Conversation 304-017

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Let me ask you, George, do you remember there was set up this, what I understood to be a rather confidential group of condolences and so on?

What did you decide?

We decided that it would be a specific thing that we decided was that we should be prepared to lift the search area with

But you can't do that without understanding it.

Well, we did quite a little staff work in the OSB on it, but we think it's probably what you could.

Uh-huh.

The objection is that it's bilateral, and therefore you brought it like that.

On the other hand, the reason I say you can't do it is that I was talking to Rogers, and I said to him, I can't do it.

Well, the GATT people say that we are not legalists, they stand down.

No, but beyond that, everybody seems to think the search arc should be removed, and they're all upset about that.

And this could be described as a very forthcoming move.

We're not trying to discriminate against any particular country.

We've got to have everybody.

It's just a way to move.

But here is a proposal for getting the ball rolling.

And undoubtedly, we can work out things that would help with the less developed countries.

Although their currencies, they'd probably be better off if their currencies changed their value a little bit more.

What I had in mind was this, that McConnell did it on Thursday, and of course he did it today.

There's a problem here.

As you know, there's the Peterson Group, Peterson Voter and all, and the very reason that they are developing the franchise development policy

The difficulty is that I have to find a way to get it to me and also a way to get me the best possible advice that I can get on it.

Now, I know, I became aware of the fact that the common stuff, which is social design, and I'm also aware of the fact, too,

She's not the easiest to deal with.

If you think there's a problem with her, and there is, with Rogers and Laird, it's just that I don't think she's an angry person.

She's not going to be on this subject.

I don't think so either.

The other side of the coin, the other side of the coin too, and the reason we brought all this in is that this whole subject is infinitely more complex and broader than international economic relations.

It's for people with foreign policy primarily important problems.

In terms of the Germans, I mean in terms of the Europeans, it may be that what we would want to do economically, which could be to treat all the Europeans alike, is quite different from what we want to do politically.

because we may want to split the Europeans.

We may want to split the British and play, let's see, with the French at the present time.

We may have to play the Germans against them.

I don't know that any of this will eventually prevail, but I know it has to be considered.

Now, of course, overlying all of this concerns your address on Mars.

There's a lot of things that we have to apply to certain columns.

and the Europeans were blaming on us and so forth and so on.

And I really wrote and posted, and I remember that the protectionists led the Hitler, I think that's what he said, that this is the way I know it is, because Hitler came along with the reasons of Roe and June, but nevertheless, I have on others,

But nevertheless, it does indicate to you the scope of the problem and why I don't want to get in a situation where, for that matter, either Peterson or Crump walk in and say, not this is what we're going to do, and let's go.

I think this is something where this group could be set up where we really need Judge Muhammad.

Now, it's a very delicate matter to handle.

And where I think you come in consistent, I think you can broker better than anybody else.

I think you can broker because basically the person knows something and is considered to be an expert in the field.

So Colin and his people would be touching.

Second, you're very close to using and therefore you can do that.

I hope that works.

I cannot, under the present circumstances, actually I'd rather see Pete before I see Connolly, because Connolly will come in a while.

So I don't tend to decide with Connolly.

But I think we do have to set up a meeting, I suppose, next week.

I don't think you're in very good shape, but it's best to say that because we've had plenty of time to know.

And I would also say many times, I guess we really must do this.

Pete has been trying to put together a big picture.

I've just got to peek at it and then I'll find out more about it for the day.

My initial impression is when I would consider it first class effort.

There's no reflection on it.

The subject is cooperation, and the subject is intricate political, economic, diplomatic problem on the first magnitude.

It's also a matter of domestic policy.

A big domestic policy problem.

Damn right.

There is.

It's exposing in several ways.

It's exposing not only from the standpoint of the international set, but it's exposing from the other side of the climate.

I'm very strongly thinking we should keep it.

You're going to get attention from both sides.

Keep it unless you get a good something in return.

Go back and then to the...

to the things that that four person group agreed on, and follow that example through, and this is a great procedure, and something that bothers me, or I haven't quite had the quality to handle.

We agreed on that, and our understanding was that that up here, that would be a major proposal that's going to be taken to the IMF, and we had prepared

I felt something of that importance, that it must be clear to you

and I expected that's what John would do.

And I asked him if he had, and he said yes.

So I didn't pursue it any further, but when he talked to the cabinet, I felt, I think I got the notion pretty well, and I can read, I think, fairly well what, where you're going, and it didn't seem to be an issue.

had this in mind at all, and we also talked to Milton Friedman that same week, and he had talked to the 94 at my house, and he tried to bring this up, and he didn't respond, and I didn't know.

Well, I sort of surmised that probably he had talked about it with you, but perhaps not in the way that you bring out it feels significant.

I was very busy meeting with people and so on.

And Paul Volcker was very busy.

Yeah.

