Conversation 126-001

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across the board, 90-day freeze on rents, profits, and wages, prices, et cetera, to be followed by a totally controlled economy.

They were all totally controlled.

They believe that the future of America, as I believe, and I trust all of you will believe, is a totally freer and more controlled economy.

The steps that I will announce tonight

would send them to be opposed to that goal, actually they are not.

They are necessary steps.

Steps that have to be taken for reasons that I will spell out in my speech.

The speech will be available at 2 or 7 o'clock.

It is not yet completed.

It has been run off at the present time.

It will be delivered to you and to the members at the same time.

And we will have it before, at least one thing, before you read it in the press.

I'm going to meet with the members of Congress at 5.30, and something will be said to them.

The highlights of it are this.

I've already indicated that we projected this opposite of a 90-day freeze across the board, which, if not, it would have been down here on this desk, or the desk there.

If you go up or down in a matter of a few weeks, that is not the only reason for that.

What we have done, what I have ordered here, and will announce tonight, are first, a 60-day freeze maximum.

to be no longer in that kind of crisis.

The produce will not include weight loss, it will not include products, it will not include grants.

I mean, just to give you an example, just to give you an example of the kind of things they had in previous programs.

A rocket destroyer of both products cannot be included because it's impossible to handle.

And both programs, on that, the key is not the without-resolving, the reduction is the trial.

And eventually higher prices, so.

It does not include wages, not because we're trying to be easy on labor, but because as we looked at the causes of the present inflation, we couldn't make labor the culprit at this time.

Labor management systems have been highly responsible up to this time.

And as I will say tonight, if they continue to be responsible, they will not be good and free.

But they did, of course, very important work.

And because the two or three more settlements have come up, most of the big two behind this, the two or three more, we trust that they will be responsible.

And whether they will be responsible, I think, will be quite affected by the action they take tonight.

In the event that the leader of a major union, for example, as a team service are now making negotiations and they have to go to their membership in the face of a 50% increase in food, they just aren't going to be able to hold the line.

There's no way that that was loud and clear as we go here exactly the same way.

So 60 days on crisis, that's all we can do.

Second, it will include, in addition to that, a number of other items, which I will just have to briefly .

It will provide, in that 60 days, a 30-day period basically in consultation

as to what should follow.

Now, what should follow on here will not be a return to page two.

It will not simply be the status quo of page three.

But it will be designed as a follow-on program, which will do the job without

putting the American economy on its break jacket, and building a store that can have an eternally controlled economy.

That's my major goal.

In other words, what we want to do, we're one of the biggest booms in history.

We want to control the movement on that bus.

And so if we did not move at all, we might have continued to question the lead of the bus.

If, on the other hand, we removed one of the most stringent controls in the Senate, as already proved in the Democratic Caucus in the House, probably would go down the line for that movement on the bus.

But we are doing it as a follow-up to that line, which we think will

There must be stability in the food crisis.

And therefore, that is going to be tackled, you know, how, you know, we, of course, are going to be increased by the problem of supply across the country, and I'll have more to say about that in a moment.

The other is gasoline.

There are across the country, not in Obama, but across the country, a number of disturbing reports of very sharp increases in the supply of gas in service stations.

Sometimes we're not able to agree on that in 60 days.

That will be followed by a program, price stability for gas.

Now, having said that, when we talk about seeing prices and stability for food prices and stability for gas prices and the rest, all of you know,

But that doesn't mean a thing unless you do something on the supply side.

As far as food is concerned, I have, of course, asked in the Congress, as I have previously, for a form of legislation that is not replaceable.

I'm not spelling out the attributes of them, but I'm sure you would have taken a very hard look at the requirement of the selection committee for us, and there's not going to be any conversation or any comment on the selection committee.

In relation to the site, that's not going to happen.

Secondly, it is going to be necessary for us, of course, to have the isolation, because it will affect the group on the 10th and 14th floor.

More authority will be supposed to serve once combined.

Third, even more important, we're going to tackle the problem of the demand abroad.

Here we have enormous problems with our State Department friends and our NSC friends and the rest, because it runs exactly counter to what we would try to do and actually what the partners want to do.

And we love to sell this stuff, but we've had surpluses before.

We've always wanted to have markets abroad and all that sort of thing.

But at the present time, for a variety of reasons, a huge, but much increased demand for fuel, a much increased demand for fraud, bad weather and bad crops abroad, and atrocious weather here in the United States, we simply have a shortage of belief in this country.

But we're just going to continue to wait six months, the next three to four months, and we must deal with it and deal with it effectively.

That is the reason why I'm trying to ask the Congress regarding the head-mounted reporting system, regarding any additional licenses for the sale of the current supply.

But I'm going to ask the Congress for some authority, additional authority, to control exports abroad and to balance those against the national, putting it quite candidly.

the consumer in this country must come ahead of our foreign friends.

I don't mean that our foreign friends are going to be put down to shoot.

I don't mean that that's going to be a response to it.

