Conversation 890-008

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Thank you.

I would say 15 minutes after we finish here.

That's for that.

What I was trying to do was to... How do you get along with my mother?

Have you been able to work with her?

You know, I've talked to you about it.

Shall we talk about that a minute?

I've talked to you about it.

I mean, he's quite candid with it.

And you need to know this so that you will have to embrace Henry.

Well, I have already, but... Frank, I'd rather have you speak with Henry for a reason that he...

I'm speaking quite candidly at the moment.

I'd rather have you say it for a reason that...

He's got this Soviet summit coming up and so forth and so on, and the European summit.

And of course, both of those things are, well, Henry likes it, but he sometimes has to get in.

He's a hell of a lot, I know.

I mean, he does, but I mean, you can even help him.

On the other hand, in both of the areas, in both of those areas,

on the European side, the more and more dominant part of it is economics.

And Henry doesn't always ask the first base about it.

He admits it.

I mean, he learns it fast, but he admits it, you know what I mean?

You do.

You understand that.

By economics, I am referring not simply, I'm referring to the trade legislation, I'm referring to the monetary thing, but what I'm referring to more is whether it is in the interest of the United States

to go along with the European idea of not blaming economics with security.

Now, the difficulty with George's position is that he cannot, and of course will not, and he'll do what he said, but obviously all the economic guys just say, well, trade isn't wonderful, see?

And let's make the best deal we can.

The national security guys say, the hell with trade and so forth.

We've got to do national security.

You know my views.

You know my views, and they're very close

to basically develop them into a position of independence and isolation, a third force against the United States.

Now, the question is, and this is a critical framework, if we could work it out, if you would go with George, I would like to be on a basis where you would handle that dish.

that dish for basically, for the deal.

In other words, Henry does not have, we do not have anybody in here, and I do not want, I don't want to have the, otherwise what will happen here is they'll come at me, say, from the economic side, and then Henry will come in with his view about this and that and the linking, et cetera, et cetera, et cetera.

But I think you being in the treasury might be in the position

to be the bridge between both Henry Wiggover Glyer and George Wiggover Glyer.

That's what I had in mind.

But you see, George, I'm not thinking of having him just come over there to be another very bright poet.

You've got plenty of bright poets over there already.

But it's this terribly important matter of linkage.

And the linkage is more important than the trade.

That's what it's called.

And with the Russians.

Yeah, I didn't trade with the Russians.

Well, I think, President, what has been arranged for the short term is that I'll more or less

stay here after the confirmation to work on the sojourn.

Otherwise, we're going to have to pull it out and trace it, frankly.

And Henry doesn't want that because he doesn't want to, frankly, because this is part of the process, which is not basically dead at chance to learn.

What I'm simply suggesting here is that I want this a much bigger concept than simply that he's going to come out there and be the talker.

and your sort of East-West negotiations and so forth and so on.

It's more than that.

It's really a question of giving you and you a feeling of basically the national security involvement.

Well, you remember your deals with Brown, for instance.

Remember you called me at that time and Brown sent that excellent message.

Well, we made quite a few points with the Japanese

No one would think of that instantly.

There's no reason why you should.

And I frankly would prefer that you not.

Because you should think of what's right to do when a character says, I don't even know what is right, and I'll weigh that with whether it's worth the political cost to do this stuff.

Is that the kind of work you get out of that sort of situation?

Yeah, well, I think it's essentially what we try to do from here.

I think it may be worth trying to do it from there.

It's going to be a delicate operation bureaucratically and psychologically and personally to operate in a kind of a twilight zone.

We have another problem here, too.

We have a problem.

We have set up another plan in the planning office.

Yes.

Now, the difficulty is the planning office does not make any changes.

I mean, it problems me.

But I think with George, so therefore, I like when the treasury paper comes in, George, I want it to reflect his views too.

So that, so that, you see, so that it doesn't keep, you're sending something in, the flanking call is coming in, and then Henry comes in and says, look, Mr. President, it ain't the right thing to do.

See, that's what, you know, this happens so often there.

Now, if you could get his input, that's where I think we'd have a real good deal, a real, real good deal to go with.

But shall we try it this way for a while?

I'm game.

It's, it's, there are lots of risks involved.

I think it's, I think it's good.

The other thing is this, that what we do, we have to do the negotiations online there.

I mean, what I meant is, when we get to the Russian things, you know, I mean, the working groups and so forth, we get to the European thing.

That's what I, what I like because we've got the, he's been, he's been kind of doing stuff and doing stuff for a lot of us.

And I think now that he should be, now the advantage here is you, you, you being in a basically even a sort of a more formal public position would be good too.

Because then you see you can have him up there.

Okay.

We must have spent too much time on this, but I just wondered.

Well, our thought was precisely along the lines that you just asked on, and particularly when the East-West business and the Soviet business came along.

That's what triggered off in my mind the idea of talent doing that.

And as far as I'm concerned, that's what I would look for him to be in charge of.

And the Under Secretary of the Treasury and the setup that we derived after you

Yes, we can do this.

Is he a charter?

Is he going to become an undersecretary?

Yes.

Take the job then.

Oh, no, I don't mean because of the title.