But Paul was not surprised of your efforts.

Of these other efforts.

And Kenny was monitoring that.

And Paul had a different idea, apparently.

And so then I kept getting into the speech via the council and my own efforts.

But the speech didn't come out that way at all.

Now, it's a perfectly good speech.

And I think it would have been helpful

express this policy.

And now people feel that maybe it isn't such a good policy.

Well, I still feel it is.

But that's not the point.

I think what that shows is that our process, this is where the self-carnival is for you.

And then, assuming that you have truly approved this,

that speech, or else you change your mind again, one or the other.

And I am a little in the dark in how much you want me to come in and see you about this sort of thing, because I don't want to in any way intrude on John's territory here.

So I've basically sort of laid back, and I've got a certain image of this problem.

On the Peterson side, which we have to face up to, Peterson cannot do a group conference.

It doesn't mean you can't do it, but it doesn't mean you can't do it.

You can.

But I think that what I'd like for you to do is to, and second, because you know more about the subject, I'd like for you to grab ahold of it and start a movement.

I understand how it carries the television credit.

I mean, you can get a, you know, a lot of people have got the, from the time we got through with it, that David was one of those people who was very creative and who was fine.

And Colton Sutton, who just spoke to us today, our people, our experience of going through the January issue, he was diagnosed with heart disease.

He finally convinced the president and all of everybody else, all of them,

Well, be that as it may, we know how those things work.

But we do have to realize that in this case, the Peterson relationship to Connell and Rogers, et al., cannot be the same as the history relationship to Rogers and Leonard.

This is going to work that way.

And what we have to do is to find a way

And I think the way to do it is for you to .

And another thing, too, is that I connect.

I think your views will have very great weight for the group.

We developed the background for the campaign.

We had about, I recall, on the order of a couple of weeks of discussion to make it a little more than that.

Yeah.

That involved the various parts of doing the gun, and...

Correct.

That was fairly useful.

In fact, that's part of the whole damn thing, right?

We had a day here on Monday night where we said, you know, that's what we're going to do, and the other thing was when...

But when you said that, then I got, in a variety of ways, a lot of staff were going.

So that when we arrived at Camp David, we had not a paper on the pro and the con of whether there should be a wage price raise for the arguments, or a pay growth on the arguments against.

What we had there was a paper saying, assuming you're going to have one, how would you work it?

As an operational matter, that's the kind of staff work that was necessary then, and I think it's necessary in a lot of cases.

Also, the paragraph would be quite useful.

Well, right.

But you can't do it, or you can do it, I'm going to make you some conjecture, but if you know that the president decides he's going to do this, and you've got a little lean time,

Then, you know, that argument is over.

And now the question is, how are we going to make this policy an operational policy?

I guess what I'm suggesting is that if some of your meetings with John, where you've been discussing, if I sit in without wanting to intrude on all your discussions there, but when it's on head,

That might be a useful thing, because then I don't know whether or not these things have been cleared and in what form, or if I feel like they aren't really being made clear, I can help do that.

That might be a worthwhile decision.

We can do that.

But I think the problem is, how do we work it out so that Peterson doesn't feel cut off?

I don't know the way we will do it.

I'll get the...

I don't know.

Well, I don't know.

He hasn't indicated yet that he has a position on what we ought to do.

Well, I think our problem is that

Where is it standing?

Where is it?

And in the Federal Reserve, you have the people who are essentially in the background of the normal policy.

And Volcker did advise us that.

He did advise us that.

They're the people who go around and represent us everywhere.

And they sit astride the staff worker.

well, he's a very tough guy within his organization, and tells them, never let, it's hard to break, choke on something that it's fundamentally not looking at it your way.

So the result, you know, he just doesn't like what they're talking about.

He tries hard not to, but the whole gold thing, which is not a big issue,

Well, I've been able to break that out of the Treasury's bureaucracy.

And Volcker, I know this from Joe and the great one, Volcker has given a message to the lawyers that we don't want to do this.

And the lawyers give opinions because

That made it seem ambiguous at best.

And so John is saying, well, let's just wait about this.

And I tell people, very frankly, I go and see these individuals and I say, let's see what my understanding of what's going on here is.

But fact remains, that hasn't been able to come out of that bureaucracy.

And I say, let's get it cleared.

And if it were to be done, we'd want to build a little command or something

from the right that be done, so that we don't just throw that out into an unexpected... Well, we'd get Milton programmed, and he would sum it up, and we could make something out of it.

But before we do that, we want to be sure we've got it.

So my posture was to get it clear of all the impediments and whether you could or couldn't do it,

and have that part positioned steadily, the programming of when you do it and how you do it, with what sort of bill and so forth, can take place.

But that's just an illustration of the, of some of the problems that I think John has there.

And where I have told him, I think we can be of quite a lot of help to him.

We have an independent staff here that can handle this.

He hasn't, no.

