunity to other children. I think it's sad. I think it's tragic. at the president the vice president both have vetoed and denied access to private schools in Washington, DC. while they sent their children private schools I think it's tragic that that one single member of the cabinet has sent his child to a public school in Washington, DC. I think it's shameful that not a single member of Congress has sent his child to a public school in Washington DC and yet we have so many members of Congress. We have a president and the vice president and the cabinet dedicated to the proposition. That what's good for Chelsea. And what's available for Chelsea? Shall not be good for any other children the truth. The matter is we cannot grow a successful economy and compete worldwide unless we allow all of our children to succeed as a matter fact. I'm going to change the word allow to we must make certain that all of our children succeed no and ifs or buts about it regardless of their race Creed color religion or economic status. And so what we set in motion was a series of tax credits and tax deductions and I think they're fairly modest. I hope that they're substantially improved. But that basically allow families to check Lee lower-income families to be able to buy a computer for their child hire a tutor or teacher after hours to help a child who struggling send their kid to a summer camp that has an academic orientation or send their kid to a private school. And that competition ultimately will drive quality. And that's what it's all about. And I think you saw the first large change in the last batch of of test scores. And by the way, we used to prohibit Statewide testing. So we have to get that law change to but suffice it to say now all of a sudden as we're starting to slowly improve our test scores you hear Educators on both the public and the private side saying look we are going to compete are schools going to be better or outcomes are going to be better or faculty is working together. We will focus on making sure that children succeed. It's pretty obvious to everyone here that one third of our kids who are lagging behind is not acceptable. It's not acceptable. all of my children all of our children must be performing as they do in Lake Wobegon, and that is everyone must be above-average. Let me also. Talk to you very briefly about the challenge that you have at this conference. And a small business people you want to grow into expand your business. Whatever employment growth that we as a state get we get largely from you. We don't look to the largest stablished corporations to give us a significant or substantial employment growth. You are the ones who grow the economy and so is to our best interests as a state to do everything we can to help you succeed and toward that end commissioner Novak in the Department of Economic Development basically want to put together today several things. But one is we do one from you your assessment relative to whatever burdens you think are unfairly placed upon business that we can remove while I may not be governor in 1999. We will be putting together the rough of a budget and we will be putting together our recommendations and hopefully they will be executed by the next. Aspiration but we do want that info secondly. A lot of people are drawn to your attention the problem of the Year 2,000 the Y2K problem. If you will, we is an Administration. I've been working on this for some two years. It's a bloody problem. It's a difficult problem consulting firms are going fabulously Wealthy on it. But the reality is if we don't do it, right some of you in this room could sink and the rest of us will be harmed. So it's to our best interest to make absolutely certain that every single company every single level of government is not just aware of the problem, but it's taking action to make absolutely certain that there will be a smooth transition from this Century to the next and toward that and the department of administration will be holding a whole series of public meetings throughout the state inviting you people there to participate in any kind of training or update of technology that you may need. But suffice it to say that has to be more than just a footnote in your mind that has to be the red line that you execute on because frankly time is very very short the second thing. I want to question you about. Are the problems of the world's economy? It stands to reason for those who rose up with the world economy. It stands to reason that we could also have the potential to ride down. I want to figure out as best as I can where we're going to be in terms of our ability to predict accurately conomic activity over the next to let alone for years. So I had a group of Economist from Minnesota at the luncheon. They talked and surprisingly at least from Where I Stood a surprisingly update they found out that the economy was resilient. It was growth-oriented that the that the growth in the in in both 1999 and the out-years would be modest possibly a leveling off. They saw a 1999 but very modest growth may be reaching as high as 1.4 1.5% on the other hand the dark side. Is this the dark side? Estimation there was a 30% chance of a recession scenario. And so you've got to if if you're in the if your business is dependent upon outside activity, you've got to start to draw. What would it look like if that 30% scenario became a reality and other Economist believe that the recession scenario is now 50% Now the reason I mention is this is that I have always approached financial planning trying to take the most pessimistic scenarios because of you take that at least you won't be surprised by what's taken