Petrol shortage in US

This has been one of those weeks in which the life that the headlines are about – the SALT treaty, Rhodesia – seems far removed from the life that you and I lead. Except in one thing: petrol, and the apparent lack of it, which I talked about last time.

But there are a couple of things to add about that. One is the curious fact, it's startling to me, anyway, in view of the three-mile queues of cars in California, the fact that the available petrol throughout the country is 92 per cent of what it was at this time last year. In other words, there's only eight per cent less. From all the panicked cries you'd think we were reeling from the sort of blow the Arabs delivered five years ago. Surely it should not be difficult for people to get along with over 90 per cent of the petrol they've been used to? Surely the president could come up with some simple measure that would effectively save eight per cent of the supply without having petrol stations closed for the weekends and, as is happening, making people offer car salesmen a $2,000 bonus for new Japanese cars that get more mileage. 

Well, the president has rocked on his heels, back and forth, with so many plans suggested and plans dumped, that he finally came up with the bright idea of asking people to put their car up for one day of the week to think of the good of the country, to walk once in a while. In other words, he asked us to be 'good'. 

Now in any crisis – worse still, in any imagined crisis – this never works. And in a supreme crisis, that’s to say in a war, even then, people, however patriotic, are forcibly rationed and punished for violations. But with November 1980 gibbering on the horizon, that appears to be the last thing that President Carter would like to be remembered by. It may seem odd to anyone who pays close to $2 (£1) a gallon, to hear Americans screaming over the prospect this summer of paying 50p a gallon but, after all, it's what you're used to. 

The other point I'd like to make goes to one of the raging complaints of a large part of the American population, the argument that there is no real energy crisis, that the whole thing is a cunning and shameful invention of the oil companies. I'm indebted here to a correspondent, a man who is apparently a financial analyst or perhaps financial hobbyist, anyway, somebody who knows his way around the annual reports of business firms. He just looked over the 1978 report of one of the giant American oil companies. I won't read you his entire finding but I'll digest most of it and quote the rest. It's enlightening, even funny to me and so it may be to you. 

He starts out by noticing that the 1978 profit of this company was at a record high of $1.1 billion – that's one thousand one hundred million dollars – and he remarks, quite rightly, that most Americans who suspect the oil companies as the villains believe this kind of figure to be very large, even, as some people have said, obscene. He also notices, however, that to conduct its business, the company had to make an investment of nine billions and take the additional risk of borrowing so much more money that the total capital employed was 23 billions and, for this investment, the owners of the business got a return, which was also a record high, of 10.4 per cent. 

Now the company's total business was 37 billions, which means that its profits represented three per cent of the price of the products it sells. He points out, in a wry aside, that if only the company were sufficiently socially minded to conduct its business with no profits whatsoever, it's apparent that the price of its products could be brought way down to 97 per cent of its current price. 

Of course if the company did this it might have a tough time inducing investors to put up 23 billions (its total capital) for no return whatsoever. However, he says, investors might be comforted by the knowledge that their investment, whether producing a profit or not, enables the company to pay to its own government and foreign governments a total of $8.7 billion in taxes. And he ends up with this Benchley-like comment: 'It looks to me as if this giant oil company is in the wrong business since by making a huge investment (23 billions), it gets in profit only 1.1 billions, whereas governments putting up no money get 8.7 billions. If the company management were truly greedy, they would get out of the oil business and into the government business, thereby substantially increasing their take. As for those greedy investors, they might consider how foolish they are to risk their capital for 10.4 per cent return instead of lending it to the government, at no risk whatsoever, and getting, at the going rate of government bonds, 9.5 per cent return. 

Well, in spite of this exposition, my correspondent ends on a woeful note. 'I still expect,' he writes, 'to go on hearing about the obscene profits and rip-offs of the oil companies.' 

I imagine that the holes in this exposition can be spotted at once by Mr Carter, and Mr Callaghan, not to mention the Workers Revolutionary Party, but it's at least comforting to timid people like me to know that by just avoiding all risk and buying government bonds you get over nine per cent interest instead of going into a $23 billion business and getting, if the company remains on Easy Street, only ten per cent. 

