On June 14, 1971, President Richard M. Nixon, Stephen B. Bull, John B. Connally, George P. Shultz, Paul W. McCracken, Arthur F. Burns, Manolo Sanchez, and Alexander P. Butterfield met in the Oval Office of the White House from 3:02 pm to 3:29 pm. The Oval Office taping system captured this recording, which is known as Conversation 519-011 of the White House Tapes.
Transcript (AI-Generated)This transcript was generated automatically by AI and has not been reviewed for accuracy. Do not cite this transcript as authoritative. Consult the Finding Aid above for verified information.
Well, you know, it really was.
I know that a hundred years ago, it was a big new dance, you see that?
I remember it was a dance.
But it really was the way.
And no one got, no one even got a name for it.
No, we haven't even talked so much.
I don't think they ever forgot about it.
That really, really went much nicer than what it is so far.
Because the Trish of Disneyland wanted to go down there, wasn't it?
That's right.
Disneyland, she also had the opposite plan.
Well, that's the corridor to the east wing when you make the book.
Where's that going?
Well, you know, it's not part of the movie.
It's going to be in the city.
Well, it's going to be Trish, Howard, Ed, or you.
Can we ever change?
I agree with her.
She said, my 22-year-old daughter, she watched it on television.
It was wonderful.
She watched it through three times.
She's a very romantic gal, if you remember.
She said, oh, that was so romantic, and I just loved it.
And I saw it through to me yesterday, and he was coming.
She said, she stayed up, and she stayed up, and she stayed up, and she washed it, and she moved it, and she got it.
That's correct.
It's amazing.
It's like, oh, I can't believe it.
The only thing, I must say that that was quite a terrible sale.
The only thing that I thought was not proper was the CDS saying that the cost
of Tricia's silver and China and Crystal for a playset.
I don't think they did.
But how much would it cost?
Well, not in every case.
The case of Crystal was $9, as I recall.
In the case of the playset in China, it was $89, something like $89.
But they actually put a dollar back
which I thought was not in keeping.
But otherwise, everybody, you damn right, did a very excellent job, I thought.
Ed Newman and Barbara Walters did an excellent job.
I thought the cover job couldn't have been time to do it.
We saw it all the way at 10.30 that night.
You did?
All the way at 10.30.
All the way at 10.30.
I stayed up late.
I guess we'll, uh, we'll, uh, start with you, uh, Paul, today, and your analysis, and then, uh, go to, uh, John for a little, uh, just, some kind of parent for a video, because I've got to go and take my real video today.
Did you?
I had a match last Friday, and I had to do it yesterday.
Oh, okay.
So why don't we start, Paul, here, and I'll here.
I think it might be worthwhile in this case to...
I think it is about an hour or a hundred or so a year we've been out here for a good night and we are on.
It seems to me the problem we face is something like this, that we've got to get back to the point that I've been telling you now is that it doesn't make you sleepy.
So we are going to have to make a choice as to whether we want to proceed
Now the problem we face is that we also have to be concerned about the question.
I was interested in, uh, those polls on the death of many constitutions.
Yeah, that's right.
And I don't think it was the economy that made it so.
It wasn't the economy.
But the inflation.
The inflation made it almost the size of an apartment.
And they were the same for all time.
Well, that's right.
Sure.
What polls were they?
Polls taken by the Domestic Council on Domestic Issues.
Well, this was not published.
None of this was published.
It's the three ways.
Which side would we have?
Well, I think the, uh, 10-acre route.
Uh, the problem is, the more distant the road, the more likely you'd run into breakdowns in the industry.
Well, there was, but we don't have, I mean, I've got, I've had that analysis, and I'm pretty well paid.
I, I, except, except to know that the West Coast was much higher than the Black Sea, much more mature than the West Coast.
The East basically was more mature than the West Coast.
The east you don't have a, you don't have a plan.
The west coast, the real, the real, it's a very big conch up in the coast of the West California Sea.
Twenty-five people.
Twenty-five people.
And Russia.
I think they, they, a lot of them are probably facing this.
But we want, we want to get a expansion during the, you know, the end of the month.
On the other hand, if we don't come out of this with a better fighting performance, then of course the rest of the period is what we'll have to deal through all of this trial before we get back to the same level of unemployment that we had in the outset.
I haven't made any progress against the places I've been to this year, but I'm glad we're able to engage so that
And this is what is leading me to the feeling that more and more that we're going to have to have some more overt actions in the wage, price, cost area in order to be able to at least answer the question, what is the administration's program?
In the distance, I mean, the office.
Why don't you take a, take a moment out here.
Just leave this, take a moment out here.
I guess all of us, we all see all these reports that are coming in, you know, and I saw the Fed has one, and I saw this one.
I don't need to think, probably just two days over.
What was it, industrial production?
Industrial production, yeah, that's the last one, and then retail sales.
Well, not now, but not in the month before, up a year ago.
But, uh, Mr. Starr, salesman or something, I'm not too much concerned with the change.
The big change seems to be recurring.
Anybody have this idea of a year over a year increase, regularly?
What?
The big change seems to be recurring, a big year over a year increase.
Uh-huh.
The May retail sales, excuse me, just the sales are from April.
April is up from March, which was a very big increase from February to May.
psychology.
They look at the television and not go, you follow, I don't, but I'm sure some of you do.
I read them sometimes every morning.
And in May, there was a week there when a person in Vietnam sort of dropped out for, broke out for a dance lesson.
Anyway, there was approximately a week.
And the networks, you can print their very new second story, The International Monetary Crisis, and they scared the hell out of people.
It's
you know people people when i say i was thinking that coming when did that come i don't know
We're going to have some in the store market.
I didn't say a word.
Well, this May figure, first of all, is a preliminary figure.
