Conversation 498-011

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I had another go around with our friend this morning.

Here is the problem.

He says this has been drafted by the Politburo.

And he says they've never done this before.

I believe it because there's so many conflicting interests involved.

And that the previous time when I told him to substitute a word, they said it's already implied.

in the text, and just to make sure they're willing to make a public statement that says they're committed to making an agreement simultaneously.

He said, if I want to change, he has no authority to change the text of the Public Bureau.

If we want to change that word, then he has to go back and it will take two weeks.

Now, and it caused some irritation, now we have these choices.

I just want to put them to you.

And what he is willing to do, and I'll show you the text, he's willing to, when we exchange these letters, is to give him a statement saying, when I told him that the agreement should be simultaneous, he told me on behalf of his government that this was unnecessary because it is already implied in the text.

And, of course, there's the public statement they will make which commits them to it.

Now, we have three choices.

We can go back to them for two weeks, for another go-round.

And he said they'll almost certainly accept it.

What he asks us to consider is whether it's worth the irritation it will cause.

Secondly, we can accept it.

And thirdly, we could do something in between, which is to say,

that I would call him in and say, the President accepts this.

However, since you tell me that it doesn't make any difference to you, and since he feels it makes a difference to him, he would like to ask you to change this without making it a condition.

And he would certainly appreciate that.

The advantage, if there were no other considerations,

In general, one should play it hard with them.

The other hand looked at from our side now.

The danger that I see in waiting is the following.

If this goes another three weeks, two weeks, they'll babble on in Vienna for ten more days.

Their proposal will leak.

So that by the time you go public, it will look like scavenging on Smith's deal.

I think that's the fundamental consideration now.

It just depends on whether we think they're going to break their word.

What does it really say?

May I read you the upgraded part?

There are two hearts and flowers paragraphs which you... Will this be made public?

No.

What is made public is easy.

What is made public, we are on easy street.

The governments of the United States and the Soviet Union, after reviewing the course of their talks on the limitation of strategic armament, have agreed to work out this year an agreement for the limitation of anti-ballistic missile systems.

They have also agreed that, together with concluding an agreement to limit APMs, they will agree on certain measures.

To limit ABM.

They will also agree on certain measures with respect to the limitation of offensive strategic weapons.

That is... Certain measures.

Yeah.

Well, what they are, that isn't...

The two sides...

The two sides are taking this course in the conviction that it will create more favorable conditions for further negotiations to limit all strategic arms.

These negotiations will be actively pursued

So in the public statement, they are committed, there's no problem with the public statement.

All right, now go ahead and private it.

The one thing we have, he hasn't yet agreed to this year, but he says there's no problem, he just has no authority against the check.

How long will it take?

Mondays.

He hasn't had it this year.

He says it's no problem.

That's what we're talking about on a priority basis.

Otherwise, we're saying we're just going to continue to do what we've been doing.

Wow.

I mean, there's no question about that.

I'm looking here to hear.

That's right.

And they will publish that as a Soviet government statement.

No.

Who sees this?

Everybody.

No.

Just the president will.

The first two paragraphs, they're peculiar to ours.

That's not in theirs.

Theirs picks up with the third paragraph.

What do we, uh, how much of this becomes public?

Nothing.

Except for the fact that there has been an extension.

We saw what Mr. Rogerson said.

Yeah.

If you don't, Mr. President, your active role will really not be that.

Oh, of course.

Just want to be sure we do.

We've got to be goddamn sure that they know who's done this.

Because I know all these boys play the game.

And they're going to know.

Well, I think you'll convince Smith.

Oh, yeah.

Oh, yeah, and Rogers, too.

Smith will convince Rogers.

Proceeding with the situation, Rogers.

Yeah.

Good, good.

Oh, yeah, that's why he says they'll certainly accept it.

That's the difference.

That's the long term on the next paragraph.

For all of this.

I wanted to change it.

I wanted to have the word worked out in there.

This is a commitment to make the basic understanding before the other one is completed.

There's a difference between an agreement and an understanding.

That's the same degree of formality.

That's also why they want to use the word disgust.

Oh, yes.

Well, yeah, but that's going to be tough.

All of this is going to be tough going.

There's no question.

I think what happened, Mr. President, was they started out with this on this tab, started pulling back from it.

Then when they yielded, they put it in the press statement.

The press statement, they say they will agree, which is the easy one.

What's he say?

What does he say to the understanding?

How does he plan it again?

He says the following.

He says that his government believes that it is unnecessary to change it because this is implied in what they said.

I told him to say the agreement and the understanding would be completed simultaneously.

He said that's implicit and it's unnecessary.

He says further, they have this public statement in which they're committed to an agreement.

And thirdly, he's willing to let me hand him a piece of paper that says, that quotes what he told me.

He would say in effect.

When I raised for the ambassador to bring him.

understanding the agreement should be completed simultaneously and that this should be incorporated in the letter, he communicated to me the view of the Soviet government that this was unnecessary because this was already implied in the letter and explicitly affirmed in the public statement.

And I didn't make the agreement.

They made it in the record.

And so you've got this whole record

If you've got that name in there, we can charge it with breaking and so forth.

Do you really come down to it?

They don't want to make the agreement.

They're not making anything.

No piece of paper is going to make it.

Oh, no.

The only question is if they want to play rough in Vienna or Helsinki when the meeting takes place, whether they can then say all they are bound by is the letter, not the public statement.

But if they don't want an agreement, they can find 500 other ways of stopping the agreement.

And they can then say, we drafted this thing sloppily.

And that will be partially true.

We are great to say that.

Yeah, and we'll have some vested interests in the bureaucracy which will want to prove that doing it out of the White House has its disadvantages.

