{"conversationCode":"073-004","tapeNumber":73,"conversationNumber":4,"identifier":"37-wht-conversation-073-004","startDateTime":"1971-09-11T16:06:00.000Z","endDateTime":"1971-09-13T12:40:00.000Z","startDate":"11-Sep-1971","startTime":"12:06 PM","endDate":"13-Sep-1971","endTime":"8:40 AM","dateCertainty":"estimated","timeCertainty":"estimated","participants":"[Unknown person(s)];","description":"Unknown person(s) met in the Cabinet Room of the White House on an unknown date, sometime between 12:06 pm on September 11, 1971 and 8:40 am on September 13, 1971. The Cabinet Room taping system captured this recording, which is known as Conversation 073-004 of the White House Tapes.","locationCode":"CAB","recordingDevice":"Cabinet Room","latitudeEstimated":38.8975,"longitudeEstimated":-77.0374,"chronCode":"Cabinet","chronRelease":"Cabinet Room Release","chronReleaseDate":"16-Oct-1997","aogpRelease":null,"aogpSegment":null,"lastModified":"2015-07-27T17:04:10.235Z","findingAid":"Conversation No. 73-4\n\nDate: Unknown between September 11 and September 13, 1971\nTime: Unknown between 12:06 pm, September 11 and 8:40 am, September 13, 1971\nLocation: Cabinet Room\n\nUnknown people met\n\n******************************************************************************\n\nBEGIN WITHDRAWN ITEM NO. 1\n[Non-historical]\n[Duration: 35m 18s ]\n\nAn unknown person talked with an unknown person at an unknown time between 12:06 pm,\nSeptember 11 and 8:40 am, September 13, 1971\n\n[Conversation No. 73-4A]\n\nEND WITHDRAWN ITEM NO. 1\n\n******************************************************************************\n\nRecording was cut off at an unknown time before 8:40 am, September 13, 1971","filename":["073-004-splice.mp3"],"tapeStart":"","tapeEnd":"","participantsList":["[Unknown person(s)]"],"prevCode":"073-003","nextCode":"073-005","aiSummary":{"text":"This meeting involved discussions about the progress and complexities of the ongoing wage and price freeze, with participants including Chairman McCracken and members of the Cost of Living Council. Key topics included the administration of the freeze, policy formulation challenges, compliance efforts, and specific issues like teacher salaries and landlord rent controls. The primary focus shifted to planning for \"Phase Two,\" the post-freeze economic stabilization strategy, involving complex bargaining with labor and business to determine acceptable wage and price guidelines and the overall approach to inflation control.","topics":["wage-price freeze","Cost of Living Council","Phase Two","economic stabilization","policy formulation","inflation control","labor negotiations","business cooperation"],"generatedAt":"2026-10-27T14:56:18.158Z"},"topicSlugs":["wage-price-freeze","cost-of-living-council","phase-two","economic-stabilization","policy-formulation","inflation-control","labor-negotiations","business-cooperation"],"audioDurationSec":2121,"audioFiles":[{"file":"073-004-splice.mp3","bytes":33936263,"durationSec":2120.99,"bitrate":128001,"missing":false}],"audioIsShared":false,"audioProbedAt":"2026-10-27T08:04:57.776Z","originalFilename":["073a.mp3","073b.mp3","073c.mp3"],"spliceSource":{"spliceType":"bigtape","sourceFiles":["073a.mp3"],"cutStart":736.5,"cutEnd":2857.5,"adjustedStart":736.5,"adjustedEnd":2857.5,"boundaryMethod":"llm-alignment","confidence":"high","splicedAt":"2026-10-27T08:04:57.776Z"},"transcript":[{"start":736.5,"end":754.5,"speaker":"Unknown","text":"[unintelligible] what indicates the success of that tactic is somebody in this country reported it here."},{"start":754.5,"end":776.5,"speaker":"Unknown","text":"The newsmen came up to George Meany after the meeting with the labor leaders yesterday and asked, and their last question to him of course he said the president told you what he's going to do. And he said, \"No.\" And with that, he lit his cigar, got his Cadillac, and drove away."},{"start":776.5,"end":784.5,"speaker":"Unknown","text":"[laughter]"},{"start":784.5,"end":810.5,"speaker":"Unknown","text":"Mr. President, we really did listen, right, Archie? We appreciate you listening to us this morning, as you may. But I'd like to, let's start off with Dr. McCracken and the members of the Cost of Living Council, as you know, has done a very difficult and yet extremely fine job."