Dollar slumps in Europe

I was about to begin by saying that in my campaign against the jargon that's beginning to be rampant in the Congress, the Pentagon, the colleges, all government offices and the newspapers – so that everybody now says he's going to 'conceptualise an innovative programme' when he means he hopes to do something new – in this little campaign of mine, I was going to say I feel like David facing Goliath except I'm David without a single stone, let alone the five that he carried.

Well, such is the infection of this gobbledegook, that I almost began by saying, 'Whenever there's a major airplane disaster' – 'major' has displaced the words 'main, serious, important' and even 'big.' 

Let's start again. What I mean is, whenever a big airplane crashes it inevitably makes the big headline and the first thing that dinner guests mentioned the other evening was the crash of that DC-10 at Los Angeles on Tuesday. What appalling luck it was for the pilot that he was a veteran about to retire that very day and ready to take off for his last flight. The consolation, if ever there can be a consolation for an air crash, was that with a less skilful pilot, the plane would have plunged into a plant that stored aviation petrol, not to mention a parking lot at the end of the runway. 

It was a great relief to hear from everybody, the airline officials, the first inspectors on the scene, most of all the passengers who still had their wits about them, to hear tributes of the courage of Captain Hershey. He can retire if not happily, at least honourably. It must have been a blessed moment for his family and friends to see the sub-heading to the story which read, 'Pilot on final trip is credited with saving many lives'. 

However, I brought this up not because it was the first story on the television news on Tuesday night, but because it wasn't. The first story – which always carries more emphasis than the big front-page newspaper story, since on television your mind can't wander to other things – the first story was the brutal battering of the dollar on the European currency markets. Currency trading is to most of us one of those mighty mysteries like dating the arrival of man on earth by the slivers of iron or zinc or bicarbonate of soda, or whatever, that some moocher finds in a pit in Devon or East Africa. 

And on Wednesday morning, a great friend of mine who's been in investment banking all his life said, 'I don't imagine that 98 Americans in a hundred have any idea how the currency market works. I'll go farther,' he said, 'I don't believe 90 per cent of the boys on Wall Street understand it.' 

Well, I must say that I am certainly among the 98 per cent, but I also must say that the National Broadcasting Company – to whom, I hasten to say, I owe nothing whatsoever, so I can identify them – NBC did a service the other night by ending its nightly half-hour news programme with a little six-minute documentary showing half-a-dozen Englishmen in London coming to work in the morning, on the telephones all day talking to clients all over the continent and swapping dollars for marks and dollars for francs and airily tossing off figures like 1.5 which turned out to mean 1.5 millions. When five o'clock struck, they yawned, stubbed out a cigarette, put on their jackets and assembled at the local pub and was seen as just another bunch of affable office workers who'd done a day's work. A pretty hot one, though, as one of them confessed. 

In view of the universal ignorance of how or why the pound or the dollar is strong one day and weak the next, what most of us want to know is, and I suppose it's natural that several million Americans watching the other night must have had an immediate reflex and said to themselves, 'Bang goes our summer holiday in Britain – or France, or Germany, or wherever' because through the jungle of jargon that covers most financial and economic stories, one reporter had the brutal sense to say, and he was talking about the disastrous collapse of the dollar against the mark, 'What this means is that an American going out today in Bonn or Berlin with 50 cents in his pocket to buy his usual cup of coffee would find when he got to the café that it was going to cost him 80 cents. Well, he'd certainly need a shot of caffeine to recover from the shock.' Of course, as we always read, things settle down later in the day. 

What do you suppose was the response in Washington? Well, you have to say which part of Washington, which branch of the government? The newspaper critics and the Republicans in opposition were saying, as many more Americans than Republicans have been saying these past few weeks about the coal strike, why didn't Carter do something? This is a cry that's grown louder and louder from a baffled populace in the past year, so much so that the latest reliable poll shows only 30-odd per cent of the American people thinking that Mr Carter is doing a good job as president. 

