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Show - j j 'I gp- - - 'r"l'"1,T. I ly. j -- 'y 1' I Hjrlnf! irHfTiri 1 11. ir.iirli..iimr f Williams Quits, Saves Senate Onerous, But Necessary Job At least New Jersey Sen. Harrison avoided being only the A. Williams 16th person evicted from the United States Senate for unethical conduct. Instead, he became the 326th to resign. Reasons for his departure are still disreputable. Ilis protests about enticement, entrapment and unfair trials notwithstanding, Sen. Williams disgraced his high office and trailed sour odor into the Senate. He should have left, one way or another. Questions abound concerning the case. Abscam now celebrated Whether the Federal Bureau of Investigation is also culpable in the way they caught certain members of Congress with a net cast for government kickback takers will evidently be the subject of future, formal inquiry. It ought to be. But that doesnt excuse Sen. Williams. Court verdicts declared the senator guilty of wrongfully participating in conspiracy and bribery developed by Abscam. Videotape evidence compiled in the case portrayed Sen. Williams agreeing with illegal money transactions more than once, on different occasions. The Senates Ethics Committee found the facts appalling enough to justify the senators expulsion. It was neither snap nor pleasant judgment. veteran in the U.S. Senate, Pete Williams was personally likable and, perhaps, the victim of temptation placed in his path, not by other actual lawbreakers, but by overzealous the FBI, to be exact. Yet he did yield, his wrongdoing, subsequently proven genuinely offensive to the criminal statutes. And when he chose not to ease the detrimental fallout on the Senate, denying, rather, all guilt, his colleagues had no option but to act A 23-ye- ar law-enforce- themselves. Elective, representative bodies such as the U.S. Senate are constantly vulnerable to charges of corruption, actual or imagined. Refusal or inability to root out the actual kind whenever it appears destroys credibility and prevents a capacity to influence and effect public policy. Sen. Williams carried disrepute into the U.S. Senate. As a national institution which must preserve a respected reputation as long as the country protects itself against ruin or collapse, the Senate, its unimplicated membership, faced a distastful but mandatory chore. Had not Sen. Williams been compelled to resign, it would have been obligatory to put him out. Could Apply the Hurt The world oil glut probably allowed President Reagan to take his latest punitive action against Libya; an embargo on Libyan oil imports. With a declining demand for petroleum products, traceable in large measure to the general downturn in world economic conditions, the United States has become considerably less dependent on oil, and particularly imported oil. Airlines Should Be Routed Toward Free Competition By Alfred E. Kahn Special to the Los Angeles Times The competitive market is a stem disciplinarian. It exerts unremitting downward pressure on costs, prices and wages, and on work rules and business policies that frustrate productivity. Economic history attests to the benefits of that discipline. If we have learned anything in this country during the last 15 years, it is that we are never going to lick our problems of stagflation unless we strengthen the discipline of competition. That is the only proper context in which to view the present financial distress of the airline industry. The distress is real. The trunk carriers suffered a $230 million operating loss in 1980 and probably a bigger one in 1981. (On local service the other hand, the carriers such as U.S. Air, Piedmont, Frontier and Ozark had operating profits of $160 million in 1980, and probably made money in 1981 as well). As a result of the major carriers heavy losses, it is apparently becoming respectable to advocate restoring a regime of regulation that we scrapped only 3 Vi years ago. Under that regime, the government systematically protected the airlines from competition for 40 years. Is it now time to reinstitute that kind of regulation? And should the practice be extended to other industries? Since, for example, automobile manufacturers lost about $4 billion last year, should we, by the current logic, institute a similar government-sponsore- d cartel for that industry? Isnt it clear that we will never lift our country out of stagflation by having the government help every troubled industry to restrict competition, raise prices, exclude new g upstarts, restrict output and relieve its managers, stockholders and workers from the pressures of competition? We must, of course, confront the argument that there is something special about the airline industry that makes competition unworkable. While it was principally interested parties like the airlines and unions that opposed deregulation because