But I do say that in that respect, that it comes to the hard choice between whether or not we're going to have meat and egg in the tables here in crisis season.

or whether or not we're going to serve the interests of an American foreign policy person, be it Pakistan or Timbuktu or the rest.

The American vision is not to come first, but we need some authority from the Congress to get it.

Those two areas will, of course, be mentioned.

I should mention a couple of other things I'm going to ask the congressional leaders to do, and I'll mention to you.

Long term, in order to handle the inflationary problem, we have got to deal, of course, continue to deal effectively with the matter of the budget.

If the budget exceeds the limits that we have put upon it in substantial amounts, it will create pressures for rising prices.

Therefore, I ask all of you, as I will ask the members of the Congress, to continue to support the very large budget that we have, but to support it at the levels that we have .

We will also ask that the energy field, we're going to have a major energy message that they brought in.

It's going to be probably on Saturday.

We don't want to trap them in on the story.

And also, there's going to be another major energy message on Saturday.

But I am putting that to the Congress again on the last slide.

everything else.

That is going to solve the problem of gas at the pump now.

It will have an enormous effect on it later, and we've got to get going on that as well as on a number of other things.

I know that, for example, a paper this morning, the Libyans confiscated the Bunker Hunt Company, and that's an indication of things to come from the East, an indication of some of the enormous problems we face in so far as an energy shortage, not only here, but in Europe and in Japan.

in the months ahead.

With regard to this entire program, I was in his summer on ice by second, that it isn't as much as the controllers want.

There are people in this country, including some,

And including some people who honestly believe in a total economy, like John Calvin, who believe we should have a totally controlled economy.

I don't believe that.

Then the question is, why do we do this?

Why not just sit here, sit here in phase three, and see whether or not we survive?

Well, first, you've got a pragmatic problem in the economy.

Carnage is the website here.

And if they send out a bill, which they would do without any question, I've checked this off quite a bit of mandatory controls, a freeze for 90 days to be followed by mandatory control of wages, prices, profits, that bill, I'd have to veto.

And that bill would cover my veto.

There wouldn't be any question.

There's a little argument on that.

Some of the labor leaders will be able to change their minds.

But they'll say that in this room and never outside.

Because their membership

Unfortunately, most of the people in this country have been left out of hand for so long, they kind of went and used all the controls and it wouldn't happen.

So that had to be stopped.

That was the main problem.

The other reason is this.

Phase 3 is a far stronger program.

and keeping the forces of inflation under the control of anybody for your life.

We've been doing a great deal.

The difficulty is that we've had a very, very great problem in getting it across to the people.

It's the old story, the very old story, told all over the country.

I used to hear it in the Quaker fashion.

The old man, a leader, just eating hell and his dog food.

Why doesn't he hit that?

Why doesn't he talk to him?

He says, man, I'm just trying to get his attention.

What we're doing here is we're going to get the attention, of course, from his 60-day views.

Beyond that, however, we are going to get in place what we believe are necessary moves in two critical areas, primarily the food area.

dealing with it both on the energy side, more importantly even on the supply side, as I said before, and also the energy side.

That, of course, is important to a number of special interests.

It's important to us and maybe more so to them all.

With regard to the entire program, I can say that there was very, very great and honest disagreement among members of our staff

that a lot of members of this cabinet, members obviously were conscious, those who had thought about it, had frankly on the whole together with the financial and everything.

If I had been a politician and I hadn't made the decision, the decision was not made in an opportunistic way, but it is, in my opinion, the right thing to do at this time.

It will deal with the problem.

It will focus attention on the problem.

It will buy the time that we need to have in order to get across the country.

One, what our real goal is, a free economy in the end.

Two, what we are doing to deal with the problem that basically people are very, very concerned about.

And three, the mission of that, to convince the people that not only are we dealing with it, but that our program is the right program.

Now, that brings the cabinet in.

We all think in terms of the next 60 days.

I always start with June, July, August, Easter, next week.

Take the time off.

Take a little time off.

But let me say that we need all of you out as much as you can.

And in this instance, more than with just the average person in my association, with the opinion makers, with those who have been in action,

This is a good program.

You don't have to be defensive about it.

You don't have to be defensive about it with the Conservatives.

You don't have to be defensive about it with Iranians.

Basically, it's a good program, but it needs understanding.

It needs to be sold.

This is not a British record in the economic field.

This is a good record.

And now let me conclude by some good comments on some of the possible results.

We hear so much that is wrong of our economy and of our country today that we overlook it.

And this is almost because we share so much with the government.

And I would only suggest that on the economic side, we look at our rate of inflation.

It's bad at this time, although at the end of last year we had reached the lowest level in the industrial world.

But when we look at the other side of the economy, we are obscuring the biggest boom in American history.

There are more jobs and higher wages.

There's more opportunities in America than ever before.

We don't want to kill them.

We want to continue.

We are still basically a broad expansion of our economy, rapidly increasing our growth.