},{"start":810.5,"end":840.5,"speaker":"Unknown","text":"Well, we, as I indicated last Saturday, we meet each morning, the Policy Committee meeting, indeed, we met this morning at 8:30. We're, at the outset, we were considering primarily rather specific questions on kind of question-and-answer basis, where we're shifting much more to policy issues. That is, what, what do you do about,"},{"start":840.5,"end":861.5,"speaker":"Unknown","text":"what do you do about contracts that are being negotiated during the freeze for the taking effect after the freeze, to use one expression, and a kind of complicated effort. This is a preliminary screening operation, and we bring, of course, these issues to the Cost of Living Council, where they're hammered out."},{"start":861.5,"end":879.5,"speaker":"Unknown","text":"Here, I would pay tribute, you know, once again to Arnie. I think he's done a superb job in moving this along, and getting us as far as we've gotten here about 4:00, 4:30. And, well, Arnie,"},{"start":879.5,"end":896.5,"speaker":"Unknown","text":"Do you take up, for example, such matters as, such as deferred wage increases, and so forth, in that in the old wage estimate, that's that's one matter, I'm sure."},{"start":896.5,"end":918.5,"speaker":"Unknown","text":"Yes, we do. And, as I indicated earlier, if anyone wants an education in the complexities of our pricing system, just get into the kinds of questions we get into. The idea that it's a simple case of what the canned pork price is for a loaf of bread,"},{"start":918.5,"end":933.5,"speaker":"Unknown","text":"you get into the things, and the most, this is a tribute to the ingenuity of our economic system, which again, all kinds of extremely complicated arrangements, and just how the wage-price freeze applies to these specific situations, it's kind of very difficult to to ascertain."},{"start":933.5,"end":957.5,"speaker":"Unknown","text":"Mr. President, as Chairman McCracken has indicated, we're now coming to the end of the fourth week of the freeze, and it seems to me we can review our progress or activities in terms of the various aspects of our operations. First, in terms of structure and personnel,"},{"start":957.5,"end":979.5,"speaker":"Unknown","text":"we began at 9:22 on Sunday, August 15th, immediately after your speech with four people. And thanks to the active cooperation of General Lincoln and the IRS, Department of Agriculture, we have 4,000 people in the field, all associated with ongoing jobs,"},{"start":979.5,"end":999.5,"speaker":"Unknown","text":"who are chartered with the administration of the freeze. These are not new employees, and the size of the group is small, and I think it's responsive to your notion that we should not have a massive bureaucracy to administer this. In terms of policy formulation, I think it's fair to say that we have bitten the big bullets"},{"start":999.5,"end":1023.5,"speaker":"Unknown","text":"in terms of making policy determinations through the Council on the major issues that's brought up to the villain, as with respect to rents, as with respect to third increases, as with respect to what's covered, what isn't covered. The issues that have concerned the Council now are smaller in magnitude, but more complex in nature,"},{"start":1023.5,"end":1045.5,"speaker":"Unknown","text":"and require more intensive staff working considerations by the Council. In terms of compliance, that, of course, is hard to tell. Best evidence we have is that compliance has been widespread and most enthusiastic. As General Lincoln would indicate, the number of complaints we've had,"},{"start":1045.5,"end":1070.5,"speaker":"Unknown","text":"when given the complexity of the American economy and the number of transactions, is indeed very small. In terms of problems, I would say our two major problems have been one, on the broad scope, maintaining consistency in our treatment of landlords, wage earners, businessmen, because we feel it's very important that everybody feel that they're getting a"},{"start":1070.5,"end":1094.5,"speaker":"Unknown","text":"fair shake. And in terms of a specific problem, really, one of our most durable one has been handling the teachers. And I think, in a way, we've been fortunate that when the freeze started, the Congress was out of session, but also the teachers were out of school, and they had a lot of opportunity to be very articulate and vocal"},{"start":1094.5,"end":1122.5,"speaker":"Unknown","text":"on this issue. We now think it's resolved, and certainly that's helped the climate a great deal. Last, I think it's very important to note that this has been a total governmental effort, that every department, General Lincoln's group, has done a superb job, and every department has provided maximum cooperation to moving program forward in a rapid and hopefully effective way."