On June 30, 1971, President Richard M. Nixon, H. R. ("Bob") Haldeman, Alexander P. Butterfield, unknown person(s), Ronald L. Ziegler, Paul W. McCracken, Manolo Sanchez, and Stephen B. Bull met in the Oval Office of the White House from 11:00 am to 12:08 pm. The Oval Office taping system captured this recording, which is known as Conversation 532-012 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 Do not cite this transcript as authoritative.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.
Draft statement, I don't know if you want to see it, but that's the Soviet cosmos.
You don't look.
I did say you wanted to have me.
Oh, did you?
Sorry, I didn't want to have you, but...
That's fine.
We'll do that.
Huh?
We'll take it then.
I didn't mention it.
I didn't mention it.
But, uh, the Henry had a couple of points that he might...
But it should be out.
It should have been out this morning.
That's why I mentioned Henry at 9 o'clock.
Well, Henry, I think it's out now.
I'm sorry.
Yeah, so today's meeting is... Let's see what we can do.
The question of, get this down and kiss it right away.
Modify it in terms of my putting it in my mind.
I don't need to see the final statement, but get it out and then buy it.
Get it out and then let me see it.
Question of who you want in the meeting.
They recommend Hodgson, Conley.
The State Department guided report on quota negotiations and the CEA guided to deliver the industry report.
The CEA guide and all.
Bring in Mr. Zegers, please.
What the hell is he going to do?
They'll draw on there.
Just, you know, kill the meeting.
They have a, they've done a revised deal on this thing.
Five months.
That means half the course.
But I don't want them to go on for a half hour.
Yeah, we'll kill it.
We've got a purpose of this is to, is to make it increase.
Ray's got Anders working on another shot on this thing, which he's gonna be shooting for him tomorrow, if that's okay.
You have tomorrow afternoon clear.
Tomorrow morning you're going to work with Henry.
Yes, and tonight I have to work on this.
So I can't do it any longer tonight.
I'll start working tomorrow.
Is tomorrow's ready?
I don't think I'll have any tomorrow.
Tomorrow you can go out with what you want.
Tomorrow night is good.
I suppose I can work on that.
Look, we'll have it.
See if you can appreciate me on that.
Who's saying farewell?
This Henry's got a statement that Henry's got some stuff the president dictated.
That if we get shot, we get shot to Christ's face over to Henry.
It was in the Bible.
It's in the Bible.
It's in the Bible.
But mine is shorter, very, very big, basically.
It's about three cents, two cents.
You see, that's the difficulty with all these things.
The longer it is, the less effective it becomes, you know.
And it doesn't get used anyway.
That's the point.
Just make it very, very short.
And can I ask you, Bob, what is the, what's his farewell?
Who's Mendoza?
Mendoza is the chief.
No, sir, he's your...
Chief Steward, you asked Hawaii.
Yes, he's going to do another assignment with one of the Hawaii stewards, and you asked that he bring his family in to say goodbye to you.
Now, what's the correctness of the thing?
No, I won't be ready then to talk.
before talking to them.
I've seen the script.
Is that what it was all about?
Well, yeah, we give you the format and the feel of it, so you know what the script is out of.
I read it.
It was all there.
It's all there.
It says what we do.
I've got to spend time on the speech.
See, I'll have to spend some time getting them together.
And the staff are giving me a complete script.
That's pretty clear.
I'll go in, as you guys, I usually do 15 minutes before and get the feel, and that's it.
If this is right, if this is the correct thing, but I don't need to have a long gas session about it.
Because I've got to determine what kind of thing to do on it, how to do it, really, is the basic thing.
He's not coming after us.
Not at this time.
Yes, sir.
And I think hitting the turkey snake again was very effective in the crime rate.
If you're permissiveness, that's the line.
It's the code word.
You understand?
Right.
Looking back at the law enforcement officials, it's been irritating to them.
for exactly what we're trying to do.
I see what I mean.
Your business has kind of been, you're in the American people's support.
I'm a law enforcement official.
We support Mr. Rubin.
I'm sure he's controversial, but he's a man that does things in their lives for the sake of others.
I think it's an effective thing.
But then also, I think the crime statistics are important, too.
All very well.
compacted into about a two-minute section, and then we'll be back in 61 cities.
61 cities, over 100,000 crimes, narcotics, and we have a major breakthrough.
And the year for these things has come to an end, is what I want to say.
It's a thing that people will understand, and also reflects what we can hear from President Baxter.
You know, Bob, the more I think of it, it's just infinitely more effective to do all these things without reading anything.
Or television, for instance.
I mean, the television, it isn't worth a goddamn if you get up and read something.
It just isn't worth it.
If I could have read that stuff that they prepared in the FBI thing, it would have been like a, it would have been just a white copy, you know?
Today, you're absolutely right.
There are times over where you read and then, for example, in Arkansas, where you read some and broke away from the text, which is effective.
You couldn't have done that today.
You couldn't go out and read the Turkish announcement.
The Turkish announcement had to be done.
Just give them a line there.
I think you've got to, the other thing, of course, is to get the writers to get it in more succinct.
Just remember that.
But get it in a couple of things, and they're going to lose it.
They're going to forget about it.
They're going to forget about it.
They're going to lose much of it.
