Nixon, Peterson & Ehrlichman on Economic policy and International trade

3:16:59Well, I understand you've got a few little odds and ends.
3:17:23You've got the department around you.
3:17:28It's still there.
3:17:32We've got an outstanding undersecretary, this fellow, Glenn.
3:17:40He's one of the best guys in the U.S. government.
3:17:53Great.
3:17:54Okay.
3:17:57On the foreign economic side, if I could just spend two minutes on that, having spent a year at it.
3:18:07As you probably know, there's this legislation before Congress on commercialized shares.
3:18:12We hear about that.
3:18:16A lot of discussion.
3:18:19My view about that, Mr. President, the more I live with this problem, is that this is really a piece of a much larger problem than
3:18:36This commercial I was chasing is really a piece of a much, much larger problem.
3:18:41It may surprise you because I know there's some other points of view, but I'm not so sure that just putting commerce cars around the country is really going to solve the fundamental problem, which I think really is
3:18:56the people in our foreign policy apparatus really should become you know more economics oriented than the men at the top over there and i just just want to express my concern that if this thing is seen just as a hard power player uh that it really isn't getting at the real problem remember you think that you can indoctrinate the foreign service officers and economics they're smart enough to understand that you think they
3:19:22that with the kind of background they have, they believe in a private enterprise system.
3:19:26So that's the problem.
3:19:29Maybe you could.
3:19:29Maybe the thing that is needed there, you suggest, is a very strong undersecretary in charge.
3:19:36I think what I'm saying is that if the men at the top don't take your tough-minded point of view about a lot of these problems, then I don't think the organizational problem is going to solve it.
3:19:46And I think whatever you decide to do about organizations,
3:19:49the more I sit through textual problems and whether we can compete or not in agriculture and problems like that, the more it sounds to me like we ought to consider post-72 election, strengthening the top side as well as whatever you decide to do about these attachés.
3:20:13On the Soviet thing, I don't know if I assume Henry and Peter have kept you up to date,
3:20:19I spend an awful lot of time on that.
3:20:22And I just want to say, be sure we're all together on the fundamentals of this thing.
3:20:32The question here, I think, is how fast to go and what to be stated.
3:20:37And what kind of linkage do we want?
3:20:40The more I have looked at these deals, the more clear two or three things become.
3:20:45One is that
3:20:47They seem to need a lot more from us than we do from them.
3:20:51Secondly, these big deals, the raw materials and the ventures and all the oil and gas that you're familiar with, when you really dig down deep into those, you find out that they require a tremendous amount of capital.
3:21:05I've got late assessments here on the oil deals.
3:21:07They're now over $7 billion as they begin to price them out.
3:21:15It's a lot of front money, Mr. President, and the payout on those is, you know, eight years out.
3:21:22Now, our entire ex-in financing is only about $12 billion now.
3:21:26And the thing that is concerning me is if we don't do this gradually and linked and on a phased basis, we could end up that instead of having positive linkage, we end up with reverse linkage, where they owe us so much money that they, you know, that there's a potential here for using it against us rather than
3:21:45a plus for us.
3:21:46So our thinking is moving more and more toward gradual, you know, some XM, some FM, MFM.
3:21:56Keep a lot of things in our pockets.
3:21:58Don't approve some of these big deals until we, you know, can get something important for it.
3:22:04And I assume Henry Peter talked to you, but just want you to know the more I live with this problem, the less enthusiastic I am about saying
3:22:13going to grant xm or we're going to grant this other i see a much more phased operation rather than you know kind of an open and these raw material deals that casigan is very excited about when you really look into those there i think here we've six seven eight year payouts billions of dollars they're gonna need our credit and
3:22:38If we're going to do that, which is a big question, I'd rather save that until you've really got something big for us.
3:22:43Whereas if we just kind of open up, we've kind of given the chips away before we've played them.
3:22:50So I don't know where you stand on all this, but I just want to report I'm a little less euphoric about moving fast on this than one might expect as I get into it.
3:23:09It has to be linked to other things, which, of course, is not the usual way to do it.
3:23:18We're not going to handle that here.
3:23:24The point is that this is true for them, not for us.
3:23:27It begins to look like we've really put the numbers down.
3:23:30By quite a margin.
3:23:32Businessmen talk about their huge sales and the rest of it is nonsense.
3:23:36Or there's something.
3:23:37Oh, yes.
3:23:38And there's enormous amounts of equipment required for these sort fields.
3:23:43But frankly, I'd rather have them a little disappointed because you haven't gone all the way.
3:23:48You had to let them build their hopes way up, and then finally had to pull the string in a couple of years.
3:23:52It just got out of hand.
3:23:58Well, OK. Up to this point, have you talked to Brady?
3:24:03Yes, I've talked to him several times.
3:24:05Several times.
3:24:07And Petalicet, I haven't taken any substantive line.
3:24:10I'm just making the arrangements.
3:24:12What line are you taking?
3:24:12I mean, it's just that, well, we aren't ready to do it.
3:24:18Well, Petalicet will be over, hopefully, at the end of the month.
3:24:23He's the trade minister.
3:24:25And we're just making the arrangements.
3:24:28And he keeps wanting to get me to say something about XM and FN.
3:24:32My line is that that will be the subject of the discussion.
3:24:37So I haven't given him any line on what the substance of our position is.
3:24:41I've just been making donations to get them.
3:24:48Before we go, .
3:25:00Your opinion is so mature.
3:25:01What logic should we take of that from an economic standpoint?
3:25:07In other words, it's not an end in itself.
3:25:11I agree with that.
3:25:12And then you sort of say, well, from an economic standpoint, it would not be in our interest to do this or that.
3:25:18It would be in our interest to do this so that we can get the picture done.
3:25:22And we'll know what the trade-off is.
3:25:25We won't give it something that's more advantageous to them than to us.
3:25:29Right.
3:25:31Absolutely.
3:25:34All right.
3:25:44So on XM, for example, instead of saying you're going to give XM, you simply say we're going to give this much XM for these purposes.
3:25:50Yeah, that's all.
3:25:52Then you'd save the rest for later.
3:25:54Save the rest for later.
3:25:55And on the MFN, you can do exactly the same thing.
3:26:04I think Peter and I and Henry are all agreed that MFN this year pre-election is a very dangerous political gambit for you to get in.
3:26:13You have to go to Congress for that.
3:26:15I pray that that would open up a real... We have no problem there.
3:26:23Is your attitude the same on polling?
3:26:29I understand that...
3:26:31Our attitudes on Yugoslavia and Romania are one of it.
3:26:36Henry's comments have been to go a little slow on the Polish thing right now because of some of your points.
3:26:45It's interesting that they all three want to visit us, Poland, Yugoslavia, and Romania.
3:26:50And I think we've agreed, Peter, one of the things we have to organize is how we're going to stage the Eastern European countries, basically Europe, what you want to do before, what you want to do after.
3:27:00Yeah, yeah, yeah.
3:27:02But it's no accident that they all want to come over here.
3:27:05I want to, but I want from you a memorandum on Russia.
3:27:08Don't look at politics or economics, because I've had the same feeling about this all my life.
3:27:13It's sort of a myth, but I have many people like my good friend Don Handel who tells me it's the greatest thing since...
3:27:24So, you know, most of your business people may say that.
3:27:28But it depends on where you're going to look at it.
3:27:30Just to say what's in it for us economically, what's in it for them.
3:27:33And then you see that it's also a fighting game.
3:27:37There's a lot in it for us if you're willing to extend it to someone's credit.
3:27:40Oh, yeah.
3:27:41That's the point.
3:27:42That's the point, right.
3:27:43Our businessmen are very happy to make big sales as long as we can.
3:27:48Yeah.
3:27:48Sure.
3:27:48We are a great organization.
3:27:52Sure we are.
3:27:52And when push comes to shove, they all want a guarantee, without exception.
3:27:57They want either their investment guarantee or their credit guarantee.
3:28:00So you end up .
3:28:02All right, on the energy situation, as you know,
3:28:12Peter and John are both involved in that.
3:28:14I just want to very briefly register that the more I get into that problem, the clearer it is that that's going to be really one of the tough, long-range problems.
3:28:22And it just cuts across to the whole government, politics, everything else.
3:28:28There's one aspect that perhaps you haven't been briefed on.
3:28:32You know, we have a maritime administration over there.
3:28:34And Andy Gibson, who's another very good man, but he's not very good.
3:28:38I'm sorry to say.
3:28:39we've been projecting how what the maritime implications are some of these imports and you know peter there's that one in testament it's the high one that we might have to import as much as half of our oil and andy's laid out what it means in terms of ships and it means a maritime fleet that's equivalent to the entire tanker fleet of the world at the present time you're aware of these super tankers that the japanese and others are using
3:29:08What I have not realized, Mr. President, is the enormous economic demand.
3:29:12You know, the Japanese have been using it.
3:29:15It costs 60% more to ship oil than the regular tankers, and it does that.
3:29:19And then you get into this damn problem of the docks.
3:29:22You know, those super tankers require these deep docks.
3:29:27You know, the docking.
3:29:29And we don't have any of those.
3:29:31And the only candidate we've got is one out in Delaware, John, that we mentioned where there's a political problem.
3:29:38Well, I have a feeling this one is really going to require all of your resources to get reconciled.
3:29:44Yes, the problem here is the fact that we have a, that it's going to require an awful lot of subsidy.
3:29:49In other words, the building of the tankers and so forth.
3:29:53I mean, I can certainly see what you're, I mean, just looking at it straight, assuming it is going to require subsidy, it is going to be a budget problem.
3:29:59Your point is that we need to work on that.
3:30:03You're either going to have to do something major on the domestic front,
3:30:07which gets you in the business of incentives and all of those problems, environment and all of those problems.
3:30:13Or you're going to have to import more, or probably feed a lot more coal, would be my guess.
3:30:18And to the extent that you import more, it's going to raise these major questions about supertankers and docks.
3:30:25Now, you probably know this, but I haven't, but these supertankers are now landing outside the United States.
3:30:32I don't know if you're aware of that.
3:30:34Up in Canada.
3:30:35and the Bahamas, and then they're reloading and bringing them to the United States.
3:30:40And the whole name of the game on this business is these deep docks that go with the supertankers.
3:30:46And we just don't have any of those docks at the present time.
3:30:48Remember the Japanese steel industry case we talked about, the way they take people out from Australia and they land on the shores?
3:30:57They are using these supercarriers.
3:30:59But what are your feelings on where you sit?
3:31:04You would strongly recommend we move in this area, but you would also recognize that Schultz's budget problem has to be considered.
3:31:09Let me suggest this.
3:31:11I think you ought to push it then.
3:31:14Do you understand?
3:31:16Here's the way I feel it ought to be.
3:31:18It's your job as a cabinet officer to push like hell for having in mind the fact that we'll either do that or we'll give it to the damned welfare.
3:31:27or one of these other, I guess, programs around here, which are a waste of money, in my opinion.
3:31:33So in my view, I don't mean, I mean by that, I would push the case on that thing, and then let us, so that when people line up at the trough to see what they're gonna get, well, I am much more interested in putting things in what I call hard goods and soft goods.
