Nixon phone call with Shultz on Wage and Price Controls and George Meany

2:24:48Hello?
2:24:50Hello?
2:25:19I guess I got you just when you got back.
2:25:22I just walked in from the drug bill signing.
2:25:24How'd you get along with the other George?
2:25:27Will?
2:25:28Are they going to walk out?
2:25:29I don't know.
2:25:30He raised questions about the general program, the price side, interest rates going up.
2:25:36Arthur Burns abroad saying he wants to get interest rates up and they have the strictest wage controls anywhere in the world right here.
2:25:45and so on and burns burns saying that is a jackass damn thing it's a terrible thing to say and it's just like it raises the same problems that butts does but in a different way who the hell is for interest rates going up except the goddamn bankers well i told him that joey had had a little discussion and i wish interest rates i wish that uh all this business i mean i know that it's and i you could see this too then hobart rowans which of course is pure burns i
2:26:14...says that now the government has come around worried about the dollar and all that sort of thing.
2:26:19The hell with the worry about the dollar.
2:26:20I'm not worried about the dollar.
2:26:21Are you?
2:26:24What I told them was that, first of all, interest rates were a lot lower than they were at the start of the freeze, but I said, you just let that prime rate notch itself up a couple more times, and those bankers are going to hear from us in no uncertain terms.
2:26:38And I say that off of John's comments this morning about his own ideas about...
2:26:45calling them in and giving them hell if the interest rates start going up too much.
2:26:49And we talked about meat prices, food prices, and some of the things that are in the works there.
2:26:56John is back.
2:26:56John, got any plan on that one?
2:26:59Well, I think at wholesale, the last two or three weeks, there has been a decline in the very high cattle prices.
2:27:09Well, I can say something about that.
2:27:11Analytically, probably...
2:27:13that has crested although it is taking a terrific increase this month as i'm sure you've been told um he talked a lot about what's it go to what is the what a two percent increase in one month in the in the food at home component of the cpi yeah and what's the cpi generally i don't know that yet sir that'll be announced on thursday right the and then they talked a lot about the the the
2:27:43Resentment of having their contracts interfered with, I said, well, you know, if you have a control system, some contracts are going to get knocked down.
2:27:52Otherwise, there is many.
2:27:53Might as well not have it.
2:27:55That's right.
2:27:56You just can't go approve everything.
2:27:57And they sort of expressed their distaste for an economy where somebody in government tells you about your wages or prices.
2:28:07I said, look...
2:28:09There's nobody agrees with you more on that than I do, unless it's the president.
2:28:14However, everybody agreed, and George, you were in the forefront of saying that we had to do something.
2:28:20And everybody did.
2:28:21And everybody stood for it.
2:28:23Most people.
2:28:23And he said, well, how long is this going to last?
2:28:25I say this.
2:28:27The sooner it's over, the better, but you can't get rid of it now.
2:28:30The prices are going up too high, and...
2:28:34we have to keep the pressure on trying that i said i finally concluded by saying that that i have only uh i talked about the small firm exemption that had gone over to the pay board price commission in the normal course of events right right uh that i had really only two
2:28:54I didn't plead with him to stay on the board or anything of that kind at all, but just that first, the president is working hard to make this program succeed.
2:29:05Where we find problems with it, we try to correct them.
2:29:09And he wants the support of all the main sectors and wants to work with you and the labor movement in making it work.
2:29:16And we are going to make it work one way or another.
2:29:21And second...
2:29:22Whatever you do, the construction industry thing is working pretty well, and we think you'd be doing a disservice to your people as well as to the general thing by disrupting that.
2:29:34And he, I think... Well, you made as good a case as you could.
2:29:39We had about almost an hour of discussion.
2:29:41You made as good a case as you could.
2:29:43And he said, well, we'll be talking about it tomorrow, and so we'll see where we come there.
2:29:49In the meantime, we'll be getting up some...
2:29:52Some suggested talking points on the interest rates today.
2:29:57Can you do it?
2:29:58Can you make a public statement?
2:29:59Meaning?
2:30:00Arthur, I mean Connolly.
2:30:02Oh.
2:30:05There may come a time when we're just going to have to go after Arthur Burns.
2:30:09Yeah.
2:30:09Directly.
2:30:10I don't think this is the time.
2:30:11You don't, huh?
2:30:12All right.
2:30:14Well, the interest rate thing is totally opposed to our policy.
2:30:18Right, it is.
2:30:19And the prime rate has now gone up two notches.
2:30:24It's up to four and three quarters, I think.
2:30:27And I think if it hits five or a little over, John plans to...
2:30:33Call in the bankers and take the gloves off, or some such thing.
2:30:36Well, Arthur's in charge of the damn committee to keep interest rates down, and here he's letting them go up.
2:30:43That's why he ought to be taken on on that statement.
2:30:46You can't have the chief controllers advocate interest rates going up.
2:30:51Right.
2:30:53So, I think we've done what we can, and gracefully, that is not...
2:30:59I think you did it the right way.
2:31:00We just had an exchange of views.
2:31:03Right.
2:31:04trying to stay on all fours.
2:31:05He knows our position.
2:31:06He has a political problem, I think.
2:31:09They'd like to blow this thing, but if he blows it, it isn't all that bad for us either, you know.
2:31:17Then we're going to have to take it on and let our Democratic candidates support George Meany.
2:31:23I'd like him to do that.
2:31:24One position that I would hate to see us get maneuvered into is where we are the advocates of controls and our opponents are the advocates of freedom.
2:31:34and oh god i should say not that we need to be careful of yeah but we will work along on this right oh i know i don't want that i can't i know i understand i understand no you're absolutely right i just uh but i i but i'm going to say i don't think it's going to be that i don't think they can ever come out advocates of freedom hell they don't want for that they're from our controls but we'll see okay all right thank you
2:32:10Thank you, President.

Nixon phone call with Shultz on Wage and Price Controls and George Meany

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Also recorded on March 21, 1972

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