You give them a text in one of the three or four paragraphs out of the whole thing, but the texts are irrelevant when it's old.
They're really irrelevant.
I mean, they're nice.
People like to sit in the bus and read the text.
But they don't use it, Bob.
You see that?
All that really matters is what you can get on a minute and a half of television.
And frankly, somebody can take a thousand words, and out of that, they can text a page.
One thing the text does, and you move away from it, is the buildup prior to the speech itself.
It has some effect from that standpoint.
You write the important things in the television.
Production.
Supporting.
Supporting.
It's nice to be able to be in front of everybody.
He has never served his party party.
He has always served his country.
That's the kind of thing, I guess you've got to get somebody on it.
or somebody who thinks in terms of the juggler.
In order to get that more into text, if you're gonna have it in text, you gotta have it just as good.
You agree, Ron?
He's got a mic.
I like that.
I was pleased that you mentioned he served three Democrats and two Republicans.
That was a good point there.
This is true.
It may be that Ray's
That's what, basically, is a grabber.
They grab her.
Cook is a good rider, and Ray is a good rider, but they're both philosophical.
Andrews has some feel for this.
Some better than either of those two.
He either has none.
I mean, he has a little, but he doesn't quite know how to do it, if you know what I mean.
And Buchanan has quite a bit.
He's got a heart, I'm sure.
I guess what we have to do is start to come down to one side.
Yeah, I'll go with that.
I just wanted to say that the AP bulletin as President Nixon today declared the year of permissiveness with regard to enforcing the laws of the United States.
The bulletin on that piece is there.
That's good.
You can give any issue.
What does he mean?
Does he say another remission?
The President said that the President and the Attorney General backed strong law enforcement, justice, and so forth.
Can I see that?
I don't know who was the permissiveness.
What do you say, Johnson?
Gentlemen, it's quite clear there wasn't any permissiveness regarding court decisions.
I read about it with regard to the
for this matter, and I've heard the train's a-crackin', I mean, it's crackin' awfully hard.
Your permission, sir?
Just say you stoned it out, didn't you?
And remarked.
Stoned it out very quickly.
Well, I think, maybe, uh, I guess, uh, maybe they're looking for something that they aren't gonna get.
But I kind of think that the only thing I want is for you to get a few suggestions down there, like the fear of permissiveness thing.
That's a pretty good thing to say, isn't it?
And it's blunt.
It's tough.
You see, the other thing is this.
When you talk about the economy thing, part of the problem of our speech thing is that the language is
It's just too goddamn responsible.
I sure did.
I may be wrong, but I take the land.
It's a person.
I prefer the price line.
Coke matches.
Beautiful stuff.
Press all gods about it.
It's over.
This is really what we're saying.
People come back to this and this is speech.
So what the hell do they use?
Let's get you to that average guy.
Give him a beautiful speech and say, Jesus Christ, we did something.
Now that era of permissiveness, that'll stay.
But you think so much you can do?
People will think about their kids, and they'll think about dope, and they'll think about the judges that let people off, and they'll think about law enforcement guys who stop, and they'll think about governors and attorney generals, and they'll think about the previous administration, and they'll say, my God, there's a tough guy in this job.
And they backed J. Edgar Hoover from the same state, who is a controversial man, which I said I was going to say he's controversial, but I was going to use him as a date.
They say he's controversial.
I said anybody who doesn't, anybody who stands on the right side of the road is not a big controversial man.
And I think that if we are really talking about triggering your own thinking, and people are not, by nature,
the type to do this sort of thing.
And, of course, if they don't believe in it, they can't do it.
You see my point?
If an individual, if a writer, a researcher, a PR call, doesn't believe a certain way, he's not to God.
He's gotta have his heart into it.
That's why I, why you lean to a McGinnity.
I don't know whether it's a word of God damn or not, but at least he believes this sort of thing.
McGinnity would have had the utter permissiveness in these remarks.
You really believe it?
Yeah.
And also, you've got to be clear.
He believes it to be stronger, that it's important to cut out this crap.
See?
And there are others that do not.
And there are others that do not.
They don't believe that strongly.
They say, well, you've got to, you know, we did it over there in the drug thing.
They looked at it almost exclusively.
I don't see most smart people on compassion, treating the addicts and the rest.
You can't go too far there.
I'll let you know.
What you do, what you do, you see, when you go too far on the compassion line, brother,
Then you're saying to people, well, it's not your fault, but it's society's fault.
And my point, which is the son of a bitch, the son of a bitch that goes out and becomes a drunkard, or the son of a bitch that drugs you, you'll feel sorry for him, but you don't forgive him.
And I just have a deep break in the law.
It is his fault.
It's not yours.
He did it himself.
He's living in the same society everybody else is.
That's the point.
I just think that we, because that's the whole, I don't think it's permissiveness to fit in there with crime.
he put himself there not who he is
You see, here's the thing.
The point is that, except if you can, if you don't have anybody on the writing staff who thinks that way, who believes that, see?
If you can't believe it even too strongly, he has no compassion.
None.
I'm making you just straight out.
And now, man, the guy in this office has to show a little compassion.
See?
He has a compassion.
But, boy, you're sure right.
There's a hell of a lot more people that aren't interested in the bill.
There are more people...
an awful lot of people don't like to do that.
They're victims of crime that aren't criminals.