On the other hand, the price we pay

If we wait, it's when their author or alleged author becomes public that then the impact of this is going to be substantially lost.

Well, look, if this reads disgust, isn't that what Smith's already got to be on?

No.

With him, they didn't even agree to discuss it before they said discuss afterwards.

They agreed that they will make a read to basic understanding.

I didn't say that.

The Soviet government, I'm just now reading.

The Soviet government favors the principle of freezing strategic offensive weapons and is prepared to read to basic understanding on this point.

As President Saul just agreed to discuss, so now they say they will agree to read to basic understanding on freeze.

The question is when

Are you ready?

Yes, sir.

It would be neither.

No.

I could say to him.

He changed that word.

It's one drop.

What do you want to...

Otherwise, sir, if you believe, uh, it will do an announcement on Thursday.

I think that the best thing, now, the other thing we've got to understand, are we, by going to this announcement on Thursday, jeopardizing the appeal?

I will enable you to take advice.

Huh?

Yes, sir.

I think you tell...

If anything, it helps you into position.

See, one inventor took this, doing it now, looking at it cold-bloodedly domestically, is, if you pull this out of their hand, after having sold China, what they had at the end of the day, particularly the public, the public statement, I think the public statement is part of the record, too.

The public statement we couldn't improve on.

He must check it, but he is certain because it's in the letter.

He sees no reason to agree to work on it.

I already made this issue.

The public statement is part of the agreement, too.

I don't see how they can get in and they can get out.

No, we can sit it.

Discussing this, sir.

Particularly if you've held that exchange with them, as to what disgusts me.

Thank you, sir.

Well, so far so good.

Everything's going along nicely up to this point.

Do you need a camera?

Do you want an American camera?

No.

Well, we're making you do it.

I'll be scared to death.

We're making you do it.

I'll be scared to death.

I had a couple of questions.

I thought it would be useful to have a just a brief chat about a couple of things that I think you're already familiar with in this whole safety net environment and the rest.

And after that, I'd like to repeat to go into the

Now, let me begin with, if I can, with my own views on, which I understand, John, that you've incorporated some of this in the speech, which I would further endorse.

And candidly, all of us want to clean up the environment.

Everybody is for safety.

That promise I should be saying.

There are a lot of people who

who claim they want to clean up the environment for safety and in the name of those causes, rear out the destroyed system.

Also, there are well-being people who want to clean up the environment for safety and who really want to destroy the system, but are so obsessed with the issue that they don't look at the cost, in other words, the cost-benefit ratio, that, hell, everything that man does does something bad to the Earth or something good.

I mean, it's a question of balance, not element.

My views, I have expressed them publicly and privately, and I'm expressing them amongst more and stronger private leaders.

I am very much concerned by those, by the attempts of those who use the environment and the safety issues we use to our consumers in its broader aspects for what I think are very detrimental and negative purposes.

Now, we have to fight sort of the delusion

we have to fight a delay in action because basically the House and Senate all read the polls and that sort of thing on these issues, then it's the old story.

You can't beat something with nothing.

So therefore, we have an environmental program.

We've got a safety program and all the rest.

But I am extremely aware of the difficult position

We put many American businesses in by going overboard on these issues.

I'm aware, for example, in the field of automobiles, that when we have these safety standards that are too rigid, that inevitably it simply weakens an already terribly weak, heavy position with the cheaper, smaller European and Japanese cars.

So for that reason, I have played a very hard game

with our own people.

John Irwin is handling Ruckelshaus.

We're doing as well as we can, having in mind that we have heavy legislative pressures here.

But we will find a place to deal with that situation.

On the safety side, I can only say that I think most of those people are crazy.

I mean, the seatbelt thing with the fire going off or the lights flashing and all that sort of thing.

Ridiculous.

It's all ridiculous.

And it's going to be stopped for everything.

The airbag is what really convinced me when I heard that nutty thing.

You know, an airbag when I was flying off and this and that and the other thing.

And they can't get anybody tested, from what I understand.

Or some can't get them tested.

But anyway...

Anyway, we're not going to have it.

We're not going to have it.

Now, in this field, what we really need from you and what we need from your colleagues in the industry is that let's be darn sure that you've got to get on and off the top of the cars.

You've got to be basically a business statesman.

All presidents of GN have to be.

Because you're so little, you've got to be.

You couldn't survive in the world today without that kind of an image, so to call.

Now, on the other hand,

If you will, I want you to have in mind that here in this place you have a group of people, at least from the White House I will add, we of course have some influence in the administration at times, but we, you have people who philosophically are very much in your corner in terms of your competitive position, in terms of

of trying to defend the system, business interest and so forth, a catch-on warrant, and sometimes it seems to be very unwise attacks.

And if, so if you will, through Erland, where he, and I guess that's the best of my shots, your shots.

On these subjects, I think so.

On saving the environment, through Erland, having a man, or if you, if it's important, he knows how I do.

Either Peter Flanagan or I, interchangeably.

Peter Flanagan.

So that's on the show on that subject.

So I don't know what you get.

And also in the industry, we've got to use that opportunity.

Very, very good.

I think that's a very constructive attitude.

I think that's very, very good.

We appreciate it very much, Mr. President.

We're dealing with something that's highly emotional.

We're dealing with something that's highly technical that people just don't understand.

Sure.

If we have an answer to the internal combustion engine with all the heat and all the pressure and everything else that's going on, and we don't have the standards that we're talking about, but we're working very hard and we're coming close, but we still don't have the final answer to it.

From a safety standpoint, we've been working on safety for a long time.

and only have to look at our record of safety in the United States against any other country in the world and understand the inherent safety that's present in our vehicles.