But that is what I meant.

If you get that, then you see he's in the undersecretary's very group and so forth and so on.

That's not... Take him over to the system.

You've got to set up...

What I would suggest is this, George.

Sometimes, you know, you can sit down Henry and so forth.

He's got to work on the salt.

And he's got to work on that.

I'm going to stick with that through June anyway, because we're right in the rhythm of it.

My point is that the more I can get stuff in this whole economic field from your office that I can rely on, the better.

That's what you put in the shot, man.

Good.

Go ahead.

One is to report to you on the trip, and I'll respond to any questions you have.

I have some thoughts that seem to be worth registering with you.

And then there are just a whole series of things in the domestic economic sphere that are coming to a conclusion, and we have some strains in the system, and I'd like to get an indication

on the U.S.S.

trip abroad, first on the U.S.S.R. part of it, it seemed to me that, just in terms of the tone that I got out of the way they treated us, and particularly the suppression of discussions, it seemed clear that he puts tremendous importance on his relationship with you personally and with the U.S.

That came through very strongly, more so than when he was there.

Well, it's getting to be a sort of a nostalgic thing with him.

I thought one of the most interesting little things was at the end, we stood up and there was a picture over in the corner that I remarked on, and he described it to me, and then he said, well, let me show you something else, and we went into the little back room that he had.

came out with a wooden carving of himself, which was a real good and interesting piece.

And he put that down.

So let me show you something else.

And he went in a second later, came out, so it must have been right there.

And he had a picture of you and he and the signing of the cross there and so on.

And the interesting thing was that that picture was in his little back room.

and was readily accessible and just sort of showed that it was in the front of his mind and told more than his words, I thought, as I observed the thing.

He put, he made a distinction, it was kind of interesting, between what he called trade and what he called economic policy.

And by trade, he seemed to mean vodka or Pepsi and stuff like that, which he thought was worth working on to the extent they can.

But he put economic policy in terms of things that have a long time span to them.

And obviously he's thinking about the gas deal and things of that kind.

But I thought that the conceptual problem, the thought you've expressed here in discussing how it's positioned, that what he was saying was that kind of exchange is more than trade.

It is a certain way deeper.

relationship that expresses some confidence that this is not a transitory moment, but something that extends a little further into the future, and so on.

So I thought it was interesting that you made that point.

We try to register, as you and Henry and I discussed, the MFN problem that we have.

And I described it, I think, exactly in the way that you suggested.

It seems clear from what happened that he got the message on it.

On the other hand, he also transmitted the message that I'm sure he's transmitted to many others, namely that he regards it as a pivotal issue.

that he thinks is substantively important, although I don't know how substantively important it really is, except as it falls to the ex-save credits.

But he regards that as a testing issue, that if we don't come through with this, it shows that we really aren't that interested.

And that I think came through in that discussion.

We talked to him about the organizational arrangements because we had been told the change in Peterson and so forth that made them wonder about it.

And he said, well, they hadn't looked me up and they thought they were going to see me doing this because they thought I was confident.

But he said, the main reason why we're glad to see you doing this is we understand you're close to the president.

And we really don't care who does this, as long as that person is close to the president, we can feel we're dealing with the president.

And this was a kind of a theme of the personal relationship with you.

So that's on the USSR, and there are all kinds of substantive announcements that have been in the various communities.

I was interested in the impact of the fact that I had been to Moscow on the Europeans, and they all wanted to know about and talk about the USSR.

And in sort of sifting out their reactions, not to Michael in particular, but to the whole thing, is on the one hand they're sort of relieved on the peace issue, but they're really, underneath it,

a little sorry to lose their monopoly position.

That is, they had it all their way with the Russians and the Chinese.

Now the U.S. is in there, and they're worried that we'll have more generous credits and so forth with the Russians than they do.

And in the process, there was not a concerted effort, but it came up in various settings, an effort to try to

us that there really wasn't anything to trade with the Russians and we shouldn't be thinking about it very much.

They didn't have much to sell, which is true, and that the gas business is all the way off and probably too expensive.

Basically, they tried to discourage an aggressive posture toward the USSR on our part, and I think it reflected their own

their own desire to have that whole playground for themselves.

And I thought they were a little bit edgy about that.

Not many Europeans like this idea that they should be the bridge between Egypt and the West when we produce supercars.

What a trouble it is.

They aren't the bridge.

They're just a collection of hauntings.

All right.

Well, I think that's it.

that aspect of it shown through in their comments.

On the questions of Europe and the US, it seemed to me there was a great desire to avoid confrontation.

And I think that your response to the brand message made a big impact.

And clearly, both on heat and on brand,

of things that kind of came to a head then, the monetary conferences, the two in Paris, all brought out the fact that they, while they have a very strong, it seemed to me, sense of the community, they're all talking about the community all the time, they don't want a confrontation with the U.S. and that's on their minds.

On the trade bill, for example, while they're quite apprehensive about some aspects of it,

They're clearly happier to have a trade bill and to have the U.S. in there in negotiations than for us to throw up our hands and not have one, which they would regard as kind of a withdrawal, I think.

It also seemed to me that they looked for U.S. initiatives in the money area and the trade area, and I was amazed at how easy it was

do what we did.

