On October 7, 1971, President Richard M. Nixon met in the President's office in the Old Executive Office Building at an unknown time between 3:32 pm and 3:43 pm. The Old Executive Office Building taping system captured this recording, which is known as Conversation 285-040 of the White House Tapes.
Transcript (AI-Generated)This transcript was generated automatically by AI and has not been reviewed for accuracy. Do not cite this transcript as authoritative. Consult the Finding Aid above for verified information.
to be made up of persons outside of government, all public members, not beholden to any special interest group.
Price commission will develop yardsticks, will be empowered to restrain price and rent increases to the necessary minimum, and to prevent windfall problems.
Its goal will be to continue to drive down the rate of inflation.
This goal, however, can only be achieved with the active cooperation of working men and businessmen, farmers and consumers, members of the Congress and of our state and local governments.
That means all of us.
I am also calling a pay war to stop the inflation of the wage and instead of subtle increases, the kind of increases that do not really benefit the working man.
For example, the past six years wage earners have received big wage increases.
But every white worker knows that these increases are practically all that need to be eaten up by the rise of government.
The life of a worker knows.
These increases have practically all been eaten up by a robin across the road.
The pay work will be made up of representatives of labor, management, and the public.
Both the price commission and the pay board will seek voluntary cooperation from business and labor, but they will be backed by the authority of law to make their decisions different.
Their staff will be small.
Stabilization must be made to work not by an army of bureaucrats, but by an army of patriotic Americans in every walk of life.
The Costa Living Council, which is headed by the Secretary of the Treasury, will have the power to back up the pay board and the price commission with government sanctions where necessary.
Our experience over the past seven weeks proves conclusively that the vast majority of Americans will cooperate wholeheartedly with the system of voluntary restraint.
If there are any who try to take advantage of the patriotic cooperation of their fellow Americans, I can assure you that the government must be and will be prepared to act against you.
For that reason, I am asking the Congress to extend for one year the Economic Stabilization Act, which gives the Congress the power and the President the power he needs to act without depletion.
This afternoon, a few hours ago, I've asked the Congress to extend for one year the Economic Stabilization Act, which gives the President the power and means to enact the Constitution.
Holding the line against inflation means holding all the line.
Consequently, I am appointing a government committee on interest and dividends to apply the art stick to both these areas.
This will be headed by Dr. Arthur Burns, Chairman of the Board of Governors of the Federal Reserve System.
The nation needs interest rates as low as they can be to make the credit requirements of American families on equitable terms and to stimulate non-inflationary economic expansion.
I am confident that this can be accomplished on a voluntary basis, but as a safeguard, however, I will ask Congress to stand by controls over interest rates and dividends.
Let me turn now to the subject of promise.
Many of my good friends have advised me that the only politically popular position to take is to be against profit.
But let us recognize an unassailable fact we cannot deny.
All Americans will benefit from more profits.
More profits fuel the expansion that generates more jobs.
More profits mean more investment that will make more goods, more contentment.
More profits mean there will be more tax revenues to pay for the programs that help people in need.
That's why higher profits in the American economy would be good for every person in America.
Windfall profits, however, are quite an event.
When wages and other costs are held down, even though prices are also held down, circumstances could arise in some cases that might generate exorbitant costs.
A few cases where this happens, rather than tax such profits, the price commission's policy will be that business should pass along a fair share of its cost savings to the consumer by cutting prices.
Or we'll live too long in this country with an inflation psychology.
Everybody just assumed that the only direction for prices is to go up.
I must hope for some price reductions, I acknowledge.
Let's have some prices go down.
Let's see some prices go down.
Summing up these actions to stop the rise in the cost of living, this is what we will do and what we will not do.
We will prevent some adjustments in prices and wages that fairness demands.
We will not prevent inflation for our economy.
We will concentrate on those major, we will concentrate on those major portions of the economy that are primary cause of inflation.
but we will not hesitate to take action against any part of the economy that fails.
We will continue price and wage restraints until inflationary pressures are brought under control, but we will not make controls a permanent feature of American life.
When they're no longer needed, we will get rid of them.
We will rely primarily on the good faith and voluntary cooperation of the American people to make this program work, but we will not let any selfish interest escape the fair enforcement of the law.
I call upon all of you tonight to look at this program, not as Democrats or Republicans, workers or businessmen, farmers or consumers, but as Americans.
Let us recognize this profound truth.
What is best for all of us is best for each one of us.
We cannot afford a business-as-usual attitude anywhere because fighting inflation is everybody's business.
Let us look at the future.
I have said that 1972 will be a very good year for the American economy.
Let me broaden that estimate a little bit.
Coming here can be more than a very good year for the American economy.
It can be a brief year for America and the world.
It can be a year for the first time in 15 years in which we can achieve our goal of prosperity and continued peace.
It can be a year in which great progress can be made toward our goal of full employment.
without the inflation that robs working people of the full value of the dollars they earn.
It can be a year in which the American competitive spirit is reborn as we open up new markets for our goods abroad and new careers for our working men at home.
It can be a year in which we and our international trading partners build upon the most significant initiative in monetary affairs in 25 years.
A year in which we replace the crisis-prone system of the past with a new system
a tomb of beauty.
It can be a year in which historic events will take place on the international scene, events that could affect the peace of the world, not just for a generation, but even the next century.
We often hear people say, these are troubled times.
I say these are grave, sad times.
We're at the threshold of a great new year.
An age of movement, challenge, and change.
We have an unparalleled opportunity to create a better world for ourselves and for our children.
Let us dedicate ourselves tonight to make the most of our opportunities.
To join in a great common effort to stop inflation and to create a new prosperity and a world of peace.