The industry tends to take the brunt of this battle, not understanding the fact that up to now, the proportion of safety in the law and the legislation that was supposed to apply to the drivers and the states

has not been implemented in any great extent at all.

What we need, I mean, our traffic enforcement, half of the accidents have been caused by people not drinking.

It's just quite obvious that we can never build a vehicle that handles cars, right?

And you look at some of the old cars that are on the highways today, they're improperly maintained, they haven't got good tires, they haven't got good brakes, they haven't got good steering, people are reluctant to stop them.

money for maintenance, unless it's absolutely necessary, some form of compulsive inspection has got to come before we're ready to get to the next problem.

So we can keep on understanding things to be added to our own, you know.

Now, speaking about the airbags, the airbags in Tennessee might be able to work out, but they're just terrific problems to solve.

First of all, nobody knows whether it'll last the life of the car.

Nobody knows what it had a certain firing to do.

No.

The thing goes off.

I'm expecting that one to be harder than that.

And then on top of this, if you can get us some attribution, believe it or not,

And we'll be present in this thing that's going down the road.

Every accident that happened, either because it went off too soon or it didn't go off when it was supposed to.

So these are things that have been concerns in this area.

Well, the thing is that we have got to, the pendulum has swung too far.

That's right.

It's swung too far against business and against your business and I know it.

And maybe we have, well, I have not been interested in it.

As careful as we should be, we're basically fighting as we need to accomplish this.

It leads in that direction.

It's not our doing, but I do.

But we are determined to try to reverse the time as much as we can.

Listen, I know that you are, and I really do.

And I just hope that we can get against the arguments and all sorts of things.

The whole thrust that's got to be is to keep the trust on jobs.

That's the way you can convince them.

Because labor is a big job.

So what do they want to do with it?

They want to have all these darn requirements and then send the jobs to Germany and Japan.

No, not that.

But anyway, as far as I'm concerned, you put the darn airbag in that car, it's crazy license.

We should see if we're looking at trying to meet the 1973 standards right now.

For which safety or car?

For safety, yeah.

We want, in our policy, to call it a completely passive system.

So we're trying to, well, we can't have the airbag in 1973.

We're supposed to have a passive system.

What does that mean?

Well, Pat, when you look at it, this means that you get in the, you open the door of the car,

and all these belts fly in place, and then you sit down and you close the door and all these things lock automatically.

So you're going to be belted in, but it looks just like you're getting ready to dive into a circus now, really, to get in there.

Is that required?

It's going to be required.

Either this or the O-bay by 1979.

Oh, no, no, no.

This is the regulation we're working on, and it'll be about a month before anything surfaces on this.

Procedurally.

So this is just your private information at this point.

But this whole subject is very definitely... On the review?

Well, it's more than review, actually.

Yes.

Well, we're trying to do our best.

I think the best thing for you is to just act as if you expect it all to happen.

Just let me tell you that...

What we have to do, John, is to get ahold of those nuts over there in that department.

We have them, Mr. President.

I've got a letter here for you.

Is it basically the Department of Transportation Bureau?

Well, it's been there quite a while.

Well, there's a man there that we appointed who is a victim of the system, partly, and partly is a zealot.

And partly a victim of the publicity.

He has yielded to what he considers to be overwhelming public pressure for this thing, and without any balance in it, as near as I can tell.

The Secretary understands the problem.

He acquiesces in your...

view on this and i think in about 30 days we'll have them both on track airbag well it's it's all covered under one regulation and this uh way to do it is very simple well this delay procedurally the manufacturers have filed petitions for reconsideration and the reconsideration process is underway and on about the 14th of june

is the final date for action on those petitions.

So that's the time frame within which we're working.

You know what I'm talking about?

Yes, sir.

You see, I couldn't say that this is basically a court thing, but it is not.

It's a damn regulation under law, as I understand.

And I'm glad you said that.

I never want to see it again.

I didn't know this law was there.

I think that that kind of regulation

You know, it's just an issue that affects the economic impact of that sort of job.

You as a lawyer, and I as a lawyer, you're a lawyer as well.

Well, it is wrong if you cannot have that kind of enormous impact without

I just can't imagine the Congress passing such a law.

Well, the Congress has swept up in a number of these things.

The air quality standard hearings are going on now before Bill Rumpelstiltskin.

And this was a piece of very tough legislation.

The air quality is one that has more appeal to people.

It has direct economic impact on the fact that we found ourselves in a situation where we could not go up.

And simply say to the Congress, we're against air quality regulation.

So we tried to soften that.

And you can't be against safety either.

When you take the airbags or take the seatbelts and shoulder mounts, about 35% of people would ever use a seatbelt.

And there's only about 4% of people who never use a shoulder harness.

Now, you should use them if you're going to have an accident.

You're better off to have them than you are without them.

But the fact remains that they don't use them.

And now, what this is, is finding a way to make the use of this stuff mandatory.

And of course, it's going to raise the price of our products.

Of course, the cars are the savers.

Ours are the savers.

Really good sounding drivers.

You ever drive a German road?

Yes, sir.

It's scary, isn't it?

It's scary.

Everything's working out.

It's a kind of racing.

Well, I mean, I've been there.

They just put the accelerator on the floorboard, and away they go.

But the accident, the accident right in Germany is about two and a half times.

Right.

Japan is four times.

England is twice.

Yeah, yeah.

You see, the thing about our accident rate, people point out that more people are lost each year in auto accidents.

It's already killed the whole world.

It's not true.

But the thing is, we've got so many damn cars we've got.

Everybody's driving one of these monstrosities.

You know, it's a weapon.

I would never drive one again.

You know, I got hurt in a car.

Well, because of the, when I was in California, but I had that, you know, I don't touch one now.

You get out of practice.

You've got to learn all over.

