Letter from Washington

How goes the government’s war against inflation? Regard. Government-imposed oil import quotas help keep the cost of all petroleum products unnecessarily high. These quotas cost the American people about $5 billion a year; the average family pays $100 a year in higher gasoline and fuel oil prices alone. Now there is a move afoot to make matters worse. Bills pending in Congress would require that either half of all imported crude oil or —worse still in inflationary effect—half of all imported petroleum products be carried in American-flag ships.

Does the maritime industry need such protective legislation? Yes, but only because the industry has been rendered flabby and uncompetitive by a mishmash of government subsidies and restrictive practices imposed by government-protected labor unions. Needless to say, the bills are supported by an unconvincing argument from a predictable source. “The national security demands it,” says Rep. Edward Garmatz (D., Md.), who represents the port city of Baltimore. In 1970 George Shultz (then Director of the Office of Management and Budget, now Secretary of the Treasury) declared that oil import quotas would be costing the public $8.4 billion by 1980. If either of these bills passes, Shultz will have to revise his estimates upward. Hopefully he will continue to argue, as he did in 1970, that the quota system “does not reflect national security needs, present or future, and is no longer acceptable.”

Featured Tags

Presidential Election

Wisconsin

Florida

Department of the Treasury

How goes the government’s war against inflation? Regard. Government-imposed oil import quotas help keep the cost of all petroleum products unnecessarily high. These quotas cost the American people about $5 billion a year; the average family pays $100 a year in higher gasoline and fuel oil prices alone. Now there is a move afoot to make matters worse. Bills pending in Congress would require that either half of all imported crude oil or —worse still in inflationary effect—half of all imported petroleum products be carried in American-flag ships.

Does the maritime industry need such protective legislation? Yes, but only because the industry has been rendered flabby and uncompetitive by a mishmash of government subsidies and restrictive practices imposed by government-protected labor unions. Needless to say, the bills are supported by an unconvincing argument from a predictable source. “The national security demands it,” says Rep. Edward Garmatz (D., Md.), who represents the port city of Baltimore. In 1970 George Shultz (then Director of the Office of Management and Budget, now Secretary of the Treasury) declared that oil import quotas would be costing the public $8.4 billion by 1980. If either of these bills passes, Shultz will have to revise his estimates upward. Hopefully he will continue to argue, as he did in 1970, that the quota system “does not reflect national security needs, present or future, and is no longer acceptable.”