Conversation 581-011

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I have two copies of this page.

My wife wants to read it.

there's no way to set this up without it being a hell of a mess.

And second, that there's probably no way to set up something that's going to be particularly effective.

That the whole game then gets down basically to pretty much a psychological problem.

And the fact that

particularly of everything else, not so much the people, although they are concerned, but particularly our hammering business people have got to be convinced that there's something going on.

Now, the thing that I think is, the guy that I hope that you think of, and I'm going to think about it over the weekend or something too, is Michael Collins.

He's got into it all here.

He's been busy this week.

But the thing I think you have to bear in mind is, I think we should bear in mind, is to set up something that will cause us as few problems as possible in history.

I'm not sure about that.

I'm not sure, of course.

I mean, it could happen.

I'm not sure.

I never thought they would be able to have to do that here.

But I think it was hard.

I think someone had to look at a tree.

Now they've been there for a while.

I don't think we have gone for a reason.

He hates this business.

I'd like to speak to him more.

And to end it there, he has precipitated this and controlled it.

He's got himself positioned in a way to...

I'll get more or less what he wants, and then if it doesn't work, just save it.

It's disgusting in a way, but there it is.

They have settled on a steel contract basis.

Employers need reassurance that they'll be in crisis

Thank you.

Just a little bit of sugar.

All right.

Justice, do you have a system that sounds

as good as it can, but we'll leave as few possible decisions as possible that we think we have to make between now and the election.

Because any procedures, any decisions that have to be made are definitely going to be butchered.

I just don't see any way I agree with her, with Mr. Moran, and so forth.

I don't think this will work.

That's my view.

I don't think this will work.

I wish you were out of line, but that's my thorough conviction.

Also, the other thing, which I think you're all aware of,

We don't want something that gets forgotten and invented.

It's going to be very hard to get rid of.

I mean, it's terribly important for us to stick to our ending with regard to moving away from this at some point.

Now, we have a, any of us, some of you have sat through these meetings.

We have a very, very significant share of businessmen

Consumers, congressmen, senators, all our crutch.

That's really what it gets down to.

That's why we've gone through this damn first phase.

And that's why they want to continue to have the crutch.

They want the government to come in and save this thing.

They don't want the responsibilities of a great free economy.

That's really what it gets down to.

That's what we're dealing with.

Now, having said all these things, I'm open to any suggestions.

You got something to order?

Go ahead, George.

I think that there are all sorts of ways to look at this and think about it, but the labor issue presents the problem in its most immediate form.

This is an event that exists quickly while you are out, and Arthur wants to have, as he puts it, a slow thought after the freeze, whereby

One would expect that wage increases of 3% would be right, but above that would be a problem.

I would get that out of that.

Now, that is unacceptable to labor in two ways.

One, that a government board tells them what the standard is.

They want to evolve the standard from a tripartite board.

And two, there will be contracts facing us with way more than that.

so a question is do you want to blow the thing up on the 91st day so to speak by insisting on something that labor won't accept and saying with Arthur Burns standing right there that by gosh we went for a strict standard and we tried and these labor fellows are against inflation

or against doing something about inflation.

And they've refused to cooperate, and we're going to have to do thus and so.

But basically, the system blows up.

Or, and I really think this is the dimension of choice, or say, we appoint a tripartite lord.

We, so to speak, hand them the freeze in the wage area.

Say, now, where do we go from here?

You evolve.

standards which will be reviewed by government groups.

But we recognize that if Bridges gets a settlement, and he's doing pretty well for a 70-year-old fellow.

He's staying in there hour after hour, and they're in settlement territory now.

But I'm waiting on a situation where they're close enough now so that all the ingredients are there and they have got the wage issue.

where for a two-year period, now this is the measure of the problem, looking at it from Arthur's standpoint.

For a two-year contract, the wages by themselves, they're arguing between $1.10 and $1.40.

They were between $1 and $5, so they've come down into territory, so the union has given way down on wages.

suppose they settle for $1.20 for two years, $0.60 a year, that is probably on the order of 13%.

I mean, there are a lot of other things in addition.

So what are you going to do about that?

Well, in my judgment, there's only one thing to do about that, and that is declare it a part of the past and go on.

I agree.

But that is not...

I'm always a part of the past.

But we work this way.

So I think that one could have a tripartite board with labor and have them participate and set these standards.

And they would probably have some effect on the most outlandish situations.