},{"start":1122.5,"end":1145.5,"speaker":"Unknown","text":"Unless Mr. President now is so something briefly on Mr. Weber has said as a first point on organization, I think we have prepared a good one, and this is due entirely to the cooperation of other departments who supplied their people,"},{"start":1266.7,"end":1284.7,"speaker":"Unknown","text":"requests for exemptions. Uh I have thus far signed out, I think, about 90 no's under the heading of exemptions. The council has not yet solved the area of request for an exemption"},{"start":1284.7,"end":1306.7,"speaker":"Unknown","text":"that is uh merited uh my approval. Finally, I want to stress the cooperation of business people everyone here uh can attest to that the people who have come in to see me usually they're hurting, but they state their cooperation with the freeze, they want to talk about"},{"start":1306.7,"end":1329.7,"speaker":"Unknown","text":"what's coming after the freeze [unintelligible] the freeze. Along the point of state and local government we uh we started out not too well with one governor,"},{"start":1329.7,"end":1350.7,"speaker":"Unknown","text":"I think that my regional directors as of this time have personal assurances from every governor, except, perhaps, that one that they're strongly in support of uh the program. Uh we had generally assurances, similar assurances to our regional directors"},{"start":1350.7,"end":1371.7,"speaker":"Unknown","text":"from the mayors of the big cities. Uh we have one mayor on the West Coast uh that uh we're conducting a dialogue at the present time. Uh final point, I want to uh attest to what I would call the excellence in the policy making."},{"start":1371.7,"end":1391.7,"speaker":"Unknown","text":"As an investor studying the uh printed books about this sort of thing years ago, uh I think it's remarkable the way that the council and the council's staff have tackled these problems and have come out with uh statements that our field people could use. I'm just looking for this"},{"start":1391.7,"end":1409.7,"speaker":"Unknown","text":"report to me. As of three days ago, we had 181 questions from our regional offices and most of these were sticky ones that we hadn't given answers to, but as of last night, 144 of that 181"},{"start":1409.7,"end":1425.7,"speaker":"Unknown","text":"had been answered and this is a credit to the policy that has been developed by this council and the council's staff. If you have no questions, this ends point, part of that the of the [unintelligible]"},{"start":1425.7,"end":1444.7,"speaker":"Unknown","text":"The council meeting this morning is to consider and talk about phase two, what is to follow the wage-price freeze. From the very outset, almost from the time of the first meeting, uh work was undertaken with respect to this, headed by Herb Stein who has been working with his group"},{"start":1444.7,"end":1465.7,"speaker":"Unknown","text":"uh consistently on this while performing other functions for the council. And this morning, uh with your permission, we just like to get into a general discussion of phase uh two, and Herb, if you will, uh uh you gave us all a paper this morning, you outline uh where you think we are, and then we'd like to accept the general discussion."},{"start":1465.7,"end":1485.7,"speaker":"Unknown","text":"Herb? Well, I'll try briefly to bring you up to date on what we've been doing about phase two up to this morning. Up to 10:30 this morning, we had We initially were asked to review the options and we did prepare a paper which uh reviewed the options without any inhibitions, starting"},{"start":1485.7,"end":1506.7,"speaker":"Unknown","text":"the OPA and ending with nothing as two extremes of possibilities, although we knew that uh the extremes were unlikely and that the main effort would concentrate in the middle. Uh, very, very soon it became clear that the action, for the time being, at least, was going to be in the area of rather voluntary, highly cooperative,"},{"start":1506.7,"end":1526.7,"speaker":"Unknown","text":"informal and uh limited in coverage program to restrain rise of prices and wages, and possibly other economic shares. Another thing that immediately became obvious was that the process of planning for phase two