You get out on the California freeway with an automobile, you've got to practice it.

You need to go up to 70 miles an hour.

If you're driving a car long, you better turn off your hand.

Now, the other subject, but let me say, whoever figures is the best.

I mean, you know the...

And also the thing to do is to handle it very discreetly.

We told, when Ford was here, he raised a couple of these points, but the thing is to do it very discreetly because if it just looks like it's all in the White House, we'll take business out of it.

On the other hand, just let us do it.

Now, let's come to the piece.

Have you discussed with him the business about the Japanese?

In general, there are five specific issues.

Well, we aren't able to say yet what we're going to do, but we're thinking about it.

We don't know what we're going to do.

It's ridiculous.

It's ridiculous for them to put all those regulations on to keep us out.

And then, for our smart, free access to our point of view, no.

I think, however, that the Japanese are very much concerned about the United States attitude.

Sure.

I just came back from Tokyo.

There was an export there.

The one, not the biggest, but the one big.

The one that's going to be the biggest.

It's going to have to be, Mr. President.

They've got Japan now as the second largest producer of vehicles in the world.

They, up to now, have been able to get by with most of their production in Japan.

I think they're going to reach a saturation point in Japan.

And I don't think they're going to sustain the production capacity that they've got on the basis of their domestic market, which has ranged from 15% to 20% in most cases of their total production.

They're approaching a point where they're going to have to export probably 50% to 60%.

of their in order to be viable.

And we haven't come up to that problem.

Right.

And that's the one we want to anticipate.

Well, of course, we will be looking way out for years from now.

They're going to make it because, you know, basically, it's the Chinese.

This is dreaming now, but it's going to happen.

Southeast Asia is going to go up.

In other words, the market down there for the kind of things that can sell in countries like Indonesia and Thailand and China itself and so forth can turn out to be just insatiable.

But right now, for the next 10 years, we have a terrible crunch.

We're going to have a crunch.

We can also have a crunch down the road with respect to them.

I don't know how free this trade is going to be.

We, for example, are trying to get up to Korea.

At the present time, there's a very low market.

But the price of the mission in Korea is going to be the establishment of a local Korean automobile industry.

So Korea is not going to be open to them.

So is Korea going to build their own economy?

Korea is going to build their own economy.

It's the same as all these Latin Americans are trying to do.

And when you get to China, they'll have their own economy.

Or they'll have it on the basis where if you're going to participate in the economy, you're going to build it in China instead of in Japan.

I see.

Mr. President, if you'd like, I can outline the strategy.

There are at least three things we very much want from the Japanese.

One is a significant revaluation again.

The second is a lifting of the investment restrictions.

And the third is a major curtailment of all those restrictions you and I have talked about on imports.

Now, my thesis is,

that while they will talk about liberalization and talk frequently and eloquently about it, the speed of that liberalization will be very unsatisfactory from our standpoint.

And therefore, the way to get them to speed it up is to take something and anticipate it that is of great importance to them and simply withhold it until we resolve not a destructive situation, but one that's fair and equitable.

And my view is, as I look at their steel planning for 74 and 5, tremendous expansion.

You would know more than I about this, but I assume they're planning to use a lot of that steel in automobiles.

They look like they're planning major.

And I think automobiles may be that happy product that's on the presidency that they're planning on.

And any thought that that might be curtailed is likely to have a great deal more effect on speeding this up.

and something they've already achieved.

And that's, in a nutshell, what we're talking about.

I think that this is the other thing that they will understand.

I think that they're going to blow the sweat down to the last note.

We're trying to make a deal with their own company.

Could you tell the President what some of the restrictions are there?

putting on you so that you can hear my credibility at the moment.

And I'd like you to hear Greg.

Well, first of all, we export to Japan US cars, Australian cars, German cars, English cars.

Combined, we do 1% to 1% of the business in the audience.

Is it worth it?

No, no.

Well, we have, I think, 13 dealers over there.

We have a hell of a time trying to support them.

So they imposed taxes on us.

They imposed late taxes, late taxes.

They imposed surtaxes, duties, problems as I told Pete down in the hot springs in there.

Cadillac costs $30,000 over there.

And I think they've been very stupid in the United States.

Because, first of all, we can't compete.

You know, they took everything off.

If they were smart, they would say, well, all right, we'll just take all the restrictions off.

Nobody can compete in this market over there.

It's an important subject for a novelty that any other company may have.

But I think they've been in a very short study because they could have taken a lot of the heat off themselves if they would do this.

Could you tell the president about your

John Venture, and how does this work?

We have a company over there that manufactures pendular trucks, primarily, to passenger cars.

And they have a provision over there that no single outside interest can own a stock.

And no combination of outsiders can own over 20% of the stock.

This is the position.

they take, well, we can get up to the 20%.

They can always bend it.

So each one of our subsidiaries would qualify for an outsider.

So they've been trying to restrict us to 20%.

And we are willing to go in on the basis of the 20% interest.

And we haven't held it out.

We realize that you can't get, we're holding out the 35% interest.

Because if a 35% interest takes a third interest in blocking and changing the violence of the corporation, so we would at least have that measure of protection.

about making available technology.

They would like to have an agreement whereby we will share technology, particularly in the environmental and safety areas.

Primarily what they want from us, I think, is a couple designing a passenger car that would be a competitor in the Japanese market, which the one in the building now is not.

So I made the rounds with everybody, the government, the Ministry of Trade, and I got the same story everywhere.

General Motors is a big corporation.

And these people expect a big corporation like that to be very generous.

Where's Japan?

Little weak people.

The taller the tree, the stronger the wind.

You know, this kind of stuff.

And when it all boiled down to it, they wanted us to operate at a 20% interest rate.

