President Carter was urged by his chief domestic policy adviser in a confidential memo last week to shift the blame for energy and inflation problems to "a clear enemy" -- the international oil producers cartel -- to mobilize support for his policies.
The stiffly worded memo from Stuart Eizenstat, Carter's assistant for domestic affairs, also warned that national alarm over energy prices and supply was sapping the credibility of the administration in a way comparable to the Vietnam war.
The document, dated June 28, paints a dire picture for the president of an increasingly crippled U.S. economy and plummeting presidential popularity pools. A copy of the memo was obtained by The Washington Post.
"In many respects, this would appear to be the worst of times," Eizenstat wrote. He added:
"Nothing else has so frustrated, confused, angered the American people -- or so targeted their distress at you personally . . . ."
It was the harshest analysis of the current state of the Carter presidency that has yet surfaced from within. The memo contained eight recommendations. The first of them, the attack on the Organization of Petroleum Exporting Countries [OPEC], was implemmented shortly after Eizenstat's memo was sent to Carter in Tokyo, where he was attending a seven-nation summit.
"With strong steps wwe can mobilize the nation around a real crisis and with a clear enemy -- OPEC," Eizenstat wrote. He urged Carter to "shift the cause for inflation and energy to OPEC, to gain credibility with the American people . . . to regain our political losses."
His first recommendation: "Use the OPEC price increase as the occasion to mark the beginning of our new approach to energy . . . . We have provided you with a tough statement that will accomplish those ends, and buy us a week or so before the publis will expect more specifies."
White House officials acknowledge that this was the genesis of the tough comments Carter leveled against OPEC at the close of the Tokyo summit. He said then: "I don't see how the rest of the world can sit back in a quiescdnt state and accept unrestrained and unwarranted increases in OPEC'S oil prices,"
Carter said that, because of the OPEC price increase, a recession was "much more likely than it was before."
Eizenstat's memo had a very limited official circulation. According to the note at the bottom of the document, he sent copies to Vice President Mondale, presidential adviser Hamilton Jordan, and presidential press secretary Jody Powell. Energy Secretary James Schlesinger was not on Eizenstat's distribution list, but Schlesinger figured, though not by name, in the contents of the document.
"The continuing problem of conflicting signals and numbers from DOE [Department of Energy] persists," Eizenstat wrote. "The DOE allocation formuls are now coming under particularly heavy attack. Yesterday, the state of Maryland sued DOE for misallocating gasoline. Other states can be expected shortly to follow that politically popular route,"
Eizenstat counseled Carter:
"You must address the enormous credibility and management problems of DOE which equal in public perception those which [the departments of] State or Defense had during Vietnam [whether fairly or not]."
In an interview yesterday, Eizenstat acknowledged writing the June 28 memo in the president. The president and other administration officials have agreed, he said, that it is important to "use the OPEC decision to focus public attention on the energy problem."
"One problem we had in 1977, when we first roposed our energy plan, was that people had not focused on the real problem," Elizenstat said. "The OPEC price increase was the mobilizing event that we didn't have in 1977."
Eizenstat emphazed in the interview that he now believes that Schlesinger, in conjunction with White House officials including himself, is working to resolve the problem of the "public perception that had led to a credibility problem" over Department of Energy figures on the gas shortage.
These steps, Eizenstat said, include:
Weekly news conferences in which Schlesinger has begun providing weekly statistic from the Energy Information Administration of all current distillate [hearing oil] and gasoline production levels, levels of crude oil on hand and refinery production levels, expressed as a percentage of capacity.
The Energy Department has sent 200 auditors to make spot checks of refineries' production.
The Energy Department has contracted with an independent accounting firm to oversee its statistical compilations.
Energy and Justice Department officials have been investigating whether oil companies have been guilty of price gouging or hoarding of oil.
"During the Vietnam war," Eizenstat said, "the Defense Department's weekly casualty figures were always suspect. Now we have instituted a series of steps aimed at getting rid of the Department of Energy's credibility problem."
Eizenstat's memo seemed designed largely to convince the president that he was coming home from Tokyo to a crisis of grave, even critical, proportions -- both in politics and in policy. Most of the eight points in his recommendations, rather than laying out specific solutions to the gas shortage, dealt with prompting the present to take action.
He did not offer suggestions for dealing with the allocation of gasoline, but did propose creation of a National Energy Mobilization Board to develop projects and bypass "the normal regulatory tangle."
Eizenstat envisioned that Carter would want to address the nation on energy "around the third week of July" on new production initiatives including the development of synthetic fuels. And he urged Carter to spend the next two or three weeks exclusively on the problem of energy.
But more than anything else, Eizenstat's memo dealt with the political rehabilitation of the president.
In unusually blunt language, by presidential memo standards, the domestic adviser told Carter:
"It is perhaps sufficient to say that nothing which has occurred in the administration to date -- not the Soviet agreement on the Middle East, not the Lance matter, not the Panama Canal treaties, not the defeat of several major domestic legislative proposals, not the sparring with Kennedy, and not even double-digit inflation -- have added so much water to out ship."
Eizenstat emphasized his point of dire circumstances by recounting something that had been said to him in New York City Mayor Edward Koch during a meeting with the vice president concerning gasoline allocations for New York.
"Mayor Koch indicated to me . . . he had not witnessed anything comparable to the current emotion in American political life since Vietnam.
". . . The similarities between problems of credibility and political opposition from the left are real, though clearly underserved."