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Well, it's been all right.

All right.

I thought we'd get to it.

One of the reasons I'm saying that is because all the crap that I put aside, all the balls I had to pay, all the work I had to rip, all the paper to check, I had to get it all out of the way and leave it.

Did you do that all the time?

I did the same thing.

That's why I always tell all of them, I said, I'm down on the last day on the scheduling thing.

So I can't sit in that office and get all the crap out there.

I said, I hate to come back to the law school.

I just hate it.

I also hate to take it all with me.

Because I know I wasn't doing it.

When I get away, I don't want to do it.

I'm telling you, I just know I ain't doing it.

That's all I'm telling you.

But on the economy, I doubt the state of Maryland.

I took a little bit of a line to give out, because we had to prepare in a way that was what we were going to do.

So the way I put it was to do a lot of reading at this time.

And the line that I wrote was, I said, no, that's not your problem.

I did it, and I took off.

And I made up my sentence.

Absolutely, I said, did you?

It's a matter of fact that I said that he agreed to my district trip.

So while we're talking about this subject, I want to set the record straight that I'm not a federal director of the Senate.

So I'm saying that the effect of the action is solid.

This is a matter of fact.

The administration approves this to be done for OPM and the director of the OPM so that they can get their proper levels.

But both men said that it would deal with the fact that the president was going to have to take action against the federal pay and the register

They did not want to have a pay increase, and therefore I had not pressed, we had not pressed back to them.

But I thought, just get that out of the way for them.

Well, that, I just have a very, you know, got to go out there.

I said, he's, I said, I have monetary policy, and he's not sure how much money, and his support of our fiscal policy is,

expenditures within our full capacity of full-fledged revenues.

I said, we see exactly the like.

I said, I mean, this is the strongest employer in the country.

I said, the question on the wage and tax returns is really a question of greed.

And I said, we both, we both agree on two ends of the spectrum.

I said, on the one hand, we both recognize that the, that the problem of wage, price, buyer, borrower is very serious in this country.

On the other hand, both of us truly reject the left-wing economic spectrum of the Galbraith theory that we should have a permanent wage and price control.

Now the question is, how can we achieve this without a government that bothers us?

The reason why I do not know is because the experience of every major question I've had for a very short time and then it's taught that it will only work if there are some mental and some enforcement procedures

So therefore, as the Secretary Connolly, the Secretary Connolly pointed out this morning, we welcome hearings in Congress.

If they can find a method, if they can suggest a method whereby a wage price policy could be adopted, which would not carry with it a huge bureaucracy and criminal penalties on which it's tied to the economy, then we'd be glad if we made a limit.

And on the other hand,

If you ask a specific question, are we ready now?

Do I favor the wage price guidelines or wage price book?

The answer is no.

I said, on the other hand, it's hard.

I said, I've asked the Secretary of Labor to submit to me every major wage price negotiation that's coming up.

We're going to use the persuasive power of the White House

on a rifle shop basis on each one of these to keep them in line if we can, to the extent we can.

Second, when the Productivity Commission meets on September the 21st, the major and the leaders of industry and business said today, the top of the list on that day will be the problem of this wage price problem and how we can keep the American industry competitive.

But finally,

The real question is, how can we control the rise in wages and the rise in prices without the very, very grave negative factors of compulsion and criminal penalties, which are implicit in any permanent wage and price control system, by the way.

So I'll add a headline so that you can read those.

But that's exactly the line they're taking too.

Now you'll notice that I've hedged the line some already by saying we will intervene in every major investment in December.

Secondly, we will bring it up in the Productivity Commission September 21st.

It will be a major subject for discussion.

Third, that we will, we plan to,

to cooperate with the Congress and say that, like I said, if you're interested in the areas to determine if there is a way to set up, like I said, for example, are these wage prices, are we going to set up wage prices, of course, that are going to affect all prices, including the filling stations, or the production, or what you've got, or are they going to affect just a few prices in major industries?

These are some of the questions.

And then you come down to the fundamental question, how do you enforce it?

I said, these are the questions we should address ourselves to before just talking loosely about the wage and rights voter.

But anyway, I gasped, I gasped around, and I thought, how come out in the press, if you do, they say, I didn't first leave it, it's an opposed wage-price voter.

But then the second paragraph, I said,

But isn't that all we can say, yes sir?

Yes sir.

We've got to indicate that we care, and we hardly mean the various things.

That's funny, but that's the reason for the statement this morning.

It was Dan's idea that we won't be making, but we want to play something.

We want them to know the subtle terms that we did at the demagogue in here.

They introduced the damn thing two days before they go home.

Yeah, but that's beside the point.

Yeah, the points that we raised in there are so frightening.

You read about it.

You do this, you get a reason.

Everybody can see the spectrums of okay.

These businessmen are out of their minds.

They're the ones, they're the ones that piss me off.

And I read the weekly news magazines.

And this is one of those weeks where, at first, every news magazine, everybody, except for the cover on you and Lucy, is naked.

The economy, the economic game plan has failed.

Everybody in Washington has failed.

So the stock market's running on its head.

So what do they base it on?

They base it on one of the CPI that was too high.

That's fine.

Second, they base it on the fact that the leading indicators, while they were mixed, did not go up.

They were off-swinging.

They ignore retail sales.

They ignore consumer standards.

They ignore housing, they ignore construction, and they ignore low-end apartments.

Now some of those things are bound to indicate some priority.

Where's that?

The unemployment figure, did you get it?

No.

It should be 5.8.

Yeah.

So that's not bad.

No.

So in other words, we are down.

See, they can say 5.6 is an aberration, but 5.8, it was 6.2 in January, now 5.8 in July.

That's great.

I'll try.

Well, here's one of the reasons why I get this, and I don't mean to disagree with you guys, but there are fear and grace.

Oh, shit.

He really is.

I've talked to him.

I want to talk to him.

He said, look, you know what?

He's already gone.

Because he predicted the fact that his unemployment was going to go to 7.5 to 8%.

He's probably staying down 12.

I don't know.

But now he says it.

He says it's going to be more inflation, it's going to be higher inflation, it's going to raise prices.

He said inflation continues to raise prices as much and as fast as you can.

Everybody else is doing it and the government is the worst at them.

They're trying, trying, trying to raise prices.