See?
I think that irreverence will start to, will start to give hope across the border.
See, it's a slogan, it's a word, and so forth and so on, but you can see that it's just something that may
and you start, we'll start, there'll be columns, pitching about what's he mean, what is for missing this, are we just going to be, police brutality, all that bullshit.
All right, fine, we'll be on the side of the police brutality, let them be on the side of the other.
All right, that's the way we're going to do.
And I want this bunch around here to understand it, you know, everybody, everybody's got to understand it, basically, that I am not going to stand for this, this is soft,
permissive, excusing, public relations line.
You know what I mean?
It's just like this Ellsberg.
There are those who believe all the making of modern
After all, he did it for a good cause, and he just was honest, distant, a guy who didn't believe in the Lord.
And the 15,000 Shadasses were out here demonstrating, you know, slashing tires and the rest.
But they really were well-intentioned young people.
They were really just against the Lord.
You know, you heard a lot of that.
Or they were just there, and they were just trying to demonstrate.
They were trying to be heard.
Nobody was listening.
That is not the way to handle these people.
That's the way I feel about it, and I don't want to...
I'm just sick of these people that are always whining around about that.
We're going to go the other way.
That's not our line.
It's not mine.
I don't believe it, you know?
And most people don't.
I don't think they do.
I don't believe it.
That's the most important.
I don't believe it, and I'm not going to go the other way.
Constitutional right, yes.
But we don't.
You mentioned that sort of solo voice.
And do it.
But you don't constantly let the constitutional rights override the rights of people to be free from assault.
That's what this is.
Well, it sort of gives you a little feeling of the tone that I want to get in.
And also, doesn't this really relate to the common thesis?
That he says, you know, yeah, retell.
Take this position and don't swing over it for compassion.
Once necessary.
It's a good one enough for people to pick up, you know, to pee on their pipes, even if they don't believe in it.
Sort of, some of them will, Coles will believe it.
You know, pedal it around a few columns, and you heard permissiveness come to an end.
In 60 cities, over 100,000 currently went down.
Where, I don't know, nationwide, worldwide, when I say worldwide offensive against drugs, 61 cities crime went down.
Next is Max Hoover.
uh, Nixon and Attorney General backed law enforcement officials throughout the country.
We, uh, we also tied in the back of our support for those bills for, not only anti-crime bills, but for policemen and others that are law enforcement officials that are killed in line of duty.
You see, it's all part of a pattern.
See, those four or five things like that could be a... Now, we could start a lot of columns going, and we could get some...
Eventually, we'll get the television and get a speech made in the Congress on that.
I mean, get a couple of strong guys up there on the law enforcement side to praise the president.
I mean, we've got to get people in the outside.
Get some cabinet officers, Bob, to say this.
Get clients there.
All spokesmen should say it.
Let's have that one of our themes.
You see, we've got drugs.
We just dropped
Drugs and crime.
This administration is going to fight drugs and crime.
We back the cops, right?
Now, if you could put just one person, one of your right-hand guys on that, just write this, write these baskets until they start saying it, see?
And repeat it, and put it in every speech.
Dole should have it in every speech.
Congressman should have it in every speech.
Cabinet officer should have it in every speech.
Every cabinet officer.
Well, the demonstrators, there's about five strings there in which the demonstrators, the drugs, the cop, the Kellerman Bell, the attitude of the president.
What is it, 75?
I think we don't care about it.
24, I think we do.
That's some fantastic vision, isn't it?
Yeah.
Yeah, we're doing a good job on it.
I didn't know the job rating was way down.
It wasn't that low.
I think it was maybe 32 or something.
Good company.
You ought to be at 90% on that one, Bob.
You really should.
Look at the heat we've taken on.
The appointment of judges.
I'm appointing non-permissive judges.
The appointment of U.S. attorneys.
I'm appointing non-hardline U.S. attorneys.
Appointments.
Appointments of judges and so forth.
How the court is today.
Supreme Court has tilted now away the permissive decisions to a harder line than the law and the crime rate.
Now, if somebody would get a little paper out on that and get a talking point right through the government, I think it would be great.
Yes.
This is the kind of thing that I think is, you know, in terms of our public relations objectives, it's a terrific one.
Well, this is the department that's going to speak to you.
I want to emphasize the domestic issues.
That's valid.
It's a domestic issue.
It's a separate economy.
What other thing has more to do with this?
What other thing can be and are we doing anything about?
You see, it's one of the few where the base spenders can't.
In other words, we're seeing in all the social programs, whatever we advocate, we aren't doing enough, whether it's for teachers and others that, after the NEA, that should attack them.
Why isn't she coming in now?
We decided not to have her in for two years.
Well, I've told you she should come in.
I know, and we set it up to do it, and John and a couple others felt she should not.
And they wanted...
Apparently his office then took it over.
They called and invited a new president to come instead.
He's not known.
He refused.
He said the other lady was still president.
The lady was still president.
It's a man.
Poor Rickerson had a tough time, but it handled well.
Yeah, he came out all right.
And I talked to him last night.
He said it was, you know, they treated him okay.
Yeah.
He's too bad he got up.
He's not happy.
but we have no reason, I see no reason to see them now in the U.S. Army.
Come on here.
All right, all right.
Okay, sit down.