So, we still don't have anything locked up.

Well, Niazawa told us that they had liberalized this restriction, and now our companies were eligible to buy 50%.

Yeah, but this is a different job.

There are two things.

We went in there with a joint venture to set up a new company to, say, assemble cars.

And then we could have a cookie with some muesli.

Azusa was established as a Japanese company, and they draw the line on that.

And this, of course, is one of the things that... Now, let's talk about the other thing.

What's American?

Research, et cetera, et cetera.

I'd like to wrap that up.

Good morning.

talking about this, the more we see the need conceptually for two concepts.

One, what you might call a defensive minimum concept of what kind of minimum fundamental economy and structure of manufacturing in what fields

is in the best interest of the United States.

As I mentioned down at the business council, there are some people who would be quite happy to let us become a service nation and an important investment in them.

And while I think we might be willing to let that happen on certain products, I would think there are certain other products where there is a point below it is not in the interest of this country to let our production sag, but still provide

And one concept I think that the President is referring to is what you might call the floor or the minimum.

Now, at the other end, as we discussed down there, Jim, I think we have to think about where do we want America to be, possibly, five to ten years from now?

Where do we want to lead?

How are we going to get more competitive?

And what do we start doing now to get ready?

Now, one area that I think the President is referring to is technology.

the more you think that we're going to justify the higher wages, we're going to have to be adding some value that's usually proprietary, some benefit.

Now, I had a chance to check out the numbers I mentioned to you yesterday.

I want to be sure I'm right on this.

But we indicated that there are probably a variety of very important fields in technology that five to ten years from now are going to become very important, not only in a business way, but in a social way.

energy sources that we've discussed, of water, perhaps medical, I don't know, we're just beginning to think about what we're talking about, but which may not be receiving the kind of investment that they deserve in terms of the national interest.

The one idea we're kicking around is some way of defining a set of goals for this country in economic terms, part of which might be leadership in certain fields, and then getting a group together to tell us

not only what those goals ought to be, but how do we get from here to there, and which of the fields that aren't going to get adequate support if we rely on the private sector, and why not, and what should the government be doing to

Now, I tried to encourage the press to use the R&D figure you said was 10, probably.

Yeah, I want to check that.

Jim, I did a study a few years ago on innovation.

My impression was that the industrial private R&D number was about 7 then.

I'm going to guess now that it's around 10 now.

But we can check this out.

It may be up a little bit.

I tried to encourage the press a little bit, too, because I know he's concerned about

resources and how much money, you know, is available.

But if we look at something like the space program, where we're spending a little over three, and sometimes in our context, that looks like a big reduction.

But I have the feeling that if we could define the areas we want to lead in technologically, for not a prohibitive amount of money, it might make a

a decisive difference in the posture of this country five years ago.

Let me give you an example of what you typically saw, but it didn't kick it off because it's a piece of .

The other day, we had two reasons in the interest of .

One, we've got a breeder reactor.

There's got to be .

So it's got to be noticed about it.

It's a big program, and by committing maybe three to four billion dollars, they say, too, but I would say it'll make three to four billion dollars, and then by the year 1980, we can have a resource that can shoot through a greater reactor.

And that does not have so many breakthroughs, and it's not already in sight, because this is really, they know, the scientists know they can do it, but they have to build the plants to do it.

Everybody says it will be an energy security system.

The other is water.

Everybody talks about your own sea water and so forth and so on.

But there is apparently no magic way to do it.

And everybody says it's not going to be discovered.

So we assume the latter.

On the other hand, it is generally agreed that the key to that, of course, is the cost of power.

You get your power cost down.

your energy costs down, your water, your fresh water cost is thereby, or new water, I should say, fresh, is thereby that comes with that in viable terms.

Now, so we had a reading on it.

What did we find?

We found that the United States has had what they call a saline water program since 1952.

Where is it?

It's over at the Department of the Interior.

Now, what happens to it there?

Well, there's a hell of a lot of competition in the Department of Interior that doesn't want any seaweed water.

They want a little hydrolytic dams, and so forth, and irrigate, and et cetera, et cetera, et cetera, all of which are present across the West Coast.

The same water program over there is under very well-intentioned, but very poor management, and they don't want it.

Now, in terms of what has happened, we came to the key point.

I said, now, where are we from a standpoint of the scientific research?

Well, Doc Hayden, who's a very well-known scientific writer, said, he thinks we're ahead of anybody in the world in research.

I said, well, then what is the problem?

Because he had already pointed out that Germany, England, the Russians, I don't know about the Japanese, but certainly those three haven't, possibly France or other areas in this field.

And the reason is that all other nations, that all these other nations,

The Russians, of course, were totally subsidized, but the other nations as well subsidized these practical applications.

I said, well, what is our method of doing it?

Well, our method is what it was back in 1952, 50-50.

We say to private industry, look here, we've got a scheme whereby you can build a big water plant, and we'll federal open it 50%.

You take it 50%.

Now, that isn't much of a deal at this point because it isn't after the business.

So what we need, and then we look at defining what is really needed for the United States to remove this area is to build probably one or two very large mines, just really sitting on the edge and so forth.

So one of my instructions after the meeting where I said to her, when the domestic comes, that I said, draw here, change the deal, make it vote to pay 90-10 on the rail and the roads.

But the main thing is, let's get it done.

And if the government punched here, she'd be much bigger.

Now, I would not have ever argued this way when I came to the Congress in 1947, because they do probably

would not argue that way then or maybe even now.

Because then we all say this is a private enterprise company, it doesn't make sense for the government to go in and demand that we're going to make the future so-and-so, and so on and so on.

The whole SST argument, of course, comes in.