Prices are now achieving a jagged function and you go along with the political strategy, international, he just says international, protect your dollar.

against the right and the end and the gilder and you know, these guys are petting and stuff and that's what it is.

And they're all way free of them and the net is the same here.

You get 50 times mocker.

That's just the stuff that I've done.

That's one of the laws.

And, uh, just, uh, you have to try to get close to no one.

It's a long, long story.

I believe that's what it is.

I don't want to give you some evil word.

I don't want you to be talking constantly about this and then just talking it to death.

This morning, the only thing that happened to me significantly outside of this release, which came up yesterday on the program center, I should have done that.

The French did something unusual that we don't yet know what it is.

But it caused quite a ripple in the exchange markets in Europe.

The Belgians and the Dutch both closed their exchanges for just a few minutes, then reopened.

They're trying to analyze what the Swiss did.

We think the Swiss are going on a two-rate system, although, in other words, they have one rule applied to their domestic monetary situation and another

exchange rate, frankly, in international finance.

That's what the Belgians do now.

It's not a bad system.

I don't think they've done it.

We first thought they were.

What they say, apparently, is that they're going to apply a penalty to any French business that takes in dollars or uses dollars for speculative purposes.

And

So I think the penalties are twice the rate of interest that the non-government pays on pretty stiff penalties.

But I think the ripple is about over.

The benefits took in $68 million.

The Swiss took in $68 million this morning.

The benefits took in $15 million over the swaths line.

They took in about $15 million this morning.

The banks took in about $90 million.

so it might be moving around fairly controlled requirements this morning, but I can't think it's going to settle down.

It's just a hell of a situation.

There's no apparent reason.

It's because of the pressure.

But apparently this is the, this actually today follows their, just started this time of speech on Friday, if you recall, and we discussed it, which he said they were going to hold dollars.

And we're going to ask for gold.

If you remember that was the speech that the other party takes out.

Apparently that was predicated on trying to keep a run from occurring on the dollars when today they announce this restriction and these controls on their own French businessmen to keep taking into the dollars and let them speculate on dollars.

Other than that, there's a market everywhere, of course, stock market down here.

in August and probably will again this week.

Let's get him out of the way, sir.

Let's start learning.

Sir?

Let's get him out of the way.

Oh, we've got to learn that.

I think this afternoon is what we were talking about.

We're going to get some bad news here in August.

I still, unless this French thing boils up more than I think, I don't know.

No one's heard us except the Dutch, the Belgians, and those bastards all the time.

And we will pay out some more, some more of our assets, probably they'll call us.

We may be talking about $100, $150 million, but we've got to draw up the IMF and just pay it.

until such time as we take these actions.

But that's all right.

Let me get away from the financial finance and get back to the psychology of it all.

What more actually could be done in your opinion?

It's really, you know, this is basically a psychological problem, right?

Here's 4.1 instead of 6.6.

4.1, the first half of 6.6 was in 1970.

Here's, that's,

How many free countries in the OECD have less or more inflation, or less inflation than that?

But beyond the less, on the other, on the minus side, wage price problems are added.

But the minus side, what in the hell can we do to change psychology to this day and age?

I think that's the end of it.

I think so much.

What was that when they asked what was my prediction for the future?

And I said, well, I think the problem is in the future.

That's it.

I remember last year they were saying the economy wasn't going to come back.

And I was trying to say, if you would be wrong.

And it was a tremendous burst up, $52 million for the first six months.

I said, now they're saying the same thing.

I said, they're going to be wrong again.

I said, I believe that it's going to go up.

They believe it's going to go down.

I said, now the time has come.

I said, I have confidence in the economy, and I can bet on the economy.

And that's not all we can say.

What in the hell?

I don't know.

What is your feeling?

I mean, between now and September 1st, what could you do?

We even talked about this yesterday, Chuck Colson.

Yeah.

That group.

And Peter and Paul Craig.

I don't know what you can do.

I have a feeling as far as achievement.

We've got to find running against this from the standpoint of the

It's like a wave of pessimism running against us.

It's being fueled by the hills, it's being fueled by the media, and we don't have enough good news, enough overpowering good news to in itself turn them.

Because they can point to a lot of good news.

They can point to some bad news.

They can point to the international community.

They can point to the dollar right to steal something.

They can point to steal something.

The weight, the fact that they don't close some of the mills.

You know, there's enough they can point to to make their case, too.

The truth of the matter is that what's hurting us the most is the very thing that Pierre Renfrew is talking about.

He says, and another person says that,

Park Park Park Park Park Park Park

So that means that people aren't going to invest now.

They're going to wait until they get that insurance.

Well, he instructs them.

He says, write your letters.

Prepare your case.

Go down and leave it.

He says, political strategy.

Corporate officers who get invited to Washington should use the indication to push for some form of re-institution of the investment tax credit.

Have a rule prepared.

He gave what the investment tax credit would do for the company.

Reduces external borrowing needs.

Increases capital expenditure programs.

Decreases pressure to raise prices.

Leave the memo to the people who invited you with a request for a response.

So he's instructing you.

None of those are.

They're only common sense.

This is within our reach.

Wilbur Mills is promising you.

Now, he's following.

Now, we've just pushed the administration, just pushed the administration farther.

They'll come out for it.

Now, part of this psychology is a deliberative psychology.

Now, in my judgment, no question about it.

You see, they're trying to run, they're trying to say the economy's in a hell of a state.

They've already got us in tax.

No question about it, okay?

No question about it in my mind.

None at all.

They used it as an excuse to inflate and raise interest rates.

And they said, where are we talking?

What is the reason for interest rates?

Given the economy, interest rates are going to go up unless there's a hell of a demand for money.

Not a hell of a demand for money.

Unless they really understand.

So it's the other way around.

That's what you think.

That's what I think.

That's what you think.

I have problems.

And they say, well...

All this abundant supply of money indicates to us that you're not going to control inflation.

You're just going to have more and more inflation.

All this money supply.

Can I ask you this?

We don't have a lot of people.

Could you keep the streets and the streets alone?

I don't think so.

I'm not sure we can do it.

I'm not sure we can do it later.

It's kind of like trying to do these things with lawyers.

Do you think you ought to have a bank that's in?

We've had one possible.

Let's first, within two weeks, prior to this Lockheed thing, the banks all 24 of them, now this is met there, the chairman of the board of the Bank of America, this is Bill, Marvin, Gary, and representatives of all the rest of them,

of the rest of the community up here.