Good morning.
Nice party.
Yeah, yeah, all right.
He had all of his fan team that's official there.
Another thing that was, I think, a good thing, Tom, is it allowed us to get in on our second period.
When I say second period, it's coming.
I don't know if people don't get it.
Secretary of Cabinet officers coming down, then you get an undersecretary like Packard usually gets to some, or Irwin, right, because of their foreign policy thing.
But some of those undersecretaries just seldom get to a White House dinner.
We forget they get to church services and Christmas services and all the rest.
And so we thought this was a chance to spread it out and get all those folks into security.
Well, you've got some really high-grade people.
They've had to shop around.
You know, right down the line, you take your Cabinet officers,
important for these people.
And he, as I said, they are the kind of guys that work.
They get paid too well.
They get no glory.
They get no publicity.
They just don't work.
And the recognition is only what you can say to them.
In fact, I sat next to Mrs. Silverman last night.
Yeah, Larry.
Mrs. Silverman.
I didn't know her.
I don't remember her form.
I, of course, I knew him because he'd been at labor meetings.
She was pleased to come.
She probably didn't remember why I was here.
I think she had.
I was attracted to her because Larry took one of our staff people.
Yeah.
And in part because of our blessing, of course.
Oh, of course.
And we had to let her go.
It made sense for him.
And she said, well, you know, most people don't realize that the secretary has almost no staff.
You had to have somebody to help with the traditions and the certifications.
Well, I want to take more of your time.
You may recall two months ago I came in to discuss my own plan.
Sure, sure.
Indicated that I couldn't see my way clear to remain for the duration.
And I think for a variety of reasons, essentially personal, I would like to go back to the university for the academic year that will start this fall.
And I just want to come in and chat with you about this.
And I want to say also that this
This does not in any sense mean that I haven't enjoyed the doing I have here.
It's been a great experience.
Of course, obviously, I particularly enjoyed the opportunity to work with you.
But I am a university professor at this department.
that this would be an appropriate time, since I just don't think I could say, I don't see how I could say it for the full term.
Well, the only thing that would concern me is this, Paul.
What's this, June?
Is this 1st of July?
Yes, June 30th.
Well, I don't like the notion that, well, the economic, one of the economic plans to be changed or that the economic plan has failed.
Oh, that's the problem that I see there.
If you're leaving, you're going to crack and leave because the plan hasn't changed.
As a matter of fact, as you know, recommendations have been made and so forth and so on, but generally...
is we decided to, you know, see it through.
Having decided to see it through, I wonder if anything you do now is going to be interpreted that way.
What I'm thinking about is that you look at the balance of the year.
We're going to find out.
I mean, Biden, the rector of this year, when he finally gets to the budget and tax decisions,
then that will be a point of no return.
Then we either let it ride or we then make a significant, very, very important decision.
I think we'll be letting it ride.
I think it's going to pick up.
I don't have the, you see, I know nothing about it, but I've read your stuff and I've read Stein's and stuff as it comes in, particularly with a true view, of course, mainly because when a human gone, he sends it in.
And I know what this thing is, and I know the concern about the, well, maybe the second quarter isn't as good as it should have been.
We didn't like the last month's consumer price index.
And I think, I may put it quite rightly, I think inflation is going to continue to hang high.
I don't think there's a hell of a lot that our meeting, for example, with the steel people is going to do with it.
It'll help some.
I think unemployment's going to hang high a little longer than we'd like.
But when I consider the alternatives, Arthur's going so far, and I know you don't go this far, but Arthur said we need to do economic policy.
Well, if you really press it, if you start down that road, well, if you go there and you say, well, first we'll have a job on it, that we'll do, that I think on an individual basis we'll take on steel now and we'll take on
uh textiles next or you know any of those where where we can't do it and regulate construction and that's working pretty well right now and the businessmen i know all say we should do more but when you press them what do they want they want wage controls they want price controls because their profits are to be better than you know that there's no businessman who wants his prices controlled not really
He doesn't just want the bureaucracy, and he's afraid of his profits being controlled.
He just wants us to do something about the unions.
Well, so we got that problem.
Now, then, of course, deeper than that is our least concern that, well, we have a whole new situation now.
People's confidence is shattered and so forth.
I'm not so sure that he's right.
And I'd say that the next four or five months will tell us there's a hell of a lot in the boiler.
Despite what this fellow...
I mean, the unions giving their usual pitch able and the rest of the trouble is lack of purchasing power.
There's no lack of purchasing power in this country.
There's plenty.
It's like the Great Depression, right?
Oh, good God.
I mean, there's plenty of them.
And also, on retail sales, as I understand from the stuff I've been seeing from you and also talks with developers, they're going to be pretty good this month, aren't they?
June?
Our preliminaries.
Of course, it's very flaky.
This is only three weeks.
Really, we have only three weeks.
Yeah, we did.
Well, I think we had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
You had three.
But I, as I say, this is a very preliminary sort of thing.
Well, when I talk, for example, everybody takes it on a personal level.
I talk to, uh, cough your teeth.
When I talk to a man, Sears, he said, well, he said, he said, our sales are the best here.
He went on about how, he said, we're the best in a year, or maybe in 18 months.
Now that's a big outfit.
I had a dead car in California, you know, that's the biggest thing on the West Coast, as I know, not like Sears.