place in if you generate surpluses, well that's happy news, but it's a little difficult to to to deal with the production of of deficits and increased reading. So if you go back to July the recession scenario was only 15% by September it Rose to 30% So it kind of makes you wonder what it's going to look like in November and be remind much of our economic activity and much of the world's economic activity is Guided by external events, which may not appear to be economic in nature the Clinton crisis, but much more importantly the potential paralysis and Washington as a result of the Clinton crisis. That's one factor that the external world is looking at the possibility of a collapse in Russia the possible impact on any forfeiture of debt to both France into Germany will be factors any sharp rise in unemployment in Europe, which is also fairly high at this time will be a factor any further the evaluations of currency be it in China Venezuela, wherever it may be that will be a factor and obviously if any of those countries are trading partners, that will be a factor. So suffice it to say You must spend some time taking a hard look at the economic front and my best advice and I'm not a small business person. But my best advice at least from a governmental perspective is at least draw up one pessimistic scenario. now in closing Let me say this. Don't underestimate your enormous importance to the well-being of our people. I personally am very very saddened. By the Bates that seemed to revolve around the issue of who has and who has not. And what it tells me is that we are losing sight of what the American dream is all about. My parents came from Sweden they were not intrapreneurs. But they did understand several things. They understood one let if they and their generation worked hard. Their children may have a shot at success and that's why most of us came from Generations who did precisely that their life was hard a very hard life, but they understood that that hard work in America could pay off. From their perspective it would not pay off and sweetie, but it would pay off in the United States. And that was the Immigrant dream and the key to that was obviously education but the other part was the intrapreneurial spirit that somehow was at least perceived to be and I think it's probably true is confined to Americans. There was something about America know how the dream of a kid taking a little 6 cylinder engine out in the garage tinkering with him before, you know, what he comes out with a new device and goes out and makes a fortune. That is the American dream. Willy Loman in Death of a Salesman again and attempt at least in part to define the American dream you as small business people are living that piece of the American dream. It's to our interest to make sure that every single one of you succeeds the more you succeed the more the rest of us succeed the more quality jobs. You create the stronger communities you build the better schools. You build the better recreational systems. We all enjoy. And very selfishly the more you make the more money we pull in we get a hunk of everything you do. Is to our best interest to create a philosophy in this state that allows at least those people that are in public office or seek public office to understand how important the intrapreneur is to their well-being. Without you we do not have an economy. Without you everything else folds up. You are the backbone the strength of what this state is about. So as you approach 1999. I want you to do everything you can to create an environment that celebrates entrepreneurship that celebrates small business that celebrates the success of people. And be proud of and our job as an Administration in the times we can certainly be very clumsy and very awkward but our job ought to be to reach out to you to help you to do everything you possibly can to succeed. That's our mission and I sincerely want to thank you for all the help all the support that you give me over the past seven and a half years. Thank you so much. Minnesota Governor Arne Carlson speaking yesterday at the third annual Governor's economic Summit underway at the River Center in downtown st. Paul business owners government of community leaders also heard from the former senior Economist of the New York Stock Exchange who agreed with Governor Carlson that global economic problems will have a continuing impact on Minnesota and that a substantial economic slowdown will occur in the United States. Here is Economist William Freud. In the US and particularly in this part of the world where you have a labor shortage rather than unemployment. We seem to have forgotten about recessions. The last one ended 7 years ago. Now your Governor mention fat. Show me cannabis are forecasting recession next year. The fact is that we have been on one of the longest periods of economic expansion and our economic history the last recession occurred in 1990 to 1991. That's now more than 7 years ago. But I need to tell you that in the past expansions have come to an end not because the economy has been rising for five or six or seven years. There isn't the timetable a calendar for the periodic recurrence of downturns know the the the recessions have occurred because of distortion in the economy that began to develop. And the typical Distortion that triggered the downturn was usually mounting inflation and as inflation Rose, the Federal Reserve would step on the credit brakes and slow down the expansion and trigger a recession inflation. This time has been no problem at all and indeed with the Asian currency crisis. We are seeing sharply lower prices in the United States the new distortions