They would probably tend to pull up the laggards

So the probably net impact on the wage system would be to increase it rather than decrease it.

But at any rate, it would be a visible system of people arguing about what the right wage increases are.

And it would be there, and it would be involved.

It would be criticized.

And my guess is, if that were done, what would happen is the business would become increasingly critical of the board, of the wage board.

And there would be increasing strains.

The public members, if they had any guts, would gradually get on their high horse about it.

And then they would vote against labor on some critical cases.

And labor would then walk out.

And that might happen in the spring or in the summer.

I don't say this is absolutely certain, but I think these are the different possibilities.

And so the question is, looking at it, as you said, as a problem in psychology, as a problem in politics, so on.

But those are the kind of dimensions.

So I think that's the way a wage board is going to work.

Labor will dominate it at first, and then gradually there'll be an effort to crack down and so on.

I agree with that analysis, and I think that if you look forward to a reasonable possibility of a breakdown in a concentration of labor, guess what background you want to face?

spurned what will look like very reasonable demands from the people and spurred their offer to participate in the initial establishment of the standards, spurned entirely what they will regard as very legitimate increases and so on.

So that when a breakdown comes, it will not be a question of a confrontation between

The government insists on an anti-inflationary policy, and the labor people insisting on an inflationary policy.

But there will be a confrontation between the government, which will be portrayed as having been unfair to labor, pro-business, unsynthetic, and so on.

And the labor people will be the representatives of equity and reasonableness.

And that will be the very worst kind of situation it seems to me, which is to confront them.

And I think that

We have to recognize the policy problem, that having had three months of freeze, we have created for ourselves a situation in which it's almost inevitable that in a month or six weeks, we're going to come out and shoot an officer who just could not do his job indefinitely.

And we have to take that, try to prepare the country for that, so we don't regard that as a mammoth.

failure, but the attempt to sit on it further is just going to prolong our difficulty.

I think that is the problem with Arthur's remedy, because if we could sit on it for another few months, these labor claims will not go away.

Labor will not concede these claims.

They'll just accumulate and become more difficult.

Where is it?

We allow this initial bump to occur.

We still have some options.

Either them, the thing will settle down to a lower rate of inflation.

Or if it doesn't, the COLC can promulgate some tighter standards and say, well, this isn't working.

We'll take another step and we'll make the standards tighter.

And so we have somewhere to go.

Whereas if we start with the maximum toughness and a breakdown, we have nowhere to go.

And we're left just hanging.

Another aspect of the proposal we're sending to you is to kind of avoid having you immediately commit to a rigorous policy.

So that the initial setbacks are certainly going to be initial setbacks.

But they won't be yours.

They'll be in the first instance the wage board, and then be the COLC maybe, and so on.

But you will be above this and can

And besides, I thought, well, this has got to be fixed with something else.

But I don't know.

I think that's very important.

The, uh, you know, the insert device.

I don't know why it's such a muddy ground.

Everybody comes back, you know, and we're talking about it.

We ought to have a wage price board and ask who are the specific ones.

We have to be specific.

Now, frankly, the phrase was easy.

Crack it, it's lame, easy, and everybody said, no exceptions.

Well, but if we talk about a wage price board, which will provide for equity and all the rest, then golly, it is just unworkable.

I mean, we all know that it might didn't work.

Well, at least that's what we used to write when we used to go to the council.

Well, we haven't really.

The last six weeks didn't say that what we used to write was incorrect.

That's right.

You learned that what you used to write was absolutely correct.

That's my view.

Plus the fact that the intricacies of the price system and the subtlety and the problems that it solves effortlessly.

When you try to solve them yourself, they're just gigantic problems, and they're impossible to solve.

Well, this has been, this has been sort of part of what we've been thinking, that to the extent that a

A more relaxed type approach, which is here we've been talking about, achieves anything.

It achieves it because it delays things a little bit.

And you can have a formal mechanism, such as Milton suggested, or you can just be bureaucratic and sort of instruct the bureaucracy to take its time and process cases slowly and so forth.

And then you delay things as a result of that.

and so you hold things back a little bit in that process.

I think that's a kind of mechanism that's built into this sort of thing.

You will be getting a book like this that has different subjects and overall memorandum goals, interest, wages, and so forth.

It also includes an organization chart, and that is

That is the sort of thing that the Cost of Living Council is evolving.

That's the direction that they're thinking.

