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December 18, 2003

Host: Michael Grant
Topics:
· Arizona's economic forecast;
· ASU professor reviews county attorney's office;
· Pets as holiday gifts
In-Studio Guests:
· Gary Lowenthal, Arizona State University Law Professor;
· Tracy Clark, Associate Director, Economic Outlook Center, Arizona State University Center for Business Research;
· Jay Butler, Associate Professor, Arizona State University

MICHAEL GRANT:
TONIGHT ON "HORIZON", DOWN AND DIRTY JUSTICE. THAT'S THE TITLE OF A NEW BOOK BY AN ARIZONA STATE UNIVERSITY LAW PROFESSOR WHO WROTE ABOUT HIS SABBATICAL WORKING IN THE MARICOPA COUNTY ATTORNEY'S OFFICE. ARE WE SEEING THE LIGHT AT THE END OF THE TUNNEL WHEN IT COMES TO THE ECONOMY? TWO LOCAL ECONOMISTS WILL JOIN US TO TALK ABOUT THAT. AND TIS THE SEASON THAT PEOPLE GIVE PETS FOR CHRISTMAS. WE'LL TELL YOU ABOUT A COUNTY FACILITY THAT HELPS CARE FOR PETS THAT ARE UNWANTED. GOOD EVENING, I'M MICHAEL GRANT. FOR MORE THAN 25 YEARS, GARY LOWENTHAL HAS BEEN A LAW PROFESSOR. HE LEFT THE COZY WORLD OF ACADEMIA FOR A SABBATICAL TO ENTER THE REAL-LIFE STRUGGLES FOUGHT DAILY AT THE MARICOPA COUNTY ATTORNEY'S OFFICE. LOWENTHAL TURNED HIS EXPERIENCE INTO A BOOK, "DOWN AND DIRTY JUSTICE, A CHILLING JOURNEY INTO THE DARK WORLD OF CRIME AND CRIMINAL COURTS." HERE NOW TO TALK ABOUT HIS BOOK IS PROFESSOR LOWENTHAL. GARY, GOOD TO SEE YOU AGAIN.

>> GARY LOWENTHAL:
GOOD TO SEE YOU, MICHAEL.

>> MICHAEL GRANT:
WHY DID YOU DECIDE TO WRITE A BOOK ABOUT YOUR EXPERIENCE?

>> GARY LOWENTHAL:
I THINK THE IMAGE OF OUR JUSTICE SYSTEM WE GET FROM THE MEDIA, EVENING NEWS AND OTHER CHANNELS, TV SHOWS AND MOVIES AND SO ON IS VERY UNREAL IMAGE OF WHAT ACTUALLY OCCURS. EVEN THE NEWS, ALL THAT'S REALLY COVERED IS THE SENSATIONAL CRIME, TYPICALLY MURDERS IN CASES WHERE THE CELEBRITY IS THE VICTIM OR DEFENDANT.

MICHAEL GRANT:
IS IT THE GRIST MILL TYPE ASPECTS THAT DIFFER FROM THAT PUBLIC VIEW THAT EXISTS?

>> GARY LOWENTHAL:
99.9% OF THE CASES THAT GO THROUGH THE JUSTICE SYSTEM WE KNOW NOTHING ABOUT. HOW THOSE CASES ARE PROCESSED, WHAT HAPPENS IN THE CASES, THE OUTCOMES OF THOSE CASES, WE LEARN NOTHING ABOUT THEM. AND THAT WAS MY MOTIVATION FOR WRITING THE BOOK. AS YOU SAY THE GRIST OF THE MILL. MICHAEL GRANT: ABOUT YOUR TRAINING AS A PROSECUTOR, "A CENTRAL PURPOSE MAY HAVE BEEN TO DEFLECT POLITICAL ACCOUNTABILITY". WHAT DO YOU MEAN BY THAT?

>> GARY LOWENTHAL:
WELL, THE TRAINING PROGRAM, WE WERE -- WE SPENT A MONTH IN A CLASSROOM IN THE BASEMENT OF A COUNTY BUILDING AND HEARD ONE LECTURE AFTER ANOTHER AFTER ANOTHER. ACTUALLY, THE LECTURES SEEMED TO BE VERY UNCONNECTED TO ONE ANOTHER AND THEY COVERED A HUGE RANGE OF SUBJECTS. THERE WAS VERY LITTLE INTERACTION, THERE WAS NO TESTING TO SEE WHETHER WE WERE PICKING UP WHAT WE WERE GETTING. IT WAS MORE A QUESTION OF, THIS IS SOMETHING THAT'S COVERED IN TRAINING AND IF YOU SCREW UP IN THE FUTURE, YOU HAD IT IN TRAINING YOU SHOULD HAVE KNOWN BETTER.

MICHAEL GRANT:
THAT KIND OF ACCOUNTABILITY?