they wanted continued protection from competition, some disinterested people also felt that deregulation might jeopardize continuity and quality of service. All their fears, I became convinced, rested on some faulty assumptions: that the only way to get good service in most small markets is to force unwilling carriers to provide that service in exchange for the protected right to serve profitable markets, and that airline executives would if not curbed by a benevolent government chronically invest their funds in ventures in which they were doomed to achieve less than a going return. Instead, I discovered that: The Civil Aeronautics Board was persistently presented with complaints that service provided by unwilling carriers was poor, and in case after case the board felt constrained to hard-presse- with Libya and regardless of the merits of the Reagan administrations decision to resort to the oil weapon, the significant fact is that the African nations oil represents but one percent of the 11,386,000 barrels of crude currently available to U.S. refineries every day. It is the sort of situation that Mr. Reagan finally capitalized on; the ability to hurt them worse than they can hurt us. The Weekly Petroleum Status Report published Feb. 26 by the U.S. Department of Energy shows the United States imported, on the averThe Reagan administration is age, 1,445,000 fewer barrels per day for the week ended Feb. 19 than it did looking for a new health warning during the year- - ago week in 1981. notice to put on cigarette packages Imports declined from 4,643,000 daily and advertising. It might might barrels in 1981 to 3,198,000 barrels in consider this one: (Smoking is) a custom lothsome 1982, representing a 31.1 percent drop to the Eye, hateful to the Nose, in U.S. demand for imported oil in a to the Braine, dangerous to harmful year. the Lungs, and in the black stinking And of those nearly 3.2 million Fume thereof, nearest resembling barrels imported daily Libyan oil the horrible Stygian Smoke of the Pit represents only 120,000 barrels, or that is bottomless. about 3.75 percent of Americas total The author was not an early day daily imports. surgeon general of the United States oil Libyan imports by the United but King James I of England who States have been steadily dropping published an essay in over the past few years. Last year 1604 not long after tobacco was they averaged about 150,000 daily introduced into the civilized world. barrels, and that was down even And smoking, despite all its well more considerably from the 1980 level recognized faults (and a few brief of 716,000 barrels a day. setbacks), has been increasing in But it was that 31 percent decline popularity ever since. Throughout the last four centuries in demand for imported crude that campaigns have been really gave Mr. Reagan the leeway with little effect, including that permitted him to embargo Li- waged harsh punishments for smokers and byan petroleum imports into the legal prohibition of tobacco use and United States. manufacture. All to no Of additional significance is the cigarette avail. fact that imported crude oil during If changing wording of the cigaretthe past few years has represented an te warning will give satisfacever declining fraction supply. A few tionpackage to contemporary tobacco battlers years ago of Americas total crude oil we say go right ahead. But nobody composed nearly half of the crude oil should be under any illusion that a processed by American refineries. As stronger assertion of the weeds well of Feb. 19 they supplied 28 percent of known evils is going to significantly the supplies available to refineries. reduce the number of smokers. King Whatever the status of this coun James I could vouch for that. A Warning Eart-W- ot Random Shots The Confusion Solution Pentagon spokesmen say the long delay in selecting a basing mode for Ihe misbegotten MX is giving the Soviet Unions defense planners a peek of trouble. Air Force Brig. Gen. James McCarthy told the House military construction appropriations subcommittee that the diversity of (basing! choices open to the United States "creates great uncertainties for e Soviet planning." Since the planners don't know whether the United States is going to put the MX on giant airplanes or bury they deep under mountains or just leave them in old Minuteman silos they presumably don't know how to set up a force to knock the MX out. That suggests a way out for the Pentagon which can't seem to find an acceptable depolyment scheme for the MX. All that the generals and other administration strategists have to do is maintain the confusion alxiut basing long after the initial loo MX are olf the assembly line. The Soviets will he forced to hold off on building w eapons to eliminate them But there is a drawback: the Kremlin brass force-structur- f may get the bright idea to aim a bomb at the