Conversation 530-010

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The light is making you say what you did.

Leaks.

As a businessman, I hate to do it.

But we're not going to crap around with it anymore.

I don't care that they gave the cap.

Because I got that.

With only the parliament present, I said, no, look, before this stuff happens, the parliament, I said, is he going to go over high execution?

I said, he's going to come anyway.

And I said, when he calls, it's me calling.

Don't assume that it's the White House doing it.

If they just got to me, I would be softer.

I said, if you get to me, I'll be tougher.

So we've got to do it that way.

And what is happening is that when you get to see the iceberg, I'm sorry, it's difficult.

But there is a, right down through the line, it says, hashing.

You see the publicity, it says hashing, too.

to see publicity.

And some want to do us in.

Some want to do us in.

I don't mean cap people.

Some of them are supporters.

Some supporters want to do us in.

Others simply want to live with the press.

But in either event, both are doing enormous harm because then the only guy who makes the decision is going to fall is my son.

In business, this kind of crap can go on once, and I'll tell you, there'll be more firings than you ever saw.

But you can do that all the time.

I've got lots of covers for it.

It'll be faster, perhaps, than it would be like Japan.

We've got an attitude problem here that I think is valid that I want to be sure you and I talk about.

It's centered around safety.

I'll give you two or three very quick anecdotes.

Before we get through that, let me ask you to do one other thing.

They're thinking about... You're thinking about sending Greg to Japan.

Do you know him?

Do you think he's strong enough?

My question is, all right, I want you to, Ted, don't tell anybody you're doing this, but I want you to run through your mind the toughest, strongest, ablest businessman that could be at the moment.

I need somebody that will fight like hell for us.

Because I have great doubts.

The most important aggregation businessmen were here in the so-called Kaidan Ren, which is what relates to Sato and that partnership they had over there.

And they met with guys like Roach

and Gene Halliday, and Don Kendall, and, you know, I mean, the American elite.

On the course of the presentation from State to them, John got a very urgent call saying it was a fiasco.

I got four calls saying it was a fiasco.

And why was it?

Why State?

Who was State?

Alex Johnson made the presentation.

Now, why was it a fiasco?

We've spent a great deal of this time talking about what a... No, that's it.

What a flying thing open and out it was.

Hold on.

Now, second round.

Well, you can appreciate how good a bunch of businessmen have responded to this.

So I called Alex and I said, well, it's going to go over very well for you to talk about it.

Because 97% of the businessmen said, we've got to screw it.

How do we get something for that?

What's the problem with that?

I get memoranda for them that are briefing, you know, me and Bill Rogers for, you know, ambassadors and everything.

And the tone of it, Mr. President, goes something like this.

Our relationships with Japan are really basically good economic relationships.

Bill Rogers called me yesterday to send a speech over and I, you know, that he intended to give to the Japan Society.

It's got comments in there that

Well, I just made a note here.

We're five times larger than Japan.

Our companies are five times larger.

And the total effect of this on the business community is one of the world really hasn't changed very much in the last 15 years.

It really is much more competitive.

We can really take these fellows at their word.

They're making progress.

And it's creating us some rather substantial problems.

So I just want to take a minute to go through

My philosophy, and I've got a date hopefully with Bill Rogers on Thursday, but I want to be sure I'm, you know, you and I are ahead of this.

I have a teacher who said to me, I've been looking for a way that you could do the unilateral business.

We tried to do this legislatively.

I say to the officer, at least 50-50, we found it.

There's a balance of payments provision.

This is what I mean by making a limit made out of a limit.

It says if you have persistent balance of payments problems, you can take unilateral action to get those problems taken care of.

As long as it's non-discriminatory.

When I've got a thing that's sick, we've been trying to plan the strategy, but we think we can take some product categories, quote-unquote non-discriminatory,

whereby taking, let's say, the 1970 base, like automobiles, you know, some of the other stuff, it would have a tremendous impact on the Japanese, and they would understand it.