was not one in which the government or a group of experts or the government could lay down a preferred, ideal solution,"},{"start":1526.7,"end":1531.7,"speaker":"Unknown","text":"that what we were engaged in a process of bargaining with the parties to determine what was acceptable and to try to find the"},{"start":1531.9,"end":1549.9,"speaker":"Unknown","text":"satisfactory and still work a little acceptable by the other parties. And essentially what we're involved in now, I think, is in the body background and support guidance for the bargaining process, which moved to a higher gear yesterday with the visit of the labor people on continuing"},{"start":1549.9,"end":1567.9,"speaker":"Unknown","text":"next week. So our group prepared a paper in which we tried to identify what seemed to us the main elements of bargaining. Many ingredients about which we wanted to learn of the positions of the other parties, to discover how far they were prepared to go or how little they were prepared to go."},{"start":1567.9,"end":1589.9,"speaker":"Unknown","text":"And also to try to discover what the government sticking point ought to be. That is what what the government really ought to be aiming for and what it should expect to achieve as a minimum condition for going down this tripartite route. At what point it might have to go into another direction. So we were meeting to discuss this this morning"},{"start":1589.9,"end":1607.9,"speaker":"Unknown","text":"immediately getting on the first question. What are the objectives? What kind of consensus do we expect from the other parties about where this all is supposed to end up, or should we expect them to have agreed before starting on anything about the goal? Or the alternative would be to leave this quite open, as some of these people here suggested yesterday,"},{"start":1607.9,"end":1629.9,"speaker":"Unknown","text":"working with these three parties, these tripartite bodies, come together and resolve what worked out. Which may be, uh, which isn't the party's usual approach. And that's what we were discussing before we broke up, then maybe pass that point. What's involved, partly, is the extent to which"},{"start":1629.9,"end":1650.9,"speaker":"Unknown","text":"we aimed very seriously and very very quickly at getting the rate of inflation down, or whether we would accept a more gradual, can accept a more gradual de-escalation of the rate of inflation. And there are tradeoffs there. Policy which looks on paper"},{"start":1650.9,"end":1666.9,"speaker":"Unknown","text":"like getting the rate of inflation down fastest may also contain the greatest risk of blowing up the quickest. And that's the kind of issue that we're involved with now. And pass around myself very much open on on this point. But--"},{"start":1666.9,"end":1687.9,"speaker":"Unknown","text":"Well, let me, uh, let me, uh, say this at this point, uh, Herb. Mr. President, I think it's fair to say and if anyone takes exception, please speak up, it's fair to say that that there's a general feeling of all the members of the Council and among those with whom they've talked that you have indeed seized the initiative."},{"start":1687.9,"end":1710.9,"speaker":"Unknown","text":"And what you've done has been highly acceptable to the American people. That it is a display of the type of leadership which this country needs and wants, and that they expect a follow-on in whatever form that is calculated very frankly to, uh, fairly well, uh, restrain"},{"start":1710.9,"end":1731.9,"speaker":"Unknown","text":"unbridled, uh, inflation. But what For whatever reason, whether it's, uh, a cost-push or a demand-pull, or whatever, I think people, uh, want this respite from, uh, from inflationary trends, uh, from the inflationary expectations. I think that's fair to say now. Now, how do we How do we get there? How do we achieve this? This is where we are in discussion,"},{"start":1731.9,"end":1751.9,"speaker":"Unknown","text":"uh, we I think need very frankly, uh, Herb and members of your group to perhaps this week hate the the scope In addition to what you've done, take the scope is, uh, is it desirable to include, uh, interest?"