However, that is if not another question, a larger one which no doubt we'll be forced to face a little later on. At the moment, the interesting thing is the variety of reactions in Washington according to which government agency you work for, according to whose bread you're buttering or failing to butter. Let me give you only a couple of examples and you can probably go on to guess at others. 

The Department of Commerce, especially its overseas division, could be cheered, even considerably bucked, by the news of the sagging dollar, or as they put it, 'the dollar-to-mark relationship could signify some export advantages for the United States in competitive markets.' Well, that's plain enough. Let's exaggerate wildly for the sake of simplicity. If it takes five marks to buy one dollar, then a German has to pay out five marks to buy one dollar's worth of goods, but if the dollar slumps so badly that the dollar is worth only one mark, then a German importer can get from America five times the amount of goods he used to get for the same price. He would be tempted, shall we say, to buy American rather than Italian, French or whatever. 

Of course, by the same rule, Americans buying German goods are going to have to pay five times what they used to. This would delight the American industries hard hit by foreign competition and I don't doubt there could well have been rejoicing in such a town as, say, Brockton, Massachusetts which one time called itself 'the shoe capital of the United States'. For many years it has been a severely depressed town, beaten down and put out of business by the arrival in this country of excellent shoes – the Italians were the first mass invaders – made by much cheaper labour. 

Well, we could go on and on to the end illustrating the contradictory emotions of various Americans and different trades to the simple headline, 'Dollar Battered on European Markets', but the first question the news reporters asked is why the sudden lack of confidence in the dollar? And that question is naturally put as a political challenge to the administration, more than to anybody else, to the State Department which is charged with administering foreign policy. 

The administration was quick to come up with an explanation. It was all the fault of the stubborn Congress in refusing to pass the president’s energy bill. You remember that – how long ago was it, two, three months ago? 

President Carter was going to go on a world tour but, at the last minute, he postponed it because he said it was essential to pass an energy bill that would save all forms of energy, penalise gasoline guzzlers, encourage the making of small cars and so on. In fact, he said, we were now importing more oil than we'd done before the Arabs put on the squeeze and this, he warned, was a sign of our descent into a position of disastrous dependence on foreign oil. So another feature of his energy bill was much encouragement to invest large sums of money in discovering other sources of energy. At the time, and until we've broken the 30-odd year deadlock in finding cheap, nuclear energy, he said the main switch must be from oil to coal. That cheered up everybody except the conservationists who hate to see a beautiful landscape in such western states as Montana ploughed under or scarred or stripped for coal. 

But it greatly cheered the coalminers to the extent that they heard themselves saying, 'So, the country has finally found out how vital we are to its existence! Very well! Then we're going to get better working conditions, fairer pension plans, better sick pay.' And so, the coalminers struck and have stayed 'struck' far beyond the ability of industries to keep going at full blast or anything like it. 

If the strike were to go on and on, for a couple of months, I'm sure, there'd be only one big American story. It would be the alarming shutdown of industry, the rationing of electricity and water in the cities and a massive rise in unemployment. The casualties of the coal strike, after all, are people who've never seen a lump of coal and every night now, for several weeks, we've seen pictures of silent factories, overworked employment agencies, bitter steelworkers laid off and several towns across the country that went on strike against their electric bills and voluntarily stopped using electricity, taking to candles and fiddles and dancing instead of frozen foods and television. 

And when the dollar slump happened, again people said, 'What is Mr Carter doing about it?' Maybe they'll believe him when he puts it down to what old Harry Truman used to call, 'his do-nothing Congress' – at least the Congress that is doing nothing about energy. 

From Europe, however, we heard louder echoes of the same questions about Mr Carter's leadership. 'Why can't the most powerful politician in the world, why can he not persuade or bully his Congress? Why can he not assert himself in a national coal strike? Is such an administration to be trusted in its promises to defend Europe at all costs?' 

So, put it down maybe roughly and sloppily, but a lot of people feel that way, to lack of faith. The Europeans may be wrong but when, the other night, one European here said, 'What Europe is saying is quite simply – take me to your leader!' A rueful American present said, 'Which leader?'.

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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