Contact: Meredith Dickenson or Ellen Sterner 214-768-7650
mmdicken@smu.edu

Dec. 19, 2003

NEW YEAR PREDICTIONS FROM SMU EXPERTS

DALLAS (SMU) — Mining on the moon. American forces out of Iraq by summer. A growth industry for college admission officers thanks to the U.S. Supreme Court’s ruling on Affirmative Action. These are some of the predictions for 2004 by Southern Methodist University experts. From education, energy and law to foreign affairs, national politics and health care, we polled some of our smartest people for their industry outlook. Reporters interested in contacting them may call SMU Office of News and Communications at 214-768-7650. We will have staff available through the holidays to return calls.

Affirmative Action

SMU law professor Maurice Dyson is an expert on education law. A former attorney with the U.S. Department of Education Office of Civil Rights, Dyson has written extensively on educational testing, school funding, civil rights and The No Child Left Behind Act.

• “Now that the U.S. Supreme Court has given the green light to race as a factor in college admissions, universities will struggle to find cost-efficient ways to consider race while trying to avoid formulas, quotas and statistical models, which the Court has sternly admonished.”

• “Without the convenience of these formulas, colleges will need to hire more reviewers to evaluate the whole file of an applicant. Some law schools will comply, while other undergraduate universities will be too cash strapped to afford the new hires. As a result, a marginal increase of applicants will get the benefit of this consideration initially.”

• “We can expect affirmative action opponents to pressure alumni donors, challenge race-based financial aid and scholarships and target universities it suspects are impermissibly applying formulas as a thinly veiled proxy for quotas.”

Energy

Mark Baxter, director of SMU’s Maguire Energy Institute, is a former executive for Marathon Oil, where he managed large-scale, global projects in China, Japan, Russia and much of Europe. At the Maguire Energy Institute, he works with a 27-member board comprised of CEOs from a cross-section of the world's energy companies. The Institute provides educational programs to industry managers and tracks emerging issues in the fields of oil & gas, coal and alternative fuels.

• “More agreement on the need for space exploration, in particular returning to the lunar surface. Energy companies will want to mine for Helium 3, an isotope used in fusion energy, and the Bush Administration is expected to make an announcement about space exploration.”

• “The race to construct Liquid Natural Gas receipt terminals in the U.S. will become more aggressive. The starting gun is sustainable higher natural gas prices. Those at the finish line will have both deep pockets and certain financial interest in the complete supply chain.”

• “More evidence that we are vulnerable on foreign influences, especially those where oil and gas is within their sovereign boundaries. As such we will see higher oil and gas prices, and therefore higher gasoline prices at the pump, electricity costs, and heating of homes. Energy shortages, irrational price controls by OPEC, and obtaining foreign concessions in Arab countries will all contribute to this. Don’t be surprised if in February OPEC cuts its quotas further.”

• “More aggressive unofficial OPEC policy such as their wavering commitment to price controls being. We saw in 2003 that OPEC tried to justify its quotas based on foreign currency exchanges. A pattern to paying attention to world currency market will continue. This is already being substantiated by OPEC’s false future demand projections based on the same guidelines that have not come to fruition, such as Iraq’s quick return as a major world supplier.”

• “World events such as an escalation of terrorism, rising increases in both oil and gas imports, and natural gas prices in the first quarter of 2004 will give impetus to passing a national energy policy, but only after some major overhauls and concessions are agreed upon.”

The Economy

Al Niemi Jr., dean of SMU’s Cox School of Business, is an economist with a specialty in regional economic development. He frequently gives talks on the economic outlook of the state and speaks to numerous civic and business groups. Niemi has written six books and more than 200 articles on economics and economic development, which have appeared in leading business periodicals and academic journals.

• “On average, I expect net job creation of 145,000 jobs per month, creating a net growth of 1.75 million new jobs in 2004. The expansion and economic recovery seen during the third and fourth quarters of 2003 will increase in 2004 with strong consumer spending and job growth driving the economy forward."

Economist Mike Davis teaches finance and economics in SMU’s Cox School of Business. He has written on the economic value of crime prevention and sports complexes.

• The first half of 2004 will almost certainly not mirror the second half of 2003. This is not to say that things will go badly—the consensus forecast, which I share, is for growth rates in the range of about 4 percent. But as the stimulus from the tax cuts and mortgage refinancing wears off, we can’t expect the economy to continue growing at an annualized rate of greater than 7 percent.

• Expect the unemployment rate to continue dropping at its maddeningly slow pace. Given the influx of workers into the labor force and the rapid rate of productivity increase, even a healthy growth rate of greater than 4 percent and an inflation rate less than 1 percent won’t dramatically reduce the rate of unemployment.

• Of course, I might well be wrong. And if I am, it will probably because of one of the following reasons: (1) Consumers were a lot thriftier with the extra cash from tax cuts and refinancing than I thought. I think most of the stimulus has already happened, but figuring out what consumers are up to is tricky at best. They might have money in their pockets (or credit cards not yet maxed out) that they’ll spend next year. (2) The productivity increases lead to a brave new world of business spending. I can’t believe this isn’t going to happen sooner or latter. Maybe it will be sooner. (3) The decline in the dollar leads to huge increase in exports. (4) The curious inflation numbers we saw this month foretell a serious disinflation, leading to a crisis in confidence.