Everybody had a top man here, and I met with a whole section of the group that came and came.

Talking about my key and what I expected them to do and how I expected them to handle themselves in the testimony before Patrick's meeting, I said to them, I don't want a meeting of bankers to occur without me expressing a deep and abiding concern about interest rates.

I said, I don't want y'all thinking to come to town without me mentioning interest rates, because I think it's very critical

Well, a week ago, we had the ADA Committee meeting here, who advised us on, who then advised the Treasury, on our financing gains.

I sat down and I argued with them.

I said, I don't want to help you by the interest rates, but I want to make it abundantly clear every time I get a chance that, in my opinion, nothing is more critical to the continuation of this recovery than reasonable interest rates.

And I said, I don't know if he wouldn't raise them.

He absolutely had to.

But over the same day, we had the Investment Bankers Association here.

And we had an advisory committee.

And I told them the same thing.

All of these were in the last two weeks.

They're doing damn good.

I'll meet with them.

But I don't mind meeting with them.

To continue on with my little analysis of it,

to tie it to money.

I think we take our money.

Well, all I can say is that it's true of war, it's true of the political campaign.

Now, the only change that I think we ought to make in our approach is that we get back to what you and I talked about almost a year ago before I came here, and that is that we put ourselves

not in a position of defending or explaining what's happening, but put ourselves in a position of being against the ends of saying, yes, there are profits.

You bet there are profits.

And we're going to try to solve it.

You bet there's too much inflation.

You bet there's too much unemployment.

Let's just reverse this thing and constantly keep in mind that you don't control the Congress.

You can't do these things.

You don't control foreign nations.

We blame some of it on them.

But let's don't forget, it's pretty easy to fall into the posture of trying to defend everything that happens.

And you are not good, we are not good.

And frankly, one of the things, if you don't have problems, then if you do solve them, or if you don't admit to problems, then you obviously can't ever provide any substantial action.

Now, to be a giant killer on the domestic front, you've got to have driving and sliding.

Now, if we don't admit we have problems, then we can never brag about solving them.

So it's helpful that we've got to say, you bet we've got problems.

Here we're cutting down on defense.

We're cutting down on space.

We're releasing a half a million men.

We're going to bring more home and more people into the labor force.

The blacks have a problem finding jobs for them, and here's what I've done.

I've got the alliance of businessmen to promise me 100,000 jobs for returning veterans plus 150,000 jobs for the disadvantaged.

We're working on these things, but I need the help of everybody in this country.

Because we have some real problems.

And say, frankly, we've got problems overseas.

And let's not kid ourselves.

The Japanese won't build us and see us produce more Fords and Chevrolets and Plymouths.

They want to produce more Batsons and Toyotas.

And the Germans want to produce more Volkswagen.

And we've got real problems.

We've got problems in dealing with these people.

Same thing on Texas.

And I just point out that we've just got problems all around us.

Now, if you don't know that, as I say, you in effect assume the burdens of solving all these things without ever getting any credit for it before you get there.

Now, there's only one other psychological factor that I don't know how we do this only over a period of time.

I think the feeling is fairly well, fairly rightly held.

that you have addressed yourself to and have mastered and have made no mistakes in the foreign affairs field.

That you haven't applied the same time or vigor or effort or interest to the domestic front.

Now, you can't suddenly do that.

So that's no easy answer.

It's just something to keep in mind that this is being taught.

I don't think it's widely held, or I don't know how widely held, but in any kind of business community, I think they feel, I think you like to farm herd butter, and I don't blame you.

I can see why you would if that's true.

But in any event, they just don't think that

that you were interested in, or that you cared about, or that you had really applied yourself.

But they don't accuse you of a lack of compassion or concern.

And they don't accuse you of anything.

They basically feel that you just don't have the fundamental interest in not applying the same vigor and time and talent to the domestic product.

And that's fine.

I don't think you've got all that section.

But now, when we come back here in September, we can take a lot of these actions.

This will change overnight.

So this is something that can change.

This whole psychology can change.

I don't like to think we ought to get out right now.

You don't think we should try to change it now?

Not this month, I don't.

You just take the wraps.

Well, first of all, you have to go forward with it.

How are you going to do it?

You can't manufacture it for them.

You can't go out in the face of a, I think it's a swift running tide.

And you can't just stand it up.

You can't stop it.

Let it run its course.

Supply is flooded, I tell you.

I think it'll begin to turn, because they can't keep up this momentum of pessimism beyond, suppose they let another third day.

I'm anticipating now, when we come back in September, you're going to be warned more or several of these things.

But if you don't do that, then we'll do something else.

Because we're going to have to do something in September.

That's right.

Because Congress is going to start .

Yeah, that's right.

You're not going to have any choice, really, at this point, or much after that.

First place, you've got all these Japanese businessmen coming here on the 8th, not businessmen, government people.

And I'm not sure that ought to be canceled, but that's another subject.

In fact, an incident at Dave Kennedy feels very strong that that meeting ought to be canceled.

to meet with the Japanese, just a few Japanese bishops.

But she said, oh, well, we're just gonna have a confrontation, and we're gonna have to roll over and play dead, and once you take the keys, they go home and say, well, they didn't really mean it.

Or we put demands on them that they keep meeting, and they're gonna have a lot of dinner with you and so on.

But anyway, they're here.

We have the IMF meeting in September as well as the World Bank meeting in September.

And all the finance members of the world will be here.

And so it's going to take a lot more time to be an economic one.

It's just going to be an economic one.

That's all there is to it.

And I think it's fine.

I think the timing is going to work great.

But in the mean time, I just frankly don't think that you've got the...

I don't think we have the... You can't ask us to tie.

No.

It was probably just as well, I guess, that when we come to think about it, that I'm really glad that I met these press guys today, because I couldn't be...

This seemed to be completely on.

He's going to pucker down.

But we have said we're interested in this problem.

We're looking at it.

You put out your statement.

Now, I put out my own interest yesterday.

I don't know if you saw it.

Yes, sir.

But I want to interest you also.

We've got other statements, too, of course, that you put out.

The one that we don't want it to wage price order.

Right.

I've also indicated we could do it.

We're not smart in terms of that thing.

Now, you should see.

Now, I don't think we ought to freeze at all.