3:31:52The great mistake we've made in the past three years is we've been jacking around here, and we're going for this goddamn welfare program, and this summer youth program, this and that and the other thing, billions of dollars, and the necessary in order to keep the country cool, but not enough for people for the other things.
3:32:10At least that's my view.
3:32:12But on the other hand, one of the reasons is that the case for the hard goods haven't been made particularly strong in two regions.
3:32:20What I think your job is, is to get in here, and I don't know whether Pete Meininger agrees or not, I'm sure John does, because John knows what it is that we sit down every time we have budget time, we go down the list and hear all these damn programs.
3:32:37The soft-coats people, you know, the liberals and the rest, always win.
3:32:41Virtually always.
3:32:42I mean, except when it's daycare centers, that's the only...
3:32:46Actually, what I'm getting at is that the demands on that side, because of the democratic political pressures, because of the liberal pressures, and all the rest, are infinitely bigger.
3:33:01But let's face it, what you're in, insofar as this is concerned, is a hell of a fight.
3:33:06And you've got to, and you, despite the fact that you naturally have a...
3:33:10kind heart and the rest will, I suppose, tend to be a little bit.
3:33:14I want you to be a hard-nosed advocate of the business side, the job side, you know?
3:33:21And let the other people, there'll be plenty of others in here advocating the other side.
3:33:25Now, unless this thing, you know, I hadn't known about this tanker thing.
3:33:29I didn't until I read this.
3:33:31But Schultz is aware of it, though.
3:33:33I think he leans this way of solving it.
3:33:35As I understand it, Pete is more concerned with the docs
3:33:39Yeah.
3:33:40I had to get in and build in the docks and bring the tanks in and so forth.
3:33:44Let's do it.
3:33:44We had a big fight on this out in the city of North West.
3:33:47It was a trouble.
3:33:48It was an environment.
3:33:52And the local jurisdictions will fight tooth and nail on this.
3:33:57It's as bad a sight as a power plant.
3:34:01And they just assume it doesn't happen.
3:34:02They want them to come in elsewhere.
3:34:04Is there any place else we can look for them?
3:34:05Is there any local jurisdiction that would not point you?
3:34:08Even Maine.
3:34:09Well, Maine.
3:34:11What about down in, how about the Gulf of Mexico?
3:34:13How about some of the Louisiana places like that?
3:34:16Texas.
3:34:17I see we're having trouble with offshore releasing.
3:34:20The whole energy problem.
3:34:21Well, there it is.
3:34:22What about that?
3:34:25Well, the whole energy problem, you know, he screwed up Alaska now, you know, that's all fouled up because maybe we should just leave the oil out there.
3:34:33But that's the next thing.
3:34:35The problem with the energy battle, Mr. President, which is going to have to be the major one next.
3:34:41Right, absolutely.
3:34:43Every one of it is political.
3:34:44It's either environmental, cost to the consumer, domestic ownership, and we have to...
3:34:49I don't think it's worth fighting half of it.
3:34:52Let me say that the fight is coming.
3:34:54I know that it should be decided now.
3:34:57It's a lousy political issue to be raised now, but it's right for the country, and it's your job between now...
3:35:04And budget time, that's what I'm talking about.
3:35:05It's the next budget.
3:35:06You see what I mean?
3:35:07Because Schultz has already submitted things.
3:35:10And I want you folks to watch this.
3:35:11You watch it, Ken, because you'll be going at it.
3:35:14But between now and the next time, I want to be sure, Pete, that the business side is strongly represented.
3:35:21And we'll have to fight out the environment then.
3:35:24Because if we should survive the election, then we'll have to fight some of these things.
3:35:29Let her hang on.
3:35:31Right, Chester.
3:35:33All right, the next subject.
3:35:35Incidentally, could I suggest this?
3:35:37Would it be possible to get some of your business friends to perhaps start talking in terms about this problem and build some public sentiment up for it?
3:35:49Is that possible?
3:35:50Or are the oil people, the tank people, and all the rest so totally oblivious to it that they won't?
3:35:56You may have noticed Raj Morton testifying yesterday with a new summary.
3:36:02on the power shortage and the nature of the crisis and all that.
3:36:06I've got a lot more of it.
3:36:08Can I suggest this, that you try to mobilize the sales part within the department
3:36:15and with Rog and the rest, let's get a little backfire built.
3:36:19You know, see, Rog is a great environmentalist, too.
3:36:22But I think we've got to build it because we just can't sit back and fail to do things because the environmentalists say that it's going to hurt the environment any more than we can fail to knock out
3:36:39some tanks and guns and so forth from Vietnam because some people think that it's wrong to defend somebody against a communist state over.
3:36:46I mean, sure, it's wrong.
3:36:47That's probably what most people think.
3:36:50But that doesn't mean you don't do it.
3:36:52But I think in this case, we need a hell of a lot of sale size.
3:36:57And you'd be a good one to sell it.
3:36:59You'd be a good one to sell it at the right time, not before the election, because basically your credentials
3:37:05I mean, you're not going to, like, let's face it, Spaniards is considered to be all pro-British and the rest.
3:37:09You're an active pro-British, but they think also that you, you know, associate with the liberals.
3:37:15I didn't associate with them.
3:37:17That's true.
3:37:18Would you agree?
3:37:18Yes, sir.
3:37:19I'm jealous of them.
3:37:21Oh, yeah.
3:37:22All right.
3:37:23The next subject is this competitiveness.
3:37:25You gave me the assignment when we pressed Chad about what to do about that.
3:37:29I'm rapidly coming back.
3:37:31That we can talk about.
3:37:32Oh, I think that that would be a very good subject.
3:37:35What I've pretty much decided is what we need is a complete competitive intelligence system in which we know so much more about our domestic economy than we know how we're doing competitively.
3:37:47Remember last spring when we first talked about steel output and the Japanese, and then we talked about new plant equipment and how much they were doing and so forth?
3:37:56What we plan to put together is a total system in which we take strategic industries, for example, machine tools, steel, other things,
3:38:05see where they're competitive, where they're not competitive, what's happening on depreciation, write-offs, that sort of thing.
3:38:11One of the things we're finding, Mr. President, is an interesting policy.
3:38:14When you say we, let me ask you, if you're just curious about how you're working, I mean, just your department, are you working for Pete's crowd?
3:38:21Well, we're going to lay out a program.
3:38:23You're drawing from the whole administration.
3:38:26You're talking, say, to a commons crowd.
3:38:28Yes.
3:38:29He did it in this, but he didn't have any staff.
3:38:31Well, we have lots of people over there, you know, on domestic congressmen.
3:38:34We've got loads of people we're going to put to work on this.
3:38:37One of the things we find out is not only are depreciation policies very different in the rest of the world, which explains perhaps why they're putting up so much plant equipment than we are, but they have a selective policy, apparently, Mr. President.
3:38:49That is, they'll pick certain strategic industries, and they will make exceptions for those industries that they will not do for other industries.
3:38:57No, we don't.
3:38:58We have a policy right.
3:38:59I was wondering if we didn't do this great tax reform bill that they brought me into signing a few years ago.
3:39:08But anyway, that must have been the most miserable damn bill that ever came across here.
3:39:13Yes, it was.
3:39:14Really?
3:39:15Why did we sign it?
3:39:16I guess we were too new in the job.
3:39:17Huh?
3:39:18I guess we were too new in the job.
3:39:19Oh, there he was.
3:39:20Everybody should pay some taxes before you pay none.
3:39:23That was the whole thing.
3:39:26So the Congress came in and they put you, unbelievably, they didn't do anything to the score.
3:39:32And you know exactly what they did.
3:39:35Some of it to the extent that...
3:39:38One of the first times, incidentally, one of the first times, Pete, that I had her talk to Connelly, I'm very sure of that, was at San Clemente.
3:39:46He came out there in 69 or so with that, you know, edgy console.
3:39:50He walked out, and I called the person, and I didn't know him, and he says, I want to tell you something.
3:39:55He says, that attachment was terrible.
3:39:57He said, I guess you never signed it, but he said, I think a long time before, he was the person talking to me about Cannelly.
3:40:09He said to Lucas, item after item.
3:40:11But here again, and I strongly suggest that you get the case.
3:40:15I'd like to have you note this, but now I think it's very important for us to get a line drawn.
3:40:21I'd like for you to be sure that Conway is sober on this, too, so that he also knows what to talk about.
3:40:27See, let me tell you a problem I see here to understand.
3:40:31We all ought to talk about these things.
3:40:34And sometimes we maybe don't advocate the same things or we don't have the same facts.
3:40:40Connolly, he knows something's wrong.
3:40:43And he says something.
3:40:44We ought to do something about it.
3:40:46And I think we need these facts to get them around.
3:40:49And the next one, this idea of using depreciation like a rival sounds great to me.
3:40:57What do you think of it, John?
3:40:58We do use it.
3:41:04Well, we use it to perpetuate the wrong kind of housing, for one thing.
3:41:09There hasn't been very much intelligence done in depreciation offices for a long, long time.
3:41:16Of course, you know, we've fiddled around a little with that weather.
3:41:20What do you call it now, the job investment?
3:41:23ADR.
3:41:23Oh, I just want two fronts here.
3:41:26ADR.
3:41:26ADR combined with the investment.
3:41:29Let me tell you that I have heard for years, and I'm probably a total amateur in this, but at least when I was out of office in New York,
3:41:39We used to hear about the Germans and Japanese.
3:41:41How were they doing it?
3:41:42They were goosing the economy through a tax system, particularly the Japanese, which was enormously effective.
3:41:49Right, I mean, that's correct.
3:41:50Remember, your office, once we talked about it, it's probably Japanese.
3:41:54And what the hell are our guys doing?
3:41:56So if you could come up, if...
3:41:58Oh, I'd love to have that.
3:42:00Particularly if you could tie it all into jobs again.
3:42:04You could say, hey, 90 million jobs.
3:42:06In fact, remember when I thought of 100 million jobs?
3:42:09That speech has got to be made.
3:42:10It's got to be made for you.
3:42:12It should be made after July.
3:42:14I mean, we're out of August.
3:42:16100 million jobs by so-and-so.
3:42:18And tie this into it.
3:42:20Don't you think so, Ryan?
3:42:21Mr. President, our experience last fall was if you will present the Congress with detailed facts instead of a lot of theories on what the competitors are doing, like we did, remember, when we won the investment tax credit, and they saw the Japanese were putting twice as much into plant equipment and knew what it was going to put in.
3:42:38I think that's the best way to get them on the table.
3:42:41Because they're very responsive to this competitive thing.
3:42:43They know we've got a problem.
3:42:44All we've got to do now is get them on the line.
3:42:46Well, you're convinced after being a congressman about all that, too.
3:42:50There's a problem, and this will help me.
3:42:54You know what they all say, if you know, if this poses some problem politically, because they'll say, ah, taxes want the rich, not the bright core.
3:43:06But if it's put in terms of jobs, that takes some time, but it has to be done.
