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The student voice of Midwestern State University The Wichitan page 4 Spring break safety Offering tips and tricks for how to have a safe, fun and sexy holiday. page 7 Out in style MSU routs the Javelinas to take the LSC South title during seniors game in D.L. Ligon Coliseum. WEDNESDAY, March 4, 2009 MSU freezes raises to offset sinking economy Kyle Christian For the Wichitan Citing a state budget crunch, MSU President Dr. Jesse Rogers ordered a university-wide freeze on wages and said he would personally chair a special committee to review ways to conserve financial resources. Rogers made the announcement to faculty and staff Wednesday in a campus-wide e-mail. In an interview with The Wichitan from Austin, Rogers cited a number of reasons for his actions. Rogers said the MSU Foundation, once valued at $18 million, and the $30 million MSU Charitable Trust, have lost as much as 25 percent of their value. Both were heavily invested in the stock market. “A significant amount of money in both of those foundations goes into scholarships,” Rogers said. “My plan is to ask the foundations to continue the scholarships, if at all possible, at near current levels. The last area that we would cut would be scholarships.” In his letter, Rogers said that in addition to the university’s revenue being down, the legislature has requested that all universities return 2.5 percent of ins oll is C r itor h C g Ed n i g ana g he s in t ir e g n u the a o lo M ack d se, legs in l b , d ou size w: dium- e Ranch H e m ght no i r h A t s g d behin te thin grass e lolling. her favori o of ngu fourand to s getting tw reat. r the stuo t ’ f e a y h eas c MSU and S . y rub ti ys so a bell sweet life ren’t alwa e for autis e3 e s e h u E pag w o I h L T things L e A t of th See C Bu resident d legge . s t n de Patrick Johnston | Photo Editor The stock ticker in Dillard reflects the economic downturn. The recession has hit home, and MSU President Dr. Jesse Rogers has implemented a university-wide freeze on wages as well as other measures to conserve financial resources. their state appropriations. “As a result, MSU is likely to lose approximately $420,000 in funding for the current academic year,” he said. Additionally, state appropria- tions for MSU for the 2010-2011 academic year will be slashed by $1.8 million compared to the current year, Rogers said. For the year ending in August 2008, MSU received $23 million from the state. Rogers acknowledged the pending of several state bills in the legislature calling for the reduction or freezing of tuition fees. The MSU Board of Regents voted in February to raise tuition by 4.7 percent. “If such a bill were to pass, MSU would be unable to increase tuition as a means of offsetting its funding losses,” the president explained. Rogers said his goals are to retain all existing faculty and staff positions, complete facility expansion and renovation projects currently in progress, and to maintain current academic offering. Rogers said a flexible hiring freeze will be put in place. Hiring will be limited to only the most critical positions currently unfilled. Job searches in progress would continue. A freeze, however, would be placed on new positions under consideration and reclassification of existing positions. Unbudgeted salary adjustments or Chris Collins Managing Editor Both rates have reached their highest points in decades. U.S. housing prices rose rapidly between 2000 and 2005, Fukasawa said. During the early 2000s, real estate prices rose about 90 percent. That’s one of the fastest price growths in the nation’s history. Prices leveled off in 2006 and declined for the next two years. Home values decreased in value by as much as 30 percent during this period. They are still falling. “The boom has turned to bust,” Fukasawa said. He attributes the problems facing the housing market, which have caused the entire economy to plummet, to four factors. First, government practices have changed the nature of loaning institutions. Beginning in the mid-1990s, government regulation began to erode the conventional lending practices in the United States, Fukasawa said. Fannie Mae and Freddie Mac hold a huge share of American mortgages. In 1995, the company was instructed to increase its holding of loans to low- and moderate-income borrowers. More regulations in 1999 required the investment company to accept more loans with limited or no down payment. “This lowered and lowered lending standards in the U.S,” Fukasawa said. The second factor of the housing downfall is the Federal Reserve’s manipulation of shortterm interest rate, he said. The Fed prolonged low-interest rate policies of 2002 and 2004 and increased demand for money. This increased the price of housing in the country. Adjustable rate loans with low down payments looked highly attractive in the early 2000s because interest was low. When the Reserve increased interest rates in the mid-2000s in an attempt to slow the economy down, it created a market where low-income homeowners were See HITTING HOME page 6 MSU professor stresses education as financial fix It’s no secret that the U.S. economy has stalled, sputtering to its lowest numbers in decades. With a new president at the helm, many Americans are uncertain about the country’s economic future. Dr. Yoshi Fukasawa, chair of economics, is also anxious for things to turn around, though he recognizes things aren’t as bad as they could be. The Japan native spoke Monday in the Clark Student Center Shawnee Theatre about some plausible solutions to the worldwide economic slump. “Are we heading toward a Great Depression of the 1930s?” Fukasawa asked the audience. “The answer is ‘no.’ Though the economic crisis we face today is a serious one, it may not be as bad as you think.” He offered some statistics: • Real GDP in the United States fell 6.2 percent in the fourth quarter of 2008 from the same period last year. • The unemployment rate rose from 4.6 percent in 2007 to 7.6 percent in January 2009. It is expected to rise to 8.9 percent by the end of the year. That’s almost double the rate of a year ago. “We’re going to have a tremendous number of workers who will be unemployed in our economy,” Fukasawa said. Compounding American worries about the economy is the stock market, which is at about half its value since the high point of 2007. This is the lowest value of the New York Stock Exchange since 1979. “That’s a tremendous loss of the wealth of our country,” Fukasawa said. “If your parents are thinking about retiring, tell them not to retire yet!” The economics professor, like many U.S. economists, believes current woes are rooted in the housing industry. Foreclosure and default rates for home mortgages have increased dramatically since 2006. See ECONOMY page 6

March 4, 2009

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