I think any logical additive opens up to us on any program, on any spot, or additional press conferences that you might want to head up here this next month or have an opportunity to have.

Sure, we ought to talk about it.

But when we do, I think we'll...

It's awfully hard to run against the tide.

Yeah, it surely is.

It certainly is.

You just get up there and look awfully, you look at it.

Well, basically, you've got to turn the tide.

You have to, for this office, you've got to turn the tide.

That's right.

Let me relate it to a stampede, Mr. President.

If you've got a cattle stampede across the curb, if you run your horse out in front of it and try to stop it, they run over you.

The way you turn a stampede is to ride with it, you run with it, along the flank of it, in front of it, leaning against each other, and you gradually put pressure, you gradually turn it.

Now this is what we've got tied up against us here.

I think it's a mistake for any of us, for all of us to get out and try to damn it.

Sure, you can't do it.

I just don't think we can do it.

I don't think we have enough weapons to do it.

If you had a militant party behind you to calm you down, you could do it, but you don't have any.

Good God, that's our problem, John.

Well, I agree.

Instead of our own people up and talking, fighting for us Christ, they're joining in.

Well, so you have no help.

That's right.

So you're an open voice.

That's right.

So the only answer you have is always something to believe in.

Can you imagine what our Democratic men would do if they were under Teva?

Well, look what they did do.

You know, and I pointed out, the last three peacetime years before Vietnam, on a climate average, 6%.

Tell me, did you ever hear it said, those trees?

Did anybody ever say it?

The Republicans tried to say it, but not one goddamn commentator hit it.

It was nothing, right?

Nobody cared.

Here we had it less than 6% and people were squealing to hell.

That's the point.

And at some point, he's going to have to take this dramatic action and turn it.

And at some point, we're all going to have to get tough about it.

Well, I mean, when Mansfield makes a statement like he made today, supporting these 14 Republicans, we all will have to denounce him.

Oh, yes.

And just to say, I think he's so concerned, he weakened his profitability.

Here's why he did it in 1966, and 67, and 68.

And I want to show you the figures of what was happening to our trade balances and what was happening to inflation.

And, of course, I'm informed of this in those years, but in those years, not in the first three, not the first three times.

It'll take man to be alone.

It's not during the war years.

No, because he basically didn't agree with war.

The time they gave him was 10 years.

That's right.

Which he did.

He was all out.

That never raised his voice.

That's right.

Where was he then?

But you don't have anybody, unfortunately, in Congress, and that's the level on which he should be.

I shouldn't do it.

No, you really shouldn't.

Others should at other levels.

This happens, but we haven't reached that point yet.

I think maybe we should go now.

That would be one help actually.

Because they've gone all over the world.

Literally.

They've gone all over the world.

Now let's see where we are in our various sentences.

You had to check with Dr. Schultz about getting him now.

You know, just on the phone, I just said Arthur didn't know, I mean, George didn't know me either.

Should I get him in?

Yes, sir.

Yes, Senator Arthur yesterday was concerned about

Well, two things.

One, who was it?

I said, no, it wasn't even one.

Apparently, the move to take over the bed.

He said, no, I have a choice.

He said, I can do that.

So I said, and I said, you know, it was the president, but I said, the president and I are talking about taking over the bed.

I said, go get the idea, and I'm trying to make it part of the trade.

He said, that hasn't been discussed.

And he said, well, it is in some countries.

And I said, I'm saying it is in some countries.

And it has been discussed on many other platforms.

But I said, we have not discussed it.

Well, he said, the thing that really gets it, really rightfully, he said, I have to have a resolution because this goes with my character.

He said, this is something that destroys me and my wife.

And I said, what's that?

And he said, well, that's this way story.

and I killed them, and you killed them, so that's a deal.

It was a deal.

And I just said that he turned it down.

That's not true.

That's how I worked it.

Let him get out of it.

I think our appeal was valuable.

You see, the action also recommended the OVM as a number two.

And so when that came true, Schultz was

He said, we ought to raise our head as a central banker to the same level the central bankers in Europe are.

I said, make him a little, too.

So I said, fine, that's what we ought to do.

But then when the question came as to whether it should, it came to me as to whether or not you could do that at the same time, veto as I'm going to, we've got to work on that.

And also, what else I have to make?

I said to George, I said, George, we cannot raise you to level 20, even though we postpone when it's effective.

And we can't raise Arthur to, and not raise those, not at this time.

It's going to have a hell of a bad effect.

So I said, I'm just not going to do it.

That's the way it happened.

On the other hand, Arthur, of course, knew that George recommended this.

So he was really buggered there to ask, how the hell is it going to be done?

I understand that.

So he just didn't do it.

But it's done now.

But I feel you can get me happy.

I feel I'm very grateful.

Let me give you another, if I may take two or three minutes, to give you a story yesterday.

Very interesting.

It may require some action on my part.

I bet my tongue.

Hi, George.

I told George this and Peter and all of them very quickly yesterday.

This happened when I got the

to the office, and he called me, and he said he'd been on the mission with Larry Woodward.

And he said that Woodward was on the mission, and he said, we had to have a tax code.

And I said, what?

And he said, I've been talking to Larry,

Well, they want a tax program in September, and I said, so do I. I said, President, then I want one.

Well, he said, I just think we have to have one.

I said, I just think, he said, they're talking about import tax.

And he said, they're talking about restating the investment tax rate.

And he said, they're talking about tax ownership.

He said, you know, most of the shipping is not taxed.

We don't tax these Liberians, Panamanians, Greek players, etc.

The old masses and the rest of them are not taxed by anybody.

He said, they haul most of the world's commerce, and he said, they just get by.

It's not free.

So they're talking about a tax on that.

So they're talking about lowering the, I don't know, the image.

They were talking about lowering the, I mean, raising the standard deduction.

And he said, they've got a fairly broad program, if they would follow.

And he said, I think we ought to, we ought to develop a tax program.

He said, I'd like to have some guidance.

And I said, well, you've got some guidance.

I said, your guidance is that we're to look at the bank of the ag tax.

and look and see what we can do, whether we can induce, force, seduce, entice, or other, get a proxy tax reduction of it.

If we should impose it.

And secondly, let's look and see whether or not we can possibly get a, we'll say, 50% depreciation on our new mine equipment.

Let's see what that is.

He said, oh, I couldn't do that.