3:43:13Well, anyway, I share the concern about it, and I'd like to see something that we don't.
3:43:21See, Treasury is, and I still haven't been convinced of this, but Treasury is terribly unimaginable.
3:43:27IRS and Treasury, when it comes to tax reform suggestions, you know, they always work.
3:43:33They were against it.
3:43:34Conley and I have got a very long session a week from Friday.
3:43:37I'm going to really take them through this and detail what we're doing.
3:43:40If you could point these out and say, look, if he could get a guy over there who was an activist on the tax reform side.
3:43:51Tax lawyers are strange.
3:43:55They just want to get it more confused.
3:43:57Another thing he asked me to look at carefully was this technology and the use of technological technology.
3:44:03We've launched a study on what's happened to all these government patents.
3:44:08Information we have is not very new, but you might be interested in what's going on here.
3:44:14You, the government, now own about 22,000 patents.
3:44:18The vast majority of them are royalty-free, non-exclusive licenses available to foreigners as well as the United States.
3:44:26I mean, that's kind of been the policy.
3:44:28We can only find that about 2% have ever found their way into commercial
3:44:33production anywhere.
3:44:35That is, you know, where they're used by somebody.
3:44:38We think, Mr. President, that we really have to look at our whole patent policy, both when we grant the contracts and what we do with the ones we got now.
3:44:47As an ex-businessman, I can tell you that these new products are awfully risky business, and the R&D is only about 10% of the total bill.
3:44:55This non-exclusive royalty-free business looks like it's very democratic, you know, it's in the public interest.
3:45:01But I'm afraid that what the business people are telling us is, you know, what's everybody's business is nobody's business.
3:45:07And, you know, if this thing is free to everybody, they're not likely to do much about it.
3:45:11So we're getting very much involved.
3:45:13In fact, we've got a big group of... Patent officers here.
3:45:16Yes, that's right.
3:45:18On a new set of tax policies, patent policies here.
3:45:22Tell me this.
3:45:24Can I ask in this connection?
3:45:26What is...
3:45:29We're still working on our, what was our, I remember I had something to say to you about research.
3:45:37We sent a special message.
3:45:39It's underway.
3:45:39New technological opportunity.
3:45:43You talk about it.
3:45:45But on this, what are you recommending here?
3:45:48What we're saying is on the new contracts that we're letting, we'd like to try some new wrinkles.
3:45:54Such things as cost-sharing.
3:45:56where we get the companies to put up some of their own bills.
3:45:58They'll have more of an interest in whether they exploit it or not.
3:46:03Perhaps let them have patent rights to pay the government back out of their sales.
3:46:08But what we've got to do is get more of this into the commercial production.
3:46:11Because what I'm afraid of, Mr. President, is we're spending $17, $18 billion now in government R&D.
3:46:16And my appraisal is that not much of it is getting into the commercial sector.
3:46:21But Reuter is out selling.
3:46:24Yeah.
3:46:25Can I add to that?
3:46:26Go ahead.
3:46:27Can I just say one thing that I want you to do?
3:46:29All these things are important to these programs that you're talking about.
3:46:34You've got seven months now before the election.
3:46:41And I want you to, to the extent that you can, to let your good young guys over there run that shop and come up with some good ideas and remember that
3:46:54Greatest ideas in the world that are not sold like stillborn babies.
3:46:59And we want any.
3:47:01Now what we really need here is that I feel that you, as I said when you took this office, are a hell of a salesman.
3:47:11And I'd like to have just enough, and I have all the facts, just enough that you got and hit not only these things but other things, everything from
3:47:20Well, defending the, defending the administration against the charge that we're pro-business and against the poor folks, hitting the job thing, hitting the, uh, the exchange you can, the, uh, the price problem, uh, looking to the future with regard to, you know, the jobs, the hundred-weighted jobs, uh, sort of lifting the curtain a bit on R&D and the rest, lots of people, the rest of the world isn't fair to these other people that have,
3:47:46I think that the idea that the administration is progressive in the area of jobs is a pretty good one.
3:47:54And I think also you could be in a position of always practicing everything saving.
3:48:00You're all in environmentalists, but then go on.
3:48:03But I do feel that I just don't want you to bury your light over there in that bush over at the Commerce Department.
3:48:12And I'm going to have John Ehrlichman take a stab at looking at some along with the three other folks and the rest at that scene.
3:48:28But if you've done your thinking, John, since I wrote you a few days ago.
3:48:31Yes, sir.
3:48:32But I mean, if you haven't, you know what I have in mind with regard to Pete.
3:48:38He has got to be out in the country selling.
3:48:42And he's got to sell it with conviction about the fact that we are deeply interested in the jobs.
3:48:47We're deeply interested in keeping on the coastline.
3:48:48We're deeply interested in the strong, effective business community.
3:48:52And...
3:48:55I think it might help to change the image of business.
3:49:01I don't know whether that's solid or not.
3:49:04It might help to the administration, which is under an arms fire because of IDD and the rest for the wrong reasons, is saying we just don't give a damn about the little problem we want to care about being conglomerates.
3:49:18Let me give you, if I may, two other quick ones.
3:49:21Are you aware of the National Industrial Pollution Group?
3:49:24You know, that's the group you spoke to one day.
3:49:27I guess it's got more than half the PMP.
3:49:30Let me just communicate to you what some of them are saying about quality of life and environment, just so you hear it directly.
3:49:36Yeah, sure.
3:49:37There's all this talk, you know, about zero growth.
3:49:39There's this big study in Rome that says we shouldn't grow much.
3:49:43I don't believe in that.
3:49:44And here's what they're saying.
3:49:46What are our quality of life programs going to cost us in this country out five years?
3:49:50We keep adding them, you know, one or two at a time.
3:49:54And I just pulled some data together here from OMB to illustrate the point.
3:50:00They tell me that our current quality of life programs, just the current ones that are in your current program, will cost us $75 billion, roughly more, by 76.
3:50:12This does not include the environmental programs, the safety programs, and so forth.
3:50:17Now, the point that the businessmen are making, Mr. President, and I would have to say I think it's a good point, this is health programs, welfare, mass transit, the whole business.
3:50:29This is without safety and a lot of these environmental programs.
3:50:33I think a very important discussion that someone like me can have is to start projecting some of this material into the future.
3:50:41and start getting a real discussion going about who's going to pay for all of these things that everybody seems to want.
3:50:48I talked to John on Saturday about if we could figure out some mechanism by which these costs could be projected out in five years, so we could start having a rational dialogue, because what the quality of life people are saying is zero growth, but we want billions of dollars for the programs.
3:51:05And the business community is uneasy about this, understandable to them.
3:51:09Because they wonder, who's going to pay for all these programs?
3:51:12And don't you need growth and jobs to pay for this stuff over here?
3:51:18We talk about this, John, but I think we're going to have to do some projecting into the future so we can start having, you know, some intelligent discussion.
3:51:25Because when I confront these guys with $75 and $100 billion and say, no, you say you don't want any growth, how are you going to have all these other things you tell me you want?
3:51:35And you see, they're often the same people.
3:51:38Very often the environmental people are also the quality of life people and the welfare people and all this sort of thing.
3:51:43But I think we're going to have to engage this issue in some way, because we're listening by each other.
3:51:51Basically, they're all listening.
3:51:56On the Productivity Commission, you may remember that I took over from George on the Productivity Commission.
3:52:04We think maybe Abel and Woodcock will stay on.
3:52:06I see where you were at.
3:52:09You think they will stay on?
3:52:12Well, Abel Munkoff may stay on.
3:52:15We have got a first-class political communication problem here of somehow getting productivity from sex appeal.
3:52:21You know, it's just a cold concept every time.
3:52:24So we're going to try a couple of things.
3:52:27One, talk to the advertising council people about launching a major effort that somehow gets you identified with this.
3:52:35And this could be a wild one.
3:52:36It's a little premature, I guess.
3:52:38But this is a problem, you know, Mr. President, the entire world is having.
3:52:42This whole cost-wage push problem is going on all over the world, you know, in Germany and France and all this stuff.
3:52:51And you remember that great feeling in this country post-August when you announced the white wage price freeze?
3:52:55There was a little bit of a sense that we were all in it together.
3:52:58I'd like to get some of your breaststrings working on how we could give productivity a little bit of a...
3:53:06How can I put it?
3:53:07Almost a moral, spiritual, bringing the country together, you know, international kind of thing.
3:53:14But we've got to lift it out of the grubby mud where it is at the moment, I'm afraid.
3:53:20The other thing the business community keeps saying, and you know this is not a new point of view, but to those who say, well, the bargaining system is going to work post-phase 2, what they're reporting to me is, what's going to make it any different post-
3:53:35phase two than it was pre-phase one.
3:53:38But we can't have strikes in this country.
3:53:42Very few companies really are willing to take strikes because, as you know, Mr. President, there are all sorts of benefits for strikers.
3:53:50Most of the companies that have tried having strikes end up concluding it wasn't worth it.
3:53:55And when John Connolly had this meeting with the food chain the other day, they gave us quite a lecture on that subject about strikes, that everybody who's had one has been sorry he took it.
3:54:04So let's get this again in the post-election and what we ought to do about this bargaining labor thing.
3:54:10Again, it's nothing pre-election.
3:54:13No, I haven't heard George.
3:54:16I know he's pretty hot on this subject.
3:54:21There's a danger here that some of your business community is primed in this pre-election.
3:54:29And it could put us in a very tough situation.
3:54:32No, no, no.
3:54:32Go after it later.
3:54:33No, I don't think you do it.
3:54:35No, don't do it now.
3:54:36You've got to elect a few people first.
3:54:40You can't run the votes.
3:54:42The final subject is this minority economic development.
3:54:45I've been out to talk to four or five of those.
3:54:48The more I live with that problem, I told John on Saturday that I don't think we're ever going to appeal to the segment of the voters, you know, who want the passionate rhetoric and the soul and all that sort of thing.
3:55:00But I think this black economic development theme may be our best one politically.
3:55:06But the thing that's worrying us... What?
3:55:07We called it the greatest addiction four years ago.
3:55:12I think our problem is, I've been in Chicago, New York, one other city, making speeches to these audiences, and I think our problem is that a lot of the general voters, you know, the moderates, the independents, even the fair amount of black community,
3:55:26doesn't seem to know too much about this program, as he knows more than he should.
3:55:31I know.
3:55:31But I'm telling you that there is a very select group of people who are in the field that admire it and think it's great.
3:55:39But when I go beyond the experts, you know, in this field.
3:55:44Well, I think we have, I told John, I think we've got to consider two or three bold steps between now and November.
3:55:51One might be whether we could get attracted some real stars to help us promote this activity.
3:55:56You know, some really well-known blacks who would be willing to go out in the field and sell the virtues of this program.
3:56:04The theory being that if I mentioned that we have to be sure we check them out politically and they won't come out against you.
3:56:12But if we could get a couple of these stars, a couple of these athletes who are well-known in this field to say, by God, this Nixon has really got a good program here.
3:56:21We think we need something like that.