>> GARY LOWENTHAL:
YES, I THINK THAT'S RIGHT. MICHAEL: YOU STATE THAT PROSECUTORS GIVE DEFENDANTS ONLY ONE DAY TO ACCEPT THE MOST FAVORABLE OFFER BEFORE IT IS OFF THE TABLE. WHAT'S THE REASON FOR THAT?

>> GARY LOWENTHAL:
WELL, I'M NOT SURE IF THIS IS STILL THE PRACTICE IN THE COUNTY ATTORNEY'S OFFICE. THIS WAS WHEN I WAS THERE.

MICHAEL GRANT:
THIS WAS FIVE YEARS AGO?

>> GARY LOWENTHAL:
A FEW YEARS AGO. DURING PRELIMINARY HEARINGS, WHICH IS THE VERY FIRST STAGE OF A FELONY PROSECUTION, THE OFFICE POLICY WAS TO MAKE THE BEST POSSIBLE OFFER THAT WOULD EVER BE MADE IN THE CASE ON THE DAY OF THE PRELIMINARY HEARING AND TELL THE DEFENSE THAT THEY WOULD NEVER, EVER GET A BETTER OFFER. IF THE DEFENDANT TURNED DOWN THE OFFER, THERE WOULD NEVER BE AS GOOD A DEAL ON THE TABLE LATER STAGE IN THE CASE. OBVIOUSLY, THE PURPOSE IS TO GET THE CASE OUT OF THE SYSTEM AS QUICKLY AS POSSIBLE.

MICHAEL GRANT:
PROSECUTORS WIELD TOO MUCH POWER. HOW SO?

>> GARY LOWENTHAL:
THIS IS A NATIONWIDE ISSUE. PROSECUTORS HAVE POWER BECAUSE LEGISLATURES GIVE IT TO THEM. OUR LEGISLATURE, 25 YEARS AGO THE LATE '70'S AND '80'S PASSED A SERIES OF MANDATORY SENTENCING LAWS. IN MOST CASES, PROBABLY A MAJORITY OF FELONY CASES MANDATORY SENTENCING ALLEGATIONS ARE FILED. THE DEFENDANT, IF FOUND GUILTY AT TRIAL, FACES A MANDATORY PUNISHMENT OF QUITE A FEW YEARS IN PRISON, THE PROSECUTION CAN OFFER TO DISMISS THE MANDATORY SENTENCING IF IT WILL PLEAD GUILTY TO A LESSER CHARGE. JUDGES ARE MORE LIMITED TO MORE OR LESS ADMINISTRATIVE ROLE IN PASSING SENTENCE.

MICHAEL GRANT:
IN FACT, I'VE HEARD THE COMMENT MADE ON A NUMBER OF OCCASIONS THAT MANDATORY SENTENCING LAWS DID NOT REMOVE SENTENCING DISCRETION FROM THE SYSTEM, THEY MERELY MOVED IT FROM THE JUDGE TO THE PROSECUTION.

>> GARY LOWENTHAL:
ABSOLUTELY. AND IN A STATE LIKE THIS, WHERE OUR JUDGES ARE SELECTED THROUGH A MERIT SELECTION PROCESS, YOU'RE GIVING THE DISCRETION IN SERIOUS FELONY CASES FROM JUDGES TO PROSECUTORS, MANY OF WHOM ARE A YEAR OR TWO OUT OF LAW SCHOOL, JUST LEARNING THE ROPES, DON'T HAVE THE EXPERIENCE AND MAY NOT HAVE THE SAME LEVEL AND USUALLY DON'T HAVE THE SAME LEVEL OF PERSPECTIVE ON A CASE AS A JUDGE MIGHT.

MICHAEL GRANT:
YOU STATE THE DEFENSE ATTORNEYS REFER TO THE COUNTY ATTORNEY'S OFFICE AS THE EVIL EMPIRE?

>> GARY LOWENTHAL:
SOME DEFENSE ATTORNEYS THAT I MET DID USE THAT TERM ON MORE THAN ONE OCCASION.

MICHAEL GRANT:
24 HOURS TO ACCEPT A PLEA DEAL OR --

>> GARY LOWENTHAL:
I THINK THERE'S A SENSE FROM THE DEFENSE PERSPECTIVE IT'S NOT A LEVEL PLAYING FIELD, ALL THE POWER IS ON THE OTHER SIDE AND THEY THROW US SCRAPS FROM TIME TO TIME AND THEY NEVER SEE THE HUMANITY OF OUR CLIENTS. THAT'S WHAT I WOULD HEAR ALL THE TIME FROM DEFENSE ATTORNEYS, FORMER STUDENTS OF MINE.

MICHAEL GRANT:
ARE THE CASELOAD PRETTY CRUSHING ON BOTH SIDES?

>> GARY LOWENTHAL:
ABSOLUTELY.