And I said, what do you mean?

Well, he said, I just don't know how we can do that.

I couldn't work on that.

And I said, why can't you?

He said, well, I can't imagine anybody wanting to propose a Bradley ad tax, just a sales tax, or a reduced property tax, and decreased depreciation.

And I said, well, hell, I can't.

And I sat there and just stunned.

And this happened.

All this leads up to taking two things.

One, well, then he went on.

Well, I've got to have some direction.

I said, well, I'll just give you some.

Well, he said, the morale of my people is bad.

And I said, why is the morale of your people bad?

Well, he said, we just go through all these exercises of getting this tax proposed, and nothing ever comes up.

And he said, we send them over there.

And he said, the White House and they're rewritten.

And he said, we don't ever know how they're interpreted or explained.

He said, all we get back is word.

It was very unsatisfactory.

And he said, morale of my people are bad.

He said, we haven't been on the hill in a year and a half.

And I said, what's that got to do with it?

Well, he said, that's what we were all here for, working on catching others on the hill.

And I said, no, you're not.

And I sat there, and he made me some goddamn meds.

I almost fired him yesterday.

But all I'm telling you is two things.

Number one, that Woodruff and Mills are talking about very much the same program that we've talked about.

Number two, that I may fire a code.

to do is come get some flabbergasted.

But I was flabbergasted.

He must be kidding me.

I don't know what I was talking about.

He meant he gave us that goddamn municipal tax bill last year.

All right.

The point is, Mr. President, and the thing you have to realize is, and I don't want to be disloyal.

I'm not disloyal to my own people.

But I'm more loyal to you than I am to them.

Truth of the matter is, these guys come in over there liking you.

And they put a lot of money up on the hill.

They will get up there with Larry Woodward in the finance committee, in a way it's a means committee, and juggle these tough calls back and forth.

Now, that's what they really want.

They want to compete with Larry Woodward, rather than Arnie.

He's better than Eric Bartlett in the Spanish.

So, anyway, that's what he did.

I like him.

He's on his head.

He's a magically fellow.

But I may run the ball.

You're getting in to discuss the substance of some tax-matic economic seven and whatnot.

And instead of talking about the economics of it or the legal aspects of it or whatever, he always wants to talk about the politics of it.

and the fact that this committee won't take that or this fellow won't take that.

One meeting finally said, look, there are people around here who are better experts on politics than we are.

And our job isn't to talk about the substance.

That's what it takes them forever to get a point out of.

Basically, he was talking about politics and that kind of thing.

That's right.

We thought about the politics.

Well, and I said to my colleague, I didn't say anything.

I'm not going to get a headache about an hour.

I said to my colleague, I didn't say anything.

I just sat there for a full 30 seconds because I started firing yesterday afternoon.

I just started saying, hey, you guys go back to work.

about where we are and what the plan is.

We didn't have to go to Texas.

That's a tough one.

I guess we had to be on that case.

At least we cut something out in the game.

We're not the bussiness.

That wasn't a bad statement.

I don't know whether it was the Texas thing.

Maybe in Dallas.

Oh, I'm sure it would be headlines.

We didn't have... Yeah.

We did have a program, a no busing type plan, and I don't know whether it's really any good or not.

We talked about it in the morning.

And we didn't have anybody to talk to about it on Tuesday because they were all over.

But maybe by next Monday.

Take them down and see if they can't work it out.

Right, right.

The main thing is, I understand we're not in the office.

That's what it is.

Let's be sure that Dallas, we don't screw that up.

I don't care if there has to be bustings in Dallas.

I don't care.

Let the judge find out that there would be immoral visitations at night.

I don't care.

I'm not going to appeal to Dallas.

Never, never, never.

Dallas is going to stay.

I understand.

That's too important to us.

Austin is terribly important, too, and so is Chicago.

On the economy thing, there are two very quick things.

One, we are now in the mosaic.

We're in the month of August.

I said that to John when I was reading a news summary in a news magazine.

I said, John just brought in Pierre Wilfrid and so forth and so on.

And if you haven't seen that sort of thing, you really see what the problem is in the whole clack

for a variety of reasons.

In the case of .

Maybe they're trying to push us into getting .

In the case of, and also if they're trying to prove that their own estimates are correct, in the case of big publications like The Times or The Post, it's a very different situation.

There, it wouldn't make any difference if the goddamn economy had 1% of the planet, no inflation.

They would be whining about it at the present time because they are so enormously frustrated by the foreign policy issue.

And they are practically paranoid in their concern that maybe we might win the election.

So you see, this is an orchestration.

And that's true, but whatever the race, you have that.

You have our Democratic presidents, and if I were a Democrat, I'd be the exact same thing.

I'd be innocent of all this.

Actually, there are no Republicans for Democrats.

In fact, some of them.

John Pack, which is a point that John and I want to discuss with you.

If you've ever, by any chance, thought that Republicans even did innocent foreign policy.

Can I stop?

All right.

But the best defense we got out of the China thing, the best defense were by Democrats.

You know?

Yeah.

It was more light.

Huh?

It was more light in the discussion with the bipartisan leaders than there was in the Republican leaders.

Oh, okay.

Now, here's the point.

Here's the point.

There isn't any question that when you look at the facts, that this is a psychological recession at this particular point.

The facts are not all good, and they're not all bad.

But on balance, they are better than they are bad.

And when you think of the unemployment, say, at 5.8, which you're not supposed to know, you think it will be on Friday, that's necessarily 6.2 at the high level at the end of the year.

That's progress, right?

Some progress on inflation, 4.1 out of the 6, right?

Some progress on maybe failure.

which is the most, as I understand, three years.

Not enough there, not enough on our planet.

Nobody is satisfied.

I said it's fine.

I'm never satisfied.

Never will be satisfied with what we do in the economy.

That's the way the economy is.

Never was.

They say any kind of success or failure is working.

The point is that in terms of decisions of people, consumers, it's working reasonably well.

And in some cases, very well.

In terms of business people, it isn't working for them, damn.

I mean, the big business people, that is, who have to invest in the future.

That's why the inventory is running down.

That's why the new plant equipment stuff is not going down.

In the case of the

publicists who do not apparently, ironically, affect what people do, because what they do is what they read the essay is, in some respect, in general.

But does it affect what they say, or how they think?

In terms of that, it's bad.