Now, having dealt with those people, as you and I have discussed before, for ten years, my impression is the right way to do it is not with a lot of public print in which you get into a political doubt, you know, and have one, but behind the scenes, very quickly, but very discreetly, but very toughly,

And my scenario is very different from what the State Department is talking about, which would be, be sure you've got a job on with teeth and, you know, something like this.

And you sit down quietly in the back room and say, these four things are terribly important, you know, to get done.

The restrictions, et cetera.

Try to put a little positive on it by perhaps bringing it into Southeast Asia in some way or something.

But on the tough bargaining, I think in the unilateral, tough-minded view that you're willing to back up, in which, in effect, they understand that unless they take certain actions, we're going to have to take other actions, you know, to redress this balance of payments argument.

The reason I think it's a possibility is, thank God, we've got all these guys saying we've got a balance of payments problem.

You know, the head of the IMF, I've got statements from everybody.

But the reason I want to be sure you don't already have it on this is I think I have to sit down and go through the Japanese problem and say, though, not that I'm speaking for you in a sense, but my perception is there a totally new force on the scene.

Here's what he will raise.

He always raised it.

He clearly, oddly, hit him on this with some small gathering a couple weeks ago.

And I don't know if there's nothing specific.

So be that specific getting through.

Oh, hell, the end is probably undervalued by 15 to 25 percent.

And that alone would make a tremendous difference.

Oh, specific where we're getting hurt.

Oh, textiles, automobiles, you name it.

We've got a trade deficit this year that looks like three billion dollars.

And you see, one of the mistakes we make is we take these people if they're worried.

They've come out with these ads.

You may have seen them.

They have newspapers that talk about responsible marketing.

I confronted the Japanese with their own five-year plans.

So while they're out making speeches about responsible marketing and this sort of thing, I know what their own balance of trade is.

For the United States this year, it looks to me like a number like $3 billion in the hole.

Secondly, while they're talking about responsible marketing, their 1975 Economic Planning Agency projection is for somewhere between $8 and $12 billion surplus on trade.

You see.

So where are they going to get it?

Where are they going to get it?

They're going to get it out of other people.

Why the hell are Europeans going to get it out of other people?

That's right.

So I think, I've got all the specifics, I think, by name, but I need to assure you and I have a common understanding.

Oh, my God.

I'm a giant.

I'll go back all the way.

All right.

The second thing you gave me to do was technology, and let me tell you what we're doing.

First of all, you're in Japan, and I'm going to sound like a cunt up in Japan.

I hope not.

I don't mind.

Japan's 10-year plan, I've just gotten hold of, and I've read very carefully in the book that I'm handing out on briefing, and I'm going to ask you to do some reading in that so that you can get your own flavor of it.

Japan is obviously in this next decade going to build up their own technology.

They're buying cheap on the outside.

Their own plan is to go up by a factor of five or six times in the 70s from a little over $2 billion on

You know, industrial R&D is $12 billion.

So they're entering into the phase.

Now, I think this makes this technology U.S. problem that we've talked about all the more important that we really give ourselves a shot in the arm.

Now, I've sat down with David, as you've suggested, and all those guys.

I'm putting the following wrinkle on it for your consideration and theirs.

When we pick these projects, I would urge us to have three or four criteria in mind.

Very importantly, jobs.

Because I think we're, you know, we're getting in the posture.

You asked me to meet with labor, and I'm lucky to come here alive.

You know, they're just taking a part in jobs, and we don't give a damn about unemployment.

We don't give a damn about the job.

I've come up with a happy number.

I've read you about it.

You may or may not remember it.

100 million jobs by the end of this decade is the number we're going to have.

What?

I don't think it goes great.

I remember you and I were talking about it.

Ah, yes.

You've got to get a target.

Now, the emphasis I think we should put on several of these technology products is new jobs and new industries.

See, we'll need 20 million more by the end of the decade.

So when you pick whether you go into water or something else, I respectfully submit that job input should be a very important criteria.