To have an overall government group like the Cost of Living Council, maybe with the expanded productivity commission as a sort of an advisory body, following your suggestions in the meetings that Fitzsimmons be in, and we have some agriculture people on and so on.

Then you have, and that has a staff, then you have a price-cost-profits board, a pay board, and then it's being suggested a rent board.

And we suggest that.

We went into the property suggestions for a rent board with the kind of control there, and each time you go specifically into something, you see,

The problem is everyone agrees that controlling rents is not a question of controlling the money paid or charged, but rather the services that go for that money.

How much heat are you gonna get?

How much of this and that?

And you very quickly get to the problem of how do you police how much heat is produced in the two flat in the south side of Chicago?

So that calls for a large bureaucracy, inevitably.

And I think that

that somehow or other, we need, at least in my judgment, we need to work out some way of being more relaxed about that.

Rats, how would you handle us?

How do we handle rats?

Maybe that's more susceptible to a guideline and other things.

There are in the book a variety of

You can set guidelines except for the quality problem that George mentioned, that the landlord can still adjust the quality of the service and he can escape.

It seems to me that the best thing would be to get rid of rent control as early as possible.

And aside from the psychological effect, I think things we would need to get rid of, I don't know if you're ever going to keep, but I think that it would be unfortunate to give an impression in your initial announcement to the rest of them that we're kind of going to demand relaxation.

We have to kind of retain the feeling of this thing and then slip out from one thing after another more or less quietly and successfully so that if we just live with the rent control, I would say, it allows the landlord certainly

immediate release, exempt all places that are now vacant or become vacant, and maybe allow everybody to be sent to Creech or something for a few months, and then get rid of it.

Get rid of it in circumstances that are a little removed from the initial announcement phase, too, but not on the day before election.

That would suggest, for example, rather than having a national rep board that does things

that the Price-Cost-Profits Board specifies some standards and promulgates them, and you have to set up a special board that you have to then abolish it sometimes.

Well, or you could delegate that to Mr. Roth.

Let me ask you this about the, I noticed the article about the name, or at least the standpoints called the Price Board.

The reason, obviously, you're putting in the word profits is that there is such a hell of a political pressure on it.

What specifically could you do about profits, though?

Well, how can we address yourself to that question?

I certainly think you're talking about bank profits.

That would be a hell of a good start.

Well, we already collect the profits of the federal and third banks.

There's not much we can do about it.

I don't know.

I mean, well, we would be receiving reports, or the agencies would be receiving reports on profit margins of a large number of firms.

And they would look for cases in which the, as a result of prices being held stable and wages being somewhat restrained, very rapid growth of productivity,

was generating exceptionally large profits.

Now, in a really competitive world, you would expect prices in such an industry to come down.

So that doesn't happen very much anymore.

But in those cases, you would order a reduction of price.

You'd have to find some fairly exceptional rate of profits.

And you wouldn't be able to do it comprehensively because it would just be too much of an investment.

The first, you think, in the standpoint of public relations, you'd have to call it private property court.

I think so, and I think we're in trouble.

Yeah, I think it's a good... And second, from the standpoint of the business industry, you know, a lot of the little weavers of Wall Street are going to explode.

They don't want to worry about it, but they don't want to worry anyway.

Yeah, well, then we'll let them.

They'll be part of that kind of property tax, really honestly, and it won't be as...

It will bop up as much as property tax, property tax.

And the case, of course, you get into real problems.

That's one reason we suggest that having a board or commission on the price side rather than the administrator, as they usually do, is that this will involve difficult problems of judgment.

And we thought a board has a more judicious appearance and probably more judicious back than some administrators.

But you might find in the automobile industry, if all the deferred wage increases in the automobile industry didn't go through, then some restraint was exercised there, then you might find that, at hand with the big volume here that's likely to happen, you might find that in the auto industry you had a case for price reduction.

But of course, when you run into a problem like this, then maybe this is true.

If she had a possible choice, then you're not a criminal, but not an American.

What is the situation now on that?

What legal sanctions do you have to control profits?

the profits would be the standard by which you set the prices, even on the other side.

So if you're considering, shall we allow prices to go up, but costs arise in an industry or a firm, shall we allow them

prices to go up, one consideration that would have to be considered certainly would be the profits.

If they are running at much higher profits than, say, in some recent period, you might expect them to absorb some costs and create some others not.

So that some decisions or consideration of profits is an inevitable part of these prices.

And I think you can make a good case that in an average, the main purpose is to do something about inflation.