It's splitting off the revised figure of the month earlier.
The revised figure is up sharply from the preliminary one of the month earlier.
Well, they won't take a lot of it.
You got your production paper right here.
Uh...
I posted and said, my name is Don.
I got it from the production's mother.
I understand that one doesn't mean as much as some of the others.
It's just one because it isn't as broad as after the day, if that's correct.
I think that's the other frequency of my email.
Well, the server sent this for you, and I'm not going to ignore it.
That's what he was saying.
Jack, do you agree with that theory with it?
Yes.
It's very significant.
No.
No.
No, it wasn't.
What is happening when I'll find myself a council member?
You've got a test time for you to be an 8% manual rate.
Deflation?
Hey, no, that's... No, that's... No, that's... No, that's... Do you always get...
Does that always happen to the Fed?
Who else does that?
Does Congress do that, too?
No, not that one.
No.
It's this one of our...
I never know which one I'm reading.
I'm reading the National Commerce Department stuff, and I think somebody's writing it.
I mean, the guy doesn't know what he's talking about part of the time.
Go ahead.
Yeah, this is not an issue.
It's a gun problem.
It's a gun problem.
It's a gun problem.
It's a gun problem.
It's a gun problem.
as have other things like personal income figures.
And to a certain extent, you get one reading.
And then all of these other tax entities come along.
This is all old.
If you really have to get a replay of the old, it's just totally generally artful.
Well, this is really more than a person.
That is retail sales.
What is that based on?
Well, that's what I have.
Sounds as false as...
I'm a part of the University of Tucson.
Well, I don't think all of you, everybody is amused as to what is happening.
I think we would all agree with Paul, the economist, but the movement is up.
It isn't as fast as we would like in terms of reducing unemployment.
It isn't as fast in terms of reaching the goal of 10.55.
We're going to have that.
On the other hand, you can...
You can also look at it in terms of toward the end of the year and next year.
It's too fast now.
The whole problem here is timing.
We all know that.
God help us from having what we had after in 1960.
We rarely remember when we returned in the year.
We settled the steel strike.
Everybody we talked about the soaring 60s.
But we hear everything, you know, in January, all of us, we live, we call.
And then you came into the city in February or March and said there's something wrong with this thing.
We didn't do anything.
And we had 400,000 increase in unemployment in October.
And that's enough tools to watch it.
So what were we talking about here today?
But go ahead, John.
Talk about the things you like.
probably more optimistic on the general economy, I think, in the light of time.
I don't know what you do, but other than what we're doing, I think we have a justification to continue as long as we are, assuming that certain basic things are going to happen.
Beyond any question, I think you're going to get an increase in interest rates.
You do, I guess.
We've got one with a slight kickoff today, the First Pennsylvania Corporation, which is the small half of it up here.
Well, no, but it's not like the Chet Chase or Bank of America.
It's not small.
It's really what I'm saying.
It's based on another line.
Oh, yeah.
He's a lab rat.
He's a lab rat.
He raised it.
He raised it.
I think you're going to see...
prime rate go to 6% in a very short period of time.
I would guess in 30 days.
Now, I don't have a good topic simply because they've been putting up money in the end long figures that have been abnormally high for the last several months.
May was 16.3%, I believe is correct.
Everybody, every economy, monitors know that.
all say this is too much.
They all say this is too much in terms of my supplies.
It's got to be cut down.
I don't know anybody that agrees with that.
I think there's some question of how much.
I mean, they'll differ on how much it needs to be cut down, but I think everybody agrees it can't continue on.
Because, again, because it feeds the fever of inflation.
This is the real problem that you have.
This is the real problem, in my opinion, that we have to concern ourselves with.
As a matter of fact, there are two problems, and only two.
Both psychological.
One is the continuing fear of inflation.
The second is the feeling on the part of us.
Everybody in the business world I talk to, I don't care whether it's Metcalfe, Sears, or a road contractor,
in Amarillo, Texas, they all talk about doing something about electric costs and waste costs.
It's a fixation.
It's almost a session.
That's the entire business community, geographically, industry, doesn't make a difference.
Wherever they come from across the state, they say you've got to do something about electric costs.
You've got to do something about the rise in waste.
Now, these are the two things that I think are, that we have to concern ourselves.
One, the continuing fear of deflection in the D.C. conventional part of everybody.
We're going to continue to have war.
And secondly, just whatever.
Actually, I don't think we have a problem on the things that are going on in terms of
still floating.
I think sometime between now and the International Monetary Fund meeting in September, we will all get together and come back with some recommendations to you on what we do with respect to the rules of the IMF.
My guess is that it would probably be the consensus, and it is the guess at this point, that we would probably recommend a wider margin or a wider vein.
They now provide for a fluctuation of 1%.
of the fixed parity that's permissible.
I would think before we're through, we probably would recommend 2.5% above, 2.5% below, which might give you a fluctuation of 5%.
And everybody's got to agree on that.
But that would probably be consensus, maybe 2% above, 2% below a fixed parity would give you a flexible band of 4%.
But I think most people
at least, would recommend a wider thing.
But we'll see.
I don't now see any emerging problems with international.
I don't see any great problems domestically.
Did I ask a question there?
I heard you.
Arthur, are you and John and Chuck McCord about the
What I'm really talking about is this.
My position has been, and I'm going to tell you this, that we are not going to call for an international conference at this point.
We are going to, as much as the fright that was expressed at the time this began has proven to be, has proven to a certain extent,
At that point, you have no idea where you're approaching that.
The idea that we should...
I'm not a woman, I'm not a poet.
I think I have a name.
We need to have clear notions.
We have a present time of where we want to come out.
I think the saboteur of the treasury must have seen a woman.
I have a kind of sequence, but I don't want any.