A dead car, I was saying, gee, I guess you're in a tough time in California.
He said, look, don't let them in, isn't that bad?
And then he said that his sales were 7% above last year.
This is in, and that's Orange County, Los Angeles County, San Diego.
He says that this thing is, he says the consumer is acting better.
Now, of course, there are various things.
Another thing is in the mix.
Sure, automobiles may be down some.
I mean, they're not as strong because they're buying cheaper cars, right?
And another thing that you have to have in mind is that during the end of May,
Go on the housing thing.
You can't have two million housing starts without somebody having to start to buy some damn refrigerators and television and all the rest.
And that's great.
Oh, yes.
Various out of it.
What I'm saying is not to be all bad.
Remember last year, about this time, it looked pretty good.
And that steel strike came.
I mean, the auto strike came off.
This year, maybe a steel strike.
Although, I have a guess.
I think they're not going to strike.
I do too.
Is that your view?
But...
whatever the case may be, but whatever it is, I think that probably that we've, well, what is your, what's your prognostication?
I agree, like I said, the economy is not moving as fast as we'd like.
It is far too much.
We may, we're not going to make 1065.
That should probably be the point.
What really scares me terribly would be to have it move too strongly now and then be sluggish this, frankly, August, July.
Those are the only months I care about next year.
Wherever the economy is, if it's even 6% of employment and it's coming down, one tenth of a percent, just so the move is downward then, all matters.
All matters.
So therefore, I am not one of those who feels, geez, we've got to go hell-bent for election to be sure that we get it up to the numbers that we predicted.
But I am terribly, I am more concerned about overstimulating now, with all the costs of inflation and the rest, and a reaction later.
That's the way I read what you've been sending in.
Now, maybe you feel differently about it.
Maybe you'd make me help you more.
I don't know.
Oh, well, I would, as you might have heard at Camp David, I would have been willing for a little more coal under the boiler on the tax side.
Yes, on the tax side.
The difficulty there is, very practically, I would, too.
If we get the investment tax credit, by itself, if we do it in a phone, there ain't no way
The bills, they don't vary.
If we sent any tax legislation down first, it probably wouldn't matter.
Second, but even more important, they'd make it a Christmas tree and then it'd be like, it'd be a damn monstrosity.
You remember what they did with the tax bill?
Yeah, that's what I'm afraid I've seen now.
You were right.
I think that was our, we made one major mistake.
Just be free.
Yeah.
Because it didn't have enough good in it.
Of course, you were to balance the bet, too.
You were leaning in that direction.
I was going, that's, Peter, it's done now.
I never saw it.
Now that it's done, even without the tax, I'd like to have some.
It's cold water and so forth.
But, uh, but, uh, but one thing, and it's only one thing, I do feel we've got to check on.
Charles raised the point yesterday that, uh,
that the statuses rates that are five billion dollars being held up because of environmental, Ehrlichman says that's not accurate.
Accurate or not, we've got to do everything we can to get that in.
That's why this railroad thing, you know, those putting 400 million dollars in that trust fund money and they're overpassing it, but it's not a bad idea.
I think that's the next one.
Yeah.
The other thing is that in terms of the economy's move on the
you know, the carrying out planning, the depreciation, that's a good move, right?
Yes.
The real problem, though, is ending with new required legislation.
The reason that I have to argue against it is not so much conviction as it is, I don't know, we can't get what you want in a limited way.
So I can't, if we could do it by administrative order, I'll do anything by administrative order, but I can't put our faith in the Congress in this way.
Well, I... Can I talk with you?
All right, well, uh...
I really, my differences here would be shape.
Sure, sure.
That's what I sense.
Which of course we all, every economist has a different view of me.
But each of you read the numbers differently.
Archer, for example, has, I think, gone overboard toward pessimism.
And I understand that.
Archer, I mean, he's just, they just beat him to death, that New York community.
and all New Yorkers on the nation, thank God.
I feel it much better when I get in the country.
Chicago was stronger, I mean, out there people aren't, they aren't screaming around like they are here.
What do you think?
Well, of course, I'm a little less interactive.
Sure, there's no more parochial community in the world than in that little street, Walton.
And I would see the economic situation shaping up something like this.
There's no question but what the economy is rising.
There's no question but what is rising slowly.
The unemployment rate is drifting up, sorry.
Well, I wouldn't even try to predict what June will show, you know, the harvest prediction.
this month will be, I would guess that the basic unemployment situation may have weakened a little, but there is some chance that a purely technical and statistical fluke might bring the unemployment rate down.
But we don't get to take it.
And then, of course, on unemployment this summer, we help it a little bit, I understand, through this silly bill I have to sign, right?
Oh, yes.
One-tenth of a percent, maybe.
But that's one-tenth of a percent.
And as you say, people will start to feel a lot better if this thing is started.
Just so NBC doesn't come on and say, on the planet Rose again.
Yes.
We don't care what the flukes are.
No.
Well, we'll see.
Go ahead.
On the price level, paradoxically, I'm not...
I'm not terribly pessimistic about it.
I'm not as terrible.
Parker always gives his charts out.
He said that he made no wrong.
Now, I don't think that that is not true.
I don't think that's fair.
I wish we'd made more.
But it's here forever.
Yeah, that's right.