I don't think so.

Treasury people don't get paid anything.

Monetary people don't get paid anything.

Well, that's what we're going to work on, monitoring and search of them.

That can work.

Actually, shouldn't they grow pretty deep?

I don't know.

He's got me frustrated as hell, and I don't know why.

He's got to get...

on a board.

Where do the issues stand at the moment?

The way the situation is going, I think we are drifting back toward something that more or less resembles the old system with different parity or exchange rates.

That's the grip.

That's what Europeans want.

That's what bankers want.

And that's what Treasury, Dewey Day, Axis, Corliss, like as a way of positioning it.

Bird is a little cute, and I'm not sure.

issue is the weapon goes under the name of convertibility.

That is, in the old system, we were committed, even if we didn't quite live up to it, to convert dollars into gold at 35 dollars an ounce.

The central question is whether or not we are going to get re-committed to give some

There's only a certain number of them.

Some scarce commodities are dollars.

As soon as we agree to do something like that, in whole, in some limited fashion, then we have put a constraint on our domestic economic policy.

We've been a hostage to international problems, and the international problems have poured us.

in order to acquire more of these special drawing rights, or gold, or whatever it may be, through our balance of payments, as long as we do not have to convert them, then the fact that we may have a heavy balance of payments debt, we can say, well, I'm concerned about it, and it's the other guy's problem, too, and he doesn't like it.

Our dollar is, we're not supporting any other currency in any other currency.

level, they can change.

And that's essentially what's been happening.

As soon as we go back to convertibility, then you're essentially back to some version of the old system.

So I think that's a critical thing, convertibility.

Now, it's related to the other issues of flexibility.

If you have a completely flexible set of exchange rates, then changes in those prices of currency bypass the need for any convertible good because you automatically

just your balance of payments by the changes in the prices of the currency, and we handle the problem that way, and it doesn't change any of your domestic problems.

That's why people, that's why the most economists, even both Sam and I,

change the attractiveness of U.S. goods

Well, no, but you have to ask yourself, how am I going to do that?

And the only way you can do it under those circumstances is to get your prices down.

And so you say, I must control my inflation better relative to the other guy.

And therefore, I depress the level of economic activity.

I take on employment.

in order to gain some ground on inflation, in order to satisfy the international pressures.

That's been the... And if you remember, prior to your argument with Dean's decision, when we really smoked Arthur out on the money supply, he agreed back to remember in the early winter when the weather was going up, people were saying it couldn't increase.

And when we finally smoked Arthur out, the reason why he didn't want to increase the weather was to drive interest rates back to the low.

Why is it that he didn't want to drive interest rates down?

The reason was that low interest rates here and high interest rates abroad had money flows, and that came back in the balance of payments thing and put the pressure on the gold and so on.

So that's why this whole convertibility thing, you see, is right at the center of the issue.

I see.

Now, Nick Connelly has moved away.

He told my attention from the last talk I had with him.

He's going to be sent back to the US.

He is all for voting.

He's actually going to go back to the US.

He won't be a hostage to the supporters and the rest.

And that's why he's very strong.

I mean, Dan would go back there and raise the price of gold.

We are here to do it.

And for a variety of reasons.

Or to want to vote and take the gold.

That's what I, I believe that.

And the last time I talked to John about freedom of speech, he said, he said, well, John, he said, you and I, I'm the only two fellows around who think that.

All of you treasurers and best people think something else.

I said, John, I guess you and I are.

I think there's a third fellow, as I understand it, who thinks that way too, and that's the president.

And I think it would be useful with Volcker and companies

Well, we'll bring this up then since you've discussed it with the comments.

I'm going to get this up as a model.

And try to get Nezzy started with that proposition.

Oh, of course.

After we get past the other ones, we'll get in on this.

I'll say this, I just want to talk about this.

He knows what it has to do with me coming.

And I think he must be aware of the fact that I'm trying to talk to him.

I've said it all the time.

I don't know that he has all that much.

But he has a good staff down at the GS-15 or so level.

But he hasn't

Let me ask a couple of other questions.

I personally would be reluctant to see an increase in the price of gold because it seems to me you're saying that you must have convertibility in mind.

Why would you be worried about the official price of gold?

If you change the official price of gold,

Now, people say, Arthur will say, and others will say, well, why not increase the price of gold, but maintain that you're not going to convert?

So you say, well, why do it?

Well, because of the bookkeeping things that particularly the Europeans are interested in.

Oh, yeah.

Because they have confidence.

That's right.

Because they don't go away from the state.

Well, it's as though you have all these Frenchmen who have $4 billion worth, or however many francs that is, all the way in their mattresses.

And the notion that...

The franc and gold have a certain relationship, or gold has a certain value.

So if you want to devalue the dollar with respect to the franc, you have to do it by changing the relationship of the dollar to gold so that the franc can stay in the same relationship.