The second one that I've suggested to David and friends is be sure it's an American industry and not just science for the world.

And that means patents and it means, you know,

You need, and I suggested to Ed, that on each one of these major goals, water, et cetera, you do what you and I talked about.

Find the three or four best invented mines in the United States.

Get them thoroughly excited about it.

You can put a lot of emphasis on following the idea as a very important criteria.

And I said, Ed, if all you do is spend $50 million on a dull idea, you know, it's a stud horse approach to this problem.

So that's the second one.

The quality of the people working on them, and this is a recruiting job.

I mean, in certain fields.

Den Lamb is great.

In other fields, he does nothing about it.

And I think we can attract him, particularly with a little help from him.

So we're working very hard on that.

I want to explain to you, and I briefly talked about this.

I've since had several discussions with Roy Ash about this, and I've tried it out on some business.

You will be very surprised, I think.

at the virtual unanimity of view that this country has got to do some more economic planning.

At the very least, I mean, the most conservative businessmen, you know, the PR planning has appeared to the most liberal.

Say we're competing in a world where they're picking projects, they're picking goals, they're doing joint R&D, and they have a better sense of where they're going.

One of the reasons I want you to read this, it'll be in a couple of days, is just to get a sense of how they go about thinking about their religion.

And I think that's true.

We have done very well in a royal life policy.

And I must say, I'm going to lay things bare for you.

I mean, in terms of trade, in terms of the American economy system, because I have seen that the planet screwed things up so much in the last place in the world.

Well, I don't know about Arthur Burns, wage and price control, or whatever he wants.

I do say that we've got to have some long-range planning and goals because of the massive, first, the competition abroad, and second, because of the massive effect government now has, whether it wants it or not.

And God damn it, the government's got to expect you to do it.

And also, you do not have a business option here.

Or the money.

Some of these projects are enormous.

And they're just big.

They're just bigger than any company can do.

It's the way we water.

And Japan and Europe put it all together, you see.

And we, with our antitrust, have dumped it.

Now, my specific proposal, which I'm going to have to you in a couple of days, I'm sure he's with us on the shirt, is to make this rather a little bit bipartisan.

Now, I have not told either Roy Ash or Ben Hyman

what your views are.

I simply said I'm thinking about it.

Ben, you remember Heather Johnson's reorganization thing, Roy and Heather Gilbert.

They're both very hot on this.

They both think it's a problem.

And I'll send something in to you, but if you have any final objections to this, their specific mission would be a very narrow one.

What kind of planning makes sense to the United States and where should it be organized right now?

I hope, frankly, instead of

swimming before we know how to even walk in the water.

We might start out on a limited basis where we might take four or five goals, you know, we've got technology in it, you know, economics in it, instead of trying to, you know, socialize this country, we do, you know, a certain amount of limited, I mean, you'll have something on that.

And I think you're going to find more receptivity than I would have thought from the business community.

This is, you know, who normally even think we kind of let the market decide, but they know we're in a different world.

Next subject.

I don't even know whether generalized preferences means much to you or not, but you remember that's the thing you do for the less developed.

Yeah, yeah, yeah.

We're doing it mainly because we're doing it for Latin America.

You've made various public commitments.

Now I've made it with a dad in Latin America.

So let me tell you the problem as I see it.

We're running a trade deficit now for the second month in a row.

First time in a long time.

1971 will be lucky to be breaking this number between minus one and plus one.

We're trying to project an image of protecting the United States' economic interests and, you know, our future and our jobs and our technology.

You know, that's kind of a play that a tough-minded person would be in.

If you feel that we should drag off the name of the thing, we'll just do it.

We'll postpone it.

Well, this is my...

I think this is the world's worst time for you to be coming out with what looks like a generous liberal program named for the rest of the world.

Well, also a generous liberal program.

He didn't mean trade.

That's what I mean.

The State Department wants me to, you know, go out with them.

We've got to be liberal.

They know we have a neutral liberal trade policy.

Unless we get something.

Before that, we were a chain.

Now, I agree.