But today, we live in a world where not just the Russians, and in the future, the Chinese, that's way through the future, 30 years before they'll come in, but they'll not the hell of a lot in the future because of the Chinese, not because they're communists.

But the Japanese, the British,

the Germans, and that's about going to lead to their literal abduction of the Belgians and all the rest of them.

They're subsidized everything.

Now, this doesn't mean that our answer, therefore, is to subsidize everything.

We still believe in private rights and the rest.

But it does mean that in these areas of, it seems to me, where you have high technology areas,

which you follow so well, but I don't understand any of this stuff.

We have these high technology areas.

I think that we've got to take a hard look right now and see how the United States remains competitive.

And we have to do what is necessary.

Private enterprise, of course, it should be, wherever we can, we should put it out to private enterprise.

I don't care.

I don't care if private enterprise only puts in 20%.

It's great if that's the way you have to deal with it.

That's the price, that's the best instrument.

That's better than having it done by somebody in the Department of Interior or the Department of Agriculture or something.

So it gets back, as I said again, to the old, in a very different way, John, the SST.

Sure, that isn't our way.

They say it's a viable thing, not private, not private, not a building.

The banks ought to finance it fine.

But suppose they won't.

What do you do?

Not have a building?

The answer is, of course not.

You've got a building.

I don't think either the government or private enterprise alone can do this.

It's not part of the competition.

Now, the point is, the point is that what we need here, the business community, what I told the

Pete has thought this thing through.

What we really need to do now, here's one area that's right in front of us.

In order for the United States to maintain its prime position in the field of air transport, we've got to have a huge government subsidy, frankly.

Or a guarantee, shall we say.

And maybe that's, either way, it's a subsidy as we know it.

Second, in the whole water.

a new water field.

There must be a big government subsidy.

But there must be a number of other areas as we look to the future.

Maybe it's a new health programs or massive programs for X-rays, vaccinations.

But it's more likely to be in areas that do fall asleep.

But I think what you have to do

is to sit down with a group of far-sighted business people, anti-scientific types, and some of the business school, you know, Harvard Shanker, et cetera, and say, now, there's this, this, and this team, and they can look at it, they're bound to know, don't you think?

And then they can say, let's pick three or four of those, and then let's go back.

That's what's happening now.

We also, I think, ought to take a very good way to determine what we ought to go after is to make an examination as to what the competition is up to.

What the Japanese are doing, what the Russians are doing, what the British are doing, the Germans, the French.

That's about all the competition in the British, of course.

That's all it is.

And then the United States has got to get hungry.

Because what I think we may be at, that's what I think, Senator, isn't going to happen in a long time.

We may be in a position in the United States, because we are the richest, and frankly the best, and the freest, and the most well-off nation in the world, we'll slip into a second place position, I'm not speaking militarily, but economically, because we...

We just didn't gird ourselves to meet the competition.

For example, in a few minutes, I'm going to go in and try to get the group of people to come to the rescue of NATO again.

Let's look at the situation where it was 25 years ago.

You remember, Europe is on the back.

My God, we didn't have to fear the Germans or the Japanese or not.

Well, neither the Germans, nor the Japanese, nor the British, nor the French, nobody in the Italian.

They're on the back.

At that time, we could afford to be extremely generous, and we were.

We were generous with our money, and also we could afford to have a very low trade position.

And we did.

And now the world has changed.

They're strong.

They're all strong.

They've all grown up.

One of them is bigger than us.

Europe is bigger.

So now, I think we've got to re-examine our trading position.

I think we've got to re-examine our government subsidy position.

And I think we've got to

It also gets down to such things as we do get in this product, and we labor costs and the rest.

But you can't put it all on that either, you know.

It really gets down to the attitude of the garment.

And the attitude of the people.

Whether we want to accept it or not, actually at a labor cost, I think the reason the British, even under Heath, the damn good man, the reason the British have perhaps less than an even chance to make it is because maybe, just maybe, they have been, you know,

taking more in than they've been putting out for too long, and the spirit is gone.

And that's what he's problem is, these damn unions over there, of course.

We talk about our problem, but we're only 25% urbanized.

They're 90% urbanized.

Yeah.

Well, I think that this sounds very good to me.

I don't know what you think about the conference board, but the conference board has been doing some tracking.

They've had some studies commissioned.

This is something that the business council could get into, but no, we don't have staff.

No.

You see, that's the trouble.

You've got one.

It's a nice thing to talk to the business council, but all these guys are basically, you know, they're running businesses.

You need staff here.

You need staff men.

But I get around.

I think it's something that would fascinate the university.

I think every school of business, Chicago School of Business, I'd like to do it.

Chicago, Stanford, Southern Cal, MIT.

Those white guys working these days, we couldn't hear you.

We couldn't hear you.

Mr. President, I don't know if you caught Mr. Jim's comments here about attitude of the people, but I think this is a very profound part of, I think, pressure and attitude more as much as anybody.

You probably don't know this, but I was on this White House conference on youth before you asked me to do this.

I got a supersaturated exposure first hand to some of the others.

Were you out there?

Oh, at the Irving.

No, not at Colorado, but at the earlier meeting.

Oh, yeah.

And there is a new well-known... Oh, yes, I remember.

You were out there.

Now there is a very wide body of thought, as I'm sure you know,

It doesn't even accept the idea that growth is desirable at all.

Oil or zero growth.

Zero growth in the whole population.

And, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and,

You've got to put a social aspect, but also, I think... No, that's not an underestimate.

The enormous deal with all the social aspects rather than jobs, they can talk all they want, but when they finally get down to it, everybody's got to have a job and they've got to have an income.

And they don't like to ever hear that said, but right now, you'll find, I think, where the hell are the jobs going to come from?