MICHAEL GRANT:
WE HEAR ABOUT CASE LOADS FOR PUBLIC DEFENDERS, I THINK WE HEAR LESS FREQUENTLY ABOUT CASE LOADS FOR PROSECUTORS, BUT THEY ARE HEAVY ON BOTH SIDES.

>> GARY LOWENTHAL:
THEY ARE. WHEN I WAS IN THE COUNTY ATTORNEY'S OFFICE, THE WOMAN NEXT TO ME HAD 65 ACTIVE CASES PENDING FOR TRIAL. WITH A CASELOAD OF 65 CASES ALL OF WHICH ARE SCHEDULED FOR TRIAL WITHIN THE NEXT COUPLE OF MONTHS IT'S VIRTUALLY IMPOSSIBLE TO DEVOTE ANY ATTENTION TO PREPARATION OF A HANDFUL OF THOSE CASES.

MICHAEL GRANT:
DID YOU GET ANY FEEDBACK FROM THE COUNTY ATTORNEY ON YOUR BOOK, RICK ROMLEY HAVE ANYTHING TO SAY?

>> GARY LOWENTHAL:
HE SENT ME A LETTER, IT WAS NOT A CONGRATULATIONS LETTER. WE MAY NOT SEE EYE-TO-EYE ON EVERY ISSUE.

MICHAEL GRANT:
YOU'RE NOT ON HIS CHRISTMAS CARD LIST?

>> GARY LOWENTHAL:
I HAVEN'T RECEIVED ONE YET.

MICHAEL GRANT:
GARY LOWENTHAL, THANK YOU VERY MUCH FOR THE INFORMATION.

>> GARY LOWENTHAL:
THANK YOU.

MICHAEL GRANT:
WE'VE HAD ECONOMIC GROWTH RATES RECENTLY THAT WE HAVEN'T SEEN FOR YEARS. THE STOCK MARKET IS DOING WELL, AND HIRING MAY FINALLY START TO PICK UP. BUT THE SHADOW OF THE NATIONAL DEFICIT IS GROWING. WE'LL TALK TO TWO LOCAL ECONOMISTS ABOUT THE PAST YEAR'S ECONOMY AND THE COMING YEAR, BUT FIRST, MIKE SAUCEDA TELLS US WHAT OTHER ECONOMISTS ARE PREDICTING.

>> MIKE SAUCEDA:
ONE OF THE BIGGEST EVENTS OF ITS KIND IN THE COUNTRY. BANK ONE ECONOMIC FORECAST LUNCHEON CELEBRATED THE 40TH YEAR BY BRINGING IN SEVERAL BIG NAME SPEAKERS. SENATOR JOHN MCCAIN GAVE THE KEY NOTE ADDRESS.

>> JOHN MCCAIN:
WE ARE IN A ROBUST ECONOMIC RECOVERY, THAT'S GOOD FOR AMERICA AND GOOD FOR THE STATE OF ARIZONA. I WOULD LIKE TO GIVE YOU A LITTLE BAD NEWS FROM A NATIONAL STANDPOINT. THAT IS THAT I SEE US AMASSING MULTI-TRILLION DOLLAR DEFICITS THAT COULD CAUSE ENORMOUS BURDEN ON OUR CHILDREN AND GRANDCHILDREN.

>> MIKE SAUCEDA:
BEFORE THE LUNCHEON, A PRESS CONFERENCE WAS HELD WHERE LOCAL AND NATIONAL ECONOMISTS GAVE THEIR ASSESSMENTS AND PREDICTIONS. ONE OF THEM WAS FRANCIS DIEBOLD, PROFESSOR OF ECONOMICS IN PENNSYLVANIA. HE ECHOED MCCAIN'S CONCERNS ABOUT A GROWING NATIONAL DEFICIT.

>> FRANCIS DIEBOLD:
GOVERNMENT IS GOING TO BE BORROWING MORE. MAYBE THE GOVERNMENT IS GOING TO PRINT MORE MONEY. THAT'S GOING TO IN THE LONGER RUN COST A LITTLE MORE INFLATION.

>> MIKE SAUCEDA:
ALSO SPEAKING, GOVERNOR JANET NAPOLITANO, TALKING ABOUT HER CREDENTIALS TO MAKE ECONOMIC FORECASTS.

