Conversation 491-028

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I'm going to call Presley Olive in front of the camera, and you're going to be able to see that she's called George.

All right.

Well, see, we're still waiting here.

They want to take a picture of us.

There's Paulson over here.

He's here to meet you.

He's over here.

George.

Oh, we've got a lovely day for you.

It is.

Where the men's rolling in.

Thank God, I went into 20s.

And the way they write is wrong, if you're pleased.

Maybe 20s was the last time.

Is that right?

20s and 10s were the most significant period of time.

Oh, please don't read that.

Well, I never listened to you.

You never worry about what you can't control.

Okay, fine.

Well, if you had a chance to talk to Mr. Solomon about our...

are desirous of his assistance.

I have.

We've been talking about you, I think you should know.

That's not right.

Yes, I've talked to Ezra on several occasions.

He's agreeable with me.

Good.

We have started the political security clearances, and that certainly, of course, can't be announced until, yeah, until that certainly is done.

That's what I'd like.

I should be very pleased.

What about our time factor?

Wouldn't you want to be able to come on?

Wait a minute.

You're a senator, aren't you?

You've got to finish the year, don't you?

I've got to finish the summer, which is very sensitive.

I haven't come.

I believe if I don't get it, it doesn't suit me.

I came down here a few weeks.

I swear, I was here in September.

So actually, that's, that's, that's not true.

And as far as medical consultancy counseling is, someone's good to come in and out and get good.

Yeah, you can take them, take them right back.

Well, you're coming at an interesting time.

It's always interesting.

But when everybody is trying to guess what the economy will do, and everybody gets obsessed with certain numbers, we reach this, we reach that, et cetera, et cetera, et cetera, the only, perhaps, aspect would be

is that it's not about weather, but how much it's weighing.

That's good.

The direction is pretty good.

I think it's important for us, of course, not to be too bad.

But we're not going to die.

We haven't missed a little under for that kind of a report.

And two is to give the country an assurance

It always comes down.

It comes down last.

It goes up last, as a matter of fact, and then down here.

It comes down last and then up here.

So it hangs tight.

We've got to, because we've got to prepare the country for the fact that it's going to be hanging tight for a while.

And of course, as far as prices are concerned, we had a new section in the first quarter.

The second quarter may not be as good because we've had a good bounce from Harvey Trace.

And that's done now.

We've got the other hand.

But it's still the right direction.

The major thing we have to have in mind is that there is a confidence factor, and the confidence affects the stock and the bond market, business, planning, and even, eventually, consumer.

This is enormously affected by the degree of confidence that we seem to have, not in a Pollyanna attitude, but certainly, as George Schultz has said, it's there you go, but you're not.

And that's the line we're trying to get across.

But we, as you know, in this field, you have enormous, varied differences.

I remember when Pierre was here a year ago, he said, you know, on the planet, it's going to go to 7.5% or 8%.

I think you're not going to go to 5%.

I think now you should be more optimistic.

In fact, others have moved in other directions.

Paul Sanderson.

I don't mind him quoting him on a Saturday.

Some of them are really good for prognostications.

They don't base it too much on the assumption that knowledge is going to be bad.

That's what he'll say tomorrow until last week.

And retail trade.

So it looks like we don't have any, we don't have the April figures yet.

We don't have the April figures.

I was talking with Harry Cunningham at Crested.

Crested, right?

He said that Friday morning when you see the retail chain store, that's for April, you're going to be quite startled.

Yeah.

But the chain store, I watch those figures very closely because I think that's a better or a better consumer sentiment than those polls.

I don't know how you're feeling about the future and so forth.

It depends on which side of the bed he got on and a lot of other factors may have to do with what he does, those decisions.

If that retail sale has a pretty damn good pull, isn't it?

Oh, it goes in there and buys.

That's a pretty good pull.

That's what he feels, huh?

The chain stores, what they were, no, it wasn't the first.

a couple of weeks in a row.

But again, the weather had a lot to do with it.

The ladies had something to do with it, particularly the weather.

But he makes this up.

He makes this up, and moreover, he says some of his counterparts have been calling him on the point of the call was obviously to test him as to whether he had any experience training.

In other words, he got all of these citizens

Well, here it would be that both mail orders, Mr. Gershon, he was a chief contractor of both of them.