I mean, I agree with you a lot, but it's got to be a combination of arms and job things.

You mentioned something earlier, we're going to become a service nation.

The United States can never afford to become a service nation.

Can I talk to you about that?

What does that mean?

You mean like Britain?

Is that what they are?

Yes, we'd be exactly like Britain, plus the fact that then we'd be a sitting duck for anybody else who wanted to take another approach.

I think we've got to maintain our basic industries, and we've got to maintain a strong, viable, competitive operation here in the United States if we're going to live in the world.

And this theory has been advanced, you know,

I guess it was a French writer here, 16 months ago, about that every nation ought to carve out what they can best do.

Maybe the Jets can build automobiles, maybe we can build chemicals, maybe we can provide services, maybe somebody else should build the steel, somebody else should build, make the textiles and stuff.

And that philosophy, I think, would be just a suicidal course for the United States.

What do you think?

That's exactly what I'm talking about on the minimum economy.

I think from a power standpoint, I think that's a marvelous theory on lowering prices and that side of it, and that's part of it.

But let's look at America in two different ways.

As a power, and how we're perceived.

How we perceive others.

Percy.

and how we conceive of ourselves.

And I've been doing some thinking about that, and I've tried to imagine us without several basic industries.

And what would happen when the crunch was on, not just in an emergency sense,

but in a proper sense, in a trading sense, and so forth.

I have a feeling we'd be looked at differently.

If we ever, if we ever achieve peace on Earth, go little toward men, that would be fun.

But I think we're far enough away from that, so we've got to go the other way.

We'll have, we'll have the first part.

We'll have peace in the absence of war, in my opinion.

I think we can have that.

It's in the cards.

perhaps within a matter of a few years, very shortly.

But peace in the sense of peace on earth and goodwill to man.

I think that the Catholic translation is a lot closer to the truth.

You know, it says, peace to men of good will.

It's really true.

That's a very subtle difference.

The Catholic version of the Bible is only peace to men of good will.

And basically, if you say peace to men of good will, that's a long time hence.

Now, that doesn't mean that we...

that we can do some awfully generous things, and we will continue to.

But I just think that this country, well, agriculture happens to be a place where we are number one and will probably remain.

But I don't think it would be healthy for the United States to quit having

It's agricultural production.

It's good for us.

It's good to have farmers.

It's wonderful to have farmers, and we have to maintain that kind of a system.

I always wanted steel industry in this country.

That's right.

I want mobile industry.

You want a chemical industry.

I don't think we should have given up on the radios.

We don't think those are just cameras.

No, we make cameras, though.

Well, we were radioing that product, and they recorded it and stuff like that, and 45% of the television coming are coming, the black and white television are coming in from Japan, and I think about 90% of the radio is coming from somewhere else.

Well, you can take live-motion pictures.

I've got a talk with one of those fellows in Hollywood, and I must say I'm a much briefer of all of them.

They can create some of the awful stuff they produce, but...

I must say, I want the United States to continue to make motion pictures.

I don't want it all being British films and French films and the rest of it.

It's a technology that we can't afford to lose.

This is what's wrong with the SST thing.

Leaving everything else aside, it's the technology that goes into this, and if the Russians know how to fly an SST and the French do, and we don't, or how to make one, then we're going to be in trouble.

There's no question about it.

I'm surprised at the other fundamental attitude I've sensed among the young out there that I had never quite gotten in focus aside from zero growth.

There's a very cute notion that some of us older types have trouble adjusting to.

They think you're older.

Oh, my.

I'm going to be surprised what they say about me.

The point is that they think we are so rich, a major trillion-dollar economy, that they really think very sincerely, and I'm criticizing them, that our major problems

is not to create additional resources, but simply to redistribute what we have, more fairly.

And the idea of growth and creation of something new, it's really long still on, but it's a big decision now.

I suppose they'd say, well, we just need to redistribute all this.

We all have, huh?

Precisely.

Yeah.

And I think, too, the Prince's problem at the moment, we've got all of this,

You know, whatever, this is all automatic.

This is a conference.

And this is always going to be there, so all we have to do is build on what we have.

And of course, nothing can be further from the truth than that, because we're going to lose another.

No, it's kind of very interesting.

It follows different reasons.

That is the talk we heard regarding the Depression, if you remember.

They were very little talk in the first five or six years until the war began, actually, of the Depression.

Actually, when Wildey went out in his campaign in 40, he said only the strong productive could be strong and only the strong could be free.

But the New Deal in its early years was directed, overcoming the redistribution of wealth rather than the creation of wealth.

Now, there's only a lot of redistribution.

So you cut the number of hours down.

In other words, everybody, you know, you said that to show the work week.

It's even spread the jobs around, spread the wealth around, and all that sort of thing.

And what they, if only they could, I'll never believe it.

I'll never believe it unless they go and see it.

And they'll see only the top.

They just ought to go to basically what are supposed to be the perfect societies, the communist societies, any of them.

There, they take what they have and redistribute it.

And the damn places, I mean, it's a hell of a place for a consumer.

It's a hell of a place for a consumer.

Russia is, Hungary is, Romania is, Poland is.

I've been to all these countries, I know.

But you know, they go and they say, everything's equal, everybody's having an equal shot except the government elite.

They've got their opera tickets and their opera bills and their girls and whatever they have in there.

But let me tell you, the average person, it just wasn't going to redistribute the wealth.

They just couldn't have it.

I don't know.

It doesn't mean that the argument is that we've got to fund waste.

We've got to resell America to the people of this country.

In fact, the growth is good.

It's good not in itself because it enables us to do good things.

We've got the silly idea that wealth is perishable.

We have to work to sustain what we have and for what we expect to get beyond what we have.

There's another thing, of course, that is intentional that they may not appreciate.