I first of all, Arthur and I have talked about this so many times, I agree completely
But with his plan of procedure provided, we can arrive at the requirement, the desired objectives.
I heard one come out.
That's the first one.
But I think his plan of procedure is precisely the right plan.
You've got to leave the full-time countries.
You've got to go to the O.C.T.A.
We get to that point, we have to determine what we want out of this, this being a full-fledged country.
The thing, and we know, and it's great that we're talking about it a lot more.
My problem is, at the moment, one of those countries would have to be England, one would have to be Germany, one would have to be France.
But that's less than a Japan, and we've got so damn much going on, and the Germans and
The British situation is so cheap, it's so sensitive in terms of entering the common market that we don't want to, I certainly don't want to float that.
The Germans are floating.
I don't even believe in Schiller.
If you met with him, I don't know what to tell you.
He's duplicated.
How did he get back around this thing?
Now, at least to me, he insists... Will he run coming along, or is he bringing his people?
Schiller?
Well, I don't think Schiller's coming.
As far as I know, we can't find out.
I think he's pretty much coming by himself.
He's not running with a lot of people.
You're kind of in there.
Apparently he doesn't want to get into a lot of these things.
I think he's kind of manning for her.
You know, that's what he's trying to do.
You know what the other thing is?
He didn't show up to greet you.
Well, he was off on a honeymoon.
I think that's what you're talking about.
I ain't sure who planned this delivery.
He must be there.
He planned this coming home.
I got it.
He certainly could have gone and gotten there any time.
Third time.
In any event, he didn't come.
It was a delivery that he didn't come.
At this point, I don't think we can have a meeting and talk about anything.
From his education, he's cool.
From what he said, he wants to drive the dollar value down to 15.
He more prudently was right when we told him about it.
He more prudently was right when they were floating.
And I think he's gotta float for a while.
Or don't float until he floats down.
I noticed that they are...
They're still here on the water.
Well, if that's what floating does...
The little gaffer doesn't know where to let her go.
Well, he's out for a week.
He's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone, he's gone,
And there is a page in the policy that's concerned.
What about it?
There are two kinds of changes that we're talking about.
There are several of them.
There are two or three that we're talking about.
I understand that many of the people go to the budgetary policy.
I disagree with that because I don't think they realize how expansionary our legacy is.
George was better than I was.
The second thing is that there's something on the way.
This one, everybody talks about it.
If I'm a legislator, at some point, just because everybody...
At some point, you may have to do this.
I personally don't think now's the time.
I can be persuaded otherwise.
But we've got to do something.
That's right.
You're going to have to go out and destroy this world.
This is an objection I have now to Paul's draft.
Paul has a draft.
I saw it.
Well, I have two objections to these.
Part of them are going to be faced by Isaac.
I'm not sure I would agree with that.
I think that may be the way to proceed when we get ready to proceed with that.
As a matter of fact, I do think that's the way.
I don't know what's better.
Yes, on the bill itself, I would not do it for two reasons.
First, I think your criteria is too general and too vague.
I don't know how you ever really tie down the abuse of economic power and words that they're used.
That's first.
And secondly, I think if you send up a bill now, Paul, you're going to get killed.
You're going to get no action on it.
Administrations are going to get buffeted all over the lot.
You're going to make a bunch of enemies.
And that affected what she achieved.
It's nothing.
Except to prove that she came to pass on through the times.
How about this?
She made this paper in the part of the bill.
I don't know.
The most sensible actual man in the state secretary.
And it will be in office.
Finance.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
Shoulder.
The thing is, what about the suggestion that all the things that he had some more success with the construction, the suggestion being that we might apply that.
Well, let me, I mean, I can't read any of this on this bill.
This proposal is the man's thing.
Thank you very much.
Here's a power bill.
And, uh, I, uh, saw, uh, what, uh, we were trying to get at was something which was the intermediate between, uh, price of which is gold and, uh, tea.
And, uh, this is what we came up with.
Uh, I don't, uh, I, uh, I don't know.
considered to be crucial to this idea that I was thinking about.
I suggested, as a kind of interim agent, was that the Catholic and Pentecostal policy move a little bit more to work in this way, but perhaps do something like a way
... ... ... ...
in some sequence before.
Again, at the beginning of the sequence, they're going through, they're locked in.
And that's the piece of steel that's too far from this country.
That's really my concern here, is that if nothing can be done a year from now, we either have to have a better choice on the price-cost front, or at least make it very clear that we've done everything that anybody could do
Or else then we're in a vulnerable position, even if the unemployment rate goes down.
Because then all we would have been able to do is to get the unemployment rate back down to where it was.
That's because we'll, uh, we'll stop the war.
No, I can't do that.
That's related to the unemployment rate.
Yeah, it's pretty damn easy to keep an unemployment rate down if you're spending $3,000.
It's going to take two million men to run around here.
So we will come soon.
But nevertheless, I agree that having the inflation will be a considerable issue.
Well, they tend to pay as much as they can.
What's your opinion on that, George?
I must say, I think we've got two problems.
One, what we do will work.
That's one thing.
And the answer is there's nothing.
It's probably going to work much.
It's probably construction.
Unless we go all the way, then it's probably going to work so damn well.
On the other hand,
The question is, what do we do that makes people think we care?
And that's a very important part of the problem.
Now, doing the second order has to be done at a time.
It must not come so early that it fails.
And then it is thrown out to us and saying, well, we don't know how to do it right.
And then it fails.
We're forced to do something else that we don't want.
That's my thinking about it.
So I'd be willing at a certain time
I can play the, play the folks.
If it comes at a time that we have not had some confusion, I'll advise to those of them that it works or not, but at least we have convinced people that we're trying.
That's the real problem.