But we all, it's here.
We're not going to get back at Paul, incidentally, ever to the early 60s again.
Oh, I mean, it always goes flat to a plateau.
I don't get it.
It's probably going to be at 4%.
If we can hold inflation at 4.5%, 4 to 4.5%, we're going to be damn lucky.
I didn't see that coming.
I really didn't think that.
Well, I think... And I think we can live with it.
And I'm not sure.
I think probably the basic sort of par for the course level of inflation now isn't far away from 4%.
And after all, that's from a period when we took over the rate of inflation was accelerating and reached 6%.
Well, if you can stop the acceleration out of this thing we've done before, I suppose.
Moreover, a point that we alluded to at Camp David is that it's very important that we may see some relief underneath the price level on the cost side.
to a greater extent than most people realize.
Well, there are two things here that I think are working with us.
One of them is that we're coming into a light collective bargaining period.
You know, that was a very important part of the Council's development.
There just isn't
You don't get all the big stuff gets out this year.
So you've got, you've got, of course, you've got to negotiate.
Oh, yeah.
But they don't amount to that much, do they?
They don't amount to that much.
And that means... We've taken, also, we've taken the heat of the big balloons at the beginning.
And, well, you see, that's the key.
That if you move into a light period, then you're getting fewer of these high first-year settlements.
And more of your, more of your increases are second and third year.
And those tend to be pretty modest.
You know, the contracts are definitely trying to implode in there.
And therefore, I could see at least no acceleration in compensation for Manahar.
And my guess is it could work out.
Now, on the other side, with a quicker pace in the economy, we look at Rhonda Sharpe even some productivity.
I'm convinced of this.
They're already incurred.
They're already incurred.
Because I can see from that, well, you can't, isn't it true?
Well, you've got output per man hours that are going down.
Four and a half percent of that's going to be going down.
Well, that's opposite.
So I can see, therefore, labor costs per unit of output, which in 68, and 9, and 70, of course, were rising.
6% to 8% per year because we weren't getting good gains in productivity.
I could see that dropping to the, well, 4%.
And it is not inconceivable that it could even drop slightly below 3%, although I think that would be reaching.
Well, it'd be to get a little, see, just a little relief underneath the price level.
In other words, there are a lot of other things that could happen.
I don't, I understand, I know Arthur is very pessimistic.
Yeah, but let me tell you this.
He's mercurial.
We know Arthur, we love him.
And frankly, oh, you hear the pessimists in the office.
All the people are the other way.
Pierre, right, for his pessimism.
But of course, he's mercurial, too, one month ago.
But Arthur, I reminded him.
Yes, when we talked yesterday to Arthur, you remember, it was three months ago.
He wouldn't follow the cane in hand.
He said, we ought to have the investment tax credit.
You testified about that.
And we ought to accelerate the personal income tax.
Now you're examining.
You're not for that now.
He says, no.
He says, now I'm only for fighting the inflation problem.
No, you're right.
There is such a thing as being.
Another thing, too, whether it's in foreign policy or domestic policy,
There is a sort of a mystical ingredient that is required.
You've gotta get on a course and stick to it.
And I don't mean that if you're going down the dam hill at 90 miles an hour that you don't do something about getting the brakes fixed.
But we're not going down the hill 90 miles an hour.
People are not all that sure that it's bad.
That's my point.
I have a feeling, and also I feel, and here's the other side, the cost
I'm doing what Arthur suggests is too much.
I'll buy the, I'll do the, I'll do the job on the internet.
And, to be very frank with you, if we get three, four months before the election, five months, we might throw him a freeze, you know, something that shows a dramatic thing, but never throw it in in a way that
that people can know that it's, and we find out that the bad thing didn't work before the election.
We're out of our minds to do this now.
Oh, I will, you go now.
Anything that we do now has got to work.
And if it doesn't work, you see, it doesn't hold up on the wage price board.
It's as stratified, formalized as Arthur suggests, as difficult as it is.
So you put it in and everything goes up.
And they say, well, now that we've done it, what's next?
Let's put in a freeze.
Now that we've done it, what's next?
Wage and price controls.
Now, if there's one thing I will never believe, never do as long as I am here, we cannot have wage and price controls in this country.
Because wage and price controls will kill the American economy.
I don't know.
It cannot work.
I just know I'm speaking of mandatory wage and price controls with a bureaucracy of 45 to 50,000 little bastards running around the country setting the prices and the wages.
I went through an OPA.
You went through it.
You know, it will not work.
In fact, it's not only inconsistent with our system, with our economic system, it would be very inconsistent with our society.
Right.
It philosophically just repels me.
Yeah.
Based on, well, let me say this.
If you're a, what we call, moderately conservative congressman, moderately conservative politician, fine.
You've got to believe in something.
And by God, I don't believe in socialism.
I don't believe in Markup.
I want less.
You know?
So I got told those productivity conditions should be
When the communist world is turning our way, we don't turn their way.
Their system is changing.
They're failing.
Why them?
They're having to turn to rewards for more production.
So what do we do?
We turn for a system of egalitarian and wrong.
Don't you agree?
Oh, I couldn't agree more.
That's the thing.
This country, by God, is a lot better off in real life.
The other thing is,
We expect someone to look around and point the gun at the Egyptian president.