So the problem you're going to have is...

I'm getting all the statements.

Bill Rogers just made some very strong statements.

I'm getting pressured by the state.

I'm telling them, my sense of timing is it's a bad time to do this.

I'll just tell them I just can't do it.

You can just tell them that I have made a political check with you as far as the politics is concerned.

This is deadly, and I will not let this go to delay.

And that's it.

Now they say Wilbur Mills will sit on it, and my response to that is, oh, Jesus Christ, we're for it, and everybody's out beating our brains out about it.

No, sir.

I said, gentlemen, no, sir.

If there's one thing I want to say, we're working on it.

Wilbur Mills is like a four-cushion shooter.

That's right.

Don't you think we could just continue to study it?

Well, that's what I'd stall.

We're studying it.

That's right.

We're appraising it.

Our plan is more generous than your opinion.

It's the first thing that's going to happen on that hill.

Is there going to say, you guys keep talking about a new tough policy preserving our economic interests, and here you are getting the star of it again.

He said he's going to get something in in a moment.

So he believes we may have to go through some quid.

Well, this Japanese thing I'm talking about is a lot more likely with the public.

Now, I'm trying to hear.

It's good politics.

Yeah.

Good politics, man.

It's good business, man.

All of it is good business.

Good politics may get up to it.

Now, textiles and shoes, just to work on that.

Taiwan looks pretty good.

Korea seems to be stalling.

They're very tough.

Al Haig and I met, you know, about the Vice President's visit, and I went up to see him.

Our strategy was very clear.

We did not want him getting involved in the specifics.

So all I said to him was,

He knew how important this was to you politically and knew of your commitment.

We wanted it to be your solution rather than Wilbur Milton's, you know, solution.

But David Kennedy was the guy that had the responsibility, and it was very important that we be united.

I tried to keep him out of it.

Now, there's a very interesting development.

I just talked to Jerry this morning from Japan, and I suggested what we see to you like a screwy strategy, but let me tell you what the problem is.

We started out saying we'd take Taiwan, Korea, and Hong Kong, if you remember, and we found that section two of the report where you can impose it on Japanese.

The Japanese have been getting this message apparently.

I just gave them help when we were here privately.

John County's been doing the same thing.

I've been saying it to them.

Our patience is running out.

They're telling us now, you know, that's our thing.

They now seem much more comfortable doing something on textiles that's better than the military.

So I propose to the following screwy idea, which is instead of applying Section 204 to Japanese, we don't give it to anyone we apply it against.

The name of this game is to get the problem solved.

If there's any three, we apply it against the fourth one.

So you may end up with an incredible outcome where we do a deal with, let's say, Taiwan, Japan, Korea, Hong Kong, who's being sticky, or the other three, but all we need is

three and apply it to the fourth, okay?

So, it's not what we planned originally, but I want you to know that the...

They make a deal before the others will.

Because I think they realize now, I'm serious, that a lot of words don't accomplish something.

Keep thinking on it, do it any way you can, screw it, paint it over, just...

Shoes is the second part of the strategy.

I think David, you know, David has this reputation of being kind of soft.

guy.

He used to say this.

He'd be pretty quiet.

He used to scream.

The industry's not quite a lot happier with what's going on, but he has made a deal with the Italians, which surprises a lot of people around town.

It's a low growth rate that demands that some of your political friends in the shoe industry can't believe it.

They're keeping it quiet.

Now, the other one there you remember is Haley.

Now, they're being sticky.

They don't generalize preferences, etc.

But I want you to know we got, it looks like we got half of that.

Why can't we do it this time?

Well, you have that true friendship deal, you know, when we come up with 8 or 10, 15 little things to do there.

There isn't how long we can do it in the military.

The other thing they want is generalized preferences so Spain can have it both ways, but that gets us into this other problem.

promise them anything for the future, say, three or four years from now.

We'll consider it a couple of years from now.

But right now, we've got to deal with this problem, right?

We've got to generalize prayers.

We've got to praise.