Now, what do we do with this?

When a tide like that is running, you just can't get in front of it.

You can't just try.

have to sort of reflect a little bit.

You've got to sort of dodge around.

That's why I thought what John said this morning, I'm going to raise my hand to the, I followed someone's mind the other day.

I said, well, I think there's a lot of things we've got to do.

I think there's a lot of things we've got to do.

And I think we've got to do it.

Because so many people now agree with the question, unless we are activists, that this is

This could set off a psychological thing, which does get down among people who do buy things, and which it will reflect, yes, it will reflect itself in the decisions, which is going on and on and on.

At the present time, time usually condones Pierre-Éric Frey, Fortune Center,

That only affects business leaders and politicians.

But in the end, it's very unexpected in a way.

Now, all of you around us kind of delay action at this point.

That is why we need a little time.

And like you should say, there's a hell of a lot of good things, but we're not saying everything is hunky-dory.

And we're very activist.

That's why I said this morning.

Every major aid price agreement as it comes along here, I said we're going to shut the case-by-case basis.

And it would be a major subject for discussion in the Productivity Commission.

I don't need to knock your question anymore.

We've got this.

At least that's what these guys asked for, I understand, among other things.

They said we want a wage price for it.

But that, to me, was the holding action between now and September 7th.

However, if we could get it ready, if we could get it ready, we would be better off

to nip this above and down by some rather dramatic action.

But the reasons that I think are quite persuasive, I've decided that the best time to do it is the day after Congress gets back.

And at that time, we will have to move.

Because we are going to move, or we're going to get moved, one or two by the Congress.

And I'm aware that they have areas.

And so I said to John, he was the one

to work out the programs which I will need, and I will need it all on September 23rd.

And working it out here will instruct people that you have to get, that I want this for the budget decisions in the background.

That's what they're debating then.

But for example, the budget deal, I want to go in not only to what you said, the deferral of the way that I indicated this morning, I was going to be told to do the coloring, so I just cut that out.

But to deferral of the way

reduction, the deferral of HR1, any other areas on the budget side that do not involve something that would be highly depressing so far as employment is concerned.

This I will leave to see.

I'm interested in the symbolism of everything else.

This will return.

Also an indication of those bills that perhaps might well be vetoed if they can be.

The second thing is, in terms of the other parts of the plan, John is going to go forward and vet out the, you've got to vet out the import tax, and obviously the excise tax, the investment tax credit,

And can I suggest this?

Why does it have to be 7%?

It doesn't have to be.

Why not 10?

It could be.

In other words, why the same one we had before?

It doesn't have to be.

I have an investment tax credit of 7% or 8% or 10% domestically.

If you want to put a 29% investment tax credit, you can on plants and new plant equipment to be able to export and buy it.

But anyway, that's fine.

7% is all right with me.

Another angle would be to look in the research and development business that you've talked about for some of the time with us.

On the budget thing, that would be one thing that we can, at this point, I think, consider.

I mean, John, is to announce then that we're going to be on the space program.

I don't know if you can see what I mean.

But you agree, John, that the deferral of those last two, so it doesn't look like we're being even-handed to the government.

Do you think that's as far as you want to go on manned spaceflight?

There's an awful lot of manned spaceflight stuff in the budget.

But of course, there's a lot of jobs.

The problem with that is it's jobs.

And I just don't want to knock the hell out of a lot of jobs.

I think the manned space flights are symbolic in some way.

I think it shows that we're doing something.

There's a question of the amount of money.

I can't emphasize strongly enough.

It's a sentence.

And let me give you an example.

I haven't talked to them, but I've talked to them every day, and one of them had the same reaction as everybody they've talked to did.

They said, in this race, when we spend $8 million on that little buggy, you leave it on the moon.

Now, that's great.

That's a great equation.

We hear it.

One of the great accomplishments of mankind is that they have fantastic pictures and everything.

They have $8 million of all the pictures they have by leaving a little buggy up there.

Bobby Gunn.

So I mean, this reflects an interesting reaction.

There is a point that's all symptoms.

Now, one of the things on this, it seems to me, Mr. President, which we can evaluate next week, they have played it very heavy that there's been a big scientific call from this flight.

And I don't know how to evaluate that myself, but they're certainly building that, and they'll be building the scientific value of the next two very, very heavily.

And that's something to .

.

Well, that just .

.

I just don't want to .

.

some could go wrong, and I don't want somebody floating out in outer space in the next 50 years.

That's all .

.

So we're just going to make that decision.

But I think on the manned space, let's sort of keep that in the back of our heads, and we could go to the right time.

Now, the answer I want to convince them, that's just .

.

as far as you can.

There's no chance of doing it anyway.

Now, this gets us back to the way that Christ screams.

which I think we can discuss just briefly.

The wage price freeze coming then, of course, is an indispensable part of this package.

You certainly can't have an import tax, which is highly inflationary, without having a wage price freeze.

Now the question is, how does the freeze work?

Because I understand at the present time, George, you feel that if you impose it, it has to be on everything.

Is that correct?

Well, I didn't mean to take a position as such.

I think there are some arguments in favor of that.

And there's pro and con there.

Well, in terms of enforceability, of course, to the extent we're going to have the enforcements, it's impossible to impose it on everyone.

The enforceability is really then just people.

People will get the enforcements to the extent that they can.

They'll pay where they want to.

But your feeling is it should be on everything, right, John?

Basically, yes.

I don't feel that strongly, except I think it's a symbolic thing.

If I'm better across the board, just how could that study be made?

That's the real one at this time.

How the hell can you have a study like that made without having to leak all over the goddamn place?

And that is the one we don't want.

That's why we don't want any of it to leak.

but we wouldn't kind of want it left, you know, because people raise their prices in anticipation of it.

I mean, I'm speaking now of the administration and the rest.

And maybe, maybe they're just better off slapping on.

For once, it would silence the critics.

Hence the doubt.

Is the Jaguars proud that they recommend a wage price freeze?

No.

They've been staying away from that.

They have a National Commission on Wages and Prices in charge of these things.

Well, we have the reentry problem.

What do we do when the freeze is over?

We have scope of

of the freeze, and we have length.

I think, myself, those are related variables.

The shorter it is, the more comprehensive it can be.

And the more, it seems to me, you can basically make it a voluntary thing, or voluntary enforcement, I don't mean.