3:56:23And finally, I met on just the other night in New York at a big black dinner with some Chicago black Catholics.
3:56:33And you remember your campaign team in 68.
3:56:35He made an interesting suggestion.
3:56:37He said, I wonder if you fellows don't need something rather big pre-election.
3:56:42And he had the following thought that I mentioned to John.
3:56:46He said the inner cities of America are going to hell, you know, the blacks, the ghettos, and that sort of thing.
3:56:52What would you think of trying to come up with some notions of what the president's going to do to stimulate the development, the economic development, you know, the jobs, the factories, the plants of the inner cities?
3:57:04Because what's happening is we're losing all our sources of revenue.
3:57:07And within the ghettos, the blacks have to spend their money outside of it.
3:57:11And he suggested that perhaps you could get, and this comes back to the theme of black capitalism, which you started in 68.
3:57:19He suggests maybe you focus on the business economic side of this issue.
3:57:25Perhaps bring in some of these leaders in, you know, here from time to time.
3:57:29And pre-election have one or two rather major ideas, you know, in this field.
3:57:34I guess what I'm trying to say to you, Mr. President, is we've done great work with Messick.
3:57:37Maury did a terrific job
3:57:39But I just can't get a feeling that we've, I don't know whether John agrees or not, that we've somehow made a sale to the general population on this.
3:57:49And we need something.
3:57:50It's not getting out.
3:57:51It's not getting out.
3:57:52What about the productivity?
3:57:54I've spoken to this group about three times.
3:57:55I know we've gone over the Indian Creator Room once over here, once over there.
3:57:59It does seem to make a glitter.
3:58:01Yeah.
3:58:01What about the, uh, you talk about the productivity that you didn't, uh, you, you, you have a record, you're going to make a recommendation as to how to deal with it.
3:58:13Yes, sir.
3:58:14It won't do just to me.
3:58:15Oh, no, no, no, no, no, no.
3:58:16Well, aside from the advertising council, the wild idea, you might want to think about something, you know, really get, well,
3:58:28Every country in the world, industrialized country, is terrified about the union wage cost push, the way it's ruining the middle class.
3:58:34This might be before the election.
3:58:38What?
3:58:38This might be before the election.
3:58:40Something very big and unproductive.
3:58:42I'm saying it's premature.
3:58:43I haven't got it formed.
3:58:44All right.
3:58:45Well, I can't see because that's something I'd like to hear.
3:58:48We've got to let that pass.
3:58:49All right.
3:58:49Give us a couple of weeks and we'll see.
3:58:55I'd like to get a rundown.
3:58:58Give me a good memory.
3:59:05We're just talking about it.
3:59:18All right.
3:59:21How are you?
3:59:23All right.
3:59:23How are you feeling?
3:59:27All right.
3:59:28All right.
3:59:30All right.
3:59:32All right.
3:59:45Good, thank you gentlemen.
4:00:01Sit down, sit down.
4:00:30Well, I guess the main subject we have here is how many vacancies we got with one.
4:00:39One vacancy as of today.
4:00:42We're hoping that he'll take an advantage of this credit that we have.
4:00:47We haven't actually offered anything yet.
4:00:53But we're getting to the point of submitting something.
4:00:57It's our problem, of course, is he gets...
4:00:59somebody removed.
4:01:02You see, one advantage of his taking the ambassadorship and his non-vote black reference is that he, unlike them, doesn't have to worry about the election because anybody that's a black will never get removed.
4:01:23And he knows this.
4:01:24So the point is, Fred, as I told you,
4:01:32But Gary, you're riding hard on this now, because I told Rogers that we tried that in New York, and he wouldn't take it for that, would he?
4:01:40Well, we could get acceptance around the horn, which depended not only on Rogers, but on the Secretary General.
4:01:46Yeah, that's nice.
4:01:50But I think we can certainly open up a good ambassadorship, which is a question of whether you'll take it.
4:01:55But there are a couple of European embassies that are possible.
4:02:01And of course, he'd be an ideal candidate to put up at this point.
4:02:04Nobody could say anything bad about him.
4:02:07He'd get confirmed?
4:02:08He'd get confirmed.
4:02:10Well, you still want that done?
4:02:13He'd like it.
4:02:14Well, it's a good way to cap his career.
4:02:16He'd get faster and so forth.
4:02:21particularly if it's a European country rather than a black country, which I don't get something.
4:02:25He wouldn't say the blacks.
4:02:26Well, that's something we're doing, which we deserve a little credit for.
4:02:29So we've been sending the blacks to the white countries, and that's a very nice thing for them.
4:02:34Well, and it's right to do.
4:02:35It's right to do.
4:02:37Holland, that's the defendant.
4:02:38Very well, I understand.
4:02:41Holland, oh, yes, he's so good that Roger wants to bring him back.
4:02:45So I'll be leaving him there.
4:02:47Is he the fellow from Hampton?
4:02:49Holland?
4:02:50Yeah.
4:02:50Yeah?
4:02:50Yeah, he's a good man.
4:02:51Yeah, where is he now?
4:02:52Great.
4:02:53He was a former football player in Cornell, or Colgate.
4:02:57I read about him.
4:02:58Very honest, yes.
4:02:59He's back in Sweden?
4:03:00Yeah.
4:03:01I didn't realize.
4:03:02How long has he been there?
4:03:03Oh, about a year and a half, two years.
4:03:05Oh, longer than two years.
4:03:06And he's done very well, and that's a very delicate post, because the Swedes are not particularly our friends at times.
4:03:14But he just, they first came to hell, and all of a sudden they found out he was quite a fellow.
4:03:19And he has been very, very good.
4:03:23Very good.
4:03:24He's the one we can't think of for another post.
4:03:27And he's been good.
4:03:34Well, let's come to this one, I understand.
4:03:47Well, basically, we have two names.
4:03:49It's very good.
4:03:50From the west.
4:03:51We have Mr. California weapons, San Francisco and Los Angeles.
4:03:57Well, doesn't this have to be in that region?
4:04:00Yeah.
4:04:01No.
4:04:01No, it doesn't have to be in that region.
4:04:04That's right.
4:04:05Well, it has to be in this or another region.
4:04:09We can see we have seven members of the board, 12 regions, and there are five districts.
4:04:17Nobody could say anything bad about it.
4:04:19He didn't confirm it?
4:04:20He didn't confirm it.
4:04:22Well, you still want that done?
4:04:25He'd like it.
4:04:27Well, it's a good way to cap his career, to get faster and so forth.
4:04:33particularly if it's a European country rather than a black country, which I don't get something.
4:04:37He wouldn't say the blacks.
4:04:38Well, that's something we're doing, which we deserve a little credit for.
4:04:42So we've been sending the blacks to the white countries, and that's a very nice thing for them.
4:04:46Well, and it's right to do.
4:04:47It's right to do.
4:04:49Holland has been very well understood.
4:04:53Holland, oh, yes, he's so good.
4:04:55I just want to bring him back.
4:04:58I'll be leaving him there.
4:04:59He's a fellow from Hampton.
4:05:02Holland?
4:05:02Yeah.
4:05:03Yeah.
4:05:06Great.
4:05:06He was a former football player in Cornell, or Colgate, rather.
4:05:11Oh, yeah.
4:05:11He's back in Sweden?
4:05:13Yeah.
4:05:13I didn't realize.
4:05:14How long has he been there?
4:05:16Oh, about a year and a half, two years.
4:05:17Oh, longer than two years, John.
4:05:19And he's done very well, and that's a very doubtful post, because the Swedes are not particularly our friends at times.
4:05:26But he just, they first came to him, and all of a sudden they found out he was quite a fellow.
4:05:32And he has been very, very good.
4:05:36Very good.
4:05:36He's the one we can't think of for another post.
4:05:39And he's been good.
4:05:47Well, let's come to this one, I understand.
4:06:00Basically, we have two very good from the west.
4:06:04California 11, San Francisco 11, and Los Angeles.
4:06:09Well, doesn't this have to be in that region?
4:06:13Yeah.
4:06:13No.
4:06:14No, it doesn't have to be.
4:06:16I'm sorry.
4:06:17Well, it has to be in this or another region.
4:06:22We have seven members of the board, 12 regions, and five districts are open.
4:06:37Are these the two that I saw?
4:06:42I think they did.
4:06:46Yeah.
4:06:47What is, uh, What is, uh, Butcher?
4:06:50Buehler.
4:06:51Buehler.
4:06:51I guess you pronounced that with B.
4:06:53The other is Cripps.
4:06:56They're both very good.
4:07:09quite .
4:07:11He's from Los Angeles.
4:07:16And Fred is from Los Angeles.
4:07:26You prefer .
4:07:29No, I prefer .
4:07:31Oh, yeah, it's the age factor, I think.
4:07:39Perhaps it's the older one.
4:07:42It's 59.
4:07:45All right.
4:07:46Not much to say.
4:07:47Not much to say about it.
4:08:01Well, the thing I hate about it, Art,
4:08:09But I'd like to see a, I would like to see the board, it's like the appointments I made to the Supreme Court.
4:08:19The difficulty of the three of them is that they're just on the edge of the H-factor.
4:08:32Paul is over the edge, but we had to take him because he was the only southerner
4:08:41with the great advantage of restless chances that he will be there in time, and he will be a fine, fine judge.
4:08:51Generally speaking, I feel that this is going to be huge.
4:08:56You start with the situation, and we've all got to figure out what we're going to leave.
4:09:04And on the board, you've got a 12-year term and a 14-year term.
4:09:09So you take a follow-up, 59, 73.
4:09:11I don't expect anybody to serve forever, and maybe have a follow-up either.
4:09:19But I like the idea of taking a follow-up who is younger.
4:09:24In fact, I told on the court, I'm not going to consider anybody from now on who's older than 45.
4:09:33If I get any more court complaints, they're going to be 40 to 45.
4:09:40Because then they'll serve 30 years.
4:09:43They can go to their 75, they're going to be pretty good.
4:09:45Or I'm dead.
4:09:46Others can't.
4:09:47And we had to take Berger, who was 60 and 61.
4:09:50We had to take Blackman, who was 61.
4:09:56We had to take Powell, who was 63 and 64.
4:09:59And you see the problem.
4:10:00I guess that's what I feel about our community.
4:10:03Well, I feel the same way as you do.
4:10:05There's one fact you ought to know.
4:10:07Well, there's several things you ought to know about the siege factor.
4:10:11New York wants this job for a very limited period, and after he's here for a while, he wants to go into banking again and head up one of the big banks in the country.
4:10:27He's an honest fellow, and he told me that explicitly.
4:10:33And in fact, he told me
4:10:36Well, I asked them.
4:10:37You know, I had long interviews with these fellows, and they were very frank, and I asked them what they said.
4:10:43Yeah, I asked them, why did you pursue the Fed?
4:10:46They said, well, I said, I'll tell you frankly, it'll advance my career.
4:10:52I've come here two years.
4:10:54I can go out and become the head of one of the big banks.
4:10:58Well, and I said, well, I can understand that, but from the Fed's viewpoint,
4:11:05and take about two years before you're broken in properly.