That is, basically, in the first Paris conference, they were floundering around.

And we kind of stopped and said, now, look, we're not going to answer the things that you want until you've gone through better.

And in the meantime, why don't you keep your exchange markets closed another week?

And that was sort of a new idea.

And then we passed that around with Giscard's fancy luncheon.

It was almost as though you could say the central bankers were in a hurry to get them open again because the free market was getting along so well with us.

But anyway, then the second Paris meeting, we worked on that and drafted up a draft communique, which we then talked to Schmidt about.

And we carted his assistant to Paris with us in the airplane and went over and over with him.

and then went over to Giscard when we got to Paris long before the meeting.

And he took the initiative and asked for a meeting.

And basically our draft, practically unchanged, was the draft of the meeting.

But what astonished me was the sense of which, with a little effort, you could really have a determining impact on what they did.

experience in international meetings.

And it was startling to me.

The energy subject is on everybody's minds.

It's topic number two.

Topic number one is inflation.

But it's topic number two both in terms of the international monetary and balance of payments business and in terms of the substance of where is this all going to go.

And they are totally without an idea.

I just cannot face one, I don't think.

And again, they're looking to the U.S.

They're expecting somehow us to pull their rabbit out of the hat.

But there is a search for leadership on that issue from the U.S. along with these others.

And I think it was quite striking to me.

You know, for John, which would be extremely interesting, to go into the letter office and promote John, we have, of course, discussed it.

No, I'd rather say that if you're a problem here, you better keep the errors up.

I'm just thinking of the energy users in the United States being the only .

I don't know if the word is enough, but I mean it.

Let's face it.

One of the sections of the energy message will be a section on international cooperation.

And you might say that I'm thinking not just as an international cooperator, but I'm thinking of a way

The thing you have to be cautious of is that the OPEC don't think that you're a concert cartel, because the trick here is going to be a split party.

Well, we'll look for a way to do it.

And I think in some way you could put an international flavor on it, because it would greatly appeal to them and to us and to our sort of jackass press here, but I don't think this is an obligation.

Well, there are.

It is an obligation.

It is, yeah.

Well, I think that would be, that would be good.

I have a talk to give in Paris to a bankers meeting, this big annual meeting, early June, and Armo, Giscard, Schmidt, Carver, Klobbel, before it.

But that, I thought I'd try to make it into a talk on the energy subject early on.

I think we're good then.

I found them, on the whole, quite preoccupied with their own, with economic problems.

Inflation is a terrific problem.

7% in England and 6% in Germany.

Right.

5.5% in France and 6% in Japan.

Those figures are possibly correct.

I think they are.

There's no doubt about it.

Japan is doing the best job.

They're close.

The Germans and the French.

The French are very close to 6, though.

It's 5.5%.

They're not down below 5.5%.

Not the figures that came over here.

As Schmitt says, they call it a government.

It looks like a government, but it's not a government.

But they've got a decent guy as finance minister.

Yeah, no, he's very good.

And they've got a damn good central banker in St. Carlos who's driving films around.

He tells us it's much better without a government.

But they're doing all right in some way.

There's a sense of labor confrontation that Britain is just overpowering.

He seems to be winning that battle right now.

Well, he's also backed one of the unions down, I noticed.

But it's a, it's an event.

Well, I don't have a good relationship at the present time with labor.

Of course, if it's concerned with government, labor's much stronger.

They're as good as we have been.

We have an entirely different atmosphere.

The contrast struck me.

I mentioned this I.W.

Abel seal worker thing that we talked about yesterday.

And I think it would be a great thing if you had the time.

But anyway, the atmosphere is so different because we have a good, constructive atmosphere.

They don't.

It makes all the difference in the world.

And I think it's really worth trying to preserve this feeling like we're a concert.

as they announced their arrangement for the paper this morning.

It's a real step forward, and of course it fits into the industrial peace business that we're talking about.

Both Abel and Larry are on the labor management committee, so they will be .

It has you.

I know David.

He's my student.

My old man's student.

I don't live with him.

He's supporting his father.

I believe he's worried about you.

Maybe you should have an organization called the IWW.

Yeah, like they're in the web.

One of the international workers of the world.

My old man used to refer to it as the I won't work.

He is a bit faster.

Okay.

The atmosphere of a drift to the left in Europe, which it seemed to me was quite apparent, that's where all the tension and corruption seemed to be, looking at it from the standpoint of our long-term economic, just in a narrow sense,

seems to me to indicate the flow of investment funds, long-term investment funds, that we have seen in the last five years from Europe to the U.S. is going to increase.

Now there is this image that somehow one of the problems is that we have this big flow of long-term U.S. capital to Europe.

And one of the things that I was trying to do, and I was trying to find a little table that I could pull out

But it's not that way at all.

The flow is from the U.S. to the U.S.

I think that's going to continue.

Just one feature of their common agricultural policy that's probably the most controversial element with respect to us, and that's one where I think a strategy with respect to it on our part that is closely tuned to

Your overall objective beyond the economics of it is very important.