},{"start":1751.9,"end":1774.9,"speaker":"Unknown","text":"If so, what are the options? Uh, do we include profits? If so, what are the options? Obviously, we need to talk about wages, you talk about wages, prices, I mean wages, salaries, executive salaries, and so forth. Uh, what are the parameters? Uh, these are the things that we're dealing with now. Then, how do you achieve it? One of them And I'll lay out, I think, the essential point of this at this stage of the game, Herb, is that"},{"start":1774.9,"end":1796.9,"speaker":"Unknown","text":"we recognize that that there are a lot of pit-falls"},{"start":1797,"end":1813,"speaker":"Unknown","text":"demands and a lot of presently restrained actions. Frankly, we're we're stopping wage increases going into effect, to be specific, during the period of this wage-price freeze. What do we do with them when it's over?"},{"start":1813,"end":1833,"speaker":"Unknown","text":"Do we permit them to go into effect? What what do we do with respect to the longshoremen strike where they already 35% in 3 years? That's an increase that they've rejected, 35% increase. That's roughly 12% a year, 3 years."},{"start":1833,"end":1849,"speaker":"Unknown","text":"What will they settle with? We don't know. Do we let that go into effect, or don't we? If we restrain, how do we try to restrain? Do we do we at the outset say that your objective is over the next period of time, whatever length, a year, 18 months, 2 years,"},{"start":1849,"end":1869,"speaker":"Unknown","text":"say, we anticipate that we ought not to exceed 2% inflationary expansion, or do we try to speak in general terms of just bringing this country back into a stable economy, and costs, and prices?"},{"start":1869,"end":1884,"speaker":"Unknown","text":"These are these are the things that we're presently discussing. We've We've started this morning discussing in terms of what's possible, how do you do it. My own very strong feeling, and I'll start off the discussion, and then cease talking,"},{"start":1884,"end":1901,"speaker":"Unknown","text":"is the the worst thing to happen to us is that a policy be adopted that you could not sustain, and that a failure to sustain it would reflect on your ability to lead"},{"start":1901,"end":1919,"speaker":"Unknown","text":"this country. This is the great danger that you run into with respect to speaking in particular terms, whether it's 2%, 3%, 4%. Easy to do that with within any kind of timeframe. If you can speak in terms of specific"},{"start":1919,"end":1937,"speaker":"Unknown","text":"over an indefinite time, you could perhaps get away with it. The thing we don't want to do, it seems to me, is to is to disillusion the people and to let them let them believe that, well, we've we've had this wage-price freeze, but now we're just turning everything loose. Yeah. We're all We're caught, really,"},{"start":1937,"end":1957,"speaker":"Unknown","text":"by one other factor, and that is that, if we have any guidelines at all, they have to be fairly tight, fairly tight for reasons that Burt made in some studies that indicate they have to be quite tight, and we've we're only in more of a dilemma in this because, during the first seven months of this year, we said that we had the government policies which you initiated and which you've followed"},{"start":1957,"end":1979,"speaker":"Unknown","text":"resulted in the inflationary trend being reduced 5.5% that we had last year down to 4% in the first seven months. So we obviously can't adopt any standards in excess of 4% or or we sure haven't gained anything."},{"start":1979,"end":1994,"speaker":"Unknown","text":"That's about At least, that's my personal view. That's about where we are in discussions. So we can either call the members, or we're If you have anything to say, we'd love to have your guidance. We are under one other constraint: recognize you're not going to make any decisions, or"},{"start":1994,"end":2018,"speaker":"Unknown","text":"we recognize the continued urgency of remaining quiet, keeping within our own councils the discussion of Phase II with respect to Phase II. We have to know Phase II well before November 13th, so after period of consultation is over with the various groups, business, and and others who will be meeting."},{"start":2018,"end":2040,"speaker":"Nixon","text":"Well, with regard to the timing, we have to uh have a time, and uh one question you have to consider is whether that time is so that individuals one would know we were going to do something, and two would know when it was"},{"start":2040,"end":2055,"speaker":"Nixon","text":"to take effect and all, uh, it would go into place. Whether it's said publicly or otherwise. But anyway, as far as what we actually do, by the uh by the 10th of August-- I mean the 10th of uh October."