It is better to attack the profit problem or the windfall profit problem by trying to do something about prices rather than to allow the prices to stay and mop it up for the government later because the option is not to collect money from the federal government.

The federal government certainly needs it.

I mean, here's how it is.

We get a picture set up in the week.

Sure, it doesn't like that, does it?

Well, we're going to give George a book that it will contain.

I saw a revised version of the memo that I gave on the plane.

It will contain a, when will you give me that book?

Almost a minute, I think.

That's before you go to the floor.

Well, I'm going to have a different approach there.

I have to read it.

One thing I'm convinced of is this is not something that should be

I think this is something where I've got to get on awful fast.

I think what I have to do is do it at noon.

I just go out and in two minutes, which will be covered and then turn it over to Connolly and say the secretary will answer any questions regarding how the band-aid works.

Because for me to get off and start to get into this gobbledygook about how this works, that is not going to, this will not stand to speak.

Oh, it won't go.

Well, it wasn't written for you, if not, but I hope you'll get a chance to read it, because I think it explains a little more than a memo to how I think this might be presented, how it might look to people.

What I'm getting at is I think, Herbie, that your analysis of keeping it a step away from me.

I'm inclined to think that if I could just

briefly say, well, you decided to go forward with it and then let it constantly make its own.

But that's what I had in mind.

I think it's better to have it one step removed rather than have me involved in the intricacies of a little bit of a price thing.

The freeze is different.

They're both that kind of actions.

You say, we're going to do this or that, and you put a little rhetoric around it.

But this is something which really gets down to how and all those intricate decisions.

And it was, yeah.

Yeah, I like it.

Well, there is a certain appeal which must be made here, I think, for cooperation, for fighting for time, for everybody, for understanding, for accepting the fact that there's got to be rough justice at best, and so on.

And I think that that has got to come from you.

Yeah, I agree.

Well, so, I think if we can...

need to have time to line people up if it's at all possible to do that.

So the labor people are signed up before the tripartite board is announced, if there is a tripartite board.

Otherwise, if that's announced before they're lined up, then they've got what they want, and they'll bargain for more.

Whereas if we can go and say, all right, if the president decides on

this kind of a structure of these objectives, will you serve on that board under these conditions?

And they say yes, and they can be named, and they're locked in.

They still have the power to walk off, of course, but they haven't been given the opportunity to get what they want before they've agreed.

And I suppose to agree the same might be true of some of these other rather difficult jobs

would be good if the person could be named and identified right down there.

It's one critical matter, actually, in the choice of the public members of this tripartite board, because there is, you know, great skepticism about tripartite boards as being instruments that are dominated by the labor side, and we have to ensure that the

Public members have sufficient strength and devotion to the anti-inflation cause.

But I have to do the job, and that's hard to find.

I can't say that it's a labor of love on either.

Herbs are my priority.

Well, but it has to be done.

We know that.

Well, my son said, ideologically, you should fall off your sword, but existentially, it's great.

And it's a chance to, you know, even though it's not my preferred activity, I've found it very, very fun.

And maybe that's one of the troubles with this kind of thing.

Yeah.

It gets into your blood.

You feel powerful.

Well, I think we all, we just must not ever, we all know that what we're doing here is just so we know.

It's just thorough enough to give the appearance of trying to work with the damn problem and do the best we can.

Maybe it'll affect its sound.

What do you think it does, George?

I think the likely effect of, say, a year's worth of operation with a wage thing would be to raise the wages.

but it would tend to raise the ones who are lower and maybe clip off slightly the ones on the upper end of the scale and then that effect.

I think that was what happened during the Korean period on the whole.

It left alone the average wage level would have been a little lower.

But we need to have this froth, there's no doubt about it.

But I think there is the point

that we'll have to get over, not only with Arthur, but with lots of other people who think the way he does, is on the question of having such a board in the first place and putting up with some things that will be described as totally unacceptable.

That's really a question of whether you have to blow up immediately or have it downstream a little ways.

Well, let's come down to the proposition of how we get this thing.

So I'm inclined to go along with the board and track bar category because as laborers, it's quite obvious we want to participate in the house.

And if we want to do something about the problem, we've got to have their participation, or we're just going to have a hell of a battle, and a peer-to-peer.

So to our end, we'll be on the other side, and we'll love being on the other side.

so that's that now we've got to have common everybody talks about the other properties and he's been

Right, I would say fairly strong on the side that we should not be, we should not allow ourselves to be maneuvered into the position of being, appearing to be anti-labor, anti-little man, anti...