>>JANET NAPOLITANO:
THIS IS AN ECONOMIC CONFERENCE. I HAVE TO SHARE WITH YOU THAT MY FIRST JOB OUT OF COLLEGE WAS TO WORK ON THE ECONOMIC STAFF OF THE UNITED STATES SENATE BUDGET COMMITTEE. ACTUALLY ON THE REPUBLICAN STAFF AS UNITED STATES SENATE BUDGET COMMITTEE AS A REVENUE ESTIMATOR. AS SOMEONE WHO WORKED IN THE FORECAST ARENA, AND SO AS I GO THROUGH THE POLITICAL SEASON WITH THE LEGISLATURE, I REMIND THEM FROM TIME TO TIME THAT IT IS THE REPUBLICANS WHO TAUGHT ME HOW TO ROUND TO THE NEAREST $100 MILLION. BE THAT AS IT MAY, WHAT A DIFFERENCE A YEAR MAKES. AT THIS LUNCHEON LAST YEAR, THE OUTLOOK WAS BLEAK, THE DEFICIT WAS LARGE AND THERE WAS SOME SENSE OF MALAISE. THAT SENSE OF MALAISE IS OVER IN ARIZONA.

>> MIKE SAUCEDA:
ARIZONA STATE UNIVERSITY PRESIDENT MICHAEL CROWE SAID THE KEY TO ECONOMIC GROWTH IS DIVERSITY.

>> ARIZONA STATE UNIVERSITY PRESIDENT MICHAEL CROW:
ARIZONA HAS A STRONG ECONOMIC BASE BUT IT HAS AN ECONOMIC BASE WHICH IS INSUFFICIENTLY ROBUST, NOT ON A TRAJECTORY TO CREATE SUBSTANTIAL AMOUNTS OF NEW EITHER INCOME DISTRIBUTION OPPORTUNITIES FOR PEOPLE AT ALL LEVELS OF OUR ECONOMIC STRUCTURE OR PARTICULARLY HIGH INCOME JOBS. AND ROBUSTNESS IS DRIVEN BY SOMETHING THAT SOME OF YOU HAVE HEARD ME TALK ABOUT BEFORE WHICH IN FACT IS ECONOMIC DIVERSIFICATION.

>> MIKE SAUCEDA:
ANTHONY CHAN, A NATIONALLY KNOWN BANK ONE ECONOMIST, PREDICTS A 3.8 PERCENT GROWTH RATE FOR NEXT YEAR'S NATIONAL ECONOMY AND A ROBUST STOCK MARKET.

>> ANTHONY CHAN:
MOVING FORWARD, WE HAVE A BIT OF A TAIL WIND HERE THE U.S. ECONOMY BECAUSE WE ARE SEEING THAT FINANCIAL MARKETS ARE COOPERATING. WE HAVE THE NASDAQ EXCHANGE ON A YEAR TO DATE BASIS OF 48.3%. WE HAVE THE S&P 500 UP OVER 20% ON A YEAR TO DATE BASIS BECAUSE OF THE POSITIVE WEALTH EFFECT, CONSUMERS WILL COME BACK AND START SPENDING AGAIN PERHAPS AS EARLY AS THE SECOND HALF OF NEXT YEAR.

>> MIKE SAUCEDA:
LEE MCPHETERS SAYS ARIZONA'S ECONOMY IS LOOKING GOOD.

>> LEE MCPHETERS:
WE ARE EXPECTING 2004, THE YEAR AHEAD WILL BRING THE BEST GROWTH WE HAVE SEEN IN ARIZONA IN THE PAST FOUR YEARS. WE'RE LOOKING FOR ABOUT 78,000 NEW JOBS IN THE STATE, JUST TO FOCUS ON THE NUMBERS, ABOUT 3.4% JOB GROWTH.

>> MIKE SAUCEDA:
ELLIOTT POLLACK, WHO HAS HIS OWN ECONOMIC CONSULTING FIRM, SPOKE ABOUT REAL ESTATE, AND SAID IF A RISING DEFICIT HIKES INTEREST RATES, REAL ESTATE COULD BE CHANGE.

>> ELLIOTT POLLACK:
IT'S NOT LIKELY TO BE A DRAG ON THE ECONOMY BUT IT'S GOING TO BE INTERESTING TO SEE WHAT HAPPENS WHEN INTEREST RATES START TO GO UP. 7% MORTGAGE RATES WON'T HURT VERY MUCH, BUT YOU GET TO 8 OR 9% AND YOU'VE GOT SOME REAL PROBLEMS IN THE HOUSING MARKET. OFFSETTING THAT IS POPULATION FLOWS WILL CONTINUE. AGAIN IT'S A GOOD NEWS, BAD NEWS SITUATION. GOOD NEWS FOR THE HOUSING MARKET, STRONG IN 2004, COMMERCIAL MARKS ARE NOT IN DISARRAY AND CONTINUE TO DO WELL, BUT IT'S GOING TO BE QUITE AWHILE UNTIL YOU GET MUCH IN THE WAY OF SUBSTANTIAL NEW CONSTRUCTION. MICHAEL GRANT: HERE NOW TO TELL US MORE ABOUT THE ECONOMY IS TRACY CLARK, ASSOCIATE DIRECTOR OF THE ECONOMIC OUTLOOK CENTER AT ASU'S CENTER FOR BUSINESS RESEARCH, AND JAY BUTLER, ASSOCIATE PROFESSOR AT ASU. SO JAY, EVERYTHING COMING UP ROSES? WE GOING TO START POPPING THE CORKS ON THE BOTTLE OF THE CHAMPAGNE.