McArmy Ward, we've heard it from Sears, but McArmy Ward, a very conservative mail order, I'll say the same to you.

And their mail order businesses, to start from, their overall business seems to be not in that, seem to be more of a register of what the consumer decides she wants to do for herself, as distinct from a promotion of some kind.

I think it was really funny that people didn't do mail order.

It was a big business.

It was a huge business.

It was amazing.

Even in cities, people were writing in order to get it.

That's one way to avoid the business.

Well, yes.

Well, anyway, the...

I'll be able to, in a little bit, they're better, better, the import penetration is very high.

Yeah, I think I've answered the question.

Yeah, about 18%.

Yeah, rising.

Yeah, we've got to grapple with that.

I had Peterson this morning.

He could go ahead on a major Japanese.

study that action.

And the council is going to have to make, like the council in Tucson, probably looking into this too, is to really see what is the United States going to determine it's going to make and what is it not going to make.

I mean, we live in a world, it's like, you use the analogy of foreign policy, many of our good friends in the Senate say, if you're disarmed, don't build a meeting or don't do this.

I said, hell yes.

The trouble is that we don't live in the kind of world where everybody looks at it the same way we do.

If we live in a world where everybody else took the same attitude with regard to their arms, then we could go down.

One is when you're a potential opponent in the world, or at least your major potential opponent, building more of an offense and a defense, and you've got to look at your whole card and see what you're doing.

And that's the basis of where I sit.

And so it is in this field.

We believe, as George and Paul say, I'm a trader from way back.

But if you're going to have free trade, you have to have free economies.

Or at least to a certain extent, you've got to have the same rule of supply.

If you live in a world where barriers are constructed all over the world,

the Japanese, to use that as an example.

And may I say to Europe, he has a bit of a dent on the Japanese, that the fact, George, that only 5% of Japan's trade is with Europe is an indication of how well the market is down and keeping the Japanese out.

We're the ones, we provide 31% of all of Japan's exports.

Now, what do we do about this?

Of course, don't tell the Japanese, look here, we're going to cut you out and force them to go to other places, but the point is,

We really have to determine what is the United States going to make.

Are we going to quit making, are we going to give up on our own business?

I don't know.

Well, at the present time, what you folks have got to do is to take a long view and get in these cursive businesses that you sold.

The point is they look only at their own speaking businesses, whether large or small, and they can't see any broader pictures at all.

But we've got to determine, and the laborers are saying, and every one of them, they say, the private, for the business guy to throw off the laborers and dishonest thing, and for laborers to throw off the businesses, they've already looked at it.

They're both of them, they're their own soft genders.

But the point that we have to make is that

We certainly ought to be able to take a long look ten years ahead and see what we're doing and what we're making.

See what we expect from Japanese.

The game is only this.

The game is Japan.

It's Europe with Britain in the market, which it will be perhaps, maybe, in two or three years.

And looking down the road, while it isn't systemic against the Soviet Union, it will play its role with a very poor

productivity by our terms, so the ability to play and use economics for political reasons, and with the Chinese, I mean, with, they don't, when you think of the infinitesimal amount of their GMP compared to the Japanese at the present time, you can see that those who were, those who were concerned

what the trade stakes are with them, and the rest are just out of their minds.

But when you consider the Chinese as a people, what they do when they're in Singapore, when they're in Taiwan, when they're in Bangkok, or for that matter, San Francisco, the creativity, the drive, the intelligence of several of these people, you can take the lousiest system in the world, and eventually there will be some

So that's part of the Japan game.

Japan may have another way to look.

So we have to consider that.

But what we really want to find out is, I think, we ought to make a study of major American businesses.

and the commodities and so forth and say, what the hell are we going to build?

And one thing we do know is out there behind us is agriculture.

That's where we are highly competitive.

But here in this place, where our costs are the highest in the world, I mean, farm labor and all the rest, by golly, in agriculture, we outproduce the world at lower costs.

But maybe the rest of American industry can learn a little about that, too.

Maybe they can start being a little bit more productive.

Isn't that what it's about?

That's very complicated.

That's a machine.

Well, one thing that I, well, I should, one thing that I think particularly that Paul talked about, we've all talked about this, where I think you can give a dimension to our studies that is very helpful, is to take a good hard look at the whole of the national, the very national position of the rest.