warehouse where the 100 MX are being stored pending a deployment decision. T 7v Is Beautiful Success of the local "Ugly Bartender Contest" proves again that people, allowed an entertaining way to donate money to a worthy cause, often do. Its the charity challenge to find a vehicle more winsome than the cause's worthiness. At last report, the Multiple Sclerosis Society of Utah had raised $15,000 since Feb. 14, from those who pitched in 25 cents with each vote for their favorite "ugliest bartender." Thats 00,000 votes. A sizable number of candidates for the Utah Legislature would be satisfied with that many votes. As a novelty moneyraiser, the "Ugly Bartender contest rates up with the That is, members of certain organizations arc invited to buy a ticket so they dont have to attend a dinner, which won't have a speaker to honor any thing or anybody. Increas inglv vorv xipular fund-raise- non-dnin- 1 I t drop the service. Between 1960 and 1975, the certified carriers were permitted to drop 30 percent service to more than 170 localities of the original total. Wherever there was sufficient demand, even in very small markets, independent businesses would enter and satisfy the demand on their own initiative. We need only look at the explosive growth of commuter airlines to see how that happened. The actual investment decisions by the carriers, in the numbers of flights scheduled on individual routes, were surprisingly rational because they responded closely to the actual level of fares in relation to cost. An industry that was denied the ability to Alfred E. Kahn Is a professor of economics at Cornell University and special consultant to National Economic Research Associates, Inc. He Is a former chairman of the Civil Aeronautics Board and was the inflation adviser to President Jimmy Carter. compete effectively in price would compete g away its profits in various ways, increasing the frequency of scheduled flights on routes where the CAB held fares far above cost. Thus, regulation had by no means assured the financial soundness of the airline industry or prevented it from recessions or waves of overinvestment. Surely the doubling of fuel prices and the Confrontation t suddenly developing stagnation of passenger demand neither of which, I trust, the would attribute to dereaspiring have been powerful factors congulation tributing to the current severely depressed profits, just as they did in 1974 and 1975, when price competition and freedom of entry were dirty words in respectable government circles. But, more important, deregulation and the competition that it released have in all other respects done just what they were supposed to do: given the carriers far greater freedom to rearrange their route structures in the interest of cost minimization and revenue maximization; resulted in a greatly improved matching of types of equipment with types of market; exerted strong downward pressure on inflated wages; forced pilots to give up their flying times and their demand for three crew members in cockpits designed for two; offered the flying public a much greater y options; aligned fares variety of on various routes more closely to the costs of serving them, and in many cases given the public real bargains. These are the kinds of changes that we will have to produce in all our industries to solve stagflation. And the way to do that is to release the forces of competition, not to suppress them by cartelization. per-mon- price-qualit- i Must Hungary Suffer for Russ Acts? By Don Cook Los Angeles Times anti-smoki- anti-smoki- la d price-cuttin- trys relations I Conversations with BUDAPEST, Hungary Hungarians these days, whether they are party leaders, government officials or private citizens, carry a note of anxiety and pessimism over the plight of their small communist confrontacounrtry caught in the East-West tion. Hungarys worries pose questions for policymakers in Washington to which no clear answers have emerged: Is it U.S. policy to treat the Communist Bloc as one big Soviet satrapy, to be punished as a whole for what is going on in Poland? Or is it U.S. policy to recognize and exploit the divergencies that exist within the bloc, and to avoid forcing the countries of Eastern Europe back into more dependence than ever on Moscow? So far, I will say that there has been no change in our direct relations with the United States as a result of the events in Poland, said Gyula Horn, deputy head of the foreign relations department of the Hungarian Socialist Workers (Communist) Party and a key figure in directing Hungarys foreign policy. "Our relations are quite normal, and I do not see any change in the attitude of the West toward Hungary. But the atmosphere in which those relations are conducted is another matter. For example. Hungary has always paid its debts, and we are not in the same category at all as Poland. We believe we are a