>> JAY BUTLER:
IF YOU'RE IN HOME BUILDING, IT WILL BE A GOOD YEAR AND WE EXPECT 2004 TO BE ANOTHER GOOD YEAR. IF YOU'RE IN COMMERCIAL, OTHER THAN RETAIL, YOU'RE PROBABLY CUTTING BACK AND DRINKING TAP WATER.

MICHAEL GRANT:
CARBONATED?

>> DEPENDS ON THE PRICE.

MICHAEL GRANT:
REAL ESTATE ALMOST ALWAYS IS KIND OF AN ANCHOR, IS IT NOT, THROUGH MOST DOWN TURNING PERIODS IN ARIZONA?

>> JAY BUTLER:
BASICALLY, YOU GET THE HOUSE IF YOU HAVE POPULATION GROWTH. THAT BRINGS THE RETAIL. TO SUPPORT THE POPULATION, YOU HAVE TO HAVE PLACES FOR JOBS, OFFICE AND INDUSTRIAL BUILDINGS ARE BUILT. THE UNIQUE THING ABOUT THE HOUSING MARKET THIS TIME AROUND, IT'S A NATIONAL PHENOMENON. EVERY MARKET IS SHOWING RECORDS IN NEW PRICES, RESALE ACTIVITY, CONSTRUCTION, ETC. PEOPLE ARE OUT THERE GETTING THEIR HOMES TO LIVE IN AS INVESTMENT.

MICHAEL GRANT:
ONE THING I HAVE NEVER UNDERSTOOD, OBVIOUSLY THE POPULATION GROWS, WE ARE 260, 270 MILLION PEOPLE. BUT IT SEEMS LIKE WE BUILT A HECK OF A LOT MORE HOUSES THAN WE HAVE GROWN IN PEOPLE. I HAVE NEVER BEEN ABLE TO FIGURE THAT OUT.

>> JAY BUTLER:
YOU GET PEOPLE SHIFTING FROM BEING RENTERS, THAT'S WHY THE APARTMENT MARKET IS NOT DOING WELL, OR THE SHIFT FROM BEING RENTERS IN HOUSING. YOU HAVE HOUSEHOLD FORMATION. PEOPLE WHO ARE YOUNGER WHO WOULD NORMALLY BE RENTERS ARE BUYING HOMES, ESPECIALLY FEMALES ARE BUYING HOMES OPINION IT'S A GOOD APPRECIATION. BASICALLY PEOPLE WHO USED TO BE HOMEOWNERS ARE NOW BUYING. WE HAVE A GROUP BUYING FOR INVESTMENT. STOCK PORTFOLIO IS NOT DOING WELL, HOMES DID WELL, BUY HOMES FOR INVESTMENT PURPOSES.

MICHAEL GRANT:
TRACY, NEW UNEMPLOYMENT NUMBERS WERE ENCOURAGING.

>> TRACY CLARK:
IT WENT FROM 5 TO ABOUT 4.8. THERE WAS A JOB CREATION OF ABOUT 21,000 ON A BASE OF ABOUT 2.3 MILLION. THOSE ARE GOOD NUMBERS. RIGHT NOW, THE UNEMPLOYMENT RATE CAN BE A LITTLE MISLEADING BECAUSE SOME OF THAT DROP IS PROBABLY A RESULT OF PEOPLE ACTUALLY LEAVING THE LABOR FORCE AND LATER ON, IN 2004, WHEN JOB CREATION PICKS UP EVEN MORE, THE UNEMPLOYMENT RATE COULD ACTUALLY GO UP SOME BECAUSE MORE PEOPLE ARE COMING BACK INTO THE LABOR FORCE AND SAYING IT'S TIME TO FIND A JOB.

MICHAEL GRANT:
ALSO CONCERNED ABOUT THE QUALITY OF JOBS WE ARE TALKING ABOUT OR THE PAY SCALES ASSOCIATED WITH THE QUALITY OF JOBS THAT WE ARE TALKING ABOUT?

>> TRACY CLARK:
YES, MOST OF THE JOB GROWTH SO FAR HAS BEEN IN THE BROADLY DEFINED SERVICE AREAS, NOT VERY MUCH IN THE GOODS AREAS, AND ALSO THERE'S SOME CONCERN THAT SOME PEOPLE HAVE BECOME UNDER EMPLOYED. THAT IS, YOU LOSE A JOB AS AN ELECTRICAL ENGINEER AND YOU GET A JOB AS A CLERK AT A CONVENIENCE STORE. THAT'S PROBABLY NOT WHAT YOU WERE REALLY LOOKING FOR.