So he wants to make some appearance of positiveness on the interest rate side and positiveness on the... That's why I put in something, put in somebody in there that deals with interest rates.

So I think that really this program that was on the line here has a pretty general sense

caught in, of course, with the council, with Paul, with Arthur, kind of dragging his feet.

And I think in the end, Arthur's difference has been narrowed down to wanting to make this transition a little more slowly, hoping that he can preserve the aspects of the Frieze.

But I think that you considered that too.

We considered that.

But the fact is that the labor people have been sitting here for 90 days.

They think they have supported all that was in the claims for 90 days.

And in order to have a more viable, more acceptable system thereafter, we think we tell them, well, too bad we have another 90 days in which you don't get to get on board.

I think, be very irritating and very impossible for them to establish.

The management people are also, when put to the test, not anxious to have their contracts reopened.

Yeah.

You may have noticed Roach in there.

Sure.

With negotiations and guidelines that would allow the UAW contractor to stand because he doesn't want to start all over again there.

Yeah.

I don't know if I called him for it or not.

And he came, he heard the Roche talk like this, and he wanted to say to the officer that they could not, well, he said, if they, if the UAW contract with them stands, they're going to have to have a suspect surprising them.

And he was very rough.

But I think it's true that by the minute people get to confront the realities of the problem of some of their crusading zeal for taking out the unions that had in the way.

I had thought that we should go ahead and do this so that we didn't wait right after the 15th.

Or maybe the 7th.

I think that's too soon.

I think we can move pretty fast.

On the 11th, Monday.

That should give you a little more time.

The reason I need to have your attention on this is that it might affect other things if we delay.

Well, I think if we could, I think we could have a pretty good time to do it.

You see, the reason the holiday is a good time, it's like going to Sunday announcements.

You don't affect the markets, et cetera.

So it's a pretty good time to do it on holiday.

If you decide to go along with some such structure as this, this kind of thing, and we know that, say Tuesday or Wednesday, and we get some key names and go after them, I would imagine we could be ready to go by Friday.

Let me ask you, when would it be better to go?

Would it be better to go Friday, or would it be better to go Monday the 11th?

I don't think it makes much difference between those two dates, except that I would say the earlier, the better.

Because the speculation is just intense, and there are all kinds of stories being celebrated and so on.

So I think the earlier it's done, the better off we are, and we can get out and sell it.

Well, let me say, as far as I'm concerned, I'll read this stuff over, but...

I, uh, I think that, that, that, uh, all of you, you've done a lot of things about this.

And, uh, so I will approve the thing I've described here.

This, this stuff is fine.

Well, I would take it, though, from what you've said, that, for example, on the rent control, we should, if we can, fold that into general price control and make it as loose as we can.

Right.

Wouldn't that what you'd say?

No.

Sure.

I don't like rent stuck out there at all, because if you want to, as you say, get away from the dam, then probably.

The notion is there are two areas, and there are probably others, but two particular areas.

that have great problems.

One is state and local federal government pay.

And we should address that with a special group.

And the other, in which the federal government bears a heavy responsibility, is the health industry.

If you look at the CPI, the medical area has been about as rapidly growing, rising, an increased area as there is.

And yet it doesn't lend itself to the typical labor management kind of thing.

since it is so governmental and non-profit.

So we might have a special group on that, and of course we have the construction industry thing that would presumably go on as is.

That health industry thing is appealing.

I mean, that's one that needs to be .

We also have the fact that with the kind of thing that bothers me in some ways, but nevertheless it's a fact,

With the heavy federal involvement, we have great levers of control if we decide we really want to use them.

Because there's all this flow of funds, and we say, here are the conditions under which you get this money.

I do think we have to be careful about this thing.

not to make it look as if under the guise of Phase II we are slipping in a permanent system of price control in the health industry, because a lot of people are interested in that, but make Phase II much more controversial.

And to make Phase II bear the burden of a controversy doesn't have to.

We have to differentiate from the long-run plan that EGW is developing.

Make it as steady as...

So this would be a really involuntary cooperative plan for as much as we can make it, I think.

I call to you, I understand, a price, a cost, and a promise for it.

Well, that name came out of an argument we had.

It was originally going to be Christ the Prophet.

And then Stan wanted the prophets out, and everybody, Arthur, thought he did.

And Arthur put forward the general rule that the name should reflect the content.