If the franc revalues with the dollar thought of as being worth $35 an ounce, instead of

gold is worth less, and as the gold is worth less in terms of rank, so they have that political problem.

So there's a big bookkeeping operation that's involved here that is said to be of great interest to the Europeans.

And if it were really that, and that's all, why I suppose we could say, well, all right, that's a baloney, and that's a very upset time.

But it just seems to me that it's going to get

I think that's the, that's the dangerous point there.

There's also- We just won't eat.

We should build a system and not .

We possibly can, and there are ways of doing that.

I think, I don't pretend to be an expert on this, but I think that's a good thing.

But I also think that it's time for us to

to try to work things out.

I'm thinking it's been drifting long enough.

And they're going to solidify against us if we aren't careful.

There'll be things solidifying against us and there'll be a lot of misunderstanding about what it is we're really after around and we would be well off to have a good strategy session with you and lay down some points and try to get them.

.

Barfield.

All right, good.

I'm going to argue it right now.

What progress did you make then?

What did you do?

Well, I, uh...

I was...

I was just getting to discuss the monetary, uh... Let me sit down.

We got to the end of the lunch, and I left with him, and we went back to each other before the end of the week.

On that subject, we started to talk and say, well, I have a monetary strategy.

And he started to tell me what his strategy is.

And then we got cut off.

But I think that there is a really important problem here.

And let me just show you a couple of graphs that illustrate it.

The red line, I realized earlier, I'm going to bring this over so it's not a dilemma, but the red line is quarter to quarter changes in gross national product.

Six months down, six months a little bit.

And the blue line is the same thing on the money supply.

The jagged thing is what we've been doing.

Quarter to quarter to quarter.

Now, the thing that you can see is the way that red line

really tracks the blue line as we go through these periods and periods.

Remember, for instance, just before the election last year, we went into the third quarter and what happened there.

We dribbled out, sparking the strike and so on.

Now, here's the first two quarters.

There's got to be another money supply.

Levels off.

You can see what I was doing on the weekly figures.

Now you can see what's happening.

Now, if even this rate of change were to continue, we'd have to have this clearly average be up in there someplace.

Well, with this much advantage, it's almost impossible to attempt to lay up in here in order to obtain that.

So that represents a real worry.

to the extent that this short-term move on a quick, that's the weekly, you see.

Now, that can bounce back, but that's a big bounce.

I don't know why that hasn't been going.

Here it's a slightly, this is with no lags or anything.

And again, this is the money supply, this is the GMT, and these are the same quarters going right along with each other.

Again, I think...

Here's where I disagree with Milton.

Milton says the money supply doesn't have the impact until you have about a nine-month lag or so.

Well, that doesn't look like any lag model to me.

And this is an exaggeration because it's a strike.

It's apparently auto-strike.

Probably would have to be more like that.

But again, you can see there's a couple of pictures now.

Well, that is the accomplishment of it.

Well, with regard to the, with regard to the situation now, with regard to the situation, let me come to the more fundamental point.

To what extent is Connelly, on top of the, we have had an inquiry on him for a while, and we have apparently been wanting to get him to let go at the right time.

And second, when it comes to the care and feeding of our kids.

I should have to take Arthur on.

I don't know what the hell we want to tell him.

Right.

And I want to find out before I can get myself all upset.

Well, we've also got to find out what Conway's going to do.

Everybody's going to do this one, because Arthur should have told us what he wanted to do.

Arthur's got a ton of ideas.

Very persistent.

I think it's been, well, I don't know if it's been anything, but there are, there are two, well, I think two of their people are in the storage room, and I don't know if they're interested in playing with a can or anything.

We may not be running it as much as it takes to do it.

Right.

Yeah, we...

One line of argument, the one that Bill Friedman gave you in the office that day, is that now that the Fed thinks there is some machinery to deal with wages and prices in this place, they can afford to be expensive on the money supply in order to encourage expanding and so on.

And therefore, what all this machinery and everything is going to result in

It's a big fool, the inflation that makes it difficult to kind of hand back your real equity because you'll have to put in more control for yourself.

The other way of looking at it is that you may go just the reverse, that Arthur describes himself as the architect of everything that is done apparently.

Reader's not yet at work.

And therefore, he wants to be sure it works.

What's the definition of working?

The definition is that it controls inflation.

Now, if you're the chairman of the Fed, you want to be damn sure that the machinery controls inflation.

You want to be damn sure that the money providers go out.

Furthermore, since there does seem to be, have been a real impact on interest rates, skimming off of some of that inflation rate.

They haven't come right on our down.

The Federal Reserve has traditionally followed the policy of gauging what it should do on the money supply by what happens to the interest rates.

If interest rates are low or falling, they regard that as a sign that there's plenty of money around, and therefore they don't have to increase the supply of money.

If interest rates are rising high, then they feel things are tight and they better feed more money.