And it is tremendously important that we have policies that will continue that awkward movement, but at the same time will take care of this infectious oil, maybe prickly oil, that irritates so many people, in particular irritates those, you know, people in the agricultural balance.

So the American economy is good.

It has a problem.

It is a problem that is not limited to America.

The British have it.

The French have it.

The Germans have it.

The Japanese have it.

Most of them have it worse than we have it.

That doesn't however mean that ours, therefore, should be brushed off.

It is a worldwide problem.

It does mean that Americans have always expected more than most people in terms of being with such problems.

And so we are going to deal with it in the most effective way possible.

And this, we believe, is an effective way to deal with it.

I would simply conclude by saying, you're talking about what I read.

Don't overlook the speeches and so forth that are in addition to all this.

The fact that we have a splendid economic team,

George Shultz, Bert Stein, John John Lundberg, some current people.

We had the benefit to look around the conference, advice on this, and it's now supposed

and I know all of them have strong reservations about parts of it.

They've supported it now that we've made the decision, which of course is the way of doing all these acts.

But these men have my total confidence, and they will continue to, we hope to administer the freeze in an orderly way.

We hope to have phase four come out in a way that will not put us straight to an endless economy that can't be picked off.

Because our goal, I emphasize again, is a free economy.

as free as possible because that's been the secret of the success of this country and no reason to change it now.

Don't change the game plan when it's worked as well as it has.

Having mentioned that, however, don't overlook the enormously great achievements that we have in the foreign policy.

I can mention other things.

The fact that we're making progress on drugs and so forth.

The fact that our campuses aren't old enough for them all to return.

The fact that we're terrible as you mentioned.

that for the first time in a generation, no Americans are being drafted.

I heard nobody saying that.

And they're saying that it is being pranked.

I said it the other day in Florida.

Everybody gasped because some kids were being drafted.

The fact that for the first time in 12 years, no one is being killed in Vietnam.

The fact that for the first time in eight years, there's no POWs in any place in the world.

The fact that we're going to meet with Russia next week, and the most important

a meeting between two heads of superpowers in history.

And out of that meeting could well come, I'm confident will come, could well come an understanding that could make greater progress toward our goal of enduring peace at a time that any of us can remember.

He said that as a matter of a couple of weeks ago.

I don't ordinarily agree with him.

But on this, he could be right.

I hope so.

If he isn't right, and if I'm not right, then we're all in very deep trouble years ahead.

But the point that I make is that in terms of our goal, which we have the day we arrive here, of having a goal prosperity without war, without inflation, we've come a long way.

We have the peace.

That's the problem there is.

We don't have the peace.

and we've got the prosperity, we have the inflation in the present time.

It's never going to go totally away.

There will always be some.

And this is not going to be easy.

And now you'll need economists to pick up the pieces before it ever comes out.

Because their interest is not looking at it objectively somewhere.

And I'm sure you'll find one for all.

Because, and I understand that.

On the other hand, we have done very well in this field, and I am confident that the kind of management we have on our economic managers that we're going to go through this period with this, what I call, doing just enough to deal with the immediate problem, but not so much as to destroy that enormous

uh power that keeps this economy going and that was of course the reason for the decision it is limited limited in time limited coverage and phase four will be limited also in coverage limited to do just enough to do the job but enough to do the job uh and uh i think with that kind of a program that's one that all of us

fight for it, and come for it, and I hope that the men refuse to take us.

So as far as your time is concerned, I would suggest even those of you who are not on the domestic side, people from the State Department, the Defense Department, and the speeches you made about state defense, you can say something about the country.

It's going to be hard for the state of America to be talking about these fur lenders the way I have, but the point is that we'll do all right with them.

We're going to keep all of our commitments.

None of our commitments are going to be, of course, reneged on.

But it does mean that in the future, in terms of the sales of commodities, particularly free P3s, which determine the prices, as you know, of meat, of pork, of pork on the American table,

And in those areas, before we go too far in sending them abroad, we've got to make a hard look at what it's going to do and the prices of those particular commodities at home.

That's the major part of this.

It will not be well understood, and the Congress hasn't told us of it, although we're going to set up a reporting system that will help us quite well.

So that's my summary of it, George.

All you have to do now, George, go on, because you've got a lot to read in the press.

There you made it.

You had a very complete summary, Mr. President.

Thank you.

That's what you said.

We do appreciate your advice.

I do appreciate the notes that you sent me on this.

I read them all.

including reading all of the various opinions of my economic advisors.

I've been reading their videos.

That's why I didn't get much sun when I explored.

But nevertheless, they were extremely very, very, very helpful.

And the fact that we may have come down exactly the way each of you would have means that perhaps what we have done is about right.

Okay.

I think it would be helpful to just add two things to that.

One, is to describe just briefly this move the President mentioned on anti-war controls, because that is such a feature.

And the other is to ask Curtis Stein to go through with you some of these charts, because I think they very well describe

We know that if we are successful, we're going to be successful.