Nixon, Shultz & McCracken on Wage and price freeze and Phase II

1:58:26Good morning.
1:58:27Here's the people that have been down on the committee.
1:58:40I need to get the rest of your journalists to see who's the chairman.
1:58:47You're the chairman?
1:58:49Well, you're the chairman.
1:58:52George?
1:59:01We'll say that we had for an hour, because I haven't talked to the church, but I had to send her in here talking about the lack of her, and it's not as bad as it's true.
1:59:07I heard that the purpose of my call was to just ruin her.
1:59:09I'd like to tell you that I became aware over the last few weeks of the work going on.
1:59:18We had really excellent reports.
1:59:31and the people within the White House staff and others who are watching this.
1:59:39And some of the crowd leaders in the business community have said it's been handled well.
1:59:46But the part in last night's meeting was one that was just exciting because of the living council.
1:59:56It's interesting and exciting.
1:59:57They say that Weber's is a son of a bitch and they're not scared of that.
2:00:01Is that what you said?
2:00:04Yeah, but you call it the anger of these defectors, though.
2:00:13They do call it the anger of these defectors.
2:00:16They do call it the anger of these defectors.
2:00:50Five, six, seven, eight.
2:00:57We're going to have a lot of money for it.
2:00:58We're going to have a lot of money for it.
2:01:30I think that's a horrible thing to do in the middle of the street.
2:01:32Usually you're on a bus and you're going to have to go to the point where they call, and it's very expensive.
2:01:34You need to have four hours early to have to go to that bus in the middle of the street.
2:01:36I think that's a terrible thing to do.
2:01:51I learned a new play every day.
2:02:58I learned a new play every day.
2:02:58Well, I must say, it's very, very serious.
2:03:28I don't want to stress that this has gone as well as it has because of the
2:03:57a dedicated effort of a rather limited number of civil servants, and deeply important.
2:04:01We have a country with us.
2:04:03Every governor, well, I shouldn't say every, President Spence has just shut up for a while, but I think that every other governor has given much.
2:04:10He's got a member on his insurance.
2:04:11He's 23-year-old for us.
2:04:12Yeah, he was a good person.
2:04:13We had to work something out to get better with him, and so later, later.
2:04:27Now he would walk back at us, otherwise we would have slapped him.
2:04:28Yeah, back off.
2:04:29I saw a couple of signs and things where they said we want our teachers' mother across from the pay raise.
2:04:36And I saw, and the governor, no, no, the governor of Illinois, he told me there's a very radical group in Illinois organizing.
2:04:54as you might imagine, California.
2:04:57Seizures are a condition.
2:04:59member of the teacher union, and they're organized, just all of them are organized, the teacher union, they're raising food for big cattle, you know, so I'm trying to, he's trying to stand firm, and I said, stand firm?
2:05:14They just, I'm trying to get a union leader to jail, but a legal strike in 68, we've got an FBA from the University of Chicago now, so you don't need that six to jail now, and I said, I said, the others on your side, get a little credit.
2:05:25Over me, this is a person running for office, and
2:05:27But I will get back into this as we go on.
2:05:37I think one of the important things is that I mentioned George's money.
2:05:50I think it's very important.
2:05:57We really are running on what follows on.
2:05:59I think we should think a lot about it.
2:06:02But the 98 is what we're in, as we know.
2:06:05But boy, what follows after it can really be a rat's nest, apparently, or to fool you into a situation where we say, well, we're going to have a 5% salinity increase and so forth.
2:06:15And then in the next month, we'll just get 30% over two years.
2:06:26So that, in my view, can't work over 100 hours and pushing and so forth.
2:06:31But on the other hand, you can't have something that looks like nothing.
2:06:41The cost of living council is probably too big to do it, but there must be something in there where we do it more than a, this is my opinion, I don't want to prejudge what all you can come up with, where we do it on a rifle shot basis, you know, where, and where we bang, where we get an opportunity to bang somebody hard, where it can count, rather than putting up some nice little guidelines.
2:07:07services and that just creates a few guidelines and all the rest.
2:07:11And they just have to blow, and blow, and blow, and be looking at it.