I don't want to turn the reason for, take the freeze, the reason for the waiting price freeze, which, you know, we certainly should consider the first of the year, but I think it was on stage, as a matter of fact, is that we could try it.
And everybody would welcome it, or not everybody, many would welcome it, or as long as it worked.
And then after four or five months, the road begins to leak, and they say, why did you have a red carpet here?
And what about the, talk specifically to this proposal, what about the cap committee?
How about doing it through that, that, that, that procedure, is that, unless I think we're gonna do something else.
That is a possible procedure.
That committee, as a committee, is sort of not wielding it.
Well, we can set it up in a different way.
I mean, not us.
What we're really talking about is something.
I guess if we were going to design it, that would be a task, and we'd start arguing about whether to do it.
My inclination would be to set one up and point some people and try to
separate them somewhat from the residency.
I don't think you can separate this kind of committee from you in the way that you would separate a separate board.
Other than that, I think it's quite as close.
Well, there's partly that and partly that there is a kind of non-political element to it.
I think one of the reasons the construction industry committee is
doing as well as it's doing.
One of the reasons is that it is a management labor.
There are public members who aren't governmental.
And it's tied in with the governmental people.
But I think the combination of using the Davis-Macon Act and hanging there, everybody working on it, has helped to dramatize the fact that the industry doesn't have a problem.
The circuit construction does.
they are trying to give us some recognition.
The first results are really quite dramatic, and I can't really believe them, but maybe they're there, maybe they'll hold them, maybe they'll let it ring here where they are.
That was the head of the point, Mr. Morales.
I think that we're in a pretty good position.
It further seems to me that next year is bound to be better than this year as far as wage costs are concerned, and I think this year is going to be better than
than last year on that score.
Last year, we had high-wage settlements.
We had low gains in productivity, so we had big increases in liquor costs.
This year, we'll have a continuation of high-wage settlements in the metals industry, which had a bargain industry this year.
We apparently are going to have lower increases in the construction industry.
Meanwhile, productivity from all indications is picking up in the construction industry pretty strongly.
It is.
And across, in sort of a statistical sense, across all of industry, it's picking up.
At the same time, this fairly constant rate of increase in average hourly earnings seems to be resistant.
And so it's been surprising to me how that has performed over the last three or four years.
But next year, I don't see any reason why it would go up.
We're going to be in second and third years of the negotiated contracts for the most part.
All these contracts are fronted loaded so that the increments in the second and third years are going to be lower than they were in 1969 and 1970.
And meanwhile, I hope the increment will be rising.
And there are very few things being negotiated.
Longshore, where there's some interesting work going on, where we are in, and I think we do have some leverage, have been working, and can continue that.
Electrical, which presents a problem, because GE made a hell of a good bargain, it turns out, to the point where the last I talked was Fred Gorsh.
I haven't seen him in a couple of months, but he was...
He said, well, I think we have a problem.
I said, what's your problem?
I said, you've got a good deal of negotiations.
He said, well, I think maybe we've got two good ones.
And we might have to reopen and increase our contracts somewhat.
Well, I encouraged him to do that before he did the negotiations so we don't have another big catch up.
But anyway, whatever happens, the electrical people are tough customers.
And they don't give away the shop.
So I think that's sort of the big, pivotal negotiation in 1972.
We can hope they'll have railroads behind us.
We'll have some airline negotiations.
We'll be a home to railroads.
But I share the view that's been expressed here that inflation is the problem to keep our eye on.
I guess I would have to say, I guess I'm more in John's camp than Paul's on what's happening to the economy.
I think that there is a good substantial expansion underway.
And to a degree, this rise in interest rates, well, there are all sorts of things associated with it, I'm sure.
But to have a rise in interest rates in the face of the kind of monetary inputs that Arthur's been providing,
means there's got to be a hell of an advantage for credit.
What else does it got to be?
Does that mean there's something real behind it somewhere?
I mean, the money's going to be used.
People may borrow and trade in order to protect themselves against higher interest rates for a certain place on the future.
I think that's exactly what's taking place in our country.
Basically, that's what's happening.
the borrowing end, that the supply end, the lending end, this veering and intensification of the inflation rate are holding up for smaller and higher interest rates.
Because they would be paid back in cheap dollars.
So we have demand to keep producing this, and just before borrowing the supply, it would interest rate the nation.
But this money that's being borrowed is borrowed at very high rates, and somebody has to have at least some perception of using it.
That just costs their apartment to have to sit there at these rates.
We have very low inventories, the exception is the steel situation around the economy.
Cedric Stewart is the inventory failure.
At the rate sale, we're going to see more or less this spring level of inventories start getting rebuilt.
In fact, that may be what's beginning to happen.
We've got the right statistics, the proof of that.
The pressure, George, really, I think you're right.
The pressure has been much of a long-term race.
And this, again, I think it's back to the fact that nearly everybody thinks we're just going to have a continuing inflation.
They have this fear of inflation.
And that's where the pressure has been.
My idea is, and I don't know that this will happen.
It could well happen.
If you get a race at prime rate, or to have a percentage, I think it's a company.
It might well be that we'll get some additional barring in the short-term area.
It might have a psychological effect and take some pressure off the long-term barring.
I would hope this would happen.
That's the only good thing you can have from this.
I'll tell you one of two things.
One, the intervention point.
Two, the inflation point.
I don't know if that does concern me a great deal as far as how hard our choices are.
I think that we have a large deficit, but we're in full-time revenues.
You're still well spared.
That is the problem.
But we do have a very large deficit there, probably around $24 billion, as we talked about the last time.
You're still at that point?
You're still trying to sell more?
The basic thing that's varying here is the Treasury estimates and receipts.
Our expenditure estimates have been fairly consistent.
We haven't changed too much from it.
from the beginning.
In fact, our estimates of expenditures have fallen somewhat as we have.