But, also, in terms of, you see, I have a different theory about the world than the State Department people

they actually have to think of the crisis in the moment.

So they're worried about Vietnam, they're worried about the Mideast, they're worried about the little things that happen in Latin America, which don't worry them a lot, because no matter what happens in those parts of the world, it's going to affect us for a long, long time.

So the big ball game is that Vietnam is important.

It will be ended within a reasonable time.

That game is done.

It will always be a terrible crisis because they're not going to remove the so forth that are there, competing interests, great outside powers, let alone the hatreds of the people who live in the area.

Nothing's going to go, no agreement, nothing.

So we've just got to get a little bit of that thing.

But for us, it's...

First, at the present time, this is the Soviet Union, the Soviet and the United States.

We've got it all.

If we don't, the world comes apart.

And so we play a hard game of that politically, militarily, and economically to the extent that our economies can.

But that's the present.

The difficulty with the West is that, and particularly the United States and the West, Europeans do look forward a little bit more, considerably more,

is that we always are a crisis-oriented crisis at the moment.

And we do not want to take the long view.

Now, anybody who takes the long view now has got to realize there are many issues in the city.

So Vietnam is about Vietnam.

Vietnam is not about Vietnam.

Now it's been conducted in the student venture, but none of the rest.

But Vietnam and overall, Vietnam and Korea, it's about Korea.

It's about Japan.

That's what the whole business is about.

It's about Japan, it's about China, it's about the Pacific Channel, and so forth.

So looking to the future, 25 years from now, whoever lives in this globe and in this country, Europe's going to be, of course, there's still going to be a hell of a factor.

But you look out there across the Pacific and you see the Japanese,

who are an enormously dynamic, creative people.

They like the Japanese.

You look at the Chinese, and not because they have a common discovery, but because they're Chinese, they're going to play a hell of a role in the world, right?

And you look at the other peoples, and all of them potentially, I mean, and you compare them, for example, with the Africans, as you compare them, even with the Latin Americans,

There's a historical depth and there's a potential that isn't there in the other parts of solar storm.

This whole continent, they talk about it's a sleeping giant, but it's awake.

It's awake.

It's coming along.

It's moving now.

So what we want to do is, and we won't get any credit for it in our time when we're here, what we want to do is to do some real forward thinking about where we're going to be and where we want to be 20 years from now.

Because if we do that kind of thinking and make some plans,

It sets the things in motion.

And we won't come 20 years from now to an enormous economic crisis that we otherwise would have.

Now that, I don't mean avoidable.

I don't mean we can predict what the world is going to be exactly like 20 years from now.

But 25 years from now is going to be the year of the sun.

No question about it.

My mind is going to be...

I mean, just because of the pull of the people, because of the pull of the, because the Europeans are going to be important, sure.

Our God, he can't take the Germans.

The British are going to make a comeback just because of their capabilities, probably.

The British, you know, the Italians, they'll never ever be better, but they are a strong people, you know.

But here it sits, the United States, right in the middle of the whole deal.

We currently look at Europe, we look at the Middle East, we look at the Russians.

Those are our current problems.

Those are the problems.

How we handle those will determine how we're judging the moment.

But down the way, the game is out there specifically.

That's why this whole Japanese thing has got to be put in that context.

What we do with Japan,

economically and politically, and what kind of a relationship we work out is going to .

What I mean to say is that we will not be here simply to give us your economic judgment, but we're interested in your evaluations, historic political trends, and so on.

It'll be interesting.

I've been to Berkeley.

You have?

Oh, sure.

53.

It is, as you know, we do not have much these days because of the change of governments.

In 53, I was there.

You knew I was the ambassador.

I mean, the prime minister.

And I went to PAYU.

Yeah.

I've got some memory.

I was in PAYU in Texas.

Yes, the language.

Yeah, yeah.

It just happened.

There are a few fans now.

One of them was five years ago.

Do you ever hear of Herbert Hoover?

He wrote about Burma.

He was a great man, actually.

I didn't know that.

He said, yes, he was in Burma.

He said, Burmese are the most, well, he said they are the most pleasant people.

This was, of course, 50 years ago.

It was a great race.

He particularly...

I remember that from the briefing I had 20 years ago when I went home.