Well, the ding-dong battle goes on between the oil companies and the injured public, the petrol station owners and their infuriated clients, most of all the never-ending battle between the presidency and the Congress. This is the really disheartening news. No news, surely by now. Those of us who were close to Washington toward the end of the Kennedy days used to say, after the assassination – used to whisper, rather, in the obvious interests of good taste – that Kennedy's reputation had been sealed with a halo because only a few weeks before he died I well remember at one of his press conferences how a reporter, a famous reporter and a sympathetic one, asked him, 'What has happened to the momentum of your presidency?' 

By that time, Kennedy, just about at the stage of his presidency that Mr Carter is now, Kennedy was hopelessly stalled in his relations with Congress. He was bitter towards them and they distrusted him. Something I think over, oh, more than a hundred, bills were pending or already on the shelf and he had little hope of getting any of them through both Houses. As I've said before, the third year of any president is a very rough time. By then he discovers, to his chagrin, and the people discover, to their disillusion or disgust, that he has nothing remotely like the power that the rhetoric of his campaign has promised. He's not like a prime minister with a working majority, he can not put through everything he wants. He can put through nothing unless he has as much of the opposition party with him and also most of his own party in Congress. 

Now if that sounds puzzling, let me remind you of one fundamental difference between a federal system and a parliamentary system. Party discipline in the Congress is nothing like as firm as it is in a House of Commons. No party whip scurries around to pry you out of hospital or even out of lunch to get into the chamber and vote to the party. In the House of Representatives, the members think first of the interests or prejudices of their constituents – after all, they're only in the House for two years, their main driving force is the urge to get back. And in the Senate, the 'give and take' between two senators of opposing parties is much more dependable than the loyalty of any one senator to the man of the same party, who happens to be in the White House. 

So, on highly controversial matters, the whips hardly count at all. The president, himself, has to start lifting the telephone and begging his own party men, one at a time, to realise that they have more to gain by voting with him than by trading a vote with some opponent who has a bill coming up which appeals to the constituents of both of them. 

I remember a time when Harry Truman was president. He'd put up to the Congress the first so-called Fair Employment bill, it was the opening wedge of racial integration. In those days, the opposition to him on this bill was made up of just as many Southern Democrats, men of his own party, as Republicans. So he had to round up the votes of every Northern Democrat he could reach. One, a great admirer of Harry Truman, a senator from Wisconsin, was called one day by the president. Here was one man who could be counted on. Well, he couldn't. Wisconsin is a dairy state. Somebody had introduced a bill in the Senate to allow the colouring of margarine, so that visibly it would be indistinguishable from butter. The Wisconsin senator didn't want that. He had a Southern friend, a senator, a Democrat too, who was dead against the fair employment, the anti-segregation bill and the friend said to the Wisconsin senator, 'If you vote for this bill, I'll vote for coloured margarine. If not, not!' 

'Mr President,' Harry Truman's loyal senator said, 'I can't do it! Where I come from, yellow margarine is more of a threat to labour than a black worker.' 

So, Mr Carter must be running up an enormous telephone bill these days, calling and pleading endlessly with senators, mainly of his own party, who are against the present SALT treaty and the senators who are for recognising the new Rhodesian government. The sad thing is that, I'm sure most Americans outside Washington are no more aware of the power play involved in getting bills through Congress than a foreigner is. They thought, when they voted in 1976, they were voting for a leader who could drive the Congress like a veteran shepherd. This illusion can be kept up when the man in the White House is a hypnotic orator like Franklin Roosevelt, or a sergeant-major who gets mad like Harry Truman, or a great, good general on a white horse like Eisenhower. 

Jimmy Carter is none of these things. So he has no mask of temper or oratory, no cloak of heroism to hide behind. He's a decent, intelligent, hard-working man who admits inexperience, does not claim to be a messiah. He's you or me. This is a horrifying revelation to you and me, the citizens of a confusing world. Accordingly, the people have just given him 26 per cent for competence.

This transcript was typed from a recording of the original BBC broadcast (© BBC) and not copied from an original script. Because of the risk of mishearing, the BBC cannot vouch for its complete accuracy.

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