So there have been various things we've done to move that up in terms of the champion fiscal 72 or fiscal 71.
For 72, we have a prospect of a very that is far and beyond all final receipts.
But, you know, you can't just say this.
You can't pull all the parties down.
Our estimate is that we're going to have a meeting.
And generally, Arthur, if you're not with me, I have a solution to a meeting on that.
Tomorrow, I don't know what our legal policy is going to be.
Mm-hmm.
Take action on it.
I'm down to it.
I'm down to it.
Does anybody here believe that we should have, that we should have lived another way?
I am tending to try to hold on, on spending as far as the congressional...
And this is a concern which will be on our recommendations.
And I'm not saying that everything that comes out of it will be vetoed.
It isn't exactly what some will.
As a point of view, and I understand it now, the way to boost the economy up is to add a lot to the expenditures.
Does anybody believe that we should do it?
Well, let's face it.
Just let the budget go ahead.
We can do that.
And if you want more money in the economy, you can spend it.
It's just as easy as pie.
Because you can do it on the basis that the entire person is spending it now.
We may get it anyway.
It may be that we believe we'll not be able to do it tomorrow.
I don't know.
I don't know, John.
I don't know.
I don't know.
I don't know.
I don't know.
I don't know.
If I thought, if I had ever be shown that the spending is going to have an effect at the right time, it didn't probably, but most of the congressional stuff, it has an effect at the wrong time.
It would have next year, not next year, two years from now, that's when you start, after you have your recovery, it would come in.
If anything, it would come in to be, and here the economy is shot down.
I don't know.
There is a school of thought that strongly advocated, you know, I see it in the news.
All these people down here in Congress, and the Democratic side in particular, say we ought to spend more in order to reduce unemployment.
What's the answer to that, Mr. President?
I think one answer, by the way.
Yeah, I think one answer is to put out these, put out every lesson to us instead of working here.
Put them out and let the people speak.
Well, they're suing our penny now.
And the effect in some ways will be bad, Mr. Preston, because those who fear inflationary consequences and intensification of inflationary pressures
We're doing too much of it.
Well, your view then is that we should not.
No, not at this time.
I think it could, it could, it could move around.
It could move around a bit at this time.
I mean, I'm not making, I'm not making a judgment for all time.
I'm making a judgment as of now.
I would say, I don't know, follow the tax reduction, sorry.
We didn't do that either, not now.
See, that's the other suggestion, that we accelerate the personal income, I mean.
I just wondered if that's going to have any effect.
I don't see any, frankly, I don't see anything worth doing on the money side, other than the job-producing area.
But people got a hell of a lot of money.
We just got to spend it.
If I can show me anything, however, like when we came out in the railroad, if you show me anything, we can have a ruling from John Connick or the IRS that you've got the tunnels to be written off and that sort of thing.
Why not do it?
Let them do it.
That kind of thing produces jobs.
That's why I still like the idea of our, you know, no, no, no.
The only thing wrong with that is the size of it.
At some point, you are over all of them.
And you may want to do this in January.
You may want to recommend that we have a little while of thinking that you may want to recommend with respect to newfound equipment that it be written off and not to exceed two years.
That's fine.
Of course, there is no question in my mind that what the present liable appreciation schedule today, particularly in the light of inflation and rising costs, are not sufficient to replace global inflation.
I think that's a fair statement.
The way you're going to have to deal with this is to have a sort of optical illusion, where you just write off the equipment in a little shorter than you realize.
I think we have to recognize our resistance.
We've got a problem here.
We do have a sludge in our hands.
We are increasing the number of events in the year on the sign of the 4th of December.
For the coming months, we'll provide quantity 6.0, 6.1, 6.2.
As far as the weekly insured quantity, I don't see any decline.
It may show up in June.
Although, our concerns are not certain about that.
Uh, this, uh, this, uh, this starts to get to be a rather sensitive issue.
I don't care whether we reach 1065 or 121.
Oh, you mean 121.
Uh, but, uh, what, what I don't want is, is to, uh, is to have the economy jog along here with a nine-plot, with a nine-plot, or really with a nine-plot price performance.
I was urged to keep open the option of additional standards on the tax side.
I'm just saying in case of the acceleration of the schedule of the tax exemption, if we had a further move in the area of the investment tax metaphor, it would require some solution.
That would require the exemption.
Well, yes.
Well, I don't know how small...
You do not argue with the top of the market.
I don't want to tell you what I think.
Two months ago, I was reported not on the case.
I am moving towards the end of the lesson.
I asked, uh, to get the economy going.
I'm scared of the sooner.
I'm glad I'm going to be able to release all the books.
Well, nobody can be sure.
I know I can.
But the fear of inflation is great.
I think it's great.
It's growing brightly because of what we've done for the day.
It's growing because of what has been happening to the business side.
And as we move towards lower rates going up long, which I hope we'll be doing, I think these fears of inflation will multiply and I'll lose the power to issue.
in 1972.
And the two signs are probably needed.
First, energetic action.
Never mind what shape it takes.
I can be very humble about that.
The energetic action on a person's age front.
Second, for the time being, a halt to expansions was her policy.
This would
My guess is that that would do more to the confidence that is money than perhaps anything you can do with this time.
The same medicine is going to cause, if he is, an intensified inflation, an imperceptible shootout.
And as a result, you may find that next year, home building is sliding and sliding down sharply.
You can't stop it.
And we at the Fed will be unable to stop it.
They blow the destruction into the moon.
Now, these are the kinds of lost elements from my life.
The particular world, really, I hate to say it, I hate to think it, but I'm driven by fact, I think.
Take one thing, I suppose.
Something like a decade has elapsed, or elapsed between the recession of the 1960 and the one
The economic policies that we've applied are policies born of the painting of the 1940s and the 1950s.