4:11:09He said, well, then I'll stay longer.
4:11:13He did say that.
4:11:16Well, that's what he looks forward to, and he's very honest and direct about that.
4:11:27So I don't think he's going to stay on.
4:11:30You think he's going to work?
4:11:31Well, I suppose he would.
4:11:32The other fellow, I think this is his last job.
4:11:35He'll stay on.
4:11:36No, I doubt it.
4:11:38Now, there is another dimension.
4:11:42Let's suppose we look for a banker.
4:11:45Now, whether that concept is right or not, one can debate it.
4:11:49Probably isn't.
4:11:51Oh, yes.
4:11:52Well, I thought we ought to have one on the...
4:11:55We ought to have somebody to know something about the practical side of banking on Federal Reserve.
4:12:00I know, I know.
4:12:01You're being much too generous.
4:12:03Go ahead.
4:12:05This fellow, this fellow, Craig, is an experienced, highly experienced, all-around banker.
4:12:15Very well thought of in the banking community.
4:12:19Beor is much younger and just hasn't had that range of experience.
4:12:26Now, I can't be helpful to you, Mr. President, unless I'm absolutely frank.
4:12:41I need a man, particularly this year, of pretty good and mature judgment on whom I can depend.
4:12:54I'm a little sure of Craig's.
4:12:57I think, Mr. President, the Chairman's point of longevity is a good one.
4:13:05It's true that Buehler is a very ambitious young guy.
4:13:09He wouldn't be where he is at 39 years old.
4:13:11I've talked to someone, particularly after your comments,
4:13:19He acknowledges that he wants to go out and hit a major bank.
4:13:24But I think I have a feeling that if he is challenged, he will stay longer.
4:13:28The other point I think that we have to consider about Buehler is the very ambition that might move him out would also make him a very good candidate for another position in the administration sometime during the second term.
4:13:41He has the generalist capacity to be used in different ways.
4:13:48Can I ask a question, John, from your judgment?
4:13:55I think they did pretty well.
4:13:57I could picture it already.
4:13:59Kreb was very quiet, obviously a well-informed, well-trained banker.
4:14:08He's a quiet man.
4:14:14that does appear to instill confidence in you, Judge.
4:14:16You're, on the other hand, is a...
4:14:19is a tall, young, aggressive, vital fellow.
4:14:23He just, his health is just between 39 and 59, except he's magnified.
4:14:27This is a... You're not 59 too much.
4:14:29Well, I understand.
4:14:32But between 39 and 59 is the best.
4:14:35In certain areas anyway.
4:14:38But Ewer is a very attractive young fellow.
4:14:41I think Arthur's right.
4:14:42I doubt that he'll stay there 14 years, but I think he'll stay...
4:14:46around some five years.
4:14:47I think he would stay down through the next term, and then he might want to leave, and I wouldn't much blame him if he did.
4:14:55Let me ask this question, Arthur.
4:14:56You've got to look at it both ways.
4:15:01You wouldn't say that you lean to credits.
4:15:07Buehrer, however, is impressive, as he agrees, impressive young fellow.
4:15:12Seems to have quite a record.
4:15:14I've interviewed
4:15:16Fair number, and these are the two men that we've agreed on, and I'd be happy with either one.
4:15:22Let me ask you this.
4:15:23Let me ask you this.
4:15:24I'll decide it later.
4:15:25I think we're going to ask this.
4:15:26What do you say about the prayers?
4:15:30I mean, it's obvious you feel a little more comfortable with him.
4:15:38It is that that you feel that you don't stay long or so long.
4:15:42But let's look at it another way.
4:15:48If you were to get fewer, get fewer, couldn't you, just looking at it pretty cold-bloodedly, take him and help to mold him for what it really needed?
4:16:00And that is for somebody who understands this damn economy the way you understand it, the movement on it.
4:16:05Would you do that?
4:16:06Now, take this other young fellow just a point.
4:16:08How's he working out?
4:16:11The follower.
4:16:12Thanks, Joe.
4:16:12Well, I'll tell you exactly how he's working out.
4:16:16He's fine in board meetings.
4:16:18Yeah.
4:16:19But his influence is not great.
4:16:22His influence on other people is zero.
4:16:25It takes time to build up.
4:16:27Exactly.
4:16:27You don't get far with that.
4:16:30And that's coming.
4:16:32Now this fellow, this fellow, if I were thinking, you see, for the long run, if I didn't care about the next year very much, I'd say I'm going to take my chances with the younger man.
4:16:46And I'll work on him, I'll work on him for, you know, next year, two years.
4:16:52He's going to turn into a very kind, responsible board member.
4:16:58Yes, he is.
4:17:03How well will he perform?
4:17:06This year.
4:17:07This year.
4:17:09I don't know.
4:17:13I've tested, I've tested.
4:17:16I've spent about four hours with him, and I've talked to people and known he's going to behave very responsibly in critical policy discussions.
4:17:39Be aware, probably will as well, unless you're
4:17:45And I don't say that to purchase it.
4:17:47The United California Bank, of course, is the most go-go bank in that part of the country.
4:17:55I think it's still a little too go-go organized.
4:17:58It's a go-go country.
4:18:11I mean, you know, there are times the Bank of America for years was so overwhelmed, and the security person, which used to be the State Bank, began in the United California, sort of too big for its riches for two or three years, but it's quite a gang.
4:18:28Bob Volk, of course, came in the election.
4:18:33Prudential, he was the vice president.
4:18:36His son, his son is very active.
4:18:38Bob Volk, he'd be a good one.
4:18:40Well, we looked him over.
4:18:42First class, but he wouldn't take it.
4:18:44Well, when I say first class... You know, the man I would really want...
4:18:49Both of you are superb at doing this.
4:18:51The man I'd really want is Harvick.
4:18:54Do you know him?
4:18:55Oh, sure.
4:18:56You know, I don't have... Everybody wants him.
4:18:59And I had days past of work on him.
4:19:02You mean the farmer's standard man?
4:19:04Oh, yeah.
4:19:05Hell of a guy.
4:19:06What's he doing sitting out in the joint co-op?
4:19:09Well, he's doing very well in the business school.
4:19:13And I talked to him about Krebs.
4:19:15I've seen both of them.
4:19:22It's good to have a choice of two.
4:19:24Yeah, it really is.
4:19:26Usually it's only one.
4:19:30Well, we combed with Mr. Malick's assistance, and he and James, they worked awfully hard.
4:19:38Well, that's a definite, but I have to do one other thing, speaking of combing, having the grimmer thing in mind, if we start combing right away on the next one, so we'll have another good choice.
4:19:49Well, Mr. President, there's another possibility which may shape up, and that is Governor Robertson, you know, the Vice Chairman,
4:19:59Now there I brought Holland.
4:20:07He's our executive director around the other day.
4:20:09I wanted you to see him.
4:20:13He knew more of the technicalities than I did.
4:20:16Well, that wasn't the only reason for my bringing him around.
4:20:20Holland would be an ideal man for the board.
4:20:27He is a good Republican.
4:20:30He's been in the public service all his life, an economist, a good Republican, highly respected throughout the banking world.
4:20:41And this would be the very first time, Mr. President, that a member of the Federal Reserve staff would have been elevated to the board.
4:20:49And I think this would be the first time.
4:20:53I just wanted you to...
4:21:00It would be an ideal appointment.
4:21:04If Robertson leaves, and he is, you know, the way our retirement rules work, if he leaves July 1st, then his pension will be $1,600 a year larger than if he leaves after that date.
4:21:23So he's, uh... That's a crazy damn thing.
4:21:25I know.
4:21:25Yeah, well, I can't tell you the kind of... Well...
4:21:28Some kind of an incentive.
4:21:29He loses money?
4:21:30He loses money for staying too long.
4:21:31It's been said to get him out.
4:21:34Oh, my God.
4:21:35He must be 65, 64, 75.
4:21:36He was in here somewhere.
4:21:38I thought he was 10 years over then.
4:21:41What was Robinson doing?
4:21:42He was here at the Flaring Inn.
4:21:44Where were you going to see him?
4:21:47I know about the Sheehan, but he was here in another matter or something.
4:21:50Maybe there was a church there or something.
4:21:59I saw him.
4:22:00So he's pondering that possibility.
4:22:04He's a good man, though, isn't he?
4:22:08Not from my viewpoint.
4:22:09Not from the viewpoint of the banking community.
4:22:13From the viewpoint of the populace of the country, he's a very good man.
4:22:27He's not a populist anyway.
4:22:30He wants every small bank.
4:22:32The thing you've got to think of is not simply, we've got to think of this next year.
4:22:38It's critical.
4:22:40But we also got to think of all three of these appointments.
4:22:43We've got to think of building this board for the future the very best that we can and leading something.
4:22:49You know, that some other guy can't leave.
4:22:52I've got a list of that.
4:22:53Of course.
4:22:54Well, of course.
4:22:56I've thought a great deal about that.
4:22:58And that's why we've got the list on with two names.
4:23:00And we were going to present you with three names.
4:23:03That's the third name to give you.
4:23:09No creps would be a very, very fine appointment.
4:23:16Muir has the advantage of abuse and vitality.
4:23:19It's clear.
4:23:21Do you like them both, though, as individuals?
4:23:26I mean, the main thing is Muir is incompatible with, well, President Bobby, is Muir incompatible with you?
4:23:33No, no problem.
4:23:35It's the main thing, as I've told you, I don't want to put anybody, I've told Frederick the same thing, I don't want to put anybody on the court, I don't want to put anybody on the court incompatible with the chairman.
4:23:43I mean, they can't agree with you on everything, but you know, it's compatibility is the important thing.
4:23:47See, you see, I've got problems.
4:23:49Now, I don't know if you wrote today's paper.
4:23:52Well, I had quite a session in January, you know.
4:23:55I had three dissents.
4:23:57Well, by February, I had only one dissent, and by March, I had no dissent.
4:24:02I brought the group around.
4:24:05Well, I can't afford to have too many dissents.
4:24:09Not this year.
4:24:11But you got it pretty well on the phone now.
4:24:13Oh, yeah.
4:24:14It's beautiful.
4:24:15Are they good?
4:24:16Yeah.
4:24:18Yeah, I haven't bothered you with the figures much.
4:24:21I'll go tell them.
4:24:22Just the old experts.
4:24:24Arthur's done an excellent job of working around the New York Bank problem.
4:24:28Yeah, Hayes is a great friend.
4:24:30Well, Arthur is, yeah.
4:24:32He's fixed that up for me.
4:24:35I told him, I've always challenged Arthur Beardy about Hayes, and he never would.
4:24:40He tries.
4:24:42think you've got him under control now i've got his staff under control that's better let me uh let me do a little more thinking about it i like to i i want to do a little checking on that i have on my own california side a little conversation if you don't mind
4:25:03In the meantime, this is a good way to do this.
4:25:07But I prefer, if you can, to get one name.
4:25:09But if you can get two, sometimes that's fine.
4:25:13But this is a good way to do it.
4:25:15And the main thing is to have in mind the fact that we want to build a strong part of the future, as well as some guys in the right, totally.