Friedman's argument has always been, and I can be right about this, that that's not the right way to look at it.

That you should be watching the money supply and not the interest rate, and just be feeding in a good, strong, steady pace of interest and money supply.

That's right.

Let it go.

You say the meeting is tomorrow afternoon.

This session was set for, I think, 3 o'clock.

You don't need to see that right now.

I don't think that's .

I'm sure that would be time enough.

Yeah.

We've been giving a lot of attention.

They've already made the date.

Can you put it up as I did?

I'd better damn well see .

Yeah, yes.

Well, I'll tell you what you do.

So that, because I just, after I get tested, just ask Benedict to put it off until, uh... Yeah.

Yeah.

Hello.

Alex, do you know what the, on the schedule tomorrow, what we've got on that?

Are you home?

Oh, yeah, I thought I'd make a change.

What is the situation?

Oh, hey, there's a tail.

Yeah.

Okay, bye.

Well, if you've got Connolly on for four, that's a big crowd.

Wait a minute.

There's a meeting with Connolly on the NSC.

Connolly shows the stage, et cetera.

Is that the one you're talking about?

Is your support possible?

I'm sorry to tell you that I don't know.

I've seen it three or four.

I can't tell you.

I believe it's my recollection of the schedule of the modernization.

We have three of Connolly, Schultz, Weinberger.

Right.

That's our budget.

That's right.

And then I recall Connolly is down by himself a little later.

So that is out of our interest.

Let's see if we can get, what do you say you have, the next time it's at 12?

Let's see if we can get...

I'd like to see him at...

What's the start again?

Let's try.

Has Bennett been confirmed?

I don't know.

Uh, we've got plenty of time and I'll hold it, uh, and I'll hold the time on this because it's, uh, for a major thing, I don't know.

Okay, how long do I go on that?

Well, at the 4 o'clock meeting, I'll, that's what we're planning, at the 4 o'clock meeting, I'll talk to them about the script and I'll talk to them about this, and I'll get you up at 5 o'clock.

And then what to do with Arkin.

You see, he'll be gone.

He'll be gone a couple weeks.

And it's just the time that we may have to do something.

It's kind of very effective with Arkin.

Oh.

He does have a blood matter.

And so Arkin is trying to do the next thing.

Well, I asked Arkin, you know, either...

A colleague wanted to recite it in my life, and I wanted to recite it when they made up the list for me.

So I put it on again and again and again.

And I was not confident at all.

I didn't want to be confident.

I thought I was going to be confident.

I believed it.

I was trusting in the day also that this record was the Lord's.

Well, there are two.

One, there are two for sure, and it's possibly if they're a grimmer.

If they're a grimmer, they've got to come up to it.

I understand the remarks.

I mean, getting in the job is a good way to end the job.

Well, that's quite the way to end the job.

We're all set on a rocky shore, and so it is that we have to.

And the gardener said, now I'll take this one, sir.

He only had one, and he said that the dog was all set.

And I asked the question, he said that he had COVID where he'd gotten it, and he should have cleared the tunnel.

And I asked the question, he said, and I said, yes.

Well, I asked John about that man, and I said, I asked the fellow, and I asked the question, and I said, and he's the kind of guy you want.

And John said,

man himself is a wonderful person.

I know it well.

Good friends.

And just the greatest person in the world.

But he just wouldn't stand up to Arthur Burns because he was the guy who was God.

That's what kind of what told me.

Now, Arthur had a different impression.

Well, Arthur had exactly the impression that he was that kind of guy.

Well, I'm sure.

The other guy was named the second president

We've got to be damn sure to get the people that we want them.

Hopefully get some other candidates.

The question that I have is whether we've got any candidates.

We've got to figure that somebody will stand up.

But we're ready to have questions when you're through on that.

All right.

The board gets straight to the rest.

I'm coming back to this whole business of the... What position do you think the economy should take in Japan?

That's a...

I think it's working around about a 15%.

The, um, our time discussion was heard on that for a while, because I haven't, uh, studied it enough.

Although the, uh, serpent can't help but get the message, as the Japanese put it around, that they would be willing to devalue the end by 15% if we ruin the search engine.

and to work on their legislation, which makes it difficult for them to have a real clean flow.

There's a certain amount of stuff about their trade restrictions that they'll remove in certain areas.

It's a good time for Connolly to be there, don't you?

Well, I think it's a good time to start making agreements and make sure he does bilateral agreements.

I'm for it.

I think that's going to track this thing over.

That shows movement, too.

But I think it's also important, if we're going to go down this track, which is basically a different track to somehow get it out, that we're open, we're all covered.

The thing that I like about the Japanese is it breaks them off from the Europeans.

and also a place in Japan at a time when the country was very, very difficult.

And at a time, basically, when they did something for us, something they owed us, but nevertheless they did it.