You know, when you talk about 4% unemployment, we've only had it in the Korean War and in the Vietnam War.
Is it worth it?
Is it worth it really?
No.
Get insurance, and I don't want to kill one American boy in order to cry right now.
We'll give them welfare, we'll give them unemployment insurance, we'll give them everything else.
But the idea that at the cost of war, we'll try to reduce that down to 4% in other ways, that's going to take a longer time, but good.
I don't know why.
The idea that our Democrats in France, the moment they get in on employment, it's on a bull.
Hell, there were 9 million unemployed in 1941.
You know, 9 million.
After 8 years of the great Roosevelt New Deal, hell, he didn't cure depression.
The war did.
You know that, I know.
Great.
In fact, you know, I heard this in statistics.
Yeah, I don't think so.
I don't think so.
I don't think so.
and other people.
I'm pretty sure we'll do that.
Maybe we'll go say we want nuclear power plants.
Maybe we'll find something else.
That I buy.
But with the kind of activity like NASA where government feeds it into the private sector, I want your people to really think more about this and very aggressively hold it.
I frankly do not.
This April's
It's out there, isn't it?
Personal income is at an all-time high.
Of course, a growing economy needs more purchasing power.
It has an awful lot more.
It saves personal income.
It's out there.
No, I think the...
I think there are some things that we, you alluded to this yesterday, I didn't hear your morning, but I do think in the research, we need to give some thought to that.
And that happens to tie in.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Of course they started soon.
They finished about 1.30.
I love it all.
My good friend Tom Pappas, I have an autograph and I'll never do it.
So I made a, I said, fine.
I can't go.
You guys got me in here.
Go ahead.
In the research and development area, as you know, we're the council and David and OSD.
and I are doing a little work on this.
But I think in this area, something would be worthwhile.
We need to be spending more on research.
I mentioned the debate last night, and I mentioned it to Ehrlichman, and I mentioned it to others.
But I want all of you to pull together in that view.
We've got to come up with some plans.
Oh, we are.
We're going to work on it.
Good.
But I just wanted to flag it, because that, you see, that's good for productivity.
Right.
Our balance of payment.
Right.
It aims at our science, at our unemployment.
Right.
Technical personnel.
Right.
And it also aims at the American spirit.
And it's...
I want the United States to go forward and to be bold, to build on things.
And it's... Well, I think we're...
I think we're... We've got some ideas here.
We can put them together.
Well, coming back to your situation, the problem I see is...
As you can see, you could have a psychological impact that might be very detrimental.
Could you do this?
Could you consider, could you consider making the move, if you could, in the middle rather than at the beginning?
See, if you talk, if you talk now, Paul, you're not doing it.
You see, you'd have to analysis it, say, first of all, and then here with the budget and all the other things, bring a new man in now.
I think it could be very badly misinterpreted.
That is, you mean the middle of the semester?
The semester.
You see, then that would be after the budget and everything is really finished.
And in a sense, it's the breaking point.
That you could really, you could do it there, or you could turn some time around.
You may remember first.
No, no, I meant it.
So I meant actually finish the budget and everything.
You know, February 1st, actually, it's when you're, don't you have a semester break?
We do.
We're not that way with teaching.
Well, our calendar is a little different.
Oh, I see.
Our calendar, our second semester begins January, well, really January.
Oh, I see.
So you're on four quarters.
And we're on three semesters.
Three semesters, I guess.
And, well, I think there are certain, you know,
I could see, I think anyone who is chairman, through the economic report, ought to stay long enough to defend before they go.
In other words, that's what you said.
I would, I can, I'm not absolutely fixed on the September 1.
Let me do this.
Let me talk to...
And I had a little feel of the political standpoint, and I said, let me put it this way.
I'm a, like foreign policy and domestic policy, I want all the ideas, and I know Herb Stein, for example, has become more bearish, and I appreciate that, and how talkable he is, so.
But, on the other hand, of course, I said, I've got to make the decision, and that's it.
And we both have a plan.
It seems to me that we ought to.
I wouldn't like any step taken that would show a lack of confidence.
Well, I don't.
And that's the problem I see in their leaving.
They say, oh, the cracker failed.
I don't mean that his policies, not that he failed, but that his policies were rejected and therefore he left.
There are all sorts of little gimmicks they might play.
Now, let me explore that.
Would you, in my mind, we'll talk again.
You're coming to California, aren't you?
I've heard of it.
I think there's a budget presentation or something like that.
I don't know.
I don't know the calendar.
Maybe they haven't set it up yet.
I think they're going to California on the 6th.
But I'm taking a week off, a week off to just read.
And then the following week, we're probably going to have another one of these Scandinavian things, you know, budget goals and all that sort of thing.
And if we have it there, we want you to come out there.
They probably haven't told anybody else to say no, have they?
That would be the 19th of July.
I think that's what some people do it.
But I might do it here.
I guess that's an impressive plan.
I might do it here rather than there, depending on what I'm happy about going to the Congress.
I think you have to have another go around on these things that we talked about at Canada.
Sure.
We're not heading to Canada.
Well, you're not.
Well, we shouldn't.
We're not ready for that.
That's in November.
Well, you mean on the...
This will be the same.
Sure.
Goals.
A little more thinking about things.
Okay.