4:25:22OK?
4:25:24Yes, sir.
4:25:26All right.
4:25:28John, I've got it.
4:25:29I suppose I'd like to leave you some information.
4:25:32Do you want it?
4:25:33I'll send it to you.
4:26:04on the federal budget, what means have you seen it?
4:26:13Oh, I've got copies for each of you.
4:26:17Well, we've got the deficit down, according to one stand, by $10 billion, and the cash finance needs by $13 billion.
4:26:30Really, that meeting, which I should have mentioned, but I was mentioning to John, really shocked me.
4:26:36Peterson, though, was a very, very imaginative fellow.
4:26:39He's going to do a fine job in commerce, but he's going to talk to you about this.
4:26:45And you know, he's got a pretty good staff in commerce, I think.
4:26:48He says it's good.
4:26:49But he says that he priced out what they call this quality of life stuff, you know what I mean?
4:26:54Everything, all these...
4:26:58And by 1976 or 76, 75 theater colleges were his punches.
4:27:04And the people would say,
4:27:06et cetera, et cetera.
4:27:08Where in the head are you going to get the $75 billion in your money?
4:27:10Now, Peter said this.
4:27:13I told him to check it here to see whether he actually said he had.
4:27:18But John is going to raise this review.
4:27:19And I'm going to talk about this because we're in a situation in this country right now that really worries me.
4:27:26Because I must say, I started this while I didn't start it.
4:27:31But this population thing, you know, about the world population message, and now we want the population message here.
4:27:37And you've got the idea of no growth in population, no growth in the economy, no growth in this and that, and the other things, so that you keep the environment.
4:27:45But the question is, Arthur, that this is the part that Peter Suresh, have you talked to him recently about this?
4:27:52I ran a program to mention it to you, and if you want to hear about it.
4:27:58The point is that we can talk all we want about all these good things, you know.
4:28:04They take a very small way.
4:28:06I know nothing about this, but apparently we need an awful lot of oil.
4:28:11Now, the way to get that oil is through huge hankers, because it saves a lot of money.
4:28:16In order to get those huge hankers, you've got to have huge docks.
4:28:21As a result of the environmentalists, they're in the dam, and I ask even about Texas, where they're either standing or isn't, a major port in this country that will allow, at least presently, the building of the docks.
4:28:34Now, and I say because of the environmentalists' point that I make, is that if this country is, time after time, is going to make decisions
4:28:46on the side of the environment, on the side of the road, and continue to put more and more family assistance, $2,500 and $4,000, $3,500 and $4,000, and daycare centers, and all these other things, George, that you're constantly pushing me on.
4:29:06He's changed, obviously.
4:29:08He's got the money.
4:29:11But really, I hadn't realized, he said he talked to you about it.
4:29:17Well, Mr. President, these figures scare me.
4:29:19Well, these figures come out of Georgia, but I'm sure the five-year contest is not a number that anticipates the additional cost of about $75 billion.
4:29:25And with no good programs whatsoever, no good initiatives, it'll be five years from now before you have any legal whatsoever in your place of training.
4:29:35I think there's an additional point out that the material here is a ton of meters past.
4:29:40You can't count that.
4:29:52which, if passed, will mean
4:30:10hundreds of thousands of people will be thrown out of work the day after it's passed.
4:30:15Kaiser, Edgar Kaiser, he's a great Democrat, you know, a great liberal.
4:30:19And Edgar Kaiser says, we will close my steel plant.
4:30:22Close it, period.
4:30:25Now, would you arrange, I just said, I want you to arrange for Peterson to give this message to him.
4:30:30He's going to be seeing it.
4:30:31Because we don't want to talk about it at a general, I think a general economic meeting, you know.
4:30:38as we look ahead, as we consider this thing, because I don't think it's something we can fight effectively too well right now in the political atmosphere we're in.
4:30:48But looking at the future, we simply can't, we cannot dodge the fact that this economy has to continue to grow if we're going to be able to provide for all these social needs that everybody's for.
4:31:03Where are you going to get the money?
4:31:05Now, let's suppose we're not programming systems.
4:31:07We probably won't meet with a congressman leaving that health.
4:31:11So, George, look at this damage to upper education.
4:31:14The education goes up.
4:31:16The health program.
4:31:18All of these things, it goes up and up and up.
4:31:19The summer youth program.
4:31:22Where did they tell him?
4:31:22And then they go, I wonder how much the economy grows.
4:31:24Right, Arthur?
4:31:25Do you people think about the Fed?
4:31:27No.
4:31:29Now really, that's the truth here, Arthur.
4:31:31You have people who have to, now this was an Iowa man, Pete.
4:31:34Because, you know, he comes from Chicago, and he's kind of a little, you know, runs with the Percy and the liberal crowd out there.
4:31:42And I think he's turned around like that.
4:31:44I mean, he didn't go jizzing.
4:31:46Well, you listen to him.
4:31:47I'll read these things.
4:32:14Mr. President, read these two sentences.
4:32:16They're good news.
4:32:25It doesn't interest you?
4:32:26Very, very important.
4:32:28This hurts the executives.
4:32:32Yeah, yeah.
4:32:32I got it.
4:32:33I got it.
4:32:36Keep it going.
4:32:38As I told Gerald Gordon Metcalfe, I said, get your stocks up and keep those damn prices down.
4:32:48I said, well, how can we do that?
4:32:49I said, you just do it.
4:32:51He said, I said, 2%?
4:32:52I said, no, 1%.
4:32:54Come on, come on, let's do it.
4:32:58Get the stocks up, prices down.
4:33:01Prices, what, they sell?
4:33:02Yes, sir.
4:33:03No?
4:33:04Three weeks, and...
4:36:57people there for a dinner honoring the chief justice of the texas supreme court
4:37:18And I'm going to try to take off a few days.
4:37:23Yes, I think I would.
4:37:24I think more than anything else, I've got two quick letters.
4:37:47I leave with these damn problems too much, you know, if it was present.
4:37:50And I let them worry.
4:37:52I let them just... You read the damn papers, the television.
4:37:55You read all the reports.
4:37:56Oh, I read them all.
4:37:56And the thing too, the thing too is that...
4:37:59I let these weaknesses in our government bother me too much.
4:38:03Oh, they should.
4:38:04I'm too occupation about it.
4:38:05Let me say this.
4:38:06The thing is...
4:38:08I wish you would do another thing.
4:38:10You know, you've never done this, but I really mean, I wish that you would, you know, like Bob was saying, in the middle of the week, now tomorrow, for example, I had a chance to get that damn Canadian speech hash, so tomorrow at noon, about three o'clock, we're going to find this guy in a helicopter, spend the night at the end of the day, finish it up, come back the following day.
4:38:34It's good for me.
4:38:36It's that that brings, I think it keeps the pressure down, as far as I'm concerned.
4:38:41And I don't think you do enough of that.
4:38:43No, I don't do any of that.
4:38:44You don't, you get the hell out of the can, David.
4:38:46You should go out and play that golf twice a week, because you drive yourself awful hard.
4:38:52You're a driver.
4:38:54power, you know, dynamic, I don't know what you like, but when you make a speech, you reg yourself up, and you put yourself through hell.
4:39:03And this is what affects you.
4:39:05And on the other hand, on the other hand, it'll pass, but you just, you take off whatever time you need.
4:39:18I'm going to have to because I'm not going to kill myself.
4:39:25It's just not worth that.
4:39:26The world goes on.
4:39:28I just don't feel out.
4:39:30So I'm going to have to.
4:39:32I'll watch it.
4:39:32I'm not going to do the work about it, but I'll have to.
4:40:37I don't know how it works.
4:40:38I just haven't felt good.
4:40:40I'm pressing myself.
4:40:41And I've got to quit that somehow.
4:40:45So I've got to add a spooch.
4:40:48I know a spooch.
4:40:50I don't know what to do about it.
4:40:52I just, you know, I push to try to correct some of these things and get some things done.
4:40:57What I try to do is to...
4:41:00You know, we've got this current situation in Vietnam, and so I...
4:41:05I read it.
4:41:06I mean, I read it in the summer, but I always read it when I'm in a good mood.
4:41:12You know, when I know I'm not going to...
4:41:14But the main thing is that, as I told Paul at the end of the day, I said, I'll hear you.
4:41:20I said, except for things that have to be done.
4:41:25and some things that I ought to consider.
4:41:28I've got to be at my best to make the really critical decisions that will depend on whether we, after all this damn sacrifice in the early days, that's what we're doing.
4:41:38Henry told me he built you in somehow, if you want.
4:41:41Basically, what I can tell you, we are, if you get that damn Air Force to fly us out of that weather, they'll even doubt that.
4:41:48But I think you should know,
4:41:55If we get run out of Vietnam,
4:42:24We can't go to any Soviet something.
4:42:26I've told him that he's not in his damn mind.
4:42:28We won't have a foreign policy if we get run out.
4:42:31That's what these left-wingers don't realize, because then the Russians will have succeeded in India, and then they will have succeeded in Vietnam, and then they'll try the Middle East, and then they'll try Europe.
4:42:41So we're playing a very hard game.
4:42:42That's why I gave a little shot across the bow yesterday where I went over to sign that jackass treaty on biological warfare and non-suicide violence.
4:42:50It isn't just arms limitation, it's an end in itself.
4:42:54We've got the non-proliferation treaty, biological warfare, and the sea beds.
4:42:59Because with all the arms limitation in the world, there's still not arms left to blow up the world many times over.
4:43:04What we need is restraint on the part of the great powers.
4:43:08And you may have noticed that I said that that means that every great power must not be exercised, restrained in the use of force.
4:43:18as an instrument of aggression.
4:43:20But it must not encourage, directly or indirectly, any other power to use force, which was a direct shot at the Russians.
4:43:27It was intended to bring them to sit right there, and yet, right after, they still wanted something.
4:43:36And they do at a time.
4:43:39But the Navy, who you'd be glad to know, is doing a hell of a good job out there.
4:43:43They've gone out there, and we've got over 30 destroyers and four cruisers in there.
4:43:48and I shovel that dam road that runs along the coast clear up there 75 miles up to Vietnam.
4:43:59And of course, we're pounding the southern battlefields with everything we've got.
4:44:05So my view is I can give a goddamn.
4:44:07I don't want to see any polls.
4:44:09I don't want to see any.
4:44:10I said I don't care about the critics.
4:44:12I don't care about what Kennedy said and the rest.
4:44:15I said right now, what really matters is whether this comes out all right.
4:44:18If it does, the country will be saved.
4:44:19If it doesn't, there's no foreign policy.
4:44:49I have no problems there.
4:44:50Everything I say is going extremely well.
4:44:52How is he doing?
4:44:54Hard?
4:44:55Very well.
4:44:56He's encouraging this interest rate to slide back up a little bit, I think.
4:45:01How is he doing in the money supply?
4:45:03He's still all right.
4:45:05And how is he doing with regard to his talk about our problems in Europe and all the rest?
4:45:11He's all right, but he doesn't know anything.
4:45:13We haven't talked to him, really.