So, I heard Hooger's comment.

Even that is true.

I didn't think anything of it.

Oh, it's true.

I had that bloody sense of humor and laughter.

That was it.

Humor and laughter.

It was a great tour.

Yeah.

Well, you've got the same situation in a very different way in here at the end of the day.

The tourism is down in Nassau, it's down in Jamaica, it's down in all these other areas.

And the reason is not because they aren't few places to go and why they find places to go, but because of the bitterness and the hatred and so forth that they just aren't going to go.

We talked about the clerks a moment ago.

They aren't going to go where people are mean to them.

And frankly, that's the problem with the French.

I mean, everybody can go to Paris, but it isn't because France is expansive, it's because the French are just a mean bunch of people, and they treat you so badly.

But you know, the famous French line that somebody asked him, asked the French, he said, can't you be nice to the tourists?

He said, we don't like the tourists, we don't like each other.

I think in the countryside of Burma, my guess is, you would still find the Grace.

It's in the cities.

The cities are as stressful as the world these days.

Now, go to New York City.

It's a horrible place.

Huh?

Yeah, but it's worse.

It's worse.

In New York, you could go to the little restaurants and bars and so on and so forth.

But I think how many most of that has gone now.

You leave a risk.

Oh, yeah.

Everything.

Going from each month when the new consumer price index figures are down.

They're the worst.

New York has gone skyrocketing again than everybody else.

You know what that does to our numbers?

That pulls them up here.

Because New York has a hell of a lot of rights.

It's 10% of New York State and the whole country.

That's about right.

California's ten percent.

Well, they say that the Burmese, uh, that the, uh, that the Chinese, that they...

Cannot be bad.

They're amazing.

Extremely good.

Yeah.

I've never met anybody.

You'll find them on that trip.

They win.

They get a grand prize.

It's not quite what it comes to.

It's too bad.

It's a rich, you know... You look at Burma, in terms of its resources,

I said that.

Anybody who told me, say 1940,

The human mind, they build the poorest per capita country in the world, you know.

This is what they're doing, and they've done it.

They've succeeded, they've just passed, and they fall down to the bottom.

They fall, or Bolivia, or... Below.

Below.

Below the old.

And it's unbelievable that they can do this.

It is, really.

They've succeeded.

It's like losing ten times in a row.

That wasn't true in 1953.

It was better than some of the terrors.

And the general is supposed to be here.

It's terrible, isn't it?

Crazy in the head and very sick physically.

Yeah.

You know the economy?

Yes.

What, what, what, what?

Paranoia.

I think the country is going to have paranoia.

I think things are going to get out of hand.

More people are leaving.

Even those who are firmly socialists, you know, are in favor of this.

I just got a call from Canada again.

Call this meeting off.

I don't think it broke up easily, but let's pick it up.

It's not happening.

It's not lasting.

It was, uh, when I was there, right, it was a lovely city.

We're still there, ain't here.

Cool.

You will, uh, plan this, uh, very frustrating, I think, issue now.

It's a frustrating issue.

Everybody mentioned how the government can do that, when you get a new fine, it can't go away.

And you will find it's just frustrating.

You can find the police, or if they're supposed to move and shake the world, they can't do a damn thing.

But on the other hand, because it is so frustrating,

who say it's like war, it's one of those things that you would never miss, but you never want to do it again.

Is that fair enough?

I always tell people that before they tell me.

But if you have a good group to work with, you've got to get Paul or Herb Stein, George Shultz.

And then there's another French in the White House, too, that is extremely good, Pete Peterson, who knows you, of course, but you know him, and Plantinga,

Yes, San Luis Obispo State.

He said, well, not quite late enough to do that.

A million awards.

Now, I'll just say, well, we wish you the best.

We hope that you'll bring your family food and you'll move your switches here.

It's going to be too difficult to find places to live.

It used to be in Washington, but they're at a nice place now.

It's not here.

It's in New York.

One bit of advice is this, that Washington real estate

No matter what happens, always goes up.

It's all overpriced, but in terms of, you know, you buy, you wear, you buy, it just goes, that's all.

That's all I know, I mean, I'm not hearing, I did it, but sometimes it gets in the mind.

That's right, that's right.

That's, we had to, you know, we had to be sure that we had products.

That's the thing about it.