MICHAEL GRANT:
BUT IN GENERAL, WE'RE A HECK OF A LOT BETTER OFF TALKING DECEMBER 2003, THAN I ASSUME WE WERE HAVING THE SAME CONVERSATION DECEMBER 2002. I MEAN, IT'S BEEN A GROWING YEAR AND IT LOOKS GOOD FOR 2004?

>> TRACY CLARK:
WE'VE HAD NOTICEABLE GROWTH AND THE RATE OF GROWTH IS PICKING UP, THERE'S NO DOUBT ABOUT THAT. WE'RE DEFINITELY GETTING BETTER LARGELY BECAUSE THE NATIONAL ECONOMY FINALLY STARTED TO GET BETTER.

MICHAEL GRANT:
SOFT SEGMENTS? WHAT REMAINS SOFT IN ARIZONA?

>> TRACY CLARK:
MOSTLY MANUFACTURING, SOME MINING. MANUFACTURING BECAUSE THERE'S A LOT OF EXCESS CAPACITY AND ONCE BUSINESSES REALLY START SPENDING AGAIN, AND THAT'S WHAT'S ENCOURAGING TO ME, IS THAT WE SAW BUSINESS SPENDING START TO GO UP IN THE THIRD QUARTER, ONCE THAT REALLY GETS STARTED THEN ARIZONA BUSINESSES WILL REALLY BENEFIT BECAUSE MOST OF OUR MANUFACTURING AND THAT TYPE OF ACTIVITY IS BUSINESS TO BUSINESS, RATHER THAN CONSUMER RELATED.

MICHAEL GRANT:
JAY, INTEREST RATES REMAIN PRETTY NEAR HISTORIC LOW LEVELS DON'T THEY?

>> JAY BUTLER:
THEY RUN 5.5 TO 6%, DEPENDING ON YOUR CREDIT RECORD AND OTHER ASPECTS. IF YOU'RE IN A 15 YEAR, YOU CAN ACTUALLY GET IN THE 4% RANGE AND THERE ARE SOME ADJUSTABLES IN THE 2 OR 3% RANGE. MICHAEL GRANT: WHAT NORMALLY HAPPENS, WHEN THE ECONOMY STARTS SHOWING SIGNS OF RECOVERY, THE FED STARTS INCREASING THE RATE SO IS 2004 LIKELY TO BRING US HIGHER INTEREST RATES OR NOT?

>> JAY BUTLER:
PROBABLY WILL BRING US HIGHER INTEREST RATES BUT NOT HIGH ENOUGH TO CUT OFF THE MARKET WHICH IS PROBABLY SOMEWHERE AROUND 8%. WHAT WILL BE THE ISSUE GETS TO BE IS A LOT OF PEOPLE WILL BE VERY SATISFIED WITH THE HOME THEY'RE IN WITH A 6% INTEREST RATE AND WOULD NOT BE REENTERING THE MARKET. USUALLY ONE OF THE THINGS THAT PROPELS THE ECONOMY OUT OF THE DOWNTURN PEOPLE GAINING IN CONFIDENCE AND BUYING HOMES. THE ONLY THING GOING ON FOR THE LAST THREE TO FOUR YEARS IS THE HOUSING MARKET.

MICHAEL GRANT:
COUPLE OF MONTHS AGO THE REPORT CAME OUT THAT SHOWED I THINK THE THIRD QUARTER GROWTH AT 7.2% NATIONALLY.

>> JAY BUTLER:
IT ACTUALLY WENT UP TO 8.2 FOR THE -- 8.1, 8.2. MICHAEL GRANT: THAT WAS, IF I RECALL, THE STRONGEST NUMBER THAT HAD BEEN SEEN IN THAT PARTICULAR INDEX.

>> JAY BUTLER:
FOR AN EXTREMELY LONG TIME. WHERE WE SAW THE GROWTH AND WHERE THE UPWARD REVISION CAME WAS IN INVENTORY. BUSINESSES ARE REPLENISHING INVENTORY, SEEING EVIDENCE OF DEMAND SO THEY ARE TRYING TO PUT TOGETHER THE INVENTORY TO SUPPORT THAT. WE FINALLY SAW SOME POSITIVES FROM BUSINESS SPENDING, CONSUMERS KEPT SPENDING AND WE ALSO SAW A SLIGHT IMPROVEMENT WITH EXPORTS GOING UP A LITTLE BIT BECAUSE THE DOLLAR HAS BEEN WEAKER. MICHAEL GRANT: IS THERE ANY ARIZONA EQUIVALENT OF THAT INDEX? IS THERE A GROSS STATE PRODUCT MEASURE OR GROSS ECONOMY ARIZONA MEASURE ALONG THOSE LINES?

>> TRACY CLARK:
THE FEDERAL GOVERNMENT DOES PUT OUT A MEASURE, BUT IT'S USUALLY A YEAR, MAYBE TWO YEARS BEHIND SO BY THE TIME WE GET IT, PRETTY MUCH NO ONE CARES.