good credit risk, yet we see some circles acting more cautiously than before on the question of further loans, and we must conclude that they take their lead from governments. The question of future Western loans and credits furnishes a test case of whether the United States plans to treat the Communist Bloc as one great economic swamp or whether it will differentiate among the parts. There is justification for Hungarian concern, for it is clear here that there are hard-lin- e ideologues in Washington who are arguing that a tough policy on credits from the West against all Communist Bloc countries will increase their economic demands on the Soviet Union, worsen the drain on the Soviet economy, further slow economic growth in the Communist Bloc and force restraints in Soviet behavior. Morover. Hungarians have recently been what may well be an example of such a policy in the making Secretary ol State Alexander M. visit to Haig Jr made a Bucharest and delivered a pat on the back for the independent foreign policy line that is much-publicize- d regularly proclaimed by Romanias communist leader, Nicolae Ceausescu. But immediately after Haig returned to Washington, the Reagan administration turned down a Romanian application for credit for food purchaeses. A test for Hungray will come when its application to join the International Monetary Fund and the World Bank bastions of Western capitalism comes before the IMF governors in Washington sometime in the next two or three months. Romania is already an IMF member. Hungarys application constitutes an important step in its long and careful process of economic liberalization and normalization of monetary relations with the West. Will the United States block the application, in line with a policy of monetary sanctions against the Communist Bloc? Some U.S. colleagues. The Hungarians spoke out in devense of the Polish authorities right to impose martial law, but then they took no part in the procedural maneuvering the Soviet Union and Poland devised to cut off debate. They left it to the Czechoslovaks, Bulgarians and East Germans to support that move. All in all, Hungary in its quiet, careful way has the best record of all the East Bloc states in living up to the Helsinki commitments on human rights, free movement of people and cultural and intellectual contacts with the West, as well as trade and economic relaitions. communist state, but True, this is a the atmosphere in Budapest is totally devoid of repression or fear, just as it is devoid of any personality cult in connection with the national leader, Janos Kadar. True, too, the Hungarians have never attempted the Romanian technique of Ceausescu, loudly proclaiming a line different from one-part- y Don Cook Is the Los Angeles Times' correspondent in Paris. Treasuiy officials are prepared to recommend just that. In a quiet but persistent way, Hungary has been sending the West signals to the effect that it desperately wants to preserve good relations with the West no matter what happens to Western relations with Poland and the Soviet Union. It has just signed an agreement with the United States that provides, beginning next month, for multiple entry visas for journalists of both countries. Even the way Hungray has played its hand at the Madrid conference reviewing the 1975 Helsinki detente agreements has been subtly different from the behavior of its East Bloc one-yea- f 1 r, Moscows on many foreign-polic- y issues. The Hungarian game has been much more subtle, always tinged with memories of how the Soviets crushed the uprising here in 1956. But the Hungarians are contemptuous of Ceauses-cu- s tactics. He makes all these declarations of a different line from Moscow and it gets him fantastic attention and favors in the West, but it has absolutely no influence on the Soviet Union at all, one Hungarian said. The West never seems to notice that he' goes on running the roughest police state in Eastern Europe, with one of the worst records of economic management, the poorest country in the Warsaw Pact. Here in Hungary, Kadar has done just the opposite. He knows that he cannot possibly influence the Soviet Union in foreign policy, even if he wanted to try, so he plays close to the Soviets in order toa gain more room for maneuver with his program of internal liberalization and reform. In the end, who is making a bigger contribution to detente between East and West stateCeausescu, with his foreign-policments and his police state, or Kadar, with his foreign-policloyalty to Moscow amt his multiple-entrvisas ior American journalists, his 2.5 million Western visitors a year and his liolicy of allowing Hungarians passports for one visit a year to the West? It is no wonder that Hungarians worry out loud that American liolicy might bring them, their economy and their reforms back into the suppressive embrace of Moscow, t y y 7 I a. i 4 I i |