I felt they were ready by this time to talk about the problems that the CAP presents if they could not be forced to talk about the principles that I've illustrated.

a fear that we have a good atmosphere for discussing the problems now.

We could upset it very easily by having a flamboyant trip on the subject.

Well, those are sort of comments on one thing or another on that trip, which I found very interesting in its appearances.

Well, and he, and he, and he, and the other is basically very good.

And you know, he, and he was a man of great character.

He represents a non-name country now, unfortunately.

And all the rest represent non-name countries.

And Europe is not going to get together.

So it turns out that this thug pressure, and the potential of the thug, is very big.

And Joy, Lion, Mouse, and Tongue are big because they have big countries, even though they're poor.

And they're very strong.

On the other side.

You and Henry have talked some length about this.

It's not connected as much as I would like.

But I want this to get into Henry's head as he sort of moved around with the Russians and the rest and so forth and Europeans.

We don't move in the political area without knowing our economic stories and our economic weaknesses.

by the problems of balance that we've got in our relations with all these people.

I mean, the point that George was making about the Europeans looking to the U.S. for leadership and, in fact, almost abdicating it, that's a real problem for us, because it's that sign that enables us to get things we want in some cases, but it is not— Helping.

Not helping.

And we got— Matter of fact, that's why every time anything happens,

in international monetary things.

They say it's the big bad in the United States.

What the hell is the US going to do?

Well, many times, remember that column of freedoms a couple of years ago?

They said, this is the dollar crisis, the market crisis.

It probably was.

But here we are with the lowest rate of inflation of the major industrial countries in our whole state.

What the hell is the United States going to do about its inflation?

It's a social erosion, too, isn't it?

It's partly just a...

a habit over the last 25 years.

They've become dependent on it.

Looking to leadership for the U.S.

The U.S. talks in terms of...

I understand.

The more they get it, the more they resent it, on the other hand.

And it creates a big problem, for example, among the left-wing youth in Germany.

Yeah.

That worries me all the time.

I want to talk to you and Henry about that separately.

Because that worries me.

I think the left-wing youth in Germany will always be a part of it.

It's very deep in Germany.

And of course, France has a lot to be blamed for in creating this tiger.

Now he's trying to ride it.

They're going to have a big party conference in the next couple of weeks.

The other area of balance is this question of our relations with the Russians.

They are obviously queasy about it because they think they're making deals behind their backs.

They were the ones that pressed us not to drag our feet on détente for years when we were playing it very cool and very good.

Yes, the United States and Russia, we were responsible for catching the world.

Because we were not getting along with the big bang and bad Russians.

I remember they kept my mouth shut.

Now that we have, they're worried a hell of a lot.

We've got a problem of balance here.

On the one hand, it gives us leverage on the Europeans.

But if we overdo it with the Soviets, particularly in things that directly affect the Europeans, we'll create precisely the kind of very false isolationist tendency in Europe.

So it's going to have to be a very delicately run operation where we have to avoid some temptations.

that the Soviets, of course, are very much interested in tossing our way, and Brezhnev is very shrewd in this respect, whatever his real motives are.

He wants to play the big boy game, and he wants to line us up against the Chinese and against the Japanese and the Europeans.

To some extent, it's okay, but we've got to be awfully careful that we don't get sucked into this to such an extent that we demoralize all these people and then go off.

Well, the Russians don't have a deal.

Well, they...

And it's the same problem in solving on MBFR.

We've got to be careful in the common market where the Soviets, they didn't do it with you.

They did it with Peterson last summer where they said, you and we are the two outs in the common market.

Let's just get together and gang up them.

Well, there are some things that one can do in that respect.

That's right.

So I...

I think we have, now that we've opened up everything and everything is fluid and we've got the Russians obviously interested, I think George is absolutely right about the long-term investment.

It's interesting in the case of Brezhnev, who is, after all, you know, in his late 60s, he wouldn't be around to see a lot of this stuff.

He looks, as you know, 10 years younger.

He isn't going to be around in 1985 when the gas field would really begin to bear fruit.

But it's interesting that he's thinking in those,

in those terms.

There's some younger men coming along, and I think President was trying to rig the succession so that he skips over the generation immediately beneath him and goes to a younger group.

He's trying to work that.

But anyhow, I think this problem of balance... Part of the problem, I think, part of the problem...

and the professors particularly.

colleges and universities and all that going on.

We could just not have any world responsibilities.

After all, the United States causes all the problems.

We could just concentrate on the new market.

Blacks, Chicanos, poor whites, everything beyond the minority.

And what they do not realize is that

Put yourself in the position of a young, bright, ambitious boy growing up in Germany today.

Or in Italy.

Or in France.

Leave out the Italians for the rest.

The Italians haven't had a passage in so long that made any difference.

And... Oh, the Dutch have had one.

They're sort of traitors.

The Belgians have been squeezed too often.

Scandinavians prefer to sell cheese to the girls.

But you get back to these people.

They have had great pasts.

They were one of those.

Now what in the hell do they matter?

And they don't matter.

That's why basically...

In the old days, I always thought, I know this was the beginning of German youth, even when I was there in the 60s, I thought about this.

That concept of a united Europe was terribly important so that they would mean something.

They would have some meaning in the world, other than outside their own chicken yard.