MICHAEL GRANT:
I GOTCHA. JAY, YOU MENTIONED BUT I WANT TO CYCLE BACK TO IT THAT THE COMMERCIAL INDUSTRIAL REAL ESTATE MARKET IS NOT PARTICULARLY STRONG AT THIS POINT IN TIME?

>> JAY BUTLER:
NO, THE ONLY REAL GOOD SECTOR IN COMMERCIAL IS RETAIL, WHICH IS CHASING THE ROOF TOPS. OFFICE TO VACANCY IS ABOUT 20%, MERGERS, DOWNSIZING, DEMAND FOR OFFICE SPACE SORT OF DECLINED VERY QUICKLY SO YOU HAVE A HIGH VACANCY RATE. SAME THING IN INDUSTRIAL, MANUFACTURING, BACK ROOM MARKETING, CELL MARKETING, THERE'S A LOT OF SPACE AVAILABLE. DEVELOPERS CONFRONT THE UNBELIEVABLE WORLD OF LOW INTEREST RATE BUT NOBODY WANTING THEIR PRODUCT.

MICHAEL GRANT:
WITH THE LOWER INTEREST RATES, MORTGAGE LOAD IS LESS AND THEREFORE A 20% VACANCY RATE DOESN'T HURT YOU AS IT MIGHT OTHERWISE HAVE.

>> JAY BUTLER:
THAT'S WHY YOU DON'T SEE THE FORECLOSURES THAT YOU SAW IN THE LATE 80'S OR '90'S, WHEN YOU WERE RUNNING 10, 11%, YOU DON'T HAVE THE FAILURES, YOU HAVE SOME BUILDINGS THAT ARE RUNNING 100% EMPTY.

MICHAEL GRANT:
TRACY, RETAIL SALES, LOOKS LIKE IT MIGHT BE A FAIRLY STRONG CHRISTMAS SEASON, AT LEAST EARLY INDICATIONS STRONG.

>> TRACY CLARK:
AROUND 5%, MAYBE A LITTLE BIT ABOVE, LITTLE BIT BELOW. IT'S HARD TO TELL BECAUSE WE USED TO BE ABLE TO SAY WHATEVER HAPPENED IN THE SHOPPING DAYS JUST AFTER THANKSGIVING, THAT WOULD KIND OF DEFINE THE SEASON. SHOPPERS HAVE BEEN TRAINED TO WAIT, WAIT FOR SPECIALS, WAIT FOR DISCOUNTS, THEY'RE DOING EXACTLY THAT. WE WON'T KNOW UNTIL THE EXACT COMPLEXION OF THE HOLIDAY SEASON UNTIL IT'S OVER.

MICHAEL GRANT:
TOURISM?

>> TRACY CLARK:
TOURISM IS RECOVERING PARTLY IN THE PHOENIX AREA BECAUSE BUSINESSES ARE STARTING TO SPEND A LITTLE BIT MORE. AND I WOULD ASSUME AS LONG AS WE DON'T HAVE ANY MORE TERRORIST ACTIVITY, THAT TOURISM WILL CONTINUE ITS REBOUND.

MICHAEL GRANT:
TRACY CLARK, THANKS FOR BEING HERE. JAY BUTLER, LOOK FORWARD TO A PROSPEROUS 2004. MICHAEL GRANT: A PET IS AN IMPORTANT PART OF THE FAMILY, ESPECIALLY DURING THE HOLIDAYS. BUT WHEN MAKING YOUR LIST AND CHECKING IT TWICE, ANIMALS USUALLY DON'T MAKE THE BEST GIFTS. PETS ARE A PERSONAL AND TIMELY COMMITMENT WHICH IS BETTER LEFT TO THE INDIVIDUAL. "HORIZON" WENT TO MARICOPA ANIMAL CARE AND CONTROL TO FIND OUT WHAT YOU CAN DO TO HELP OUT OUR FURRY FRIENDS DURING THE HOLIDAYS.

>> REPORTER:
THE HOLIDAYS ARE TYPICALLY A SEASON FOR GIVING. THOSE IN NEED MIGHT BE FURRIER THAN YOU EXPECT. LOOK AT THIS LITTLE GUY, ONE OF HUNDREDS OF CATS AND CANINES AT MARICOPA COUNTY ANIMAL CARE AND CONTROL FACILITY.

>> JULIE BANK:
WE TAKE IN 53,000 DOGS AND CATS A YEAR, AND OUR GOAL IS TO TRY TO FIND HOMES FOR EVERY HEALTHY AND ADOPTABLE ANIMAL THAT WE HAVE.