And it's essentially that, and for a short while, that can work.

And you have a

smaller reentry problem, but I think we do have to figure out something that comes on the end of this period.

Well, then don't you really have to consider having guidelines for a while?

You have to consider something at the end, whether it's a commission or board or whatnot, I think.

I don't know.

That would not worry me at that point.

In other words, I'd let the damn guidelines go on for a while, and then get screws off and put the frees on it.

I mean, I know this is really jiggling around with the economy, but I must say, you can't help it.

It's just a cold reaction.

I'm not the one that heard this.

But it's a cold reaction.

What you have here is a pretty concerted, well-orchestrated assault, which is having its effect on the psychology of people.

So therefore, we need to find a way to respond to it.

And this is going to be, well, not a way to respond, but also a very dramatic effect.

Dealing with, I say, I'm only talking about the domestic situation.

Dealing with John's problem on the international front.

Sure as hell does that, Mr.

Yes, sir.

It has an impact on every person who works in your immediate office.

You've got to get all your staff to jump in with this whole picture, economic picture.

I've been making a point here lately

of having them bring me the Chicago Tribune every morning, and I try to read it as soon as I can, sort of look through it.

Just see another, and I notice you have the Texas papers in your office.

They're different.

Oh, you know, you have a different attitude.

Well, if it was Hancock, you'd knock it off the country.

You'd go to Ohio.

That attitude is different.

That attitude's different in Iowa.

It's different in Texas.

It's different in Tulsa.

It's different in Alabama.

Hell, it's different in Florida.

I went down and met with these senators, and it was the Wade Price thing last night.

Gordon Allitt was there, and he bitched for about five minutes.

And I said, Gordon, what is the unemployment rate in Colorado?

He says, 3.8%.

The rest of the fellows there all sort of got up and said, well, what are you talking about?

And he said, well, he doesn't like the fact that we had a deficit in the budget.

Well, we're getting these stories.

They start out saying, but that's terrible.

And they wind up saying, why don't they do more?

You say, well, gee whiz, which is it now?

You can't have it both ways.

My view is this.

I agree with the conclusion that it is important to make the basic decision.

This is a psychological reaction.

It is important.

I think it's unfortunate that sooner or later we won't get caught up in the possibility of questions like that.

They can just play on psychological terms.

That's what I expect.

We've been totally responsible for this time.

Responsibility works pretty well.

It has worked reasonably well.

However, it does not work psychologically.

We saw the war john on the front pages.

Hell, you wouldn't be hearing all this crap about these planes.

No, I was just going to make this point.

There's nothing else to write you on a truck.

But you see, by diffusing that to a great extent, it may come back important.

Now everybody's talking about the Congress, and they're going to continue.

I know how this thing works.

And you cannot answer this sort of thing through saying, well, we've got to grin and bear it.

That was Andrew Benson's view.

Grin and bear it.

They grinned, but they didn't bear it.

And I think we, so I think that all of us are going to find a thing.

matter of the plan, the better too.

You've got to move psychologically with a lot of symbolism.

What the hell?

Move with it.

Let them nitpick that a while.

Then you can get rid of it.

I don't see significant damage that it would do to the economy.

That's the whole thing.

What's your feeling on that, George, between from September to December?

How much damage?

Having a freeze?

I think a short freeze wouldn't be a problem.

I think that if you were going to have a serious wage price board, it ought to be preceded by a freeze.

There is a sense in which this proposal these Republicans made might be a

a vehicle in that it could be discussed seriously while there is a freeze.

If you're discussing it seriously without a freeze, just as you said, everybody's busy raising his prices.

I think a lot of the price increases that we're getting right now are in anticipation of some kind of control.

People are smelling this out again.

And they're getting their prices up.

Well, let me ask you this.

He got left for all this.

Wouldn't it be said that the way he fires the breeze on me... No, sir.

I wouldn't do it.

You wouldn't do it.

Well, it's something to be said for, but I wouldn't do it.

I don't think it's anything to charge us for.

I just think the total package has so much accumulated weight and justification for it.

Now you can put on a wage price freeze, the inevitable reaction is you were wrong.

Your policies have been wrong.

that you're announcing the light, and you've got to bring wage and prices.

And you put it on as part of a total package.

Just because there wasn't a reason to go to the other side.

Well, I didn't think we thought it through well enough to go this way.

Second, I thought it would appear too panicky, and that itself would create a lack of confidence.

Third, I thought it would be, frankly, sunny and dirty.

justified into criticism that we were cracking away or that we were submitting this to the Congress the day they left, rather than submitting it to them at a time that they could act.

And if this problem requires action, we should submit it to the Congress and keep the clerk for a hundred seconds until he's done.

So if we're back this time, that's why I said we'll wait until the day they get back, September 8th, I guess it is, rather than the 7th, or the 8th or 7th, whatever it is, and we slap it to them right then.

But you can't wait beyond that.

It must go, it must get there, and they get back, because it's over.

Well, I wonder that in addition to other things, George, if we have all the Japanese, Captain Fischer and Fieger on the 8th, I believe.

September the 8th.

And then immediately follow that around the 15th, the 13th.

So, Captain Fieger, the foreign minister, the finance minister, the central bank will be coming in about the middle of the month, so...

It will give them enough time to get a reaction from their heads of government before they come, which also is good timing.

The only people who catch off guard are all these Japanese people who are here.

Are we to...

I assume that you have decided to go with this big program, including the gold window and all that.

And our task between now and September 8th is to think through the what I call the package and draw it together.

The date that I have to see it all is okay.

Most of it is through the August 23rd.

Is that all right?

I've got to have time to think about it.

Now, the way it's all going to be done within the shop, so that, and I don't want anybody to be told, I don't want, and Peterson is not to be told.

I mean, just the three of us are going to know.

I'm not talking, hold on, I'm not talking to anybody.

And we cannot run the risk of lease.

They're all to be told, this is for November, that I decided to do this for the budget then and so forth.

Yeah.

And that I'm, that I'm, so that's the line.

Don't confide in anybody under any circumstances about one bit.

Is that clear?

The only way to play the game.

And that's what we need this study made.

And the way, the budget is easy it seems to me, that I decided.

We have that together.

And the

find any other odds and ends, or there was something, oh, the controls thing.

I didn't want him to work on that.

I didn't want to work on that.