Texas Public Education

Katherine Hargrove, associate dean of Education and Lifelong Learning. is director of SMU’s Teacher Education Program. She is a frequent commentator on teacher education and salaries and school testing. Hargrove, a former classroom teacher and curriculum writer, has been in education for more than two decades.

• “High-stakes testing will come under increased pressure as parents and schools realize the implications of “No Child Left Behind.” NCLB, in fact, will be scrutinized and hopefully tweaked. While enacted with the best of intentions, a majority of educators are rebelling about its overly simplistic approach and the use of a mechanistic “business” model when dealing with individuals.”

• “Concerns will continue over the actual ‘meaning’ or accuracy of test results as a result of the Houston school district’s alleged dropout rate and test score manipulation. Other methods will be devised and implemented better to measure student progress.

• “Teacher shortages will be examined more carefully. Many rural and some urban schools will have difficulty locating highly-qualified science and mathematics teachers. Teachers of foreign languages will be needed. In every area, increasing numbers of Spanish-speaking children demand many more bilingual teachers. Another shortage area is special education.”

National Politics

Considered one of Texas’ top political observers, Cal Jillson specializes in American politics and the development of American political institutions. He is the author or editor of 10 books, including, Pursuing the American Dream: Opportunity and Exclusion Over Four Centuries, as well as a widely used American government textbook.

• “The attempt to draw-down U.S. forces in Iraq by June 2004 will take on the feel of a skedaddle.”

• “Expect Democrats to be harried throughout the south with the 'gay marriage' issue.”

• “There will be a fascinating struggle between Republicans trying to define the prescription drug bill as a major success and Democrats seeking to describe it as corporate welfare for the drug companies. Seniors will decide the issue at the ballot box.”

• “The U.S. Supreme Court to use the Pennsylvania redistricting case, Vieth v. Jubelirer, to set limits on partisan gerrymandering. In the meanwhile, the federal courts may well strike down the Republican redistricting in Texas. And even if they don't, look for Charlie Stenholm to hold his seat.”

• “President Bush will win narrowly even though voters will express deep misgivings about key policies, like Iraq, the fairness of the tax cuts, and the continuing loss of jobs in the economy. Pundits will debate whether the result reflects voters weighing personal qualities over issues or simply the power of huge amounts of money to buy elections.”

The Middle East

Michael Provence, assistant professor of history, is an expert on 20th-century Middle Eastern politics, in particular Arab uprisings. From 1998 to 2000, he lived in Syria as a Fulbright Scholar. Because he says historians don’t make predictions, he’s basing his outlook for the Middle East on historical cases from the United Kingdom in Iraq, France in Syria and Algeria, and the Israelis in Lebanon.

• “The situation in Iraq will further deteriorate as the election draws near. The Iraqi insurgents will seek to influence the election by stepping up attacks. Press coverage will be further circumscribed. Bin Laden will claim responsibility for, or at least praise, events in Iraq that he has no connection to. The government will use this as post-facto evidence for the war.”

• “There will be no Weapons of Mass Destruction found.”

• “The government will respond to increased attacks with bombing of towns and cities and withdrawals to secure compounds. Large areas of Iraq will have no contact with Americans except by air assault. The government will be forced to withdraw troops quietly as it runs out of money, and is unable to seek more money before the election.”

• “There will be additional overtures to the international community to provide troops and money. They will not succeed.”

• “After the election, serious evacuations will occur if President Bush is re-elected. If someone else is elected, there will be a new overture to the United Nation, with mixed results.”

Health and Medicine

A nationally recognized expert in health-care law, Tom Mayo has written more than 20 scholarly articles and book chapters on such subjects as the legal implications of AIDS, abortion, right to die, neurosurgical ethics, medical futility, pediatric end-of-life care, health care fraud and abuse, surrogate parenting and patient's rights. In addition to teaching at SMU’s Dedman School of Law, Mayo is an adjunct associate professor of internal medicine at the University of Texas Southwestern Medical School. In 1989, he co-founded the Dallas Legal Hospice, Texas' first pro bono legal aid clinic for persons with AIDS and other terminal diseases. Mayo also serves on the ethics committees of several area hospitals and co-chairs the committees at Parkland Memorial Hospital and Children's Medical Center.

• “In Health law, it will take two to three months before seniors, physicians, hospitals and others have finished their review of the massive (and hugely complicated) Medicare reform bill signed into law by President Bush. It may take months longer to evaluate many of the provisions, and only time will tell whether other provisions were wise or foolish. Seniors are already figuring out that the pharmaceutical benefit, which doesn't kick in for two more years, will leave many of them poorer than they were before the benefit was enacted.

How much worse remains to be seen, but the political backlash has already started and may mean that health reform will be a potent issue in the 2004 national elections, but not for the reasons the Administration and incumbent congressmen were hoping.”

• “In bioethics, cloning-for-research (also known as "therapeutic cloning") will continue to be hotly debated. The House of Representatives passed a bill, which is still sitting in the Senate awaiting floor action, that would ban all cloning (reproductive and therapeutic). The more moderate Senate is unlikely to go along with the House on this, while the medical-research community and disability groups are turning up the heat to allow research on stem cells that have been derived from cloned embryos and to liberalize the Administration's rules for using federal funds for such research.”

• “In family law, expect more states to follow the lead of the Massachusetts Supreme Judicial Court last month and declare their states' ban on same-sex marriage violates their state constitutions. President Bush and at least half of the Congress that is running for reelection in 2004 will campaign on a pledge to support a constitutional amendment declaring marriage can only be between a man and a woman.”

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