And then as we talked about the content, it became clear we had to do something about these windfall prophets.

And so, actually, the words price, cost, and profits is a set of words that Arthur put forward, so we grabbed them.

Well, do you think we should put a rain in there?

We can put red in there.

Or that a jukebox would have a tree.

On the rent, I don't know how to handle the rent thing.

I just, I share your concern about it.

I think rent ought to be in there, just that it is such a clumsy title, I would myself prefer to call it the Price and Profit Board, and we'll treat rent as a price, and rent is a price.

Why couldn't you call it the Price and Profit Board?

Why would you call it the Price and Profit Board?

The cost was to really, to appease people who didn't like to focus on profit, because they thought that business wouldn't feel

Um, yeah, I'm not agreeing.

And also, at this point, there's a set of words that Arthur has, you know, agreed.

Well, Malcolm, where are you going to put rent?

Just say that, oh, you don't need to even call that.

You don't say rents will be under that.

Just say that rents are a price, I think.

I would not have a separate rent for it.

I would not put it in the title.

I would simply say it should be included in the price.

That's what I think.

That sounds better.

Yeah.

Now this, the government pay commission, uh, we haven't had a chance on this.

This is a piece of paper.

Uh, I, I move back and forth to whether this should be solely concerned with government pay or with a number of other matters of common federal, state, local interest.

You remember when the, uh,

When you met with the government leaders and so on, some of them raised a question about how their user charges should be handled.

And I think he said, well, we give them some voice on this.

And then I've had some kinds of roads sent in to me, two state legislators from Arizona.

The state of Arizona, in a fit of patriotism, canceled a...

a sense of the legislation that was intended to raise taxes because they want to cooperate with the freeze.

But they feel they don't know what is expected of them under this thing.

And I thought that this might be made a little broader, to deal not only with pay but with other such financial arrangements of government as they affect stabilization and consumer figures.

Could it include productivity and the kind of prices that they charge?

There are always the delicacies of the federal government telling state and local governments how to run their business.

There's a sort of inherent contradiction with our basic philosophy in revenue sharing, but not saving the time.

I think there's our basic philosophy.

And we all know that it's true that we have a problem of great concern, which is that we are leaving here a monster.

That's true.

That's what we don't want to do.

The only factor is that it could be worse.

If we don't do this, as I've said, then Congress is likely, could very well

decided to set up a new office of price administration.

And that'll be worse.

At least, this is at least, let's put it this way, the baby is in the tender hands

somebody that's out to go strangle him.

Whereas in the other case, they want to keep him alive.

That's the difference.

Well, one thing we propose is that as soon as phase two is launched, the CrossFit Living Council should set up a task force on these controls, which should be looking after what can be done to phase these controls out to make sure that the people who get to love it don't perpetuate it.

I think another issue that we might consider is whether you want to do all of this by assignment of existing people from various places, or whether we want to go to the Congress for an appropriation to do this.

Never.

I'm just afraid that if you cast an appropriation, they'll want to run it.

Well, that is a good constraint.

I would, from my view, in a sense,

That limits how far you can go, because you can only get so many of these things.

I think there's much to be even though it requires some strength.

There's much to recommend to say, well, but we're going to practice what we preach.

We're not going to add bureaucracy here.

We're going to do it in the interest of the people within, you know, assignment.

We're going to work hard and so forth.

And I very much like that.

Well, it shows that, yeah.

High priorities are attached to this.

Secretary Connolly made quite a little speech about that the other day when this question came up and there were some people, cabinet members, saying, well, it's an old kind of squeeze and so on.

It's just too bad.

And he said, well, this is the most important thing that you have to do in the next year.

And he decided he was going to provide the people for it so they never hear it online.

Sure, of course, of course.

But look what the hell most of these cabinet members are going to hear about things.

You know, really.

compared to this.

And people like to get into something that's more exciting than we do.

I don't think they'll have any trouble finding people.

Everybody does a little bit more, and they join the war against inflation.

With pop guns.

Well, it's all a question of time.

It seems to be working now.

We don't know.

We don't know anything about that, but...

I'll tell you.

The CBI goes up.

We say, well, that didn't have any effect.

And it goes up an extra month, whatever you want to say.

We might put Archer in charge of the interest rate.

I notice we have the Secretary of the Treasury here, but we... Maybe Archer should be put in charge of the interest.

Why not?

Because...

In order to keep interest rates down, you'll have to raise the money supply.