And it just says, not in our interest, but if you don't praise us, you think there's no prayer for any generalized prayers.

But we push also to get it into Europe, you know.

Okay, next subject, common market.

I've talked with Henry about this, and I've seen him in the session.

I would like to convey directly to you my feeling about Europe at the moment.

I have a feeling from every input I can get from Europe that they're getting increasingly preoccupied with themselves, with their growth, with their success, with the way they're zoning.

And the big risk we have in Europe is ironical, as it's been seen, is that the very success of that enterprise may end up biting us economically.

I've told Henry that I think we need a major initiative on the common market.

I mean, something big enough, you know, to get ourselves into that thing so that we don't wake up three years from now punching ourselves, you know, looking at that thing from the outside in.

Now, that might include something dramatic on tariffs where we become part of that, you know, the old Atlantic idea.

John Conley's working on some monetary items.

I've told Henry we need the best brains in this country trying to make a lemonade out of security.

You know, somehow it makes that a virtue instead of a handicap.

But while we got this OECD business, you know, you remember that study group?

I don't.

I hate to say this, but I have never seen anything bold come out of 18 guys on the committee.

So I'm going to decide what we want, right, in a small group, and then we sell it.

Now that's just a quick wrap-around of this 18 thing.

That's just silly.

Absolutely silly.

But I want you to know, I think we need a major in this fight.

I couldn't agree more.

And I want you to tell him that I want to put the best content he's got to get a lot of some of this Ecuadorian fisheries, which is another thing we're going to screw around.

Expropriation, I wrote you a brief note on that.

My philosophy, I don't know, may be different than yours.

Well, John and I are together on, I think, 95% of the time.

But we may be a little different on that side.

Not that we shouldn't have a very big stick, because I pushed on sugar to give you the discretion to do that.

I would do it on aid, loans, every damn thing we could.

I'm a little worried about public speaking, because I've been doing my operation on expropriation for this reason.

I've been doing the studies of what is effective, and what I find is, and maybe I'm reading history wrong, is if we make too much noise in the newspapers, we then create a new issue.

And the opponents down there drag on to the fact that Yankee, San, Peru, and we're handling that relatively well now.

I think that deal they made with Oxenthal, what the hell?

Oxenthal, of course, will make any deal.

They're a pretty successful one.

Arnold Amherst.

Amherst, yeah, and Oxenthal.

But anyway, that's a whole other thing.

If that sticks...

Gee whiz, that's going to be great for the room, great for our system.

So, where I differ a little bit, I want every stick you can have in your pocket, and I want every... You know, I like the newspaper headlines.

I'm a little worried they'd create...

But John, of course, is thinking, I guess you might be thinking of the blue, but at home, you know, on the other hand...

If you don't deliver, he would like to have something.

He'd like to find one enemy.

One is not an affectionate, jittery kid, but that's what he needs.

Maybe not all this.

Maybe if it's a homeless case, let's do it like Chile.

Yeah.

Okay.

All right?

But not Perot.

Like Perot, that's where my wife is having some lunch with Mrs. Velasquez.

She gave lunch with her over there.

Right.

Okay, Russia, East-West, we've not completed the study.

You've asked for commercial opportunities.

You've asked for how much trade and so forth.

Now, Henry and I just have to be together on this, but I want to give you two things.

The pressure for East-West trade on the business sector is just going on like this.

Sure, because our export position is weak, our balance is weak, our value in the business, you know that.

Secondly, every contract I have for Russia,

is they betray an anxiety that I find hard to understand about making a deal.

First of all, this fellow Conroy is over here, you know, the economic minister, vice minister, who tried to pretend as though he and DeVries, as though I'd invited a delegation down here, when all I've said to them is send them a piece of paper, you know, and the next thing I know they're here.

I saw DeVries on Saturday night at a party, and Henry and I had clicked.

bringing gradually to the door, Mr. Peterson, you and I must work together on this Counter River project.

We can't meet a reason to fail.