But they are getting together.

That doesn't grab those kids.

Not anymore.

Those people are now the bureaucrats that had some of them quite good, the people that were...

The kids that were young in the late 40s and 50s that were inspired by the European idea are now the Poles and these people that... Now I'm talking about the young kids.

The young kids don't give a damn about that.

No.

In other words, they know that that's an illusion.

At least one, I guess one shouldn't generalize, but certainly the academic youth...

The point is, if it shows you their real problem is an enormous frustration, they just haven't done a damn thing to be bored.

I mean, they would be better, much better off if they had our kind of problems.

They're either totally turned inward and concerned with problems of the soul and hedonistic problems, or they think in huge universal categories.

But not the middle, which makes things take.

Okay, well, let's go on and decide what we're going to find in the charts.

pension reform.

We have a set of issues here that I would just describe them to you one by one.

Right.

On pension reform, we basically have last year's bill for the midwifery.

And we've added termination insurance, which is a way in which all private pension plans are assessed

It contributes to an insurance fund to protect the vested rights that are mandated by the law.

It is relatively cheap.

We think we have a unanimous view that it is a good thing for us to do.

It's a new feature.

It's a new feature terminated.

And it fits in, of course, with the notion of

Providing something to go with the trade bill because the aspect of adjustment for a worker is irretrievable.

Let me add to this.

As far as our deal here is concerned, as much as we can in these areas, George,

Because basically, as we know, he's not an operator, but he's a hell of a salesman.

Let's get people ready, hold it in, and get him out, sell it like hell, and be the greatest thing since cream cheese.

And we do that.

Of course, he foiled me.

He's in favor of this.

And he basically, he argued for it.

And Roy threw up dragon's feet.

And Fred did dragon's feet.

And they came around and got a pen.

You see, what you're going to get, I think one of the things to have in mind, when you talk to him, when you talk to him, George and Johnny, I don't see where you're going to have Kevin, when you let him get back, just say, I count on him.

This is great.

I'm glad that, you know, he got this hand.

Let him feel a little proud of it.

All the way through here, we're doing things that management is going to be wild about.

They're not wild about this?

They're going to be mad at termination insurance, basically because the big companies don't need it.

Nobody thinks that they need termination insurance.

They're going to pay premiums that are going to support.

What will they do to the small companies?

Ruin them.

You know, don't help the small companies because they, even if we try to work out... Why is management, how wild, how much are we going to stir up now?

There's nothing in here except in the minimum wage area that I think, personally, is good.

I'm for all these things, but they are things that men have accumulated.

Now, on the termination insurance, we have an issue about who's going to administer this fund.

Labor wants to administer it.

Most everybody wants the Treasury to administer it.

Personally, we're not looking for the business in Treasuries.

We don't care.

We just send that labor to it.

The management people have made it clear that if it is administered by labor, they are really going to write hell about it.

And the reason they're concerned is that administering an insurance fund seems to them to be a step toward, and some of these other things, a step toward judging the quality of the assets held by pension funds.

the government getting deeper into the management of the funds itself.

In that sense, they're, they're, uh, well, since it's cuts, since it's cuts across both management and labor, it should be in Treasury, in my opinion.

Okay, well, I'm, that's, that's my view.

I'm perfectly willing to put it that way.

No, I guess I'd say that's the way, the only way that I can sell it to the business side.

That's okay.

John, could you agree with that a little bit?

I really don't know the pros and cons of this.

I haven't seen the paper on it.

The Labor Department bureaucrats over there will say you're beyond screwed.

Are we going to staff this through, George, so that this comes in some kind of an orderly manner?

Well, we have decided.

Well, we have.

Our idea is to have the trade bills, the pension package, the onslaught insurance package all ready to go at the same time.

We put them up.

Well, that's true.

That's part of the main thing.

And the U.S. interventions are tied in because they are a way of handling the injustice.

Well, we're going to crack at this then so the President will see where the pros and cons are.

Well, he's got a memorandum, and we have had innumerable meetings about it.

Where's the memorandum?

Is it pending here?

It's been set over here.

Okay.

Well, that's probably the President's reading.

Well, the main thing, I mean,

I think I've already talked about this termination thing, and I think with Brennan, what I meant is, we talked about it in terms of the trade.

I just hate to see a touchy thing like this come up.

I don't want to, but I don't want to approve it finally until I get a crack to see how violent the opposition is.

There's a thread running all through this, if they're not, George, of Pete Brennan and his sensitivity to some of these issues and some problems that we've got.

And then on the other side, some very strong votes for representation.

So I'm hearing from the Chamber of Commerce, for instance, they're already getting wind of this.

And they're beginning to get very touchy.

And of course, they've stepped out front on the budget thing.

And they're making a big point of that with us.

They're taking big ads and all that.

I don't want to destroy our budget by doing this.

I'm just hanging a few red flags on this, George.

I think we have to balance these and not just take them one at a time.

And so let's go through the package here.

We're not going to move on to agriculture at this time only.

Which I think we're strongly going to have to move on only because we need those agricultural congressmen and so forth to support us in some of these things.

I didn't think of some of these this way.