And the money supply has suddenly been going down, not up.

And I think that it's a problem myself.

The third quarter is much weaker than the first and the second when the money supply was going up, perhaps an excessive rate, but nevertheless, when it goes down, it really does chill things.

Well, I think the people...

People we are trying to appease by having an interest rate control board would not be very much satisfied with the prospect of our meeting in charge.

Because they know that Mr. Connolly really likes low interest rates.

But there's something to be said to that.

We have here one board in which Mr. Connolly is the chairman, according to another board in which Mr. Connolly is the chairman.

And also, poor John Connelly can't run everything.

He's got so much time, and he's got to concentrate on a particular thing.

What do you want to see?

Better, Mark.

I do know this.

Time is the essence of the information.

I, uh, whatever I will have will be met.

I just, I read it if I were here with the original.

But I think we should go forward with this kind of plan.

start getting the people involved.

I mean, and this is something where what you're likely thinking develops is going to be better than anything I can throw at you.

I would get, the only thing I would suggest is that I would invest confidence, total support, and see the way we've got it worked out, he knows I'm working for him.

And I'm going to think about this a little bit.

But he said he didn't want to give H.R.

the next one.

He had a chance to look at it himself.

So your job, the two of you, is to enlist Conley for his proposition.

Fair enough.

Well, I think our reading from you is that you want to go along with the tripartite approach and be a little sort of relaxed about these industries.

And we want to bring Arthur into that camp.

Well, I want something that will work rather than have a competition.

which will blow the thing over.

If this thing blows on the 91st day, then we're in hellish shape.

We will, you know, we will fall in hell.

That's right?

Right.

I think it doesn't need to blow on the 91st.

We've got to have a hurricane.

And that means we've got to frankly butter up

In the case of labor, I don't like anybody else, but that's what they said they'd do.

I think we have worked out, I think we have a fairly balanced thing here, which they cannot, they can hardly resist, but it was done given everything they asked for.

The thing I don't find out is that labor resists.

I think it's here that you saw George and I personally, after hearing their proposition,

I ruled against what many wanted to do, and that this is an opportunity now to at least prove substantially their way, although not totally their way.

You can't, nobody can have his own life.

But we're also, because they said we're going to, we're working on profits, so that we're going to take interest rates, so that... All right, I think we can stop here.

We've got labor, all right.

I take it also the idea of enlarging the Productivity Commission to represent the state.

Well, that's an excellent idea.

We'll go ahead and do that.

Yeah, I think that's an excellent idea.

And agriculture, have we ever talked about agriculture?

I think agriculture is on it nowadays.

Did they ask?

No, they didn't.

But if you start, I think if you do start adding consumers and state-level people, at least there's a question whether they should put

I wanted to ask you one other thing.

You were mentioning the third quarter game.

I wonder if that gives you sort of a tribute to perhaps the money supply situation.

I wonder if it's maybe just one of those ripples.

I don't know.

I mean, what was the third quarter game?

The third quarter is not as high as this person is saying.

First of all, in Connecticut, we've been jacking the edges.

This is all present there, yes, but it's going to be low like everything else is low.

Second quarter, real increases now up to 5%, which is quite a sunset.

Yeah, the second quarter, it's 19 to 22.

Yes.

But I think the...

The correlation between how the money supply is going up fast, and the GNP going up fast, could be very impressive.

Yeah.

And, uh, that's your view, you can say.

I've been very slow with the last one, man.

Yeah, I'm not sure.

I wouldn't put it back to me, so.

Of course, we did get some effects of the, the switch from the, you know, the steel on the part of it, and some galvanized boxes affected, and that kind of thing.

in a third quarter.

But I think the evidence tends to show that the economy needed some more pushing.

I think we should be very, very glad that the decision was made up there to give us some more pushing.

I'm afraid that's getting us much more push out of the concrete that we were asking for in terms of the change in investment.

On the other hand, I think a lot of that is where you may come from.

pretty much what it seems, then it's going to pass.

I mean, the very fact that it's passing is going to have some considerable effect.

I regret very much that I'm not going to believe in the action.

Well, at least it's something.

It's something, but I think the difference between what we propose and what we're going to get is very, it's quite serious.

Yeah.

I mean, the 10-5, the 10-7, compared with the 5-7.

Yeah.

And when we were up there at Camp David, I remember

We were just all saying, well, if we add a little on the individual income side, and perhaps they'll give us a lot more.