Every time the world has changed around us, I take one fact of the profoundest importance.
Trade unionism has spread and spread to public employees on a huge scale.
We've had innumerable strikes.
public employees.
These have been strikes against the government.
They have been busy with strikes.
And we honor them.
They've made them successful strikes in the sense that those who went off pitch, you know, they got nothing to brag about.
Now this has had as a consequence, or this has been moved, for any of the leaders in the rank and file, the people feel, oh hell, the government doesn't have the guts to go after them.
And let's get it while we can.
And the spirit of illegality, going after yourself, lawlessness, you know, is now spreading through the country.
And I think it'll take very strong medicine to change the psychology of the present time.
And I think if you lead in our policy of education,
The policy shape during the 1940s and the 50s aren't working, Mr. President.
I wrote down a set of tables that I'm going to leave with every member here, which I attempted to put together.
The evidence on inflation, what progress they're making, and these tables in different ways.
It's going to lead to a swift move.
I know where he is.
It's very far from clear to me that he's made any progress as president.
Now, when I look ahead to a stronger economy, lower unemployment, I see a quicker pace of inflation.
I ask myself the question, how are we going to get the lower rate of unemployment and a quicker economy?
I'm curious to see what I believe we can and will unless we convince McHenry that we are trying to keep policies recognizing that we have any problem before us.
That is the new and difficult element and that I wish
One of the things that I want to come along here before long is a reading, pardon me, of the police board employee bill that you read out last December.
This is a bill involving a blue car, federal employees, and it will have a, let me stand up now,
And additional five steps for wage increases, which would have the effect, probably, of increasing wage rates by eight to 10% above the level achieved by comparability surveys, which it wasn't quite that bad when you meet others last year.
But things have been either.
One thing that we could do, at least I don't know,
in the process of conceiving a series of steps and things to be done, one would be, as this bill comes down the way, is to now look, is to veto it, veto it with a considerable amount of effort to show just why some of the broader implications involved and just some other things at that time could hit this problem.
I didn't mean to get off the straight of the heart, but I didn't mean to hear about it.
I wanted to pick up your comment on the public employee side.
Your worth is not so much, but your wages are rising rapidly.
Well, especially with 13.
What I think is that being able to get what you want, willing strikes, has had its end in it.
I think it's a great human resource.
I'm sorry.
I'm sorry.
Back here.
That's where you get back to your wage price, Lord.
I'm sorry.
Well, you know what you do with your time?
Well, you're doing that to really satisfy the idea of the two economic policy actors.
Well, let me tell you.
Let me tell you what I know.
The, uh...
There was a vision a year ago.
Price means, at this stage, if I go forward at all, I go forward first.
A little later, the reason you cited me, you know, there will be legal dissatisfaction among the... Now, second, I think that a way in Christ's praise when it comes to that would be more convincing if you tried to remind us of this for a few months.
Or, in my own thinking, here is where I am at present.
for the August, August 1st.
You can't do it once a night supplement.
But I would, I would engage, I would engage in some strong juggling.
And you will be, well, just juggling, you know, you may not see anything.
In general, in general, I wouldn't want to be a victim of a lot, but we can do some more, all right?
Now then, call in, call in on labor leaders and business firms.
Now, I have a couple of strong needs in Washington, D.C.
I wouldn't want to steal industry specifically.
Right after that huge wage increase goes into effect and price increases that follow, I would ask the Cabinet Committee on Economic Policy to, uh, intimidate him.
and to, uh, if anything occurs again, strong recommendations.
I don't think that will accomplish very much of a supply of medicine.
This will be a waste of press for you to board under your own guidance.
The, uh...
I guess it may prove helpful.
I, I...
I wouldn't want to pretend it.
It might prove helpful.
My guess is it will not prove helpful enough.
Early in the year, he might want to go for a wage and price freeze, but then I would want to lift it by July 1st or August 1st.
The second tip he uses, that will be announcement.
If lifting of the freeze is followed by irresponsible behavior, I have to be really close to Trump.
Now, this is taking several stages here.
At every point, once you re-examine, you see one's position.
The options should, of course, be kept open.
Well, this is the kind of scenario I was laying out in my own mind.
I need to measure.
I need to measure.
But I don't see, I don't see, I don't see the invasion problem being lifted
And I see our best hopes in the economic and political sphere.
If we do not convey to the country that we've tried a policy that hasn't worked well enough, and now we're determined to put the nation's economy on an even field, then we're going to take strong medicine and eat each of it.
Three, we can get economic expansion and subdue the inflation.
That's my idea for the future.
I think what we just did was to make an element.
Sure.
Let me talk politically, Mr. President.
I think I've seen fans, the Democrats and Slavs,
I really can't.
The double-minded, with their argumentations, bear in mind what its argumentation would use against them.
They were power.
They'll point to a deficit.
They'll soon be able to point to a deficit between the U.S. and the order of magnitude of $50 billion.
To a pace of inflation that is not too much.
that point to an unappointed rate of 6%.
That point to a balance of payments, deficit, several times larger than any experience in the past.
If the election were held today, that is what
what the Democrats will be saying across the country, then I think we might get slaughtered.
We've got to do better.
Fronten, I wish to start.
Now, you know I care more about our employment than I'd like you to know that.
But I think that perhaps the best way of getting a hold of the unemployment problem
is to subdue these inflationary expectations that are still widespread and that have been re-aroused over the past two months.
And that's why interest rates are going up.
Basically, they shouldn't be rising or rising as much as they have in that sharp rising interest rates.
And as George pointed out, it's the face of the most extraordinary increase of the money supply.
It may make things worse.
Mr. President, I basically agree with Arthur.
This is what we've all been saying, that we've got problems with inflation and unemployment.
I would disagree with him.