},{"start":2055,"end":2076,"speaker":"Nixon","text":"That's the outside date that uh a final decision can be made and announced that I that I decide. I uh I feel that uh that's uh a little more than 30 days before the uh the time is uh there. And the reason I picked that picking a day, I'm actually to go back"},{"start":2076,"end":2096,"speaker":"Nixon","text":"actually to about the 7th is what I actually have in mind. The reason is that knowing the build up that always comes, and they know that you have to go about 30 days before, it's much better to sort of anticipate a bit. And uh"},{"start":2096,"end":2119,"speaker":"Nixon","text":"but so in order to In order to make a decision of this importance and this magnitude and have it announced by the 7th, let's put that date down as our working date. Uh all the"},{"start":2119,"end":2138,"speaker":"Nixon","text":"recommendations by the end by the 30th. In other words, so our our target in terms of getting the recommendations of the council should be the 30th of September. That will give me a week uh of course consult with all of you around here. A week in which to uh in which to well, seven days basically in which to"},{"start":2138,"end":2157,"speaker":"Nixon","text":"uh to get it honed down, and how do we present it and all that sort of thing. Because it's, whatever we decide, how it's presented is uh somehow, and who we consult with, etcetera, etcetera, after the, you know, the internal, what what should be done is very important."},{"start":2157,"end":2174,"speaker":"Nixon","text":"The The second thing is uh is uh Is that going to be helpful to you, except to just indicate, underline what John said with regard to we're finding ourselves? Uh"},{"start":2174,"end":2192,"speaker":"Nixon","text":"Frankly, far more important at the moment, and this will not be as important to be a year from now, but far more important at the moment that than what we do is how."},{"start":2192,"end":2212,"speaker":"Nixon","text":"Uh the uh When you recap uh the uh the various things that we have done in terms of our August 15th announcement, uh it is, of course, very significant, I mean wage-price freeze is significant, but it's temporary. Surcharge is significant, but it's temporary. Investment tax credit, etcetera, perhaps is inevitably uh and uh"},{"start":2212,"end":2233,"speaker":"Nixon","text":"And of course, uh uh and yet, nevertheless, the the total impact psychologically is considerable. Uh and how much that psychological impact will reflect itself in business decisions,"},{"start":2233,"end":2254,"speaker":"Nixon","text":"consumer attitude, and so forth remains to be seen. Probably it's probably quite a bit. But uh that will take uh well, you won't even find it You won't find it until the first quarter of next probably the second is when you'll really find whether the actions taken have had much importance."},{"start":2254,"end":2262,"speaker":"Nixon","text":"A psychological change results in in decisions changing how they spend their money. Now,"},{"start":2262,"end":2283,"speaker":"Nixon","text":"the What we all must realize is that whatever our attitudes toward uh a wage-price control system is concerned is that the public"},{"start":2283,"end":2303,"speaker":"Nixon","text":"mainly because they have no idea whatever as to how it would operate, as to how they'd feel about it after it were in effect, is overwhelmingly for it. As a matter of fact, if we were to get up and to announce a new OPA with uh even with 50,000 policemen around to enforce it,"},{"start":2303,"end":2326,"speaker":"Nixon","text":"the public would overwhelmingly support it. The public would be wrong. That doesn't mean we do it to follow them, because it's our obligation to do is to lead them, not to follow the opinion. On the other hand, we cannot uh in this instance have public confidence unless we,"},{"start":2326,"end":2327,"speaker":"Nixon","text":"to a certain extent, reassure that deep felt sentiment in among the public."},{"start":2327.2,"end":2345.2,"speaker":"Unknown","text":"something has to be done that is effective. Now, the first the easiest thing we did therefore was the first thing, wage price freeze, ninety days. That was very easy. Of course, over ninety days you reassure everybody, everybody sits, thank God, in all the polls, union members 65% of the union members, 75% of the general public says, \"We're for wage price freezes.