Maybe they're going to wise up and not give us more.

So I think we have to be prepared for the work.

We have to be watching to make sure that we've done enough.

So here goes this program.

I think we'll get it done.

Well, with this kind of thing in mind, for example, on these longshore coal and all these other bargains, we have been doing everything we can to get the contract settled in as many strikes as possible behind us.

So if we don't have those, and we have a big labor settlement, well, too bad we haven't.

But buy us everything in the sense of things that will help the expansion along.

And, you know, not worry about other things quite as much.

Yeah.

Well, I'm sorry you all have to work this weekend.

I'll be working, too, actually.

I'll try to be busy, too.

But shall we shoot it then for the middle of the week, next week, Thursday?

But we, I think we can be back to you, Secretary Connolly, ought to be able to be back to you.

Monday?

Friday, Tuesday, or whenever you can get back.

Tuesday as well, I might be back Monday if necessary.

But I think he said Tuesday was a good time.

Tuesday afternoon was what we thought.

But my view is that I'm pretty low.

I mean, I know what you have to do, but you've got to know.

You as the experts have got to figure out the least painless way to do it, and just go.

All right.

Well, we won't go.

Just for the possibility of an announcement on Friday,

Or Thursday.

Thursday or Friday.

Friday is all right.

I don't know what the difference is between one of those days and the other.

I guess it is somewhat tied up with the federal pay increase.

Like I said, it's not going to come out.

It cannot come out in time for any legislative action on that.

And the other legislative date was the beginning of some hearings, I guess.

and send it back to the currency committee about the extension of the act.

In that case, it doesn't seem to make much difference.

Well, you said the sooner the better.

But in order to get us the time to work, it's really well selected.

Why don't you just say you're writing it?

You're going to go on at night.

I can't do it Friday.

That's not going to be... How can you go to Western?

Can't do that night.

I think we can hand out a pretty well-known piece of paper in a couple of nights.

I'd be prepared to answer questions.

Yeah.

Well, I can do it Friday noon.

In other words, we can do it Friday afternoon.

With a statement and a piece of paper.

But if you're...

And I'm inclined to think myself, my own intuition is that this is not something that should be done.

50 million people and time prime television as we did the other one.

I'm inclined to think that this is better to handle in terms of without, I didn't make the announcement, make it Thursday at noon.

I go out and talk for three, four minutes about, you know, the high level.

I stopped and I said, well, the secretary here will answer any questions, Sean, you have on this.

And I just said, well, I'll go there.

And he gets to the technical things.

And he gave him a big sheet of paper to write.

Thank you.

That feels a little better to me.

I'd be interested in your, when you sit and talk to Tom, your judgment on that.

The reason that I have a, I just have a feeling that this is too, that I don't want to have too much of the crisis atmosphere again, too, of another, you know, taking off.

Okay.

What's on the other, the...

August 15th speech, I don't know a lot more than the wage price for each set of equipment, so I'm just concentrating on that, whereas this is just one topic.

Yeah.

So, Mike, I lean to that, but don't let that be controlling you.

Everybody feels that we've got to go on that big speech, but I suppose you can do it on the 7th.

I'd have to do it the 7th, though.

If it has to go at night, it has to go at 7.

If it can go in the daytime, I can do it at 8, so let's round the 15th.

It seems to me there is a speech at a certain level of generality, which is maybe more than three or four minutes, but that it would not as well if you had a lot of technicalities, but that it would be helpful for you to have done.

But maybe we should talk to Secretary Connolly.

And you would do that when?

On that night?

Well, if you're convenient.

No, no, no.

That's probably an audience you want.

You want to go on stage on that night.

I would say the evening.

But then we come along with all the supporting materials, all the explanation of the structure, who's covered and whatnot, and the goals.

I think we do need, while we don't want a crisis atmosphere, we are saying to people that this is a very exceptional situation.

We are expecting a very high degree of cooperation.

I think that especially if we are in danger, kind of on the labor side, they must know that... Well, that's a problem.

If that were the case, the speech would be something to be done very briefly.

Very briefly, actually.

I'd have to do a Thursday night till seven.

Five minutes, a five-minute statement.

Or it could contain about a thousand words, which is about seven minutes, basically.

Why don't we try to write that and see if that was a desirable thing to do?

And that might determine what we write.

And if that would be done on the 7th, then that means...

Secretary Carley could meet the President next morning.

Next morning.

The way we did.