I'm not sure, John, this was or isn't that.

I can't say that.

I don't know.

Let's see.

We've got to evaluate it in terms of how much.

I agree with that.

On employment insurance.

I think that that's the termination insurance is a problem that has the management people are more concerned about labor getting its hands on the management of their assets than anything else.

So that's why they can work to take it.

What about employment insurance, John?

Well, here we have an extension of coverage to farm workers, which is the same as you recommended in 1969, and which has a lot of support around Reganism, for example.

I'm anxious to have that.

Reganism?

Yes.

Well, he feels that California is being pushed to do it, and it's an unacquainted advantage.

But at any rate, this is something we supported before in the ag, bus code, the law.

Now the big issue here, and this is one that we've talked about before, is federal standards for benefit levels.

Yes.

You may remember going way back to the Eisenhower administration,

President Eisenhower put forward these standards to be met by the states.

You put them forward in 69.

And we were going to go for federal standards then, but you remember the Republicans on Ways and Means just wouldn't buy it at all.

So we backed off, and you put in a sentence saying that here are the standards and the states don't meet them.

They don't have to be federal.

Well, the labor union people, this is a very big thing with them.

And they want this.

And I think on a substantive basis, you have Arthur Burns like this kind of an idea.

The economists of the world think it's a good thing to do, to get these benefit levels more adequate.

The business people are violent on this.

The business people are violent on it.

And some of the state people are violent on it.

Because it is going to raise the benefits, and it is going to

You know, I think here, John, I've got to get some, John, let's check it by the Tenants' Crown.

You know, I've got to see where the, where it affects, right at the present, you've got to fight one battle at a time.

You know, it's, I've got to be sure that on the Tenants' Crown, well, whatever, whatever comes to you for final decision on this, I'm going to have Tenants' input, too, and the Intergovernmental Relations guys, just get them.

Now, um, the, uh, the, uh, Ash, Brennan, Butts, Coles, Flanagan, Stein, I all recommend this.

Coles has done a great job with this.

Um, it is a, uh, let me, let me say, let me say, let me say, I'm important.

You know, like, uh, but I am important.

I also know that we can only take on so many battles at a time.

I don't want to do something here and not even get either this or a full budget.

I don't know.

But let's take one.

I'd like to.

Why don't we take another look at this?

When I get back, if the paper is here, we'll do it in California.

Right.

I'd like to take the unemployment thing.

Oh, and it doesn't have to be here.

Send it out.

Because I can't.

I have to be able to get at it until I produce trial.

I've got to get that damn piece in two, or two days.

Or I could do it on Lexington University out there, and I could study it a little bit.

Now, the big apple here is the federal standards for benefit levels in government.

Now, Brennan, he's for that.

He sort of says, well, that's in the bid now.

Let's go on to other things, and he wants to fire you further.

And here is where the axis of the problem is.

Last time, when we went up with unemployment compensation, we proposed that state laws that allow unemployment benefits to be paid to strikers be disallowed by the federal law.

That affects New York, and it affects Rhode Island.

There's no doubt about the fact that the New York law prolonged strikes.

Even Brendan will admit that.

On the other hand, this is something Labor won.

George Meade, when he was head of the NFL in New York, got this in the New York Law.

He prized it.

I took him on when I was Secretary of Labor.

We didn't get a pass.

But I think my own view is that if we go up with federal standards, and we don't stick with that, the employers of this world will say we're out of our mind.

But Brennan is against that.

Well, that is, he is alone on that.

he's really uptight and he's talking about his special relationship with the president and he has a letter in here which is in the file that you have that describes why he doesn't agree to go along with this Fred Dent has a letter in on it too he's on the other side obviously and there's another issue in this area involving the duration of sentence you remember last

extended benefits.

The Labor Act proposes that we just increase the duration of benefits for everybody from 26 weeks to 39 weeks, and then we tack the extended benefits things that we had before onto the end of 39 weeks instead of what we had before.

In other words, we just put another 13 weeks of automatic UI benefits in the system.

Once again, everybody else thinks that

We shouldn't do that.

Brennan is very strong on board, and he's passionate on that subject, too.

I don't think he appreciates the two sides of these issues.

I went yesterday, just by an example, to swear in Bill Ussery at Bill's request, and Pete was the lead-off speaker, and then

They had under-worked representatives who were meeting there.

They had nobody from management there.

And then I actually performed the swearing-in.

And Pete said, well, he was glad to see Bill Esserina's job because that meant the two key jobs in the labor management area were held by labor union representatives.

And furthermore, we got three more labor union representatives in the department.

And if people object to it, he said, I don't see no labor guys over there in the Commerce Department.

By choice, we haven't managed the people in the Labor Department.

He said, here are these management people out there.

And Ussery is supposed to be an in-between guy, and he's been very successful.

He's pretty great.

And he'll get along all right, but it was hard to do.

What we have to do with Brennan is this.

I've got to get the whole damn package in here.

Then, John, we've got to do it.

Say hello.

We've got this one, but there's too much on the plate.

We've got this, that, and the other.

And then we'll put it out over a period of time.

You're going to win on this.

You're going to lose on that.

You're going to post all this.

But let me, you just can't do it.