2:07:19But you all probably haven't gotten into this too much yet.
2:07:23We have had two very preliminary discussions in the company.
2:07:26I think you should keep very preliminary for a while.
2:07:28Don't you think?
2:07:28You always have to do so.
2:07:29We can't help a lot of people to contribute to the thinking.
2:07:33I can't emphasize too strongly that I, despite the recent whole set of rice infections you saw yesterday, can't emphasize too strongly that despite the public support for this and all the rest, that the legacy of our passion
2:07:52is to leave this economy in a permanent straitjacket.
2:07:54We just aren't worthy of being placed in this place.
2:07:56I just feel that very strongly.
2:07:57I believe in it, you know.
2:07:57I probably will serve a bill of freedom that I have.
2:07:59People have to talk about this thing.
2:08:01We may have moved.
2:08:14But now, I think we could, I think we should all be smart enough to find ways to handle parts of the problem.
2:08:22Well, for example, you start talking about this across the board thing.
2:08:27With the thousands of price and wage decisions that are being made, I don't know how the hell you're going to be able to do it without bureaucracy.
2:08:36No, no.
2:08:36Without bureaucracy.
2:08:44and have the capability to persuade people that you can't do it.
2:08:48Yeah.
2:08:49Of course, this has some relevance also because of the way you drive the free period.
2:08:54Yeah.
2:08:55Yeah, I, I, despite that vision.
2:08:56Did it, did it?
2:08:56Well, with any of my problems, you know, it's only like a day or two.
2:08:58Well, I'll get it.
2:08:59You know, I'll let you know.
2:09:01I will help.
2:09:01I mean, there's some stuff at the end of the walk.
2:09:03Oh, yeah.
2:09:04So you've got to have power there.
2:09:08the certainty of some strong action.
2:09:10And I really haven't had the progress yet.
2:09:13Yeah, sure, yeah.
2:09:14But something that we'll keep an image of from COVID-19.
2:09:18During this period, we need to try to manage the breezes to the extent we can so that we don't just pile up the impossible.
2:09:33In other words, there are a few exceptions.
2:09:39and some other kinds of strategies that either always give a lot of public anticipation so that when it happens, it happens.
2:09:50And we act as though we expect that.
2:09:52And the question is, what happens after the vote?
2:09:56I think what we need to avoid is the impression that the freeze is sort of like
2:10:12Yeah, it's not going to happen.
2:10:12Well, I know we have an hour and 70 days left to the freeze.
2:10:16You know, tomorrow we'll have our days and minutes to scan data.
2:10:22But that probably means that if we're going to establish anything which requires an administrative machinery rules and regulations sometime in the middle of October,
2:10:36We've got to be reasonable with decisions that have to be made.
2:10:39So we've got about half done.
2:10:39We've really got a lot.
2:10:40We've got a lot, sir.
2:10:41Yes.
2:10:41Because this period just goes off and fast.
2:10:42People are trying to figure out how do we measure the effect of the freeze.
2:10:47Really, the best estimate is we won't get to the last of the freeze.
2:10:49We'll get something to nothing later.
2:11:02So 90 days is really an intense, short-term period.
2:11:04And I think the whole stuff you just talked about was about cold water.
2:11:10You know, we're wet.
2:11:13Well, the freeze, to the extent it is working, is working because we are in public support.
2:11:17You can't get around that public support.
2:11:20You see a few signs of it.
2:11:21You get up to 70% of the people that work.
2:11:30They were ready for something.
2:11:31We have practically no letters or telephone calls indicating my support.
2:11:34These people come in and say, we're all in the presence of the program.
2:11:36This is just what the country needed.
2:11:37But I'm a special case.
2:11:38Sure love me.
2:11:38I would say the teachers have been most vocal since the day that we went to Jacksonville.
2:11:59Teachers?
2:12:00Yeah.
2:12:01No, I had teachers just for my years.
2:12:03That's good.
2:12:04I was done with the football part.
2:12:08That's what I did.
2:12:09More of the Philly, I think, than teachers.
2:12:12Mm-hmm.