4:45:16But the European situation is quiet.
4:45:20Volcker went over, had a bunch of good meetings, and I'm going to start letting these fellows hold some press conferences, and we're going to...
4:45:30I don't think we're doing something.
4:45:32He's going to start talking.
4:45:33Gee, he talks.
4:45:34Gee, he talks.
4:45:35He's going to talk all the time.
4:45:38There's no advice you have on those goddamn Canadians, isn't there?
4:45:41No, except I hope you don't get any very specific trade negotiations with them.
4:45:47No, no.
4:45:48All we're going to do is sign a trade place agreement on some pollution.
4:45:52But I suppose that's all right.
4:45:55I need to go, but I've got to go to Canada.
4:45:58Your speech, they sent it over this morning.
4:46:00I took a bit of the draft of the draft.
4:46:02It looks like a hell of a speech to be honest with you.
4:46:06I certainly had no suggestion that it was a good speech.
4:46:11No, there isn't really.
4:46:12But we can at least show the people that we respect their right to be a big country.
4:46:17They never will be, but we say we respect it.
4:46:20But don't worry about Trudeau.
4:46:22I'd like to see him lose, frankly.
4:46:27And so I'll just do the very minimum I can get away with it, I'm sure.
4:46:32I noticed this morning they got a
4:46:34help in Quebec to come out with a secession program.
4:46:37They've got their whole damn platform on what they can do to nationalize certain things and so forth.
4:46:42So he's got lots of problems on his hands.
4:46:44I've already spoken on this, and I appreciate what they've said.
4:46:47I mean, I can't tell them about Secretary of Trade or some silly man, because he's just doing the, you know, they all do this, all these things.
4:47:02When they're running for election, kick the ante.
4:47:05Oh, sure.
4:47:05They'll kick us in that situation.
4:47:06They'll kick me, because I'm coming.
4:47:08Well, they'll kick you.
4:47:09That's all right.
4:47:10They'll kick you.
4:47:11I'm not running for office, Ken.
4:47:13I couldn't care less.
4:47:14As a matter of fact, I will.
4:47:16They'll kick me a little.
4:47:17I'm reaching for it.
4:47:18They're not going to kick you.
4:47:19They'll kick me.
4:47:20This helps us, and this helps you and the American businessmen.
4:47:24Who think that we're fighting back?
4:47:25I bet you.
4:47:26You betcha they did.
4:47:27And I had a bunch of them tell me that in Chicago yesterday, because after this luncheon speech, I was in the national broadcasters.
4:47:35Then I met with all the top, about 150 of the top business leaders in Chicago.
4:47:40Where did you have that?
4:47:41At the Athletic Club?
4:47:42No, at the Continental Plaza Hotel.
4:47:43Continental Plaza.
4:47:45And the Google Hotel.
4:47:47And it's the tourist week.
4:47:49We did it under the auspices of the Tourist Bureau, which, you know, 150 of you cover all of Chicago.
4:47:55And every country is that way.
4:47:57In Dallas, you can meet 100 people.
4:48:00In fact, Dallas.
4:48:01So we were in Houston the same.
4:48:03We had a question and answer for over an hour.
4:48:06All these things right after the press conference.
4:48:09So, and we talk about everything in the world.
4:48:11We talk about foreign policy, taxes, loopholes, productivity.
4:48:17How do you handle all that?
4:48:18I say, basically what I say is, what loopholes?
4:48:23I said, Aristotle once said, if you speak with me, define me in terms.
4:48:28And I said, you had two major tax reforms in this quarter century that I don't know anything about.
4:48:33One was under Eisenhower in 54, and one was under President Nixon in 69.
4:48:37I said, those are the only two tax reforms we've had, and, coincidentally, they've been under Republican presence.
4:48:42I said, all these fellows that are out on the stump talking about tax reforms have had 109 years, I believe, if I recall, George Wallace, service in the Senate.
4:48:51And I said, I don't recall a single bill that carries their name dealing with taxes.
4:48:56And I said, now, they've got a newfound interest in talking about loopholes.
4:49:00And I said, what loopholes?
4:49:01I said, now, what's a loophole to one man is a job to another.
4:49:06And I said, now, let's talk about the unpopular trade wire.
4:49:11I said, they're talking about doing away with interest on home mortgages, on the deductibility of interest on home mortgages.
4:49:20And I said, I'm not on that.
4:49:21I don't think that's unpopular.
4:49:24I said, that's a conscious decision to encourage home ownership in America.
4:49:29I said, they're talking about knocking out the tax-free municipal bonds.
4:49:32And they said, well, we'll subsidize the cities.
4:49:34I said, now, the only thing wrong with that is cities don't want to be subsidized.
4:49:38They want to live their way.
4:49:39They want to issue their municipal bonds.
4:49:41And this is a conscious, deliberate decision because the government has failed it.
4:49:46They have to take over the decision.
4:49:47And I said, and furthermore, they tried this ploy in 1969.
4:49:51These same fellows tried to remove the exemption from municipal bonds in 69.
4:49:55And I said, they couldn't get anywhere in either house.
4:49:58I said, politically, they can't do it.
4:50:00Well, they can't even talk about it.
4:50:02But I said, so that's that blue code.
4:50:04I said, now let's talk about charitable contributions.
4:50:06I said, Father, how strong are you for that?
4:50:08There's a priest sitting on the front row.
4:50:10And I said, you'd be jumping as high as that chandelier there if you really thought this was going to seriously knock out deductions for charitable contributions.
4:50:18Because I said, you'll destroy every church and every museum and every institution and every university in this country.
4:50:23And I said, I'm not for that loophole being knocked out.
4:50:26They call it a loophole.
4:50:28I said, now let's talk about capital gains.
4:50:32I said, do you want to talk about capital gains?
4:50:34I said, do you want to see the Dow Jones hit 500 in five days?
4:50:38Let them believe.
4:50:39Let the American businessman and the American investor believe that you're really going to knock change the whole structure of the laws of tax laws in this country with respect to capital gains.
4:50:48I said, I'm not for it.
4:50:49But I said, that's what they're talking about.
4:50:52These are the loopholes they're talking about.
4:50:55I said, now, I could go on down the list.
4:50:57I said, now, they're talking about depletion.
4:50:59They call that a loophole, mineral depletion.
4:51:01I said, they reduced it by 5% last year, in 69.
4:51:04And I said, that was a mistake.
4:51:06I said, truth of the matter is, you've got an energy crisis in this country.
4:51:10And I said, in spite of the so-called loopholes, we're not able to produce enough hydrocarbons to meet the needs of this country.
4:51:18And I said, the gas we're paying 14.5 cents for in West Texas, we're supplying with 14.5 cents a thousand cubic feet.
4:51:25We're supplying with $1 a thousand cubic feet of material.
4:51:28I said, that's what it's going to cost you.
4:51:30I said, it's not going to save you money.
4:51:33It's going to cost you enormously.
4:51:36to destroy the mental interest of this country.
4:51:39So I said, I'm not for that.
4:51:42And I said, now, I can go on, but there's no point.
4:51:44These are the loopholes they're talking about.
4:51:47I said, casualty losses.
4:51:50I said, the man goes out here and loses his home.
4:51:53Why shouldn't he be able to charge it off?
4:51:56I said, the state taxes that you pay, don't you want to get credit on your federal taxes for those?
4:52:00Those are loopholes.
4:52:01That's what they're talking about.
4:52:03And I said, I'm not for knocking that out.
4:52:06So I said, this is a basic disagreement.
4:52:08Well, and this is the answer that I give to it.
4:52:10So I just don't like it.
4:52:11I think it was interesting that Peterson, the reason I went here to go see him, is that I was concerned about putting him in this job because I thought he, you know, could lead to my liberal side.
4:52:26But he had security trigger.
4:52:27I liked on him on and on.
4:52:28You know, he was talking about the competitive position for him.
4:52:32You know, he's come to the conclusion, and he's the same crowd, I'm sure that you feel the same way.
4:52:38He says, we've got to use this depreciation to be more effective than we have.
4:52:42We've got to do it with the Japanese and the Germans, too, and that is give more depreciation for those things you want, for President Reynolds.
4:52:49Do you know what I mean?
4:52:50That would be a loophole.
4:52:51That's coming up with the rich, isn't it?
4:52:52Sure.
4:52:53Today, Grace Jones, that's correct, had Tyler Cruz, please, if he'd come around so far.
4:52:58Come around completely.
4:53:00but you see if apollo's exposed to that problem enough he doesn't realize that all this democoptery is correct you know well it's exactly that that's all it is sure enough
4:59:24the ITT, they caught the son of a bitch.
4:59:27Not in law, but he'd been pissing on everybody else.
4:59:31John, here's this guy, they talked to this little secretary, says that he treated the ITT as if it was his private office.
4:59:42And he took from everybody, from all of them.
4:59:47He's no good.
4:59:48Tell me about a couple things, if I can.
4:59:50Can I ask you about that over-withholding thing?
4:59:55Anything more we can do there?
4:59:57Yes, sir.
4:59:57We can do one thing that we haven't yet done.
5:00:00Give them the money and come with me.
5:00:04Well, we can do two things, I guess.
5:00:05Of course, you hire some more agents and let them do it.
5:00:09In other words, maybe it's worth doing.
5:00:11We may have to.
5:00:12Well, the first thing we need to do, I'm going to wait until the 15th to do it.
5:00:16Because people don't normally, the average person will not go and fill out a W-4 and claim another exemption.
5:00:24until he gets ready to work out his income tax.
5:00:26He just won't go through all that trouble.
5:00:29So we hope that as a result of all the activity that we've had, the spot announcements, the mail campaigns, and everything else that we've had through the corporations, through the employers, that when they file their income tax return on the 15th, a great percentage of them will file that day before and claim this additional exemption.
5:00:47Now, if they don't, then for about $7 million,
5:00:54We can have a meeting to every box-holder in America.
5:01:02And what does it say?
5:01:03Well, in effect, it says, go here, here's the form, and fill out this form, and claim exemption, and so forth.
5:01:09Could I suggest this as a line, which I think would be very interesting?
5:01:14And then also, I'm sorry.
5:01:20I mean, I haven't checked the shelter, but it's just something, if you think, well, I can do it.
5:01:24I used to make out my own farms, I don't know, in magazines when I studied tax theology.
5:01:35And the average person, of course, doesn't, most people right now, even people of modest means, go to somebody and have a tryout.
5:01:42I was wondering, since this is something that, if you could, perhaps, for maybe $10 million or so,
5:01:51get additional agents in various offices and set up the IRS office will help you make your form and others so that people can come in.
5:02:04I don't know, does that have anything to do with this?
5:02:07Those of us who, I mean, you don't make up your terms, and I don't make mine up, but the average person can't afford it.
5:02:16If you could give them an idea, and you should make the announcement that we're going to provide,
5:02:23You're putting on a special task force of so many agents to help you make out this farm.
5:02:28They're not sure about a minute apiece, I would say.
5:02:31Yeah, we do that.
5:02:33We do it anyway.