>> REPORTER:
A FULL SERVICE ANIMAL SHELTER, THE FOLKS WHO WORK HERE WANT TO MAKE SURE THE FOUR-LEGGED FRIENDS ARE HOME FOR THE HOLIDAYS. THAT'S PART OF THE SHELTER'S THREE-PART INITIATIVE.

>> JULIE BANK:
FIRST, NO ANIMAL SHOULD BE HOMELESS DURING THE HOLIDAYS. WE ENCOURAGE PEOPLE TO ADOPT OR GET A GIFT CERTIFICATE. SECOND, NO ANIMAL SHOULD BECOME HOMELESS DURING THE HOLIDAY, WE TRY TO HELP PEOPLE UNDERSTAND WHAT BEING A RESPONSIBLE PET GUARDIAN IS ALL ABOUT AND GIVE THEM THE TOOLS TO HELP DO THAT RIGHT. THE THIRD IS HELPING ANIMALS DURING THE HOLIDAYS AND WE ARE TRYING TO ENCOURAGE THE COMMUNITY TO GET INVOLVED WITH AC AND C, BECOME A VOLUNTEER OR HELP US MAKE THE ANIMALS MORE COMFORTABLE WHILE IN OUR CARE.

>> REPORTER:
THE CENTER COUNTS ON DONATIONS FROM THE COMMUNITY TO FEED AND HOUSE ABANDONED DOGS AND CATS THEY SHELTER.

>> JULIE BANK:
WHEN THEY'RE DOING THE CHRISTMAS CLEANING, PULL OUT THOSE OLD TOWELS AND BLANKETS AND CURTAINS, GO TO THE STORE, GET YOUR DOG A CAN OF FOOD AND GET A SECOND CAN OF FOOD FOR THE ANIMALS IN OUR BUILDING.

>> REPORTER:
MANY PETS ARE TURNED IN WHEN OWNERS CAN NO LONGER CARE FOR THEM. IT DOESN'T HAVE TO COME TO THAT.

>> JULIE BANK:
WE NOT ONLY TAKE CARE OF THE ANIMALS WE HAVE HERE, THEY HELP A PROGRAM THAT WE HAVE THAT'S CALLED PROJECT PET FOOD. PROJECT PET FOOD IS A PARTNERSHIP BETWEEN US AND THE WEST SIDE HUMAN FOOD FOOD BANK WHERE ONCE A MONTH WE DO A FOOD DISTRIBUTION TO NEEDY FAMILIES. IF YOU ARE IN NEED OF FOOD, ALL YOU NEED TO DO IS CONTACT US, THE THIRD SATURDAY OF EVERY MONTH, AT THE WEST SIDE FOOD BANK FROM 10 TO 12, YOU CAN GET FREE FOOD.

>> REPORTER:
ANIMAL CARE AND CONTROL PROVIDES SPAY, NEUTER AND HEALTH SERVICES, AS WELL AS BEHAVIORAL TRAINING.

>> JULIE BANK:
ANIMAL CARE AND CONTROL IS EXTREMELY COMMITTED TO KEEPING ANIMALS WITH FAMILY. WE THINK AN ANIMAL IS IMPORTANT MEMBER OF THE FAMILY AND THE BOND IS IMPORTANT.

>> REPORTER:
AC AND C WORKS HARD TO CARE FOR PETS LIKE THIS ONE BUT CAN'T DO IT WITHOUT THE COMMUNITY'S HELP, ESPECIALLY DURING THE HOLIDAYS.

MICHAEL GRANT:
YOU CAN GET A NEW PET AND PET LICENSE AT ANY ONE OF THE THREE AC AND C LOCATIONS IN THE VALLEY. FOR MORE INFORMATION, CALL THEM AT 602-506-PETS OR LOG ON TO WWW.PETS.MARICOPA.GOV. TO READ A TRANSCRIPT OF OUR SHOW, VISIT OUR WEBSITE AT WWW.KAET.ASU.EDU. CLICK ON THE WORD "HORIZON" IN THE LOWER LEFT OF THE SCREEN YOU CAN ALSO SEE WHAT'S COMING UP ON "HORIZON". HERE'S WHAT'S ON THE PROGRAM TOMORROW.

>>REPORTER:
THE SPECIAL SESSION AT THE STATE LEGISLATURE WRAPS UP WHAT WAS ACCOMPLISHED AND HOW. HOWARD DEAN MAKES A TRIP THROUGH THE STATE. FIND OUT HOW HE IS FARING AS WE NEAR THE DATE FOR THE ARIZONA PRESIDENTIAL PRIMARY. JOIN US FOR THE JOURNALIST'S ROUNDTABLE, FRIDAY AT 7 ON "HORIZON".

>>MICHAEL GRANT:
THOSE SUBJECTS AND UNDOUBTEDLY MORE. THANKS VERY MUCH FOR JOINING US ON A THURSDAY EVENING. I'M MICHAEL GRANT. HAVE A GREAT ONE. GOOD NIGHT.

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