which will slow our economy and the balance of this year and into 1999 is the Asian crisis. Greenspan has not told me what the Federal Reserve will do but it seems to me absolutely clear that there is no talk about raising rates anymore because there's no inflation to be concerned about the only question now and Wall Street is how soon will the Federal Reserve cut rates and Alan Greenspan in his usual? Pickway didn't tell us you know, the fact is Alan Greenspan gets paid to talk in riddles. to obfuscate innocence ladies and gentlemen, the Asian crisis up to now has been perversely beneficial to the United States. Thanks to The Misfortune of Asia. The Federal Reserve will not have to tighten and indeed is likely to reduce interest rates. I don't want to bore you with a lot of Statistics, but just bear in mind that our economy was growing last year at close to 4% And in the first half of this year was growing at an annual rate of about 4% that kind of growth could not be sustained these two facts. The FED has decided that the rate of growth should be no more than 3% in order to avoid the bottlenecks in employment and wages that you begin to get. But you've gotten them seen in in in this part of the world. It is now sure. That our growth rate will diminish as a result of the Asian situation. The Asian currencies are down something like 80% which means it makes us exports more expensive in those countries in foreign countries indeed. We had a report of the trade deficit and we see that our exports are falling rapidly on the other hand Imports are cheaper and with commodity prices down sharply all over the world Imports arising. We will see a Slowdown in US growth for sure. I think we'll see you grow a slow down to 3% or less even in this current third quarter of the year as exports weekend, you know in our exports has slowed down not only because the dollar has gone up making our exports more expensive. But with the depression is Asia and the recession in Japan the demand for US exports is down to court sharply. There is another reason for expecting a Slowdown and that is what Economist called the reverse wealth effect as stock price. Has it been going up consumers have been increasing their spending on goods and luxury goods on housing. Now that the stock market is going the other way. We can expect that for every dollar of decline in stock prices in net assets. They consumers will cut back their expenditures by something like a nickel as a rule of thumb. I expect that the Christmas retail selling season for example is likely to be lacklustre. Let me give you the bottom line is they call it in Wall Street. I expect we will have nine next year a very slow rate of economic growth something like 2% and indeed I expected will be as high as 2% only because I expect the Federal Reserve to cut interest rates and I expect that we'll see a quarter percent reduction is not in September and the FED May well wait in September. We will see a cut in October and or in October or November and then I expect interest rates to be cut by the Fed. twice more in 1999 With that I expect that the recession your Governor just talked about is not apt to occur. Although he said a 30% chance of recession is a possibility. I think that may be a little high, but certainly you ought to bank on the on the on the slowing substantial slowing of the economy. The concerns that the stock market is having about southeast Asia is legitimate. The problems will not be solved quickly despite IMF loans and US efforts indeed. I expect that the problems of Southeast Asia the old Asian tigers Thailand, Malaysia. Indonesia Korea will be with us for years. Perhaps to perhaps 35 Steven longer. What I am most concerned about is the spreading of the Asian disease. Particularly to Japan which is already in a mess of trouble and even to China and and and of course Latin America One Reason stocks have been down is that we are seeing trouble now in a large number of countries simultaneously. About 1/4 of the population of the world is now in a declining economy and the worst of courses in Southeast Asia, which is in a depression. Japan has had no we conomic growth for 6 years. It is the second largest economy in the world. Can you imagine no growth indeed? It is fair to say that there is no growth on the horizon. The unemployment rate which was previously unknown is is high and still going up and political paralysis has grabbed the nation. Do you remember predictions that were made only several years ago how Japan Is the model for the world economy? I remember when it was said that in the future Japan will make semiconductor chips, and we will make potato chips. In the end, of course, it was the US and Intel which became the dominant producer of computer chips. That's because we have an open economy with incentives and the kind of entrepreneurial drive that the governor was meant mentioning before The problem is it in Southeast Asia started in Thailand. There was absolutely wild lending with foreign funds. They were reckless in in in in in their banking practices in The Lending practices and they embarked on an unsustainable construction. Boom. They have 5 years, maybe 10 years supply of office towers of hotels and Residences. We went through something like that in the early 1980s. You remember we took our little are we took our are looking and we swallowed our medicine and we got it behind us. The Japanese are unwilling constitutionally apparently unable to do that. Banks in Japan. I left with speculative property loans of who knows how much 600 billion dollars to some estimates as high as a trillion US Dollars be repaid it dwarfs our savings and loan