We are standing right to this time.

And I'd like also, I'd like also for Connelly, for his scope in the Center National, really, to actually be the architect in this,

I don't want the domestic policy of the United States to be affected by this outloaded system of our United States responsibility.

Second, I think, is the turn to the

And I don't think you can get, I guess what I said earlier, I don't think we want to do it.

It's too damn complicated to go down that road.

And I think the moment you start down that road, it's not a speculation to get.

A lot of us understand that you're just wrong.

And also I'd like to

I agree with you, too, that moving in that direction is getting a little crazy.

Any question that's saved for various reasons, all that.

However, let's do it our way this time.

Let's show some independence.

Let's show that we are playing at all times.

Third thing is that I would like to see this be able to develop.

and then backwards and backwards right after the sun.

It would fit the Canadian, at least when the Canadians do have a clean float already.

And at least John has said they aren't willing to work out a, you know, these problems with them.

And I know it would be for a lot of people.

It would be nice to get something in the way of an oil rig.

And that part is tough.

But anyway, the Canadians are not too good at floating.

I don't see any reason why we can't work out something, unless we go up to some class there.

It's beyond the stretch of imagination that in some way or another we can work out something.

They're in a difficult way with the French because they trade more with France than anybody else.

And that's why it's so difficult for them to be valued when the French aren't.

But even so, I hope I've got something with them as a candidate.

I've got something with the Germans.

Because the Germans are very conscious of the American market and their relationship with the Japanese in the American market.

I don't know.

They've got to be some candidates.

I understand all that.

on the Federal Reserve that people will stand up and people live there for well or for other.

How about your fellow over here, the left one?

Huh?

Why not?

He's young.

Put a little young guy on.

Can't do it.

I think that's really his style.

All right.

We'll get somebody that believes what he does.

You've got to balance Arthur with the other end, in my view, George.

God damn it, you're not going to name the people on that.

I didn't ask Berger who he was going to name in the Supreme Court.

You can't do that, John, with all that.

On the government business, you know, there's a lot of confusion.

And all of us have been, I guess, having callers these days coming in telling us about international reaction.

Yeah.

Not only dropped that.

in the lobby of the hotel by some reporters.

And the shock waves from that...

I didn't know.

I'm sorry I missed that.

Well, he indicated that we might be able to press a deal with the Germans separately.

Oh, oh.

And he did that sort of offhandedly in a sort of hit-and-miss press conference in the lobby.

Well, he advised that he'd have some discussions with the Germans as well.

Well, not just got them, but everybody all over the world.

And...

This blue door that you saw about the Dominican shooter, that little slimy guy came oozing in under the door one day, and he just backed around the world.

He had messages from the Japanese, and he had messages from all over.

He had a message from the Italians.

And the message from the Italians was really twofold.

One was that it was terribly disturbed by this invocation in the 17th century.

And the other was that Italy was on the brink of disaster and that they wanted to start talking right away.

But the blue guard chimed in for himself and said, you know, it was a terrible mistake.

Of course, he's got his tentacles in the Fiat.

They're all being very heavy in Italy.

But he did say, coming off Japan, that they wanted the deal.

They wanted the deal soon.

and that they hope that the United States will very quickly send them signals that we want to sit down and talk with them.

Well, the common trip now, of course, is whether... Peterson is worried about that, of course, because of the country.

How many will go over there and make a deal with us?

I don't want to break the law point, by the way.

I don't want to go on one big tell swoop to...

You see, that's another place, John, where I disagree with the Burns.

We all want to send the guy out and put him in Big Five and work out this whole damn thing.

I don't think we can do that because we have too many votes against us.

Where's the State Department at all?

It's wrong.

The State Department wants to do it all at once.

Well, that was my recollection.

That's the last time I heard.

That's normally the way they would want to do it.

But I think Bill Rogers would be in trouble with this.

They're worried.

They're very worried about the third charge.

I know.

They want you to let us get rid of them a little.

But also, they're terribly worried about Japan.

So we knock Japan off first.

Harmon Myers is trying to catch a company in two minutes after Japan.

Harmon Myers?

Well, he's such a dumb bastard.

He is, and he can get in your way sometimes.

Oh, oh, I know.

He's sweet, and he's nice, but he's dumb.

He doesn't know what the hell the score is.

He doesn't even know what the score was in Iran, let alone Japan.

Iran's not very hard to understand.

It's like a little dictatorship.

Yeah, in a way.

Oh, I know.

He's a very good Foreign Service officer.

Very nice.

Gives you a nice dinner, slaps you on the back, and is in the way every damn bit of the time.

We also have to get the seat up together.

We've been waiting and waiting and waiting for a new capacity to come in.

I just feel strongly that we've got a center of high-powered business right there.

A Russian one.

Rush, there's the pipe, exactly that.

I was thinking the part, the pitch part.