I said to Mr. Kissinger at the end of the session on Monday, well, even if Mr. Kissinger calls on Monday, shouldn't you and I work together?

I said, I'll hear from Mr. Kissinger on Monday.

They're threatening to cancel the Counter River deal with cables and all that kind of stuff.

What I'm trying to say is something's going on here.

of an anxiety that's kind of unusual for diplomats because they're anxious.

Oh, they just seem terribly anxious to make a deal.

Now, I'm going to see Henry this afternoon.

Let me tell you, as a wrinkle, I'd like to suggest you fellas to throw into this.

I know it's involved with salt.

I'd like to throw consumer goods into this deal.

How do we get there?

Well, David's got a little bit of interest in consumer goods and consumer goods hardware.

I'd like to suggest we do it for two reasons.

In the first place, it's more business for us.

Secondly, from a political standpoint, anything that diverts their resources, I agree.

And a package deal is what I'm thinking.

How do we do that without, you've got to pay for the law, you've got to get these credits.

No, but they said they'll handle it financially.

And of course, what's happening is your friend, what's his name, Hanson, what's his name?

I think he's a friend of yours.

He was up that way.

They're trying to, they're drumming up magazine stories about the deal and so forth.

What can we do after that?

Well, I think if we, I'm going to talk to Henry.

We've got a list of consumer items that maybe we can throw into the deal and make a package deal so when you announce it.

you're detracting the military thing and buying more of this and spreading it around.

Now, I'm saying they seem so anxious, I think you maybe can get a little more of this in your country.

Unless I'm wrong.

I just want to get out of here.

You mean you want me to not swap grounds?

Let's assume we decide to go ahead with this.

I thought the correct senator discussed this.

I know this linkage between the big truck deal and the salt.

you know, deal.

Now that's a big deal and they're dying to get it.

I'm saying you might be able to throw some of our citizens, which I tried to be able to look like was more military, and it might make you look like you're gonna, you know, put the green wall.

Great idea.

That's a very, it was very good.

Yeah.

Also, it might open some doors.

It might open.

Anything that gets that country spending less on defense than on force.

And the next item, a deputy for me, we talked about James Lessinger.

He's taken the ABC.

I understand I got a little image problem with being some kind of a

of a liberal or something.

I think he is.

A guy has come up that might surprise you.

He spent 14 months on the Williams Trade Commission.

He's not an economist, but he's somebody I'm told you think highly of and others do, which is Dick Allen.

You remember Dick Allen?

I know, I know.

Now, Dick, I think would be, he's very much interested in doing this.

Can he keep up with you?

Well, he's been killing himself on some special projects.

I don't know.

Has he moved fast enough?

I don't know yet, but it gets to me.

I've talked with Waldman and Aramukhman.

He's fine.

The image is great.

We've got another project in the present time that we have to put some money on, which is terribly important, and that's to get this damn declassification done.

See what I mean?

We've got to declassify a hell of a lot of documents.

World War I, I mean World War II, Korea, etc.

We're going to get that system cleaned up one way or another.

And I'll be superb at that.

Let me say, I don't think your image problem is all that great.

I don't think so.

You just keep going around talking like you are.

And also, as you get into a fight with Steve, if there's anything that's irrelevant, let me say it.

Do you know anybody else in the other candidate?

Well, the other guy is a guy that's very liberal, and he's head of Democratic Nations, and I'm just in an election.

You probably shouldn't go that far.

You don't have any trouble.

It's so hard to find a Republican who isn't out there.

You know, that seems to be very easy to do.

Well, how long else do we have?

Well, we're really, we've got just two or three people.

There is a question by some of your associates as to how far we should go with this briefing.

Yeah, I know, I had to see all of them before, uh, all right.

I'll get you what you do.

Let me get rid of this later, group.

You go in and talk to Bob, and then come back, and I'll wait.

I'd like to see you.

Yeah, just walk right through Alex's office.

Sure, sure.

And then I'll let you in.

But I'm telling you, I never problemed out.

Okay.