\""},{"start":2345.2,"end":2367.2,"speaker":"Unknown","text":"Now we all know that within ninety days already some will divide it at ninety days and certainly if you kept it on for another 30 to 60 days, enormous pressures would grow up like we saw from these timber wage-increase fellows in Oregon yesterday they're what are they fellows showed me? fellows were were rather how would you say, restrained"},{"start":2367.2,"end":2386.2,"speaker":"Unknown","text":"what's basically that uh, they don't have many constituents, and they know it. All right, they're they're members union members at the present time will not follow union leaders in union leadership opposition to what he's trying to do, and they know it. And so for that reason they've got to be rather restrained. They've got to indicate that they're pleased, willing to go for a voluntary thing. But in the final analysis they really don't want it anyway"},{"start":2386.2,"end":2399.2,"speaker":"Unknown","text":"if they could get away with it. Now and stopped just laying it on the back of the union people. The business follows the same. Mines, you generalize like this don't let me lay pressure only on the union people, deal the other way on. In fact, on the business side,"},{"start":2399.2,"end":2420.2,"speaker":"Unknown","text":"they've got some price increases and so forth that they want to roll in there. They're going to be ready to take every possible advantage the moment the ninety days is over to you know make a profit out of the Christmas sales or whatever it is, and we understand that. And the margins and everything else, so that's the way the system works."},{"start":2420.2,"end":2441.2,"speaker":"Unknown","text":"The great restraining influence the great restraining influence on the union leaders and business leaders and and professional people who make price and wage decisions is the fact that the overwhelming majority of the American people favor doing something strong."},{"start":2441.2,"end":2461.2,"speaker":"Unknown","text":"Now I personally, as you know, have a very dim view of this, and getting into this, this this uh muddy water, recognizing muddy water usually is quicksand. All right, we're in it now. We had to be in it. We had to be in it because we uh"},{"start":2461.2,"end":2481.2,"speaker":"Unknown","text":"we uh we had to uh uh give them this the illusion of of change, and an illusion of an approach, which would work. I'm not suggesting that it's total illusion. I believe that what we have done will have some effect. I agree there has to be a psychological reaction."},{"start":2481.2,"end":2499.2,"speaker":"Unknown","text":"It's very heartening to know consumer groups, business groups, some labor groups, people applaud saying, \"We support the president's uh moves here and we're going to hold the line.\" I must say for behalf of the business people sitting in Oakland 13th, as you might expect,"},{"start":2499.2,"end":2519.2,"speaker":"Unknown","text":"they go ahead and earn money. Full page ads meaning we support the President come in and get all these bargains, [laughter] Then they go out and have the same ads they had before the freeze. But that's alright, that may be blockaders etc. etc. That's fair enough. What we're getting at is again this psychological factor which can- and this this is why where where we act now. We're not acting in terms of like"},{"start":2519.2,"end":2539.2,"speaker":"Unknown","text":"we were president of creation and therefore could make the world uh as it should be made. And even God, you know, made a few mistakes perhaps uh in making the world. President of creation, I think you have to agree, but we're not President of creation. We are coming in in a world an economic world that isn't, in many ways, in a very difficult shake."},{"start":2539.2,"end":2559.2,"speaker":"Unknown","text":"It isn't as bad as it been made out. There has been somewhat uh uh lessening of, at least as far as CPI is concerned, and you can't look at those numbers uh over the first seven months without saying, \"Well, that's better than last year.\" And uh there is, of course, somewhat delayed effect."},{"start":2559.2,"end":2579.2,"speaker":"Unknown","text":"And had we done nothing, that might have continued, in weeks. But we're past that point. Now what we cannot do is to follow this with something that is so fuzzy and so uh that gives the impression of being so"},{"start":2579.2,"end":2599.2,"speaker":"Unknown","text":"lacking in terms of determination and government backing that the public will throw up its hands and say, \"Ah, they've given up and we're just going to go off to the races again.