I'm more concerned about inflation than I am unemployment.
I have a different view of all of this in terms of when you
When he would announce your cabinet committee on economic policy, the rest of the media, which he used, not only he could do it immediately in the aftermath, but the sun would steal from it.
It becomes so patented.
A move after the horses out of the barn, et cetera.
I think after about two or three months of that, at least,
or you'll be successfully accused, and the figures will say, you knew what was going to happen.
Why didn't you do that before then?
This is a cheap political ploy.
You let them get theirs.
You don't have any other negotiations coming up.
You set still all spring and most of the summer.
You let the can people, you let the autocrat people, you let the steel people all get theirs, and then you did something.
So I think a respectable period of time has to be left between the steel banks
and the creation of your committee, whatever it be.
I don't disagree with basically the rest of what Robert says.
I think it's a question of timing.
I'm not sure I agree completely with his scenario.
The objections I do agree with, I think, happen.
And I agree with Paul.
Paul, the place of trust in his committee was, of his report was, that you have to have some further over-pack with respect to the
I think you're going to have to have that before next year.
Now, this is not new to you.
It's something you know, but it's something you've all been talking about.
I have a superior question for company again now.
And I would add just one thing to what Arthur said.
With respect to steel, I don't think it's too late.
I would at least do this.
At some point, George, I want the negotiators to come to Washington.
The good news is, the good news is we will be held in Washington.
They should be back in here.
All right, it's something.
During the time that they're here, I think you ought to call them down here.
You call them down, sir.
Labor and management.
And just say that we're not trying to dictate the terms of your settlement.
But I will show you what our statement keeps of what's happened in steel business in the United States.
And let the CDA or Pete or whoever who has the best feel for what's happened in steel industry
put on a very sophisticated, strong, polished, very firm presentation of what's happening in the scene of each event and so forth.
And just saying that you fellows have to negotiate with each other in terms of the practicalities of what you're going to be confronted with.
You just can't be completely optimistic about what you're thinking.
Not only here, but the world would have.
I would at least do that.
And many of them, at least you'd have the satisfaction of knowing that before they made their son, or whatever it was, you'd explained the facts of actualness, you saw it.
And that would give you some credibility for imposing
a wage-price board or a catatony within a reasonable time after the settlement, if that's what you decide to do.
I don't think you have to leave your options open.
I think, frankly, if you just have the keys and the crystal ball, I would say sometime between now and a year from now, you're going to have to impose some kind of a freeze on a wage and price of drugs in this country.
I just don't have a plan for it.
I might as well impose them and take them off again.
But let me introduce one item to the discussion.
The, uh, the, uh, there is purely as illicitly the fact that in law, your powers cease on a person.
So if you use those hours of water prior to that time, then you'd have to go to Congress and ask for their extension, whatever your favor.
Otherwise, you'd be next to having to use that extension.
So I think it's a question of time, and I think it's a question of manner, of when you do some of these things.
The, you know, the, I'm not sure when we pause.
It's a question of time.
I'm supposed to for a moment achieve you on a five to six month race to close in February and March.
I'm going to go to Congress to have it extended.
The Congress I'll give it to you.
I'm going to press the plate to the country.
I'm going to press the plate to the country.
I'm going to press the plate to the country.
I don't think you can do anything in the immediate future, very frankly, except consider the possibility, which I've just outlined, to steal the steel.
Either that or some variation of that.
I think that's all you need to do.
Rather than hide it with Paul or unemployment, make you up another point.
And that doesn't even worry me.
You're going to get blasted because of it.
But I'm sure we're not going to go up with a tax
to release the bill now.
I sure wouldn't go up with any additional spending now.
I would, but I wouldn't publish the decision as soon as we can, the magnitude of the deficit, and keep publishing it so people, the Congress, in fact, would pass these spending bills and the full amount of how much of the deficit you're going to pay.
Beyond that, I think the economic situation justifies it.
There's nothing further I can say.
I agree with you.
Mark is not advocating any of it.
No.
No, he's not.
That's correct.
I object, so I'm not.
I kind of hate to.
being a minority of one.
But I hate to see us accepting the idea that we're going to have a free or a rigid right to control.
Because I don't really think that's indicated by the situation.
But leaving that to the side, and I recognize it's still an issue.
If I could interrupt for one moment, can I ask you, George, to talk to, uh, you know, this gentleman?
Who's talking to Steele people?
Jim is talking some, Kirk has his talking some, they both have ideas about it.
I don't know, he talks some too.
Well, fine, you sit with him sometime.
Just start putting that in the middle with him.
Because I'd like to meet with those folks and I'll do it and I'll do it.
But I'm inclined to think you do a little together.
If they'll come.
I haven't had too many of them.
But it seems to me that in addition to telling them about their industry and the futility of trying to protect it, they can be helped some with that.
But it's basically .
It seems to me we ought to try to figure out how to go further.
and say to them something they might achieve, namely, how can they get a more constructive tone out of their collective bargaining so that by the time they get to the end of it, maybe they'll give it, I'm sure they'll give it a walking weight increase, but if they can at least have set up some procedure for struggling with their problems more effectively, it seems to me that's an advance that would be constructive.
little ray of hope in a river of situation.
If they agreed to do that, they'd recognize they've got problems.
And I think that's something that could be striven for.
It's like, for example, some suggestion that they might long last start doing something about work rules, talking about their work rules problems are not as great as many other industries.
But they're a whole host of things that they have to do to build their relationship.
with the nature of changes that need to be made.
A variety of other things that we might find out, and perhaps even offer to work with them in government industry sense to see what could be done to improve.
Now, I think we have to go beyond steel.
This is a very good job indicated here.
And then by the longshore, on the wave side,
There's a spurge in here somewhere.