2:12:12I had an older contestant go shoot.
2:12:14Well, the various states, some of them are 12 months contract free.
2:12:15Others have contracts on the basis that they start getting paid in the middle of September, but they're subject to waivers if they don't come through in the summer.
2:12:18Those are paid, they all start getting their home free.
2:12:43A rookie just coming aboard.
2:12:44Oh, I'm just beginning to learn about football players.
2:12:48They gave up on them during the Korean War.
2:12:51That leads you to believe that there's something, a natural way to crisis themselves.
2:12:57The football players can affect the prices of tickets for a day and a day.
2:13:00That's a deep political problem here.
2:13:02Except they have a lot of consistency.
2:13:06The way we handle other people, our teachers,
2:13:12One of our problems was, were we going to say that everything that was agreed to before the freeze carried into the freeze, given the fact that it's only 90 days?
2:13:20It was just horrific momentum.
2:13:22The freeze would have been a nullity.
2:13:24So the general notion was to take a stringent position.
2:13:29And the way that was fared was by being insistent.
2:13:31Or you would keep the football.
2:13:35Or I would certainly look.
2:13:38Well, we apply the seasonal rule to some of these bubbles.
2:13:39Of course, we're getting 29,000 last year and 100,000 now, and others, and vice versa.
2:14:01We'll figure something out.
2:14:27He's probably home free.
2:14:29He's home free for other reasons, too.
2:14:32The guy probably now in his commercials is making more than he'll make on his salary.
2:14:37My God, every time he eats, that's a baby on her.
2:14:42Baby food on her, whatever they do.
2:14:45The smokes you say we're having on you can't do.
2:14:56What I'm saying is something that George said just now.
2:14:58He said, if you want an exercise, it will renew your respect for the insinuity and the .
2:15:12Just get into the business of .
2:15:14Oh, I know nothing about it compared to what you want.
2:15:18Well, we have one little thing that we've used on the space to the extent that
2:15:28Productivity can be a bridge of some kind that will help us in rationalizing regional price problems.
2:15:32We now have the Productivity Commission's short statement that 100% importance in productivity, that wireless endorses productivity bargaining, and a variety of other things like that.
2:15:42It's all a very general term, but at any rate it represents an agreement.
2:15:54a lot of team labor people, a lot of management people, some public people.
2:15:56After a long period of time, finally, we have this document and everybody's agreed to it.
2:15:58So we have even now this document that we can put out, even though it's not contained.
2:16:27Can't you convince your friends at General Motors to be the statesman that American Motors were in?
2:16:34I have.
2:16:35That's the one that's surely in the tax package that's going to go.
2:16:38They should take the risk.
2:16:39I talked to them briefly at the State Department when we got it around.
2:16:46I said, look, I'll just move on.
2:16:51I mean, it's a way to sell cars.
2:16:55Oh, I feel that way too.
2:16:56Another thing too is that, General, you and Arnie and a person too, would you tell your staffs that, I mean, these poor guys down in Woodburg, I'm keenly aware of what they've done, and the proper time will come.
2:17:08Recognize them so many times.
2:17:11Certainly will.
2:17:13And people out on the visit, friends out across the country, and just really,
2:17:25We had one expert in each of my eight regions designated, who was an economic stabilization man, but of course on all panels.
2:17:50for a night war.
2:17:52I had about five people in my national office.
2:17:58But they didn't want to do it.
2:17:59You know, we had that test of morale, not only in my organization, but the people we recruited from other agencies and the IRS.
2:18:02I thought it was a very good and tremendous job.
2:18:03There was an agreement.
2:18:04It's true.
2:18:04You know, I think that anybody can do it.
2:18:25talking about, oh gee whiz, we've got this terrible new job.
2:18:30And it's exactly the opposite of the case.
2:18:33It's, oh gee whiz, why do we have to do the same little damn thing every day?
2:18:37And here we are, they're part of an exciting venture now.
2:18:40I remember it that way.
2:18:42And when I went to go PA, it was in January.
2:18:47A meeting after Pearl Harbor, I remember that Tom had just
2:19:00In October, before Pearl Harbor, I signed up for it.