\" Now, so that is why these what the later union people say they what they what they've suggested is something it's voluntary, but second"},{"start":2599.2,"end":2619.2,"speaker":"Unknown","text":"set no targets, and uh just uh and it'll come out all all right. That's what they've walked into. And uh business folks will, let me say, the same thing. Oh, they'll probably say make it voluntary. Restrain all labor uh uh"},{"start":2619.2,"end":2639.2,"speaker":"Unknown","text":"uh increases to 2%, but uh prices, of course, have to be be the mark as five of the businessmen who have approached me have suggested by what they tell us. But nevertheless, what we what we have here is that is is is is a a a very, a very difficult dilemma."},{"start":2639.2,"end":2660.2,"speaker":"Unknown","text":"The dilemma is that in order for voluntary program to work, we've got to have the cooperation of labor forces. On the other hand, what they will have in this battle is looking at their what they say yesterday. What they will cooperate with, if presented to the public, would have a very depressing effect"},{"start":2660.2,"end":2680.2,"speaker":"Unknown","text":"on the public. The public would say, \"My god, uh we're just going to go off to the races again. This is it's not going to mean anything.\" So, what I come down on is that what we have to do is to is to approach this about 75% from a public relations standpoint and 25% from a substantive standpoint."},{"start":2680.2,"end":2700.2,"speaker":"Unknown","text":"The 25% is that we got to be sure enough in our own minds that it's the right thing to do, that we that we can go forward. But, we have to remember that that that about 75% of it will be to to assure the country that we mean business about restraining wage and price increases,"},{"start":2700.2,"end":2720.2,"speaker":"Unknown","text":"we need to have government policies that will help. We're asking labor to help. We're asking everybody else. Matter of fact, we we may, in all the they're setting up now, uh once a month sure they're going to be some doctors, uh all sorts of professional people, and the rest were in a degree and they're going to restrain some of their fees. And that's telling that could have quite an effect. When you see the main parts of the cost of living thing,"},{"start":2720.2,"end":2740.2,"speaker":"Unknown","text":"uh the main columns when cost of living increases, services are going right up through the roof, and I've just asked all those professional people maybe if they would agree if they have maybe said we're going to cut some of this stuff down. Maybe that would help. But uh but but uh while this is not usually the way we operate in this administration, I'm simply saying"},{"start":2740.2,"end":2760.2,"speaker":"Unknown","text":"that what we must come up with here is something that uh is substantively as sound as it can be having in mind the realities that I've pointed out. But second, we have got to put around the the greatest amount of uh of public relations hoopla that we can. Having said that, don't let me sound as cynical"},{"start":2760.2,"end":2780.2,"speaker":"Unknown","text":"as that as that appears. That public relations hoopla may do some good. It could do some good because it is, as John has indicated and as all of you have found in travels in the country, and as I found as I've traveled through the country, there is in the country uh a kind of a feeling, well, on the part of an awful lot of people"},{"start":2780.2,"end":2800.2,"speaker":"Unknown","text":"that, \"Gee whiz, we ought to do something about this, and we're willing to do something about it.\" Now the problem is that it isn't that great mass of people whose cooperation is going to determine the success of this."}],"transcriptCreatedAt":"2026-10-27T14:40:24.061Z","transcriptModel":"google/gemini-3.8-flash","transcriptSource":"audio-llm","audio":["https://nixon.nyc3.digitaloceanspaces.com/audio/073-004-splice.mp3"],"url":"https://www.easynixon.org/tapes/073-004","nixonLibraryUrl":"https://www.nixonlibrary.gov/white-house-tapes/073/conversation-073-004","catalogNaId":648452365,"catalogUrl":"https://catalog.archives.gov/id/648452365","license":"Public domain (U.S. Government work). 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