But in the meantime, when do you have to make up your mind
Certainly, I can wait that long.
All right, good.
Let me say, if we could, I'd like to wait until we have that thing, and then I'll let you talk again in the meantime.
I may have some other thoughts I'd like to run it by, or I'd like to run it by company, because that's a good political gesture.
Like, of course, Dr. Schultz.
We won't message anybody.
Don't get it.
Let's not have any story of you're considering going back.
No, no, no, no, no, no.
I don't have anything.
No, no.
And, uh, but, uh,
Because it just may be that this is the right time.
You see?
Sure.
Because that's what we said before when we talked.
But I have a feeling.
It's not a feeling.
The foreign policy field, I think there's some good news going to come.
Maybe.
It may not.
And it could be very important news.
Now, if it's very important news, you realize that that has a psychological effect on you.
I'm not sure, because we're dealing with a bunch of goddamn totalitarians.
And there are three areas, of course, where it could come and come.
The Russians could come, the Chinese do.
My least possible is the Vietnamese.
But the Russians are trying to break one of those two.
Or even both could happen.
But even if you get one,
one break with either of the superpowers, that all was going to have quite an effect on the psychology of this country.
I know that.
And that would also have a really big effect on the economy, particularly the purchasing power.
And you might get this thing beginning to turn over.
Well, certainly, I think it's not that good.
Not that good?
Yeah.
When did you hear of the man who sold the business?
Well...
Ezra has a problem with unwinding his other commitments, of course.
He's going to be here about August 1st for two weeks, but then he does have some university commitments back there.
I don't think we can have the swearing-in then until maybe right after later this year.
That's a good time.
But let him come in and sit in.
Oh, yes.
Oh, well.
Deep back, though, he'll be a member of the council.
But the main thing that you should tell him, Herb and others, is he's a good soldier.
A lot.
You know, Ruby.
I know you were on a course, but I know the conference.
And I throw the one who has the biggest stake in this personally than I have.
You know, the rest have their reputations.
But their reputations, as I say, aren't going to be hurt one damn bit.
If it works and it fails, to hell with it.
Everybody's given advice, which I didn't take.
Well, one thing you can certainly depend on is Herb.
He's a good gentleman.
Oh, and his wife, too.
I know she's nice.
Oh, she's a bright gal.
She's a bright gal.
And now Herb.
Herb is smart, too.
Herb is very able.
And he's completely honest with you.
And that's why I don't want to meet Paulie.
But on the other hand, I think the thing that you and Herb both have, and I must say, Brian,
A great pilgrim, Arthur, does not have the same extent.
And he has other followers, of course, that are outstanding.
But it is, you do pay for your slaves, finally, one end or the other.
Things are never that way in the trip.
The things are never that bad.
The trouble is people sit in this goddamn town and everything's going up in smoke.
Things are going up in smoke.
Never was.
Actually, business is better than business, man.
I'm sure.
And you're applying a campaign.
Well, the parents, I believe, are going to inherit it.
That there is a perception line.
About six months.
And there's no question about that, it's true.
They'll begin to pursue it again.
Not only business, but I don't perceive it, but people who make others.
I think it's a purchase that you're going to perceive it.
Sure.
They perceive it, they're going to buy more.
Sure.
The summer tradition, I guess, is free when nobody buys much.
Isn't that true?
Yeah, that's true.
That's all, of course, seasonal.
That's a seasonal factor.
Uh, auto sales are, they're pushing awful hard, and the importance of course, taking and growing the city.
Uh, but we're gonna bang that.
I mean, I've, I've, I've really come down now on the side of using, talking to Peterson about how we're gonna use every damn device there is, even in the cost of support and policy setbacks, to stop some of these flows.
I mean, through the textile ban, the auto ban.
That's temporary.
I'm totally against a permanent building a wall around this country.
But temporarily, from a political standpoint, we just can't take this.
I think we are going to have to see to what extent the monetary system is involved here.
Ultimately, we may have to come to grips with the exchange rate.
Like the end?
Well, even...
Certainly in the end.
Certainly in the end.
And, of course, as an economist, I would not rule out the possibility that an adjustment of the exchange rate of the dollar against the yield.
You know what I mean?
Are you talking to me?
Do you agree with Archer in the fixed price for gold, the raised price for gold?
Is that all?
Is that all that you're talking about?
Well, you're still a floater.
Intermediate.
I think I would isolate the gold issue.
I mean, that's such a, it's almost a theological issue.
It's just, I don't, theoretically, I'd rather argue the floating ring case.
Of course, practically, there's too many problems.
But all I mean is that if we can't balance our balance of payments, our trade, if we can't have a strong enough account, one thing we may have to consider ultimately
is some adjustment of the exchange rate of the dollar vis-a-vis the field.
Now listen, I don't want to go into this now.
It's a very technical matter.
But if the exchange rate of the dollar were, say, 5% to 10% different now, hell, we'd have a very strong balance.
Now, I wouldn't recommend it now.
Why not?
I guess I'm a little cautious and I want to see a little more evidence first.
In other words, I don't want two trade devs at once to determine that kind of decision.
But we have to keep it open.
Well, anyway, we'll let you do a little thinking and we'll talk to you in a bit about it.
when we have that on the 19th.
So watch that again.
And keep your options open.
All right.
All right.