It's a dingy sort of out-of-step medicine.

Is it?

Yeah.

You don't mean to read it.

It's one of the great ones in the world.

No, I mean the...

Sort of a moss-covered atmosphere, but the people there, they're out there, they're dingy.

They're not too dim.

They're just good.

Got the shit out of that damn MC.

You know, we were really lucky in Russia.

Yeah.

Couldn't have made for a win without him.

I don't think.

I mean, I guess if you're in India, it's a very beautiful place.

I really appreciate the person who built this.

I really understand how they're interacting with it.

He would make a superb ambassador to China if you ever had an ambassador to China.

He's got the language and he's got the sensitivity.

He's probably not going to be a statue, but he sure knows his way around it.

We're having a movement from side to side.

I don't worry.

We're getting behind campus.

We want to be right there.

That's what we want to do.

And they will follow.

Hawaii is the best part of that operation.

I think you're right.

I'll try to hold on.

That's probably the way these things work.

Maybe people get worried and everybody gasses around and finally gets it down.

But you've got to get a combo of 10 down.

I guess I'll just hold Wednesday to hold that day.

We're working on this situation.

As a way of handling this situation, would you...

I wanted to save as much time as I can on this.

We'll just have to make this international money.

Now we owe, I'll count what we owe George and Keith.

He was happy to wait a little bit.

He said, look, we've got to get these players rounded up up here.

And we're going to get them to be in the Super Bowl.

And he's working.

He's working.

I'm not sure how far down the road he's gone.

I hope the crisis doesn't come later.

There's a poker in the restaurant.

There's some package ready for us here.

The eavesdropping I did on Saturday of Volcker and Berman seems to me to think that Volcker is very loose, very clueless.

We're expressing a lot of dismay that Harper may be for his own purposes, but, uh, I think he just didn't know what to do about this, didn't know what to do about that.

I don't know that Harper called him on all this, I'm sure.

Well, they care.

I remember.

You want to remember, but just so that I recollect.

Correct.

all the crap about the Levanotic policies.

This part, Arthur opposed.

And he's not the one, therefore, to come in and now call the turnoff.

He opposed the then.

He will remember that.

He opposed the then.

Right?

Yes.

Arthur and Wilford both seem to have a characteristic.

in the face of a big decision.

And this business capability, that was a big change.

And we're back to those things, and it's always the nicest thing to say, well, why don't we wait a month?

I know, I know, I know.

Well, do you remember the thing on Penn Central?

On Penn Central, Arthur, it's the main license.

But at the same time, Arthur, it's very important, I think, too,

having him involved in the way that he did at the pre-candidate.

I'll do my best.

Because he has given us very good support throughout.

We haven't had any dissent, no second guessing.

You mean on the way to the press boards?

On the boards, on the... You know, he went the way that he liked it, and he... You deserve very good marks on that, don't you?

I was so surprised.

I didn't know I...

I didn't do something in his person.

I was so surprised that I...

I'm trying to, I'm trying to walk people up and do quite what we're doing.

What is it?

What's the matter with Chris?

He came in and we were all set on it.

And he was interviewed by Jim Hudson and Arnie Weber and Don Rumsfeld and Peter Flanagan and they all said we really can't have ourselves a chairman.

about the subject and so on.

I thought it was a big second guessing and we tried to find somebody else and then I talked to, I never saw him, but I talked to John about it.

And he sounded awfully good the way you hear about it.

And I said,

I felt that he was starting to make a discussion.

But he has a very chosen man.

And what's it told you?

I have a list right now.

He's a presiding judge of the federal district court in my hometown.

Well, you thought... No, sir, I did not.

But I know you just want to hear it.

He's a good man.

Yeah.

All right.

Tough as hell.

That's all we need to know.

And incidentally, you see, so often we are taken in by these showboats.

And they aren't the guys that can produce.

I think one thing that's turned out well up to this point in Brunstall, you know, Brunstall is making the ocean breeze.

They're doing a good job of these things.

Of course, the whole dam thing is no good, but we well know that we're doing the best we can with the lousy system.

The only thing that worries me a little here is that we're starting to get him to believe it.

No, he was quite honest, though, especially Thomas.

That's true.

It's very true.

I never forget those little bastards in the OPA.

They loved it.

They loved to take people around.

Oh, they loved it.

Well, he's got that funny little lisp or little accent, and a very unprepossessing looking little guy, as we'll see.

He sent David back to jail, and he tried to make a call, and then he tried to sell him the piece.

Which one is he going to write for?

No, he's on Beanie's deal.

Beanie's deal.

Oh, that's great.

Great.

Well, maybe he'll think he can run over him.

That's right.

Incidentally, who in the world, this is, I would say, some presidents, I guess we hear, who in the world, uh, blowed down the name and the direction of the Parliament?

Hugh Scott.

For good Christ's sakes.

What, just because he's Jewish?