Like the exploration of the unknown, building anything, the individual, the mystical,

one person in each of us is, if he does not participate in something that creates, he'll die himself.

If all we do is to suddenly redistribute things, if that's what we're on this word hammer for, you watch what kind of miserable little people we'll do eating each other and tearing each other apart.

But if an individual is, in other words, it's just good for an individual

or an organization to be building something.

Building in and of itself is good for people, right?

That's what they need.

I think they're missing something there.

We've all been through this.

We all say, you know, it's like the poor fellow that wants to retire.

He says, gee, I just love it.

I just wish I could play golf every day.

He didn't like it.

Oh, he hated it.

So they've got to, I think people tend to take that idea.

The mysticism, I don't know,

of building, of creating, of the fantasy of it.

In other words, I don't care what it is, I'm exploring.

Not taking space, there's a whole space, and I personally think we've gone, as far as the home thing, we've probably overdone that one.

We've stopped with probably about five apollos,

You know, there's an old cliche in business that Jim agrees.

He said, no, I'm going to be a little bit of a helper now.

That is, the businesses that I've seen, they are going to say, that is, that you don't flatten out.

They don't do it.

And somehow we've got to create the imagery of we're going to build and go up, or we're going to end up declining.

And you've got to be careful how you say this.

But I think that has to be the building.

Well, I think we have to put it in terms of the individual.

An individual needs to be part of a growing, living thing.

Look at anything in life.

When it seems to grow, it dies.

The big trees in California go back a thousand years or more.

No, two thousand years.

Good God, yes.

The big trees go back two thousand years.

Forty-five hundred.

Yeah, forty-five.

Yeah, way too long before Christ.

Anyway.

They're still growing.

The minute one of those trees quits growing, it dies.

And that's what Senator mentioned.

We've got to grow.

We don't need to put it in the client of the country, but the individual must grow.

Now, they will say, the kids will say this, the way to grow is to do good things.

The way to do it is take all the wealth of this country and redistribute it so that everybody has enough.

And then we just stay right there.

No, the whole business of life is that it has to have, it has to have excitement, mystery, and change.

And what they're really talking about is Hispanic society, aren't they?

They're just saying, stop it, too.

Redistribute everything.

So another kind of present there is a profound contradiction in these kids when you explore it.

If I take one minute, we were just saying one thing was not right one day.

And I said to them, well, you sound as though all you really want in life is public service and social service and good service.

And that's admirable, because if you have more of it than I did, then I'm lying.

But let me present to you a few things that are out there.

Suppose you have a job for $50 a week, but there's lots of opportunity in that for public service.

And then you've got another job over here for $200 a week.

and you can do public service on your own time, but as a result of that, you can have your wheels, as they call them, and your high-five set, and so forth.

It's incredibly obvious to all of you that you would choose the $50-a-week job.

Now, yes, yes, yes, perhaps some Puerto Ricans would know better to get the expression set.

Bullshit.

But you know damn well, he said, that if you don't have your car, and you don't have your stereo set, and you don't have several of them,

You're going to be miserable.

Now let's get down to the case.

What you're really talking about is you want the society to provide you with a high income.

And you want a lot of time off so you can work on the things you're interested in.

And if you're this damn interested in it, what Mr. Peterson is asking you is a nice thing.

Why don't you do it on your own time?

You're only working 40 hours a day.

And he finally, at the end of an hour, said, yeah, that's probably right.

We're talking about good service and public service, but not so much that we're willing to give up material things.

And I think that's, would you agree, that's a fairly good approach.

And I think these kids are more realistic sometimes.

And we give them credit for it.

But they're impossible in a group.

And you can corral them individually and talk to them.

I don't know that we find quite a different response, at least that's been my experience.

I think we've got two other areas that we have to worry about very greatly.

One is our communication system with the press, and the other, there are educational institutions.

I think we've got inherent problems with both of these, and conveying this philosophy, and adopting constructive education.

Television.

Television is...

It's virtually a disaster area in that respect.

And the educational institutions, why is it that people who go into the press and the television and the government turn out so bad?

Because they were exposed to the day in universities.

I don't think they're all that.

A lot of them are very ill.

The third point for us is that I would add to the changes.

There's been a very great deterioration there.

And I don't mean that we all want fundamentalists

or old reactionary Catholics, or the kind of Jews that wear their long hair, but I do know this, that at the present time, this type of attitude is being, the kids are reflecting, they're teachers, they're reflecting many times, to the extent they are exposed to the churches, their churches, and they're reflecting that goddamn television.

Really true.

I mean, there's some really pretty terrible, I'm not one of the fans of Breslin, I think that they, but they, if they keep pouring that stuff out, how do you expect them to turn it out any different?

They don't read now.

How many read books?

Turn it very good.

And really, how many read teleclassics?

Television consumes the time of so damn many people that they don't have, they're not good at it.

Yeah.

Oh, I know what it is.

It's the Army engineers.

They suggested that, uh,

Well, we're going to, yeah, the Army engineers, we're all, we're doing it.

This is really the chief, the chief of the doctorate.

There's no agency.

He wants the Army engineers to be able to go.

But all that happens is that the planning for the Army engineers is moved up.

The Army engineers are still moving projects and so forth and so forth.

You know, Lucius Clay never has any doubt about this.

Because he's a strong man.

He's a very kind person.

You know, he came from the engineers, too.

I don't know if I can convince him.

But then the other hand, we may be able to, well, we can, you know, we can maybe modify it.

We can even modify it a little bit.

It's like there.

We've got to modify those.

We've got to modify them to create something.

Well, thank you very much.

Well, we've got all these contacts.

You can probably let me know.

Or let Pete know.

Thank you.