You can't choke it and say you don't get all this or you do get all that.

Either way, I know that.

But I think that with Brennan, it's going to have to be handled.

But I think we've got to handle it right here.

Once I see what the packages are, what it is,

Does that sound right to you, John?

Yes, it does.

I have to do.

I have to continue.

I have to go out and sell it.

There is the question of the level, which he is not too bad on, I think, although I'm not doing him that fine.

Coverage and stuff, others.

And then there's the question of the youth differential.

Coverage, level, and the youth differential.

He wants to basically water the youth differential way down to cover quite a few additional workers and have the level go up immediately to $2 and then scale down from that.

Well, I believe that if there's going to be a bill, it's going to be a $2 bill.

Yeah, that's right.

We cannot defeat a $2 bill.

We can go in.

One thought would be to go in where Erlenborn is with a $1 rating and

Let that be bargained up to $2 so we have something there.

Not to have that coverage and to assist for non-students on a reasonable youth differential for 16 and 17 year olds.

Now, Erlenborn, I notice, has dropped the 18 and 19 year olds out of his bill.

And I think the politics of the thing, since the last time around, has changed since these 18 year olds all voted.

Nobody wants them.

There's another point here, too.

There are two ways to skin this cat, and of course you've got the problem with Brandon's testimony, but you've also got the point that the Congress can do some of the work that needs to be done on this thing for us.

Well, if we don't take a

a somewhat conservative stance on the minimum wage.

Is that a thought for the race?

Yes, right.

There's no budget, no leadership then.

A huge, ever-rational vote.

Yeah, a lot will depend on what he testifies to.

Grant testifies to what kind of bill can appear eventually.

And if he goes up there and speaks his heart, you're going to get something from him.

They might give it to him.

They're going to give him more than any of that.

They'll just beat us over the head with whatever he says.

Oh, I've got to take a look at that one.

I know the problems with him, but basically that's what he's here to do.

And we've just got to have a hunker down and talk with him.

And the politics has got to be discussed with him.

Well, he thinks the politics, of course, are all in his side.

Because he thinks of labor politics.

I don't know.

I mean, you can see that there are many other politics.

Speaking of the politics, basically, of keeping the budget in line and keeping our own constituency in mind up there in Congress, that's what's the policy.

Good.

Before you go on that, he's looking to testify next Thursday.

Maybe we should come out to San Clemente Wednesday and have a go around on this whole package.

Although that's late for this testimony.

It could be the, uh... You better get me a minimum wage.

Something with a minimum wage, I will come and explain.

Let that be the first thing.

Rather than getting a...

I'd rather have a go around when I get back.

I've been thinking about it for a while.

And, uh...

I don't want to have a basic contribution out there.

But I want to think the minimum wage would not have decided that before, but we can't wait until Wednesday.

This testimony has to be written.

John, did you have a problem with Brandon today with the minimum wage thing?

Yes, I guess I can.

What I've had for so long yet is

so that he knows that he's getting the view in both ways.

He's your best man with Brennan right here.

All right.

And I think George had a view of him.

No, I thought George wanted somebody else to talk to him.

No, I wanted a sense of direction from you.

Let me get a sense of direction.

First of all, I don't want to lose Brennan.

Second, he's got to know the facts of lying.

You can say, oh, God, beat me here.

You feel as he does.

We feel, I feel as we do.

We've got to, we can't just choke this thing.

At the present time, we can't get an animal up there.

And we've got a hell of a problem.

The president's got to bring him, bring him along.

He's the only one that can, because a combination of Republicans and Southern Democrats will knock the hell out of this house.

They will not help.

I know.

If you expect, I mean,

They'll go for higher protection in a way.

Georgia's a little higher in a way.

But the extension of coverage is something that drives the city right up the wall.

The carnation insurance, the lobby starts on that.

Those guys all get contributions.

They may have problems on that.

I don't know.

The unacquainted insurance is kind of bad.

The whole point is that let us...

I think what he has to know is that there are some very serious problems on the other side, and that we've got to walk before we can run here.

We can walk pretty fast, and we're going to put him in a position of being in a basically forward position, but to keep him in a position where he's way out there.

Then the Congress goes far beyond.

You've got the Congress, in some instances, the Libs that will take what he does, his administration position, and put it around.

We must not do that.

So, therefore, he's got to come out for a, like, 180.

You know, I would like to sell it as a 180 going in and giving bargaining with my truck of dollars.

That's right.

With a, you know, an increase of through 19, if we could foreclose the issue down until 1976, that would be great.

Right.

No extension of coverage.

And the 16 and 17-year-olds, we have to have a reasonable differential gap.

16 and 17, we have to have.

That's correct.

That's the posture that, remember, you had talked about.

Yeah.

Well, I think we're going to have that there.

And getting back on the extension of coverage thing, that's just basically the loser at this point.

Well, state and local government workers can go up the wall and just say that we checked her out and we just can't get, we just can't do the work.

And then tell them that, tell them that he has to do more selling on that before we're able to go out of it.

We gotta have something for next year's package.

Put it on that basis.

Also, it affects our ability to get local government into the revenue sharing fight.