No, because he's a constituent.

Well, you talk about, you talk about, you talk about quality.

You know what I don't have?

He was our chairman.

He was a nice guy.

We had a hell of a time getting him approved by the bar for district judge, didn't we?

Hugh Scott single-handedly put Arlen Adams in the running, floated him every day, had him right up at the forefront, kept predicting to the press you were about to choose him.

Schreiber did, too.

Well, I wondered about it.

You know, I knew that a lot of the other names, and a lot that were not mentioned, not a lot of the three that you know that were not mentioned, were very much in my mind.

Well, I'm sure that somewhere along the line, Scott committed to Adams that he would make the suggestion to you and make sure that it was seriously considered.

Well, I think he probably sent a letter down here and got a perfunctory answer.

So then he manufactured this big PR thing that the president seriously considered Harold Adams.

And that got pointed all over the country.

Matter of fact, it was predicted in the letter.

Why did he put that out?

And he put out a cock and bull story about how the White House staff had a summit meeting and were terribly anguished over the list of six.

And then the president shifted over from it.

that to Arlen Adams and somebody else.

And he had this thing really going.

And a reporter came down to me and said, now I have this on the best of one of the news magazines.

I have this on the best authority from Hugh Scott.

You guys had a knock-down, drag-out staff meeting here.

And Harry Dent was in it, Clark McGregor, and all this.

And the thing was just made out of old form.

They all think that the trouble is they all think the staff had nothing to do with it.

Yeah, nothing to do with it.

Nothing.

I can't have it.

When I say nothing, I guess every member of the staff must have written a note or a memorandum.

I've got a whole file.

Well, you didn't show me something.

I didn't show you.

I saw the laments, the requirements, because I want to see it.

You're a good man, but you wouldn't do it.

Well, I've got 30 or 40 memos from White House staff over there.

That's great.

But this sort of thing has to be, you can't get people out there colored in the press.

The associate dean of Stanford Law School is going to see me next week.

He's going to smile from ear to ear.

That's right.

Oh, they're terrifically doing it.

Even though he's a conservative.

Oh, yeah.

The whole Stanford establishment is just beating over this.

Isn't that great?

Yeah.

Very, very great.

Very exciting.

Yeah, and Clint, by a little hope, called me up and said, Hot dog, I've got two justices.

Well, actually, he was from Arizona.

Yeah.

Born in Milwaukee.

I went to school in California, now a practice student in Arizona.

And when I left out to the key states.

I don't know how many of you went through it.

That's what you have to do.

And finally it comes down.

We're on the board.

We're on the Federal Reserve.

That's helpful.

The only reason I still don't have that, I mean, I just want to make it.

I figure if you have it, then it's pretty easy.

Easy money.

So am I.

And I sure as hell am.

I know we've got the problems with inflation and all the rest of it.

Let's worry about it.

Let's do something about the jobs.

Well, our people see that.

When I talk to him, I've got to talk to him again.

He does like to think of himself as being a political candidate.

He sure does.

All right.

He...

I mean, everybody must recognize him.

Everybody's about to get their bit of protection.

He knows that.

Go ahead.

Well, I may be a... Maybe at least... Maybe I'm at least qualified to know him.

But I'm not as very sure as I'm not.

I mean, I think the third quarter was disappointing.

There may be a number of reasons for it.

I don't know why, but I think it was tremendous.

Somewhere of it.

It was tremendous, but it was big in the first building we opened.

There's still the inventory going.

They're still buying power.

The tax may well pass, but there's something for it.

But money supply is the biggest.

But after all, we don't need a spectator.

We need some steady good.

Did Argers admit that he'd gotten a lot of money supply like that?

Well, he said that he had this fetus, and he was just starting to tell me what it was, and he got interrupted.

Well, we might have to do this.

We might do this in terms of a quadriathlete for this child.

Let me see what I can do.

I'd rather not get that in the car.

Well, let me see what I can do.

We really ought to do something with the money supply.

What I meant is, so that input gets in there.

So maybe the quadrate I want to consider that.

Nope.

Or the tri-quadrate.

Well, I've got to take on, I guess, 506.

You know what I'm talking about.

Tomorrow is the 10th week of April.

He may bring up the Office of Intergovernmental Relations with you, which is something he deferred after he got back.

What's he going to do with it?

Well, he, of course, wants to run it, and that's fine, but then there's the question of who should be the executive director.

He may raise that, but he doesn't.

He does.

You might want to call Bob and have him come in, because now it's been quite a bit of work on that.

And our feeling is CD4 should not do it.

And the effort there is to get a high-quality guy, because Peggy's gone so much.

It would be great help.

Yeah, you all set?

Ready to go?

Okay.

All right.

All right, sir.

I'll walk with you.

You ready to stop?

No.

That was the flag down, so...

Is there another congressman coming?

No, I didn't.