It's going to be this blue-collar waste bill.
Plus, the big postal settlement probably will have to foster themselves on the longshore.
At the end of the last strike, we said, well, we'll try to do better next time.
And a lot of work has been done with the union and with the management.
to sort of make them more aware of their problems.
And I'm sure it's worked on that.
Jim Huston has been very much involved.
And it seems to me that here is a case where some kind of productivity might work out.
And with the Labor Department people, a special record might be made with that Longshore Registry, which also has its problems.
Now that, then your next thing to go.
There is a situation where the companies do better if you leave them alone instead of fiddling around with them.
That's their situation.
So that's the way I would see this thing playing out.
I'd be glad to try to get a seal.
They've organized to do that with some enthusiasm.
Right now we're on a scale of 80.
It's the devices.
It's just a question of whether we want to do it.
We can do it.
The problem with me about that is that they sell and steal a four-hour day.
We can do that.
It's real.
I'm dead.
We're not careful.
They're going to have to give a cost of moving escalation.
I just feel certain they're going to have to do something like that.
as probably are good, but they should be in a position of giving it themselves and getting something for it.
And if we go out, as I think we're kind of inclined to, and start talking about it, and I do this myself, about how that might be desirable, well, we take it away from them, and they don't have to give it anymore.
Their biggest cost problem is something that's very subtle and doesn't appear on the surface at all.
It has to do with the message itself.
where they can't take the can cells because their workforce is so much older than the can workforce.
Well, it is older, yes.
And so it's a very subtle kind of negotiation to kind of keep out of because we don't know as much about it as they know about it.
So I think more of a private...
are politicized in the private and hits the general picture of the industry and has problems and doesn't presume to know where it's at, but looks at it from the outside, and I think that's why.
So, are you objecting, George, to 14-1-3, that, uh, that sometime after the steel settlement,
I recognize John's comments, but I've got several things to say.
In effect, we've had three years, and that's a round of increases in everybody's cause by now.
And let's take a deep breath and do better in some fashion.
And I think that would be a healthy thing to do.
that a board of some kind or a freezer, which is price controlled, would look good, like I think this guy does.
Which is a very good job, in the sense that it's more specific than just talking to anybody.
You know, there's one client that has not come out on this discussion at all.
I want to call attention to it.
He's now a great fellow.
He's the most
business capital investment is moving down.
Now, I think I know the record of business cycles in this country recently, but I recall only two numbers in which business capital investment did not participate in and in fact lead to economic recovery.
And those two instances are, first, in 1914, we had a depression, 1913-13.
World War broke out.
We, the huge export demand took place.
And that was the driving force in that recovery.
And then in 1933, the capital investment was not the driving force.
It was a passive act of the driving force that came from the Sears family.
Here we have a machine that's about a 4-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3-3
I think businessmen are holding back in large part because they're confused and worried and uncertain.
They hesitate.
And they see wage costs zooming.
And they see profit margins sliding.
And they're not ready to make a difference.
Before 1972, just like others, you will have to change.
I don't mind the slow pace.
on the face of this expansion, and that's unlikely.
We'll have to accelerate it, but we don't need to get in trouble.
That's the principal reason that I predicted a moment ago, George, that I'd have to do some way to press controls, primarily on psychological issues.
I think that's one of the real factors we have working against this country today.
I don't want to press the dead, or make an accusation.
That's fine.
Lots of time.
And it may change.
I know this.
Whatever we do, the Democrats and the liberal press are going to give us no credit for it.
My God, you've got Collin, Mr. Landon, you've got Ed Toros, the New York Times, you've got everybody else jumping on us for a lot of key things.
All we're trying to do is preserve jobs.
We're trying to preserve competition.
And these are the two things that these liberals already are.
They will be for preserving the competition.
I knew that if you wind up with only two major F range manufacturers in America, all of a sudden all these people just fire.
Preserving the regional competition.
I mean, let's say you all need jobs, they all get out to the corner.
On the contrary, they're downgraded every day in every way they possibly can.
So no matter what you do, they're going to take the odds out of it.
It's also the theory of the book.
It's to their advantage to have them fail.
.
.
.
.
.
I think we've got the estimates, but I think we need to have a real analysis of why they're different from the way we had yesterday.
Yes, we are pushing for that.
We would like to weigh in on this.
Consider how to put it out.
There are things to be said against the kind of full-blown analysis that we have here in tabulation.
And it might be the best part of a good job message or something like that would be better than that.
Well, we don't have some small thing down.
We have a problem.
I don't know.
I don't know.
I don't know.
I'll walk around shaking hands with everybody and sit down and say, now we've met with you, and we've met with the Amtrak people, we've met with the managing leaders, and now we're meeting with you, and this is a very important industry, and so forth and so on.
And he's better than ever, and I'm asking him, and he's like, yeah, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then,
I think the two of us and John hoping to join us by the end.
You have something to talk about.
I really enjoyed this meeting because we did the other thing.
One of the things I wanted to ask is, can you refer to and even discuss a little bit, I want you to discuss with the railroad residents in the show.
That's what it seemed to me to be the deal.
Don't.
I told you so.
And that's exactly right, Frank.
Okay.
I think we can figure out some of these things.
We've got to run away a little bit.
But anyway, we should have our next meeting after you get your budget figures.
And I will see you after.
Certainly at a later time.
Thank you.
SECRETARY KERRY, THE PRESIDENT OF THE UNITED STATES, THE PRESIDENT OF THE UNITED STATES
You're not going to read it first.
How's that?
That's fine.
I wouldn't change it, though.
Oh, no, I'm not going to change it.
But we expressed our opinion about that.
They all know what we think.
There's no use reiterating now.
All right.
Don't be too embarrassed.
I'm not going to read it.
All right.
I'll be right back.
All right.