What I would like to go back and tell them, look,

The most important thing is the federal standards for unemployment insurance and say, look, I'm with you on that, Pete, but you've got to sell the president.

And that's a very tough issue for him.

And make him do a little work with you on that subject and sort of bring it back to earth, but that isn't a settled issue.

Maybe if he worked a little more on that, he wouldn't work so hard on each other.

That's the most important thing, and it's something that... You're not for it.

Oh, I'm very much for it, I think.

What do you mean?

I'm bringing back Earth, and I'm telling him we're not for it.

No, I mean, he considers that a settlement.

And then he goes on from there to the strikers and so forth.

And if I say, look, the president's basically in favor of it, but we've got to help the province.

That's a hell of a problem, and you better...

in that position a little bit.

Or talk to Erlichman or somebody.

Well, that's all right.

I'm going to talk to him myself.

But I just need to ground Dan well before I get there so that we can know.

And he's a bartender.

He's a labor leader.

There is one thing on the trade bill.

There are two items here.

One in particular, I think, if I can get to the

on a general or selective basis.

There is a major issue as to whether the selective application of the search army should be put in terms of your being able to do it with due regard for international obligations, but nevertheless unilaterally able to do it, or to say,

that it will be done, but only when it is in accord with internationally developed MFN principles.

Now, sir, there may be the opposite.

You have, I think, a heavy feel, very strongly on this, that we must observe our international obligations and we can't

break out of that pattern.

State feels that way.

SDR feels that way.

The other side of it is, and I guess Treasury is far on this side than anybody, that if you're going to negotiate anything meaningful in the way of...

I disagree with the NSC on this.

You have to be able to have the possibility...

I'm going to be upfront and let the Congress bring us back to this if necessary.

I understand the concerns here, and that the Canadians will squeal, and the British will squeal, and the Europeans will squeal, and so forth, but they seldom do a goddamn thing for us.

On this, no, I don't take the NSC.

Do I know this argument?

Well, incidentally, Mills, Mills feels this way, too.

This is one that we can give Mills something.

Well, he'll talk that way.

Oh, I know.

The mills will talk.

He'll say, we've got to do everything and go with the gas, all that little bit.

The mills will talk that way.

But on the other hand, if he gets out there on the floor, he's going to be dumping up and down.

We've got to have a negotiating and bargaining position.

No, on that one, I don't... Henry Henry would have been opposed even to the surcharges, August 15th.

but we had to do it for other reasons.

And this is an instance here where I want the bargaining position here to be very, very strong.

I've just got to take some heat on this one.

I know all the arguments about according to the rules and so forth.

You can put in some fuzzy language indicating that we will as much as possible do this or that.

But I want the strongest possible bargaining position on this one.

that we can have.

The other issue with the trade bill has to do with the MFN for communist countries.

And as of yesterday morning, as Henry and I talked about this, it seemed as though the best strategy is to put it in as presidential authority in the trade bill and to work along with the Soviet problem.

And if it seems

that we have a propitious moment for breaking out the soviet party and going for it by itself well do that but right now doesn't seem to be quite the time we have this proposal of javits made that i described to you you're familiar with that looked like a very good idea mills is just deeply opposed to him and

So our thought is not to put it in that way, but to have it as a possible fallback in discussion in the committee.

But anyway, to stay a little loose on this issue, and I haven't heard Henry apparently meddle to bring it, I guess, last night or the night before.

I don't know if the answer is over that.

We have to do it.

We have to go all out on our .

Yeah, but the problem is that if

Jackson on the Senate side and Vanaheim Mills on the other side have signed up these people on this thing.

And it's an impossible decision for you to be put in to certify freedom of immigration.

That's a metaphysical thing.

You can't ever certify that.

So we can't have them.

You almost have to veto the bill if it comes out that way.

I don't know.

My own feeling is we'll have to go with it as a signal to the Russians.

hope that they understand that they've got to put in a pattern of performance on the immigration issue.

And if that's sunk in for a period of months, perhaps we can turn the Jackson Amendment into something that you can live with.

He's, of course, the group is very, very suspicious.

He says the Russians are going to do this for three months, and they've got their amendment, and they'll squeeze again.

My feeling is we need a little time and need more news showing that this thing is turning around on the other side.

I don't see at the moment any basis for bargaining with these people, with Jackson and Mills over there.

And if Javits had been right, that you could have weaned away a lot of supporters from the Jackson Amendment by this veto procedure, then I think we might have had something.

Well, I think he is right to a considerable degree.

The trouble is, he isn't right.

We would expect a mill.

That's right.

A mill doesn't have to be fine.

That's .

.

Well, we are working a lot .

. .

Well, the question of the, are we going to get the position when the federal government fails out, and we're getting some money, and we get a lot of voters playing, or something like that, who's resisting, and Peter hasn't been pushing for it.

We're going to sit down with the labor unions as well, and see what we can work out as part of the deal of our plan.

Let me say on the Jackson Amendment, however hard you should know this, if it comes down to a gut fight, I will not side with the Jewish community in this country in a way that will destroy our nation and initiatives with the Russians.

And I will blame the Jewish community for destroying that.

I want everybody to understand there's going to be bullshit on that point.