2:19:06It didn't hit Pearl Harbor, so I packed it in January.
2:19:09Well, I will never forget the morale and the excitement of just being there, writing regulations about tirade and all that sort of thing.
2:19:18It was just a big thing.
2:19:22And people in the open line agencies were just as jealous as they could be because they were the action one.
2:19:29That's the thing.
2:19:30People like the action, don't they?
2:19:33They like the action.
2:19:34They like to be in there.
2:19:35For some of our people, they like to do well.
2:19:39They like to keep people around.
2:19:42That's hard to do.
2:19:43So the best people who have had the operations that the man was in charge of?
2:19:50Do I have...
2:19:51Interns.
2:19:51Interns.
2:19:52Great interns.
2:19:53A girl, 19 years old, was running my restaurant, and we were partners, and she was part of it.
2:19:56We had one intern that came over to my IRS, and she was supposed to go after a master's degree, and she decided to stay out of it.
2:20:14Well, you know, I got to spend a note, too, from the beginning.
2:20:15You work out there anything you want with this man here in the center.
2:20:17He's had some notes for all those.
2:20:18The last time he was here, he had the 90-day period with his son.
2:20:23He knows the appreciation of his crime.
2:20:51This girl, I had her in yesterday and she'd come back to me.
2:20:54She said they had my picture taken with her and gave her whatever she turned to look like a girl.
2:21:01Why'd you send her back?
2:21:03They want her back.
2:21:05I said she'd come back to school, that's it.
2:21:07And I thought he wanted to get it up here with you too.
2:21:09I don't get it.
2:21:21figure what comes afterwards.
2:21:31I'm going to continue to do this.
2:21:33I was away for two weeks.
2:21:34I'm just going to assume I'm away for the next two weeks.
2:21:38You make all these decisions, they're all right.
2:21:42There's no way, during this time, there's no way, there's no way that I just don't want to know.
2:21:46I mean, to say, you know, it's just done.
2:21:50You might be hurt, but that's where you're at.
2:21:59the operation of it in the sense that we have a little, of course, the cost of living counts in these, every avenue, four and five, across all of here.
2:22:11And I know they're supposed to come to Harvard.
2:22:14They're supposed to come.
2:22:15Great addition.
2:22:16And they're doing something that's more interesting than they'd be doing back in our options.
2:22:22And we have a little policy that they have to receive every morning to take care of it.
2:22:28It does the initial screening, and that output standard is sampled by the cost of the house standard, and then we go on to process that work in our next job.
2:22:31So I think we could, I think this is constant.
2:22:32We, keeping the flow of things moving is very important.
2:22:33I'd like to add two things just recently.
2:23:01less popular every day.
2:23:03And secondly, people are going to get a little smarter every day in thinking how they can slide out from under and all of their places are going to be different.
2:23:09And if they can't, they're going to delay their deliveries.
2:23:13And in business,
2:23:24Saying, well, come November 14th is when I put the price up.
2:23:28So that, to me, is meant to, as opposed to stage two.
2:23:35I certainly think we could put up, even under the wage price freeze, in order to be effective, to, to leverage the later, the old price.
2:23:47No, that's not what I'm starting to think.
2:23:50I'm getting to stage two.
2:23:52I think so.
2:23:53It's very important to handle this because if we get toward the end of the freeze, these kinds of things can have the effect of slowing the economy down.
2:23:58As people put away for the end of that freeze period, we want to be ready to set that up.
2:24:01This is why we need to get out guidelines on what we're thinking about after November 13th, way ahead of November 13th.
2:24:04So keep that in mind, too.
2:24:23The fact that the soil is down, if we could be in business with our base to machine it so that it could come a little empty in the street, it would come back to the ground.
2:24:27Right.
2:24:28And also, we could make certain decisions here at this stage.
2:24:46Yeah, I see.
2:24:47What do you say, Gronk?
2:24:48I'm going to go back and teach you a course.
2:24:51What do we call it?
2:24:53You know what I mean?

Nixon, Shultz & McCracken on Wage and price freeze and Phase II

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Also recorded on September 4, 1971

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