I want to get rid of all those controls if we can.

Why don't you let George do a little work on that?

That's right.

I think George has the interest equalization tax.

That would be a pleasure for me.

That requires congressional action.

Oh, I think it ought to be.

That's right.

I don't know.

Well, anyway, we'll look into that.

And I'll have that.

I'll get that.

I think George, he's getting a lot of work going forward.

Right.

We'll take a crack at it.

If you can go on these.

All right.

We'll take a look at the whole thing then.

We'll see.

problems are.

I think particularly you'll want to look at the implications of the and as I say, the one that concerns me the most is the wage price freeze because I don't know how that would work.

But we can both work at that, it seems to me.

We can see what contingency plans OEP has and we can both work at the same time studying the wage price.

to explore the .

Why don't you say that the Republicans have asked for a study of this, and therefore we're complying with that study as to how it can be set up.

That's the basis of that.

The president wants to respond to that, and we're studying it in terms of so that for the purpose of your testimony, have the hearings on the way .

I don't think it should be .

I don't think I don't want them to tear up a lot of .

you know, bureaucrats over there, new bureaucrats to run the thing.

I think we ought to try to do it out of treasuries if we can.

I think it's just a better deal.

It's a major agency.

You've got a lot of pros over there.

They've got a lot of clout that can scare a lot of people without threatening.

You could use your internal revenue service for the field organization.

Drive everybody up the wall.

We've got customers.

You know, we have customers.

Secret service.

You've got secret service.

You've got the IRS.

Whatever it is, they think you've got to have a lot more.

We have.

We've got the banks.

We've got the controls.

We've got all the banks, right?

So I think this is where we are.

And then we can...

I don't want them to understand that.

Is that done now?

Do we have our signals here?

Yes, August 23rd.

Now, in these past terms, like the R&D investment tax period, we did all that in response to the conversation with Larry.

That's right.

And the excise tax, we had a conversation with so-and-so.

That's right.

And let's go on that.

In the meantime, too, with another few, I want you to go gung-ho before we're on the January tax.

Let's go all out and get that property taxed out.

We're going to get those other goodies in there.

Appreciate it.

We're going to goose the economy.

Let's give it a hello goose.

Do we have any room for maneuver on revenue carrying?

You mentioned this during the budget hearings.

We're budgeted to start paying out on October 1, and that's the budget that you set up.

There's no chance that they'll have a general revenue sharing bill by that time, so that we can at least take note of that insofar as 72 budget impact is concerned.

If you wanted to look at some of these things having to do with personal exemptions and moving the effective date, which we've talked about from time to time, and which I think are likely to be hung with the investment tax credit in some fashion,

That probably has to be done.

It shouldn't be done, in my opinion, but I think you might have to do some work to get it through.

Well, some of these tax things, the investment tax credit and that, can be described as revenue sharing with individuals.

Yeah.

Well, why don't we just do this?

Why don't we just take a safe seat for that?

We've got the problem of investment.

Hell, they haven't passed revenue sharing, and they aren't doing it.

And since the Congress has not moved on, we're not going to move the other way.

What do you think, John?

No, no, let's not do that.

They haven't done anything on it.

They're going to bring it.

I'll tell you that.

Wilbur's going to use this recess to try to figure out what he's going to, what proposal he can come up with.

They just couldn't come with it.

They're coming closer and closer to your proposal.

And they're going to come back and probably vote down your proposal.

Then they're going to add these...

these various formulas into it.

It'll be, but it'll be substantially your bill, except they want to also change the base.

But I wouldn't do it.

I'd wait.

I'd wait a while.

I wouldn't study it at this moment.

Now, he's aware about that connection.

He wants to, he was going to follow up revenue sharing with health insurance.

He now says he doesn't want to follow up with health insurance.

He wants to get all these tax proposals.

So, he wants to get all the tax

as opposed to health insurance.

He wants to set the health insurance aside.

He's got health insurance as his whole deal with the bank earlier.

He hasn't gotten much public time.

Right.

John, if the president comes out with this big program on September 8th with this heavy tax business, presumably then the request will be for the Ways and Means Committee, the Finance Committee, to drop whatever they're doing.

and get to work on this.

So that puts revenue sharing off.

Now, in the light of that, what about at least slipping the first quarter increment and hanging that back for the tax?

That gives us another big what?

Another billion and a quarter out of the budget if we're looking for the two-way savings here.

We're trying to build up this symbolism of we're taking a lot out of the budget.

That's the place you can do it.

We can certainly do that.

I suppose you've got the problem of how much of a swig of it you're going to get out of Rockwell.

You know, if you want it now.

This program is going to be so big.

It's going to be so powerful.

But I don't think you can get a swig of that in much.

It's just not going to start to work.

Well, anyway, I think this is what we do.

This is our drive.

John Fields, and I'd say Secretary of the Peace, do your best to sort of put out fires here and there.

But as he described it, it's like a stampede.

If you put your horse right in front of the stampede, you get rolled.

But the way you turn it is to ride along with it and turn it.

That's what you have to do with this stuff.

That's probably got to even say some nice things about that stupid wage price board they're proposing.

But let me say,

If having a wage price board, after we complete the freeze, is a good idea to make people feel a little better, they're like, well, god damn, we'll have it for sure.

Because if they were in the time working door, he didn't want that.

Well, that's all shit.

I want you to relax and have a wage price board.

And, uh, working the triple prices and wages.

Could be.

Okay.

All right.

Have a nice trip.

Thanks.

John.

Yes, sir.

Part of the C.M.R.

He's up in my office.

I said that.

I'd love to see it.

John brought in something here.

He said this shows you the problem.

I'll just talk to you a couple of times.

The real problem here, George, is basically

I guess it used to be not as important as I thought it would be.

There is another change until the psychology changes.

It may cool off some of us.

But I'll say that, you know, it's a very hard statement, but also a very clever campaign by the Democrats.

Very good.

And so they had it.

So we also have our games of running and what we're trying to do.

It's a very exciting thing, I have to say.

Exciting.

Exciting to be a part of it.

Exciting.

And we just need to tell ourselves, because I don't know what it is.

It's a little popcorn.

We're going to put it on this.

I don't know.

How do you think Congress is going to be?

It's a popcorn.

So the state is going to be pretty good as soon as it does.

Yeah.

I'll tell her.

Yeah.