5:02:33Yes, we might need more agents.
5:02:35Yes, we might.
5:02:36Maybe big companies, corporations, we could put them right in there, you know, where they would get papers.
5:02:41I'll get on that Saturday night.
5:02:44The other thing that I was going to tell you that I agreed to read is relating to agents, and we'll probably get back to you on this.
5:02:49When I was down in Florida, I met these two nice customs boys who had made that bystander call.
5:02:56And so we talked a little about it with the local guy about it.
5:03:00I said, this is quite good.
5:03:01I said, have you got enough?
5:03:04He said, well, they have 500 now, I understand.
5:03:07And so I said, how many, if you were to do adequately, the planes, the automobiles, and the ships, how many could you really use?
5:03:20And the fellow with arms, what's his name?
5:03:25customs man uh i mean the guy that's working the same set and the local guy they said we could they said we could we could use 2 000. now and i said well now you get all the receipts and let's see it seems to me that i said how many more are we asking questions and we're asking for 300 because that's all the budget will allow and my view john if you can use 2 000 agents in this field
5:03:53searching those damn ships and so forth and so on, using them.
5:03:56I don't know what you have found, but don't let finance be a worry about a thing like that.
5:04:03Well, it has been, of course, and the number of people, I mean, we've, y'all have increased the number of customers, we believe, more.
5:04:10I'll check into it again.
5:04:11We've increased the number of
5:04:14He said you have.
5:04:17But he said for this kind of work, the kids on the ports, they have 500.
5:04:22We are short.
5:04:23And he says they can use 1,500 more than that.
5:04:26I said, how long will it take you to train?
5:04:27He said, we can train it out in two months.
5:04:30I would say, he's talking about port officers.
5:04:33Port officers.
5:04:34That would be for ships.
5:04:36planes, and we don't have any, and cars.
5:04:41Now, why don't you, and this thing, you just drive hard and...
5:04:47Because, you know, it's quite amazing.
5:04:50These guys came in and out and all they had was one little suitcase and the damn things were five million dollars.
5:04:56Well, Mr. Rochon, he didn't bring up it.
5:04:58We didn't push it.
5:04:59I didn't push it.
5:05:00We took cuts.
5:05:01And our request should have done it.
5:05:03Well, we took cuts in customs.
5:05:05We took cuts in the Internal Revenue Service.
5:05:07That's not what I did.
5:05:08Well, I know we shouldn't, but we did it simply to try to keep them being an exception now.
5:05:14Let me say now that I'd like to change it on both.
5:05:20IRS, I think you ought to ask for 4,000 or 5,000 digits.
5:05:25You can find it.
5:05:26Go out and help people make all the returns.
5:05:29The other thing, do this thing.
5:05:31These are things that are good political issues.
5:05:33God damn it.
5:05:34Let's spend the money on these things.
5:05:36All right.
5:05:37If that's all right with you, let me ask you one question.
5:05:39First of all, I believe, and I didn't want to be sure without committing to today's 11th, I guess, and we've got until the 15th, but I think we can at least turn loose an enormous number of people to assist in preparing these returns.
5:05:54Right now?
5:05:55Right now, as of tomorrow.
5:05:57But I think we have, like, I hate to use the big time, but I think we've helped a pair of 30 cities and towns last year.
5:06:02Just to give you an idea.
5:06:04But that isn't enough.
5:06:05We'll do some more, and I understand your point.
5:06:08More than that, I don't know if you've seen the clips today or not, but I sat in Chicago yesterday, and here's where we were really in control.
5:06:15It is.
5:06:16It is quite serious.
5:06:17Johnny Walters, by the way, could also do some very serious planning on it.
5:06:21We did a survey in southeast of the United States, just finished, of the preparer returns.
5:06:30That's these people that go to these little places that say income tax.
5:06:34Not H&R Block, necessarily, but that type of thing that individuals do to help.
5:06:41And we sampled over 400 returns.
5:06:45Ninety-seven percent were fraudulent.
5:06:50I saw that, but you said that, did you, did I, I gathered the impression that you comforted a bit by saying you weren't sure it was always intentional.
5:06:59It wouldn't be fraudulent if it weren't intentional.
5:07:01No, no, it's fraudulent.
5:07:02See, we think that we do.
5:07:04You do.
5:07:05Yes, sir.
5:07:06Ninety-seven percent of these over 450,000 people
5:07:10or these little people that are the others.
5:07:12It primarily is the fellows who help them prepare the returns.
5:07:16And they're just trying to say they're gambling on the odds if we're not going to check the returns.
5:07:23And the average that it cost the Treasury was, I believe, the figure was $285 per return.
5:07:32And that's not cheap.
5:07:34Let me go after that.
5:07:38Let's don't get after our folks.
5:07:40You know what I mean?
5:07:42God damn it, that son of a bitch must be saying that I didn't pay any income tax.
5:07:47If I had said that, or you had said that, we would have been trimming out of public life that next day, right?
5:07:53And now the press sort of thinks, well, maybe it is a little confusing or something.
5:07:56Now, what the hell?
5:07:57They paid $250 million here with the tax, didn't they?
5:08:00I think that's right.
5:08:01But I don't know that they said that.
5:08:05I saw them for sale.
5:08:05Well, they didn't sell anything the worst thing.
5:08:07I'm going to ask you, I'm going to tell you one of these.
5:08:10You know, the thing that really had the greatest impact was what you did with food prices.
5:08:16That had a hell of an impact.
5:08:17We'd sit in there and check it out afterwards.
5:08:19And after your weekend, when you hit that damn thing, our support in his pool for our economic policies went up about eight points.
5:08:31And he said, we got on the MSC.
5:08:33He strongly urges, he called Colson down here yesterday, he strongly urges T-bomb the offensive on this thing.
5:08:40Now, on the food price thing, it's not only what happens, but it also is what we say.
5:08:48On this instance, it seems to me we're getting a little break in terms of what happened to the wholesale price index last month.
5:08:57Do you have any ideas as to what more could be said or not?
5:09:00You know what?
5:09:01If it's being said today, it's going to be said tomorrow or the next day.
5:09:04She's great for herself over here.
5:09:06And all these farmers and ranchers and packers and retail stores are all up for a grant for sales committee.
5:09:12Yet I'm here today.
5:09:13And they're going to be before the price commission a bunch of periods tomorrow.
5:09:17And it's going to be big news.
5:09:19And are we going to be on the right side of that?
5:09:20We'll be on the right side of that.
5:09:23But you hit the thing right in the nose and not blame on the farmers.
5:09:29Some people say, well, it's a straw man that's like a middle man.
5:09:32The hell it is.
5:09:33The Department of the Biddlemen, you all, we all know the situation.
5:09:39Those retailers, Safeway and the rest would not have lowered their prices, John, unless you talked to them.
5:09:45That's why they did it.
5:09:47And they know what people buy, and they buy on reason.
5:09:51That's why they're making their profits, and they're selling all this other damn stuff as lost leaders.
5:09:57Can I ask you one other thing?
5:10:00Are you considering...
5:10:02what we might do, say, two months before the election, the food thing.
5:10:07Because there is, you know what I mean?
5:10:09We can do even something that, if we don't have to live with it for longer than two months, we can do anything.
5:10:15And we talked about that all around.
5:10:17But considering the terms of without breathing anybody, doing whatever we have to, putting the freeze back on this economy.
5:10:23Well, could you put freeze in food prices?
5:10:26Could you freeze the food prices?
5:10:29We've never done that before, which you could have done, shouldn't we?
5:10:32Would it work reasonably well for a short period?
5:10:36If we knew it, would you do it without leaving the whole farm open?
5:10:40Well, I'd freeze the, I'd risk that.
5:10:45I'd risk that in the sense that, or you could be selective.
5:10:49You might freeze the packer level, which is the effect of freezing the hoe at the production level.
5:10:57Sure, I've thought about it.
5:10:59But I sure would.
5:10:59Well, I know.
5:11:00I sure would.
5:11:00First of all, first of all.
5:11:02Oh, God.
5:11:03Oh, this is no time.
5:11:04Oh, even that's the topic.
5:11:05Oh, it goes down a bit.
5:11:06It seems I'm going in the right direction.
5:11:09What I'm convinced of is that, see if you, I have a feeling, John, that the economy is moving reasonably well.
5:11:18Very well.
5:11:18You agree?
5:11:19Very well.
5:11:20I have a feeling that the unemployment figure, it was nothing to be concerned about at 5.9.
5:11:25Not at 5.7.
5:11:26I think the damn figure is probably phony.
5:11:29But be that as it may, I think just so it's moving pretty good next October, we're okay.
5:11:34I don't find much concern about the unemployment at the moment.
5:11:36Do you?
5:11:37No.
5:11:37I think on the inflation side, it's a question of whether the housewife is stirred up by the goddamn networks as an issue.
5:11:47And here, if we could keep writing it,
5:11:53The difficulty is we need bigger guns, the big guns.
5:11:57You see, you can't shoot you every month, every week.
5:12:01You can go about once a month.
5:12:03You know what I mean?
5:12:04And then go with the band.
5:12:06But somebody, well, my vinyl apparently did fairly well in giving out the figures.
5:12:14But you will watch that in terms of... Now, let me say this.
5:12:19I'm not going to be as quick on the trigger as some of your people here.
5:12:23Some of your people here just watch that goddamn news every day.
5:12:26They just want to react to it.
5:12:29I don't want to do that.
5:12:30I just think we're wrong.
5:12:31Let me tell you why I think it's wrong.
5:12:34I just thought about this when I was in Florida.
5:12:38You know, it depends.
5:12:39It depends.
5:12:39In one sense, the people want excitement.
5:12:42In the other sense,
5:12:44Other sense, people, my daughter, who's at Cambridge, said a very interesting thing when she looked there.
5:12:52She said, it's a complete turnaround in the colleges.
5:12:56She says, nostalgia's back.
5:12:59Oh, she says, sure.
5:13:00The kids wear long hair and smoke pot and all that.
5:13:03But she said, nostalgia's back.
5:13:05And they want a feeling of stability, of confidence.
5:13:11They don't want drastic change.
5:13:16She says that she thinks that people like Teddy and Muskie and the rest are out of step.
5:13:25Maybe not with their party, but with the majority of the people.
5:13:29What do you mean people?
5:13:30She's absolutely right.
5:13:31This is from Harvard.
5:13:33She's absolutely right.
5:13:34People now... That's why I don't think we should jerk around every time the unapologetic goes up in the night.
5:13:40Not a bit.
5:13:41Not a bit.
5:13:41You've defended this part of us.
5:13:43The other side.
5:13:43I took this figure on yesterday.
5:13:45Somebody asked me in the press conference about the unapologetic.
5:13:47I said, what are you worried about?
5:13:49Look at it in perspective.
5:13:51Who are these unemployed?
5:13:53There are 5.2 million of them.
5:13:54We say, let's take that figure.
5:13:56Assume it's right.
5:13:5860% of these people have never been employed.

Nixon, Peterson & Ehrlichman on Economic policy and International trade

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Also recorded on April 11, 1972

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