crisis. And Japan has to clean up its act starting with a mess of the banks. It has to write off these bad bank loans. It has to de-regulate deregulate the economy and allow competition. It has to cut taxes to climb out of the depression or recession of but unfortunately, they are paralyzed. Japan is not stepping up to the plate. Do you remember not too many years ago when Mexico was in dire financial trouble we bailed out Mexico. We had a an economy that pulled in Mexican Goods expanding economy. We opened our gates. We made loans. We were the wealthy Neighbor Next Door that made it possible for the Mexican economy to stay to come back. I maintain we cannot do that for Southeast Asia. Japan want to be doing that in Asia, but Japan, Itself, as I said paralyzed it is a society which is dominated by corruption and bureaucracy. It is frozen at the switch. That's the big danger. Shine is embracing change. Its ready to guide. I think the the New Asia in the 21st century. China's leaders have found a new we can all make model and that model is the United States. There is in Japan a culture of risk-taking of business of Entrepreneurship. It still exists in China. Despite a so many years of Communism. There is a story which is making the rounds in China that they were three cars driving down the street. In one President Clinton was at the wheel. And followed by another car with with President Nelson and the third car with President Jiang of China. President Clinton comes to the intersection. He gives a right signal any turns, right? Boris Yeltsin comes to the intersection to gives her no signal at all and he turns right president Jen comes to the intersection left signal and he turns right. The dominant power in Asia now is not Japan. vagina The bottom line of Asia is that the Asian countries have lived in a bubble. They have run up huge debts many much of them in denominated in US dollars. They is bursting as we speak and it has to be allowed to burst before there is any chance of rekindling confidence many banks will go bust we will do our best to Shield the the economies with IMF loans and with restructuring but the aftershocks are apt to linger for a considerable time. You might ask. Why was the Asian crisis not foreseen. Why is it that Economist like me didn't appear at programs and pound the lectern and say a a catastrophe is brewing and in Asia. What this experience shows is that it's not in Man's power to forecast everything. Alan Greenspan in a speech on September 4th said that in this regard. He said we did not foresee. Such a breakdown in Asia. I suspect that the very nature of the process may make it virtually impossible to anticipate. He said it's like water pressing against the damn everything appears normal until a crack beat brings a deluge. The effect on us companies of the Asian situation varies, obviously, there are companies that are suffering a sharp decline in their orders companies like Boeing that had major plane orders canceled by Korea and Thailand and Indonesia and indeed it will affect Manufacturing in, Minnesota. Indeed. I saw in a in a study done by the 9th District of the Federal Reserve namely the Federal Reserve of Minneapolis a statement that says quite rightly Manufacturing. Output while still high overall is beginning to slacken, especially in those products or firms with substantial Asian exposure. Four other firms that will be tough price competition. And that in manufacturing the other area that is suffering. Greatly. I need hardly tell you is that farm exports to Asia or down about 50% Excuse me are down about 35% But agricultural prices are still shrinking the pain is she being sailed far worse in Iowa in North Dakota. And yes in Minnesota then in American cities again, if I may quote from the Federal Reserve of Minneapolis, it said Wheat Growers are under the greatest pressure in terms of output price relative to cost but corn and soybean prices and also fall into a point where many producers will find it difficult to pay all costs Farm Bankers report that increasing proportions of customers have reached that limits many Bankers require higher levels of collateral than a year ago farm implement dealers a report extremely slow sales. We are beginning to get these reports in increasing numbers from companies located here and and elsewhere. And I do not believe that these profound problems emanating from Asia are going to be solved quickly. But I also do not believe that our economy will go into a tailspin, but rather will see a . A Pabst of longer. Of subdued economic growth growth of about 2% for ear. As I said rather than the 4% we have seen. Former senior Economist of the New York Stock Exchange William Frawley when you spoke yesterday at the third annual Governor's economically Summit, which is continuing today at the River Center in downtown st. Paul. This is midday coming to you on Minnesota Public Radio reminder over the noon hour. Today. We're going to be talking with the Republican Party's candidate for governor Norm Coleman. I'm Ray Suarez this week industry Executives and energy ministers from around the world mad at the world energy Congress in Houston to discuss energy resources join Ira Flatow on the next Science Friday for a look at energy consumption and it weighs the industry and individuals can conserve energy including tips for saving money on your utility bills on the next Talk of the Nation Science Friday from NPR news. Talk of the Nation at 1 this afternoon Minnesota public radio's Mainstreet radio coverage of oral issues is supported by the blandin foundation strengthening rural communities and Environmental Education through the school nature project.