Like little sermons from the Mount, the conventional economic wisdom of the day is spewed forth by politicians, economists, columnists and others.
The more we hear some of these apparent verities repeated -- like the word "students" applied to the terrorists holding the American Embassy in Tehran -- the more our subconscious minds accept them without challenge.
One favorite is this: gasoline rationing would be the worst way to try to solve the energy crisis. After all, it was a colossal failure in World War II.
In fact, gasoline rationing was quite effective in World War II, although some other rationing programs -- such as sugar -- were less successful. There is little doubt that with the present availability of computers (as Washington energy consultant Joseph Lerner observed), gasoline rationing could be made to work smoothly.
A coupon-rationing system costing about $2 billion to operate could cut consumption about 1.5 million barrels a day, worth over $14 billion annually at prospective prices for imported oil.
To save that much gasoline through the pricing mechanism would require a new tax of about $1.50 a gallon, creating an obvious and horrendous new wave of inflation. But a tax of that magnitude would also involve a rebate system of around $130 billion -- not only just as complex as rationing, but an open invitation to special interests of all sorts to latch onto a piece of the action.
If the president, Congress and the American people are serious about the need to depend less on OPEC, in the end they will have to tolerate rationing -- or at a minimum, some form of combined gasoline rationing and higher pricers. That won't be the end of the world.
The next "factual" declaration accepted uncritically is this: economic warfare against Iran won't hurt that country very much and, in any event, it would be immoral to bar shipments of food.
It is true that U.S. exports to Iran have already dwindled from a recent average of about $3 billion a year to less than $1 billion this year, mostly food. And it is true that embargoes are most effective when done in concert with other nations.
But despite the suggestion that if we cut off pharmaceuticals, drugs and food to Iran, others will step in to plug the gap, this is easier said than done. For example, Iran used to buy 500,000 tons of Louisiana rice. But so far -- according to a Dec. 21 dispatch from Tehran by Washington Post correspondent Stuart Auerbach -- Iran has been able to pick up only an extra 50,000 to 70,000 tons of rice from Thailand.
A reasonable reading of the situation leaves little doubt that an economic squeeze would hurt -- even if it doesn't crush -- Iran. At best, Iran would have to scrounge around and pay more to replace exports from the United States. At worst, it would come up short. A Chase Econometric analysis by Lawraence Chimerine notes that land reform programs and inadequate fertilizers are depressing crop yields in Iran. That means that food imports, which used to run 25 percent to 30 percent of consumption, are becoming even more essential.
As for the morality of barring food, it seems to me that when the Iranians took the embassy, it was an act of war, and they have to accept the responsibility for whatever innocents suffer in the wake of that act.
A third bit of obnoxious mythology is that the $3.5 billion Chrysler bail-out was needed to save 500,000 jobs. Chrysler boss Lee Iacocca may not have been a whiz this year at selling cars, but his pitch for the bail-out was super.
There are any number of cold-blooded analyses indicating that, at the very worst, allowing Chrysler to go belly-up would have cost 100,000 to 150,000 jobs within a few years. The real question is whether this bail-out, or any attempt to spoon-feed Chrysler, will do any better. It could do worse.
Industry analysts are convinced that the entire auto market will be depressed for the next couple of years and that it will be very tough for Chrysler to survive as a full-line company. Inevitably, they see Chrysler's percentage of total sales dwindling and Chrysler employees laid off. At worst, the company could go under very quickly.
What politicians at both ends of Pennsylvania Avenue were worried about, when they decided on